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Rosyth – Zeebrugge service

Rosyth – Zeebrugge service. Water Freight Opportunities for Scotland. Allan Hull – Route Director. 07/09/2011. History of the Rosyth/Zeebrugge service.

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Rosyth – Zeebrugge service

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  1. Rosyth – Zeebrugge service Water Freight Opportunities for Scotland Allan Hull – Route Director 07/09/2011

  2. History of the Rosyth/Zeebrugge service Route was inaugurated by Greek ferry operator Attica under the brand of Superfast in 2002 with 2 cruiseferries making 13 trips per fortnight. In order to achieve an 18 hour crossing they had to cross at 23 knots, which burnt over 100 tons per crossing. At their peak they were carrying 41,000 freight units and 180,000 passengers By 2005 they had reduced the service to a 1 ship operation as running costs were outstripping revenues. With a one ship operation they dropped to 100,000 passengers and 23,000 freight units and ultimately withdrew the service in September 2008 citing unsustainable losses

  3. Route Development 2009 & 2010 Start up of service in May 2009, with Scottish Viking Disappointing development in 2009 Freight revenue 50% below expectation Passenger revenue 15% below expectation - Passenger concept not successful with Scottish Viking During 2010 a careful increase in freight volumes was visible, passenger volumes (still) disappointing

  4. Passenger Performance 2009 & 2010 YTD • 2009 revenue: 15% below budget • Facilities on Scottish Viking not ideal • 2010 revenue: 17% below budget • Low/Shoulder season very difficult • Service did profit from Ash Cloud

  5. Freight Performance 2009 & 2010 YTD • 2009 revenue: 50% of budget • Freight mix different from budgeted • More containers • More trade cars • Fewer (Accompanied) trailers • Resulted in lower average rate • 2010 revenue: 87% of budget • Positive trend visible in market • Increase in volumes • Potential for increase in rates

  6. Last passenger sailing was on December 14th 2010 ex Rosyth Main areas of concern: • Scottish Viking vessel not ideal, alternative Ro/Pax vessel not available against an economically viable charter rate • As a commercial enterprise a loss giving service with no positive outlook could not be maintained • 2010 passenger results were positively distorted by the impact of the Ash Cloud disruptions

  7. Concept for 2011 Two pure Ro/Ro vessels to replace Scottish Viking Change of service schedule to 4 departures/week in each direction Change of service speed (29hrs crossing) to save bunker consumption Organisational changes from Channel to North Sea management

  8. RORO vessels Tor Finlandia Length 162m Beam 20.62m Capacity 1900 lane metres Drivers 12

  9. RORO vessels RORO Vessels Tor Cimbria Length 145m Beam 20.40m Capacity 2026 lane metres Drivers 12

  10. Results • Budgeted result for 2011 was still loss making with breakeven expected in 2012. Support for additional frequency only marginally better than with 3 sailings and not enough to justify maintaining the 4th sailing. • Significant increase in bunker prices in 2011 of over 40% resulted in BAF climbing from 3.9% to 18.6% which came on top of a stiff rate increase. This reduced the competitiveness of the route compared to Teesport and the Humber. • Service reduced to 3 sailings per week in May and one vessel removed to better balance costs against revenue. • The scale of the business does not warrant direct employment so all support functions are outsourced meaning there are few synergies.

  11. Current schedule Schedule based on 23 hour crossings Minimal port stays – 4 to 6 hours

  12. Outlook and challenges 2011 volumes now likely to be in line with 2010 volumes as capacity is broadly the same as with previous ROPAX vessel The lack of direct Scottish imports acts as a brake to developing volumes. A lot of Scottish exports are shipped through English ports in order to match the import collection Unaccompanied operators need scale to make best use of haulage combinations. This favours concentration around large hubs like the Humber and to a lesser extent, Teesport where there are multiple routes and daily schedules. The hinterland from Rosyth is relatively limited, making local haulage expensive as there is not enough daily mileage. This means hauliers are working on day rates. In theory there is enough volume in the Scottish/Near Continent market to support at least 4 sailings per week, but the economics of the route are very difficult, especially in the current environment of high fuel prices. Come 2015 this will become even more of an issue when the SECA limit is reduced to 0.1% from the current 1.0% pushing fuel costs even higher.

  13. Conclusions • In principle there is enough volume to support a direct link between the Continent and Scotland but it is a niche market. • The further south in the UK the port of entry is the larger the available market becomes. Lower seafreight and higher frequencies counteracts the mileage savings of using more northerly ports. • High operating costs favour scale and economy over frequency and speed • The offer is very much geared to the unaccompanied market. Anything above the drivers legal rest period is seen as wasted time and money for a driver accompanied operator of which there are many in Scotland.

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