Japanese-Singaporean global container shipping line Ocean Network Express (ONE) is sharpening its focus on intra-European services. This includes deploying more vessels and specialist equipment for handling out-of-gauge cargo without disrupting sailing schedules.
Founded as an amalgamation of three Japanese lines, ONE has made significant progress globally, and most recently and notably in European waters. The company has targeted investment in its intra-European services, achieving the highest capacity and market share growth of any carrier over the past twelve months, according to data from Alphaliner, the industry analysts. ONE has placed strategic focus on its regional network, with a clear aim of positioning the company as a leader in intra-European connectivity.
That distinctive livery is a daily sight at Birmingham’s inland container terminals, but the magnificent magenta also adorned an impressive stand at the recent Multimodal trade show in the city’s National Exhibition Centre. It was there that Stanley Smulders, Director of Product & Network at ONE, spoke to WorldCargo News.
Being competitive
“We are a global operator,” Smulders said. “What we want to do is cover all trade lanes in the world. So we have a program to be a certain size by 2030, not only to make sure that we are in a position to survive on our own if we have to, but also to have the economies of scale to compete. You don’t need to be as big as your competitors globally speaking, but you need to be competitive in each and every trade lane where you operate.
“If you look at our regional coverage, the Intra-Europe trade is very big in certain countries and our presence in this market was limited. But it is very important for our customer base, so when they say, ‘hey, we wouldn’t mind another operator there’, we say we wouldn’t mind being in there either.”
Smulders’ disarming levity disguises the fact that moving into the crowded waters of Europe is a complicated proposition. That has involved ONE in heavy investment, particularly in shipping to serve feeder routes into Scandinavia, the Baltic, and within the Mediterranean. In just one year, the global carrier has more than doubled its fleet size in the region, deploying 17 container ships, up from eight. Along with this expansion, ONE has increased its average vessel size by more than 350 TEU, from 1,450 TEU to 1,809 TEU, further reinforcing its high-capacity commitment to customers.
It has also meant Smulders has been taking a fresh look at commodity trades. “We see links that we have never seen before,” he says, living up to his product development role for the company. “We have set up services from Egypt to the Adriatic [Damietta-Koper-Venice-Damietta], partly to feed cargo formation, but also to cover our fresh cargo flows. Egypt is one of the largest producers of fruits and vegetables, and we export hundreds of containers per week, almost all to Italy. From there, they move further into Europe. That’s a massive and interesting development, and it’s only growing.”
Fast-developing ports
Smulders takes a holistic view of the European market. Where others may see a mature, perhaps stagnant market, he says the demographic of Europe is changing, and that favours a long-term development programme. In a shipping context, Smulders is keenly aware of a vast potential market within easy reach of Europe.
“Europe has maybe not the fastest growing economy in the world,” he says. “Reading the newspapers, every country in Europe has at the moment a topic about immigration.” The foresightful executive identifies Africa and its fast-developing Mediterranean ports as a locus for future trade. “When you have more people, people first start consuming. And then countries need to invest in facilities, housing, education, healthcare and everything that comes with that. It all requires container movements at some stage. Overall volumes are going to grow globally on the basis of population growth.”
It might be a visionary leap from demographic shift to project cargo, but Smulders takes the long view. Moving the means of infrastructure development is behind the astute move to fleet renewal with more versatile ships, capable of carrying a mix of out-of-gauge loads, standard containers, and flat-racks, which transport non-divisible items that can be handled with the minimum of specialist equipment.
“A focus for us is what we call special equipment,” explains Smulders with enthusiasm for expanding the versatility of the fleet in ways that port operators can handle with their existing facilities. “That can be an open top. It can be a flat-rack, but it’s still unitised. Then we realised we can offer solutions for break bulk as well,” he says, rising to his subject and addressing the challenges with enthusiasm. “Ships are in port for a certain period. You don’t want them to be delayed because you load an extra piece of out-of-gauge cargo or break bulk. So it’s a matter of precise planning. It’s a focused area, in that you need skilled people [both on ship and on shore]. A dry container is a dry container, no matter what’s in there, but for special cargoes, you need experienced specialists who know what they’re talking about. At ONE, we have dedicated teams that handle all the queries and precision planning. We have the knowledge within that team to say, ‘for this piece, you need this type of security and method of securing, so many units of flat-rack’. It’s all about the right skill set and planning together with the container terminals.”
Large and versatile fleet
Stepping beyond his European remit, putting what Smulders calls “more interesting” cargo onto the non-dominant legs of Asian-bound ocean-going routes is also a revenue growth area. “Europe has a few countries where a lot of machinery is being produced,” he observes. “If that machinery goes to Asia, shipping it would be better than moving a lot of empty containers.” That capability is a collateral benefit of the strategy for Intra-European operations, with the prospect of ONE being the carrier from door to door.
For Smulders and his European team, taking ownership of the challenge is what it’s all about. “We talk this through with ports and primarily terminal operators long in advance. If we say we need a floating crane, then we speak to the operator. Most modern container terminals have space for this equipment.”
There’s no denying that ONE also benefits from a large and versatile fleet. “We have a very regular schedule,” says Smulders. “If you have a big piece and you have to wait for a multipurpose ship to come along, you could wait weeks. They don’t have the frequency that we have. Coupled with the right knowledge and capabilities, it makes a weekly liner service like ours a much more attractive choice for customers.”
Back in Europe, the versatility of cargo handling is Smulders’ reason for getting up in the morning. From pharma to mechanical shovels, he says ONE has it covered. Developing reefer technology has eaten into the airfreight market, he says, and ONE’s new flat rack design (37 sunken lashing rings for better security and flexibility, for example) highlights its focus on customer requirements.
Complete commitment
Smulders concludes with a message of reliability across the whole manifest. “When it comes to these special cargoes, it requires a level of dedication and we know from our competitors, there are only a few who are dedicated to it, and many will not even consider it because it’s too much hassle. It requires additional, experienced manpower and skills that they may not have. We have made a very clear choice. We want to be in this target market, and we can handle it. This is why we invest in equipment like a specialised flat rack. You don’t do that if you are not 100% committed. We know that if the dry [container] markets go down, every carrier starts looking for cargo, and begins bidding for every single load, despite whether they have the knowledge and experience. We carry this specialised cargo in the good times and the bad times, because it’s a choice we make, and we do that globally.”
*This story first appeared in the July/August print issue of WorldCargo News