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Shippers from Asia are increasingly considering the potential of southern European ports as intermodal bottlenecks continue to delay container delivery through some of the Northern gateways.

Persistent barge delays through Rotterdam and Antwerp, continue to frustrate shippers, with Antwerp barge waiting times currently 24 to 48 hours, and Rotterdam 12 to 96 hours.

This is on top of the transit time, which for Maersk Line is 26 days from Shanghai to Rotterdam compared with 30 days to Genoa, and for CMA CGM is 28 days and 31 days to Genoa.

Some carriers are happy to push the Mediterranean and the deals are getting interesting.

A trade press report suggested that a recently completed analysis on the price difference between northern and southern ports found that end-to-end it was $28 more per TEU from East Asia to Hamburg compared with the Mediterranean.

Services from carriers is definitely making the Mediterranean routing more credible, but the price differential of $50, or thereabouts, and increased transit time is still not enticing enough to shift volume from Rotterdam.

While the market share of Asia containerised cargo at Mediterranean and North Europe ports has remained largely static for the past few years, record growth in volume at both regions was reported last year, a trend that continued through the first quarter and is putting pressure on inland connections.

Growing demand spurs new intermodal services

By the end of 2017, the five top northern range ports had handled 3.2 million more TEU than in 2016, and the year-over-year volume kept increasing in the first three months of 2018.Order Xanax From Mexico

In the Mediterranean, the five busiest ports handled 2 million more TEU in 2017 than in the previous year.

To cope with rising volume, new weekly rail services to Central and Eastern Europe are being introduced at Italy’s Genoa, La Spezia, Trieste, and at Slovenia’s Koper hub.

In the past seven weeks, the difference in the average rate to ship a TEU via Northern or Southern Europe was just $38 per container, with the Mediterranean providing slightly more expensive services. Looking back 12 months, however, the Mediterranean spot rates have regularly been below those from Asia to North Europe.

The University of Antwerp analysed several year’s data and found that transporting a container by road from Genoa to Basel in Switzerland will cost $511 per TEU, far cheaper than the road option from Rotterdam-Basel that will cost $994 and Antwerp-Basel at $907.

Rail transport along the Rhine-Alpine corridor from Genoa to Basel costs $624 per TEU, while the cost from Rotterdam for the same mode is $788 and $743 per TEU from Antwerp.

Obviously the type, volume, and distance that cargo has to be transported will largely determine which mode is selected, but the enormous increases in containers being handled by the gateways and the resultant congestion is making cargo owners come up with different strategies to better manage risk.

Instead of moving all cargo through one corridor, shippers should be spreading the risk, especially during peak season. If you can split volume by different routings then you can manage the risk.