While the major container lines are increasingly trying to become integrated logistics operators rather than simply ocean carriers, many remain content to outsource the rail freight component of their networks. Some focus on terminal development and others on acquisitions, but all seem to be keen on growing, particularly in the intermodal segment.
For Hapag-Lloyd, for example, complementing its ocean network with a strong intermodal one is a key part of its ‘pure play plus’ strategy, explained Carlos Velez, senior director global inland center. This is a core component of its current strategic plan, which includes increasing its involvement in inland transportation so that more than 30% of its business has an inland component.
However, Velez confirmed that investing in rail infrastructure is not a priority for Hapag-Lloyd. “Our focus is on liner shipping and terminal investments,” he said. “Rail remains an important part of our inland offering but we access rail capacity primarily through partners and service providers.”
‘Partnerships rather than investments’
In this context, it is hardly surprising that building its own network is not on the table in the short- to medium-term. “While rail continues to be a strong and growing part of our intermodal offering, we are focusing on strong partnerships with rail operators rather than direct investments,” Velez added. “Our investments remain focused on liner shipping and terminals.”
As for the rationale behind the acquisition of a 25% stake in APM Terminals Maasvlakte II and the addition of four extra rail tracks at the terminal, he described it as a move to secure long-term terminal capacity and further improve the efficiency and reliability of its network. “Maasvlakte II is a key European hub for the Gemini Cooperation (Hapag-Lloyd’s partnership with Maersk) and an important part of our strategy to strengthen our terminal portfolio in core markets,” Velez highlighted.
The four additional rail tracks form part of a much broader expansion of the terminal, which also includes another 1,000 metres of deep sea berth, additional yard capacity and further automated equipment. “The additional rail capacity will support the terminal’s ability to handle growing cargo flows efficiently and strengthen its role as a resilient gateway for Rotterdam and the wider European hinterland,” concluded Velez.
CMA CGM
Strategic investments in rail capacity by shipping lines over the last 12 months include CMA CGM’s acquisition of Freightliner UK Intermodal Logistics and the introduction by Ocean Network Express (ONE) of a dedicated reefer rail service from ICD Thimmapur to Nhava Sheva. CMA CGM Group chairman and CEO, Rodolphe Saadé, said the Freightliner acquisition would enable the company to connect sea, rail and road more efficiently.
While it is too early to assess the commercial benefits of gaining direct control over a large part of the inland movement of its containers (and the company declined to comment when contacted by RailFreight.com), CMA CGM should gain from better control of end-to-end transit times between ports and inland destinations and potential cost savings by optimising the modal mix.
ONE’s rail service linking the inland container depot located south of Hyderabad to Jawaharlal Nehru Port Authority allows exporters to synchronise inland movement with ONE’s ocean services. The announcement of carrier haulage rates for 40-foot reefers ex-Thimmapur via Nhava Sheva suggests that this isn’t merely an infrastructure partnership.
The company refers to the service as a ‘single transaction’ multimodal service, effectively bringing the inland leg into the shipping line’s proposition, while its partner DP World says it allows the full volume to reach the port together and be synchronised with vessel schedules. ONE declined our request for comment on its commercial impact.
Maersk and MSC
Over the last decade, MSC has effectively built a private European rail network around its maritime network that operates more than 40,000 rail services per year, covering over nine million kilometres. However, other providers have taken a more circumspect approach to rail investment.
When asked whether it viewed rail transport as a core component in the drive to become an integrated logistics operator, a Maersk spokesperson merely stated that it depends on the country “but when rail is available, it plays a central role in our landside transport offering as we are an end-to-end logistics solution provider.”
The spokesperson declined to comment on how Maersk assesses potential investments in rail infrastructure. On the question of where it stands on the merits of building and owning rail infrastructure rather than buying capacity from third parties, he observed that “we rely on our comprehensive vendor network for rail in Europe and it is the same for trucking, where we own very few EV trucks in Europe as owned assets.”