European operators and ports invest in ro-ros despite looming Brexit risk

Stena Line has recently ordered two more newbuildings. Pictured is Stena Forerunner. Credit: Stena Line
Stena Line has recently ordered two more newbuildings. Pictured is Stena Forerunner. Credit: Stena Line

Leading European ro-ro operators and ports are investing in additional vessel and terminal capacity in anticipation of rising volumes while simultaneously preparing for the potential disruptive effect of the United Kingdom (UK) leaving the European Union (EU).

Luxembourg-based ro-ro operator CLdN (Compagnie Luxembourgeoise d’Navigation) – which operates a network of ro-ro freight services using 24 vessels between mainland Europe, Liberia, Scandinavia, and the UK and Ireland – has recently taken delivery of two of the largest short-sea ro-ro vessels in the world.

The first of its new vessels, Celine, was delivered in October 2017, followed in February 2018 by sister ship Delphine. Both vessels are 235 m long with a capacity of 8,000 lane-metres (lm) and are described as liquefied-natural-gas-ready. They are part of the company’s expansion programme intended to increase cargo volumes on key services.

CLdN’s extensive fleet modernisation and expansion programme will see its carrying capacity increase by 70%. It includes a pair of 5,500 lm vessels currently under construction in South Korea, in addition to a pair of 211 m long, 5,400 lm-capacity vessels being delivered this year from Croatia. Exercising options would bring the total number of newbuildings to 12.

The company intends to use this new capacity to expand its services between Rotterdam and Zeebrugge to London, with new terminal facilities recently having opened in the European ports. Investments have also been made to expand capacity at its Purfleet terminal on the River Thames in London.

Danish ro-ro operator DFDS is undertaking a major expansion of its ro-ro freight capacity with recent orders for two new freight vessels. It exercised an option to order a sixth ro-ro vessel in a series of 6,700 lm ships, giving capacity for about 450 trailers. DFDS said it ordered the extra vessels to meet anticipated growth in its route network in northern Europe and the Mediterranean.

The first two of the new vessels are due to be delivered early in 2019, followed by two more later that year and the final two in 2020. Separate orders were made for two ro-pax ferries due for delivery in 2021 for the company’s Baltic Sea services. Two other DFDS ro-ro ferries are being lengthened to increase capacity.

Earlier this year, DFDS acquired Turkish ro-ro operator UN Ro-Ro and its fleet of 12 ro-ro freight ferries, which operate five routes from Turkey to Italy and France. These will be integrated into DFDS’s 50-strong fleet and route network.

Stena Line has recently ordered two E-Flexer class ro-ro vessels, with delivery due in 2022, bringing the total of this class to eight. The two latest orders will be slightly larger than earlier E-Flexer vessels, at 240 m long and with 3,600 lm capacity, compared with the previous ships in the class of 215 m long and 3,100 lm capacity.

According to Stena Line chief executive officer (CEO) Niclas Mårtensson, “We foresee increasing demand for freight capacity in northern Europe and our new vessels fit very well in matching anticipated market developments as we prepare ourselves for further expansion.”

Three new ro-pax ferries are due to enter service in 2020 on its Irish Sea route between the UK and Ireland. They have a capacity of 3,100 lm and 1,000 passengers.

“The freight market between Ireland and the UK experienced significant growth over the past five years,” said Mårtensson. “That is why we have invested almost GBP200 million [USD260 million] in our ports and vessels.”

P&O Ferries, owned by Dubai’s DP World, is adding capacity on its eight ferry routes across the English Channel, North Sea, and Irish Sea. It has recently ordered two new 210 m-long ro-pax ferries for its Dover–Calais route, due for delivery in 2021.

These orders and additional capacity indicate strong confidence in prospects for ro-ro traffic in the region. Ports served by these operators are similarly investing heavily in new facilities to accommodate the larger ships and increased traffic that they are expected to generate.

In Ireland, Port of Dublin invested in ro-ro facilities to handle the new, larger CLdN ferries. According to Port of Dublin CEO Eamonn O’Reilly, “Our investments match those of the major shipping lines, such as Irish Ferries, Stena Line, and CLdN, all of whom have already, or will shortly, introduce new larger ships on services between Dublin and both the UK and continental Europe.”

One major uncertainty amid all this optimism is the UK leaving the EU in March 2019 and what effect it might have on cargo volumes and potential delays at ports because of new border controls and checks.

“We continue to work with state agencies to ensure that essential border control and inspection facilities are in place for March 2019, or whenever they might be required, if at all,” commented O’Reilly. “Critically, we have not allowed Brexit and all its uncertainties to diminish our focus on long-term plans for the development of Dublin port.”

Ro-ro operators appear to be downplaying the potential consequences. P&O Ferries’ head of communications, Dan Bridgett, said, “As long as there are goods and people travelling between the UK and Europe, P&O Ferries will continue to provide a comprehensive ferry and logistics service to and from the continent. We will continue to monitor the negotiations between the UK and EU very closely.” P&O Ferries is planning to integrate electronic customs clearance into its own systems.

The biggest volume of ro-ro traffic in the UK is handled at Dover, with 120 daily sailings and 2.6 million trucks each year, as well as 2.3 million tourist vehicles and 12 million passengers. Tim Reardon, head of EU exit at Port of Dover, said, “Trying to divert traffic through other ports is a non-starter. The port capacity isn’t there, and a whole new fleet of ferries would be needed, which simply doesn’t exist.”

Port of Dover has been working with the UK government on contingency plans to minimise disruption. This mainly involves trucks being pre-notified to customs so that they do not need to be delayed at the port, with any health controls carried out remotely. However, there are fears of major congestion on both sides of the English Channel if trucks are delayed by new checks.

Port of Rotterdam handles large volumes of ro-ro traffic to and from the UK and has been establishing contingencies for the UK leaving the EU. The port has pointed out that one effect would be that vessels coming from the UK would require nine additional documents for goods being moved between the UK and the Netherlands. The Dutch government has already appointed more than 900 additional customs officers and 145 veterinary inspectors based on estimated trade volumes. New IT systems to deal with the additional documentation are also being tested.

The port anticipates that there will be a huge increase in customs declarations. Port of Rotterdam’s external affairs manager, Mark Dijk, said Rotterdam is making extensive plans for the change, including increasing awareness, carrying out impact assessments, and working with customs and other agencies.

Meanwhile, the customs authority at the Belgian port of Zeebrugge has opened an information point specifically to cover issues concerning Brexit. The port said it is planning to remain a major hub for trade to and from the UK after Brexit. “The port has taken a number of initiatives, including a new digital data platform, and is co-operating with a number of public authorities to become entirely Brexit-proof,” it said.