drewry.co.uk
A ‘best-route’ market study for
containerised imports to South
Germany
MARKET STUDY | 1 March 2016
Drewry Supply Chain Advisors | Market Study March 2016
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© Drewry Shipping Consultants Ltd 2016
Table of Contents
About Drewry Supply Chain Advisors 3
Introducing Best Routes – South Germany 4
Marine connectivity for imports from Shanghai to South Germany 5
Intermodal Connectivity 7
Routing options based on fastest maritime and average inland transit times 8
Tracking relative ocean freight rates by port range 13
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About Drewry Supply Chain Advisors
We are the market leader in ocean freight market intelligence and cost
benchmarking, providing an elite client base of retailers and manufacturers
with tailored solutions that combine data, tools and advisory services to
improve transport procurement and reduce cost.
Our professionals focus on advising users of international multi-modal transport
services, taking our extensive understanding of the industry and applying it to
all stages of your supply chain. Through our market understanding, industry
knowledge and operational experience, we can help ocean freight
procurement teams reduce costs and more effectively manage their network of
international transport network and supply chain service providers.
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A best-route market study for
containerised imports to South Germany
MARKET STUDY | 1 March 2016
Introducing Best Routes – South Germany Exporters and importers (shippers) in South Germany can now use new port and routing options that take
advantage of increased competition between ports, maritime carriers and rail operators.
For shippers, a Best Route is the route that has the best mix of cost, transit time and resilience. Best Routes are
not static; they can change due to fluctuations in relative freight rates or more fundamental changes in the wider
transport context. For South Germany, both are happening now.
For the purpose of this paper, we have equated South Germany to two Bundesländer – Baden-Württemberg and
Bavaria – that are geographically at the heart of Europe. These Bundesländer have a combined population of
23.5 million and contain several logistics clusters with activities in the automotive (Daimler, Audi, Porsche, BMW),
mechanical and electrical engineering (Bosch, Siemens), and chemical industries, among others. The logistics
clusters are shown in Table 1 and Chart 1.
Table 1: Logistics clusters in South Germany
Cluster Population Industries
1. Munich 2,200,000 Manufacturing (automotive and engineering)
2. Freiburg / Lörrach 1,000,000 Stockholding for Germany, France and Switzerland
3. Stuttgart / Heilbronn 4,700,000 Manufacturing (automotive and engineering)
4. Ulm 500,000 Automotive, chemical and pharmaceutical
5. Nuremberg 3,500,000 Manufacturing (engineering)
Source: Germany Trade and Invest, 2010
Figure 1: Logistics clusters in South Germany
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Munich, the most populous city (population of 1.4 million), is between 500 km and 850 km from any deep-sea
port:
Hamburg: 790 km
Antwerp: 790 km
Rotterdam: 840 km
Genoa: 650 km
Trieste: 510 km
Koper: 510 km
This “landlocked” location is a curse as well as a blessing. On the one hand, inland transportation costs are high
and shippers are dependent on transport operators for a key element of their product delivery namely timely
dispatch or delivery. On the other hand, because of its central location, South German shippers can choose their
Best Route from the numerous alternatives should an operator fail to deliver on promises.
Marine connectivity for imports from Shanghai to
South Germany South German shippers can consider the following ports for their imports and exports.
Northern Gate: Antwerp, Rotterdam, Hamburg
Southern Gate: Genoa, Venice, Trieste, Koper, Rijeka, La Spezia, Ravenna
The relevant maritime trade routes are the Asia-North Europe and Asia-Mediterranean trade routes.
On the Asia-North Europe trade, 100% of the capacity is deployed by only four mega alliances (2M, O3,
G6 and CKYHE), providing 16 weekly departures with a total floating capacity of 2.5 million teu; 2M is
the biggest player with 37% of the total capacity followed by CKYHE and O3 (23% each), and G6
(17%). The average ship size on this trade is 14,509 teu.
The Asia-Mediterranean trade is also dominated by the four mega alliances that cover 93% of the total
trade, providing 15 weekly departures with a total floating capacity of 1.4 million teu. In this trade also,
2M is the biggest player, laying on 35% of the total floating capacity, followed by Ocean Three (32%),
CKYHE (19%) and G6 (7%). The average ship size is 8,131 teu. The MED Ports that are relevant for
South Germany are covered by nine services
Based on the deployed vessel size and continuing upscaling on both trade routes, we exclude Venice and
Ravenna from the scope.
Table 2: Port sizing and marine connectivity
Port Throughput (2015)
Max ship size Frequency (weekly connections)
Rotterdam 12,234,535 Unrestricted at Maasvlakte 2 (APMT, Euromax, RGW) and APMT Maasvlakte 1
15
Hamburg 8,825,000 Unrestricted at Altenwerder, Burchardkai and Eurogate 13
Antwerp 9,649,948 Unrestricted at Deurgangckdok; 20,000 teu at Q736; 18,000 teu at Q913 6
Genoa 2,242,902 13,000 teu at Voltri Terminal Europa 5
La Spezia 1,300,442 13,000 teu 4
Koper 790,734 13,000 teu 3
Trieste 506,007 Unrestricted at Trieste Marine Terminal 3
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Rotterdam has the best maritime connectivity in the Northern Gate with 15 of the 16 services calling at
the port. The service coverage is also homogeneous, illustrating the commitment of each alliance to
offer their best possible service to Rotterdam by making it an anchor port of their string:
All four alliances have at least one service offering Shanghai-Rotterdam with a transit time of 29
days.
Eight of the 15 services, two for each alliance, have Rotterdam as a first port of call (within the
relevant port set).
Hamburg receives calls from 13 of the 16 services in the Northern Gate. Seven of those have Hamburg
as a first port of call: three for CKYHE, two for 2M and one each for O3 and G6. CKYHE’s commitment to
Hamburg is illustrated by its NE8 service, which offers the best transit time of 29 days, and its NE6
service which, together with 2M’s AE2/Swan service, offers 30 days.
Antwerp has to settle with only six Asia-Europe service calls, or less than half the services calling at
Hamburg. These six services generate eight calls because two services from 2M make a double call to
benefit from the export volumes generated in the Antwerp hinterland. Volumes at Antwerp are boosted
by MSC’s European Hub strategy which links a network of dedicated block trains with its AE2/Swan
service that offers a market leading transit time of 25 days from Shanghai.
Genoa is called by five of the nine Southern Gate services, giving it the best maritime connectivity of all
the Southern Gate ports in this study, but far fewer than Rotterdam and Hamburg in the Northern Gate.
Genoa receives two services from CKYHE and one each from the other three alliances. The best transit
time of 27 days is offered by CKYHE, followed closely by 2M’s AE20/Dragon offering 28 days. The
average transit time is 29 days compared to 33 for the Northern Gate.
La Spezia is called by four of the nine services, with 2M offering two direct calls, and O3 and CKYHE
offering one each. There is no coverage from G6. Each alliance offers a transit time of 27 days to La
Spezia, but the second 2M service offers 30 days.
From the North Adriatic ports, Koper provides the best maritime connectivity with three direct calls, one
each from 2M, O3 and CKYHE. O3’s PHEX/AMC4/AMX8 service makes a double call to load (re-)export
volumes. 2M’s AE12/TP2/Phoenix/Jaguar service offers a 25-day transit time, making it a true competitor
to Genoa as well as the Northern Gate. The same services call at Trieste, but since Trieste is the next
call, the transit times are two to three days longer.
Figure 2: Comparative transit times
Source: Drewry Supply Chain Advisors
24
26
28
30
32
34
36
RTM HAM ANR GEN SPE KOP TRI
Fastest maritime transit time
Average maritime transit time
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Intermodal Connectivity Table 3: Intermodal connectivity
From To Munich Freiburg / Lörrach Stuttgart / Heilbronn Ulm Nuremberg
TT Freq. TT Freq. TT Freq. TT Freq. TT Freq.
Rotterdam A-C 5 A-C 4 A-B 3 A-C 5
Hamburg A-B 7 A-B 5 A-B 5 A-C 7 A-B 5
Antwerp A-C 3 A-E 3 A-C 3 A-D 5
Genoa A-E 3
Koper A-C 5
La Spezia A-E 3
Trieste A-C 5 A-B 1
Source: Drewry Supply Chain Advisors
Legend:
TT: Transit Time (in days)
Freq: Frequency (per week)
Rotterdam’s large container throughput facilitates the setting up of block trains. From Rotterdam, direct
connections are available to all the hinterland hubs except Ulm. For the other four logistics clusters,
several rail operators offer competitive transit times and frequencies of a minimum of three departures
per week.
Hamburg is traditionally the strongest port for the South German hinterland. With DB Netze (the German
rail infrastructure operator) pricing North-South connections (such as Hamburg to South Germany)
cheaper than East-West connections for equal distances, Hamburg is likely to retain an important role in
the foreseeable future. Several rail operators currently connect Hamburg to all five hubs with the highest
frequency and often the fastest inland transit time.
The hinterland strategy of Antwerp is not primarily focussed at South Germany and consequently the
strong propositions that exist elsewhere can’t be assumed. Direct rail connections are only available for
Munich and Weil-am-Rhein; the other logistics hubs can use Rotterdam’s rail connections and add a
shunt by barge between Rotterdam and Antwerp. This adds a day of transit time and between euro 100
and 200 cost per container.
Intermodal operators in the ports of Genoa and La Spezia are developing propositions that is expanding
the port hinterland northwards. For now, they are aiming primarily at Switzerland and the corridor to
North-Western European ports. In South Germany, Munich has the best connectivity. Rail connections
with other clusters are theoretically possible but, at least for now, not at competitive rates or transit times.
Koper is positioning itself as the lead port in the North Adriatic. It has a strong position in the hinterland
traffic of Hungary and Austria but for South Germany it is only indirectly connected to Munich (via
Ljubljana or Budapest) with an A-C transit time. But with five departures per week from Koper to the
relay point and three onward connections to Munich, this is a viable option, especially for shippers who
have time-sensitive cargoes and who can secure space on the 25-day transit deep-sea service from
2M.
Trieste has traditionally been a key port for Central European imports (to Hungary, Slovakia, Austria and
Czech Republic), but Koper has overtaken it in terms of teu throughput. Rail connections to South
Germany are limited but for Munich there are several operators offering up to five weekly departures
with an A-B transit time making the average transit by rail one day shorter than via Koper. By contrast for
Ulm there is only 1 train per week.
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Routing options based on fastest maritime and
average inland transit times
Munich
Munich is the best connected logistics cluster, having rail connections with all the relevant ports. The all-
in cost via Rotterdam is the lowest at $1,874 per 40ft high-cube container. The route via Hamburg is $70
more expensive but is one day faster with a total transit time of 32 days. Hamburg also offers more
frequent rail departures, more operators and an A-B transit time, all of which improve the resilience.
With total transit time of 30 days, Antwerp is the fastest connection for the Northern Gate, but the price is
$150 more than via Rotterdam.
The fastest routing overall is to be found on the Southern Gate: Shanghai-Munich via Koper is available
in 29 days and at a price of $2,036 per 40ft high-cube container. Compared to Hamburg, this is three
days faster at an extra cost of about $100. Shanghai-Munich via Koper is a true contender for Best
Route for shippers with time-sensitive cargoes.
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
RTM HAM ANR GEN SPE KOP TRI
Cost from Shanghai to Munich ramp ($)
Rail
Sea
0
5
10
15
20
25
30
35
RTM HAM ANR GEN SPE KOP TRI
Transit time from Shanghai CY to Munich ramp (days)
Rail
Sea
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Freiburg / Lörrach
For the Freiburg / Lörrach logistics cluster, only the Northern Gate ports offer competitive connections.
Rail connections from the Southern Gate to Basel exist, but due to the cross border haulage they are
outside the scope of this white paper.
Hamburg is the cheapest routing at $2,082 per 40ft high-cube container, but the cost via Rotterdam is
only $16 higher. The cost via Antwerp at $2,248 is nearly $150 more than via Hamburg.
Thanks to the fast maritime transit on 2M, Antwerp is able to compete with Hamburg on the overall
transit time; however, the rail connection via Antwerp is three times per week on an A-E transit time while
operators in Hamburg are able to offer five departures per week with an A-B transit time. So for an equal
transit time and cheaper price, Hamburg offers much higher resilience than Antwerp.
The routing via Rotterdam scores between Hamburg and Antwerp: with four weekly connections and A-
C transit times, resilience of this route is better than via Antwerp, and an overall transit time of 33 days
puts Rotterdam firmly in the second place to serve this area.
$-
$500
$1,000
$1,500
$2,000
$2,500
RTM HAM ANR GEN SPE KOP TRI
Cost from Shanghai to Freiburg / Lörrach ramp ($)
Rail
Sea
0
5
10
15
20
25
30
35
RTM HAM ANR GEN SPE KOP TRI
Transit time from Shanghai CY to Freiburg / Lörrach ramp (days)
Rail
Sea
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Stuttgart / Heilbronn
Also for the Stuttgart / Heilbronn region, the Northern Gate is the only competitive option. Rotterdam is
the cheapest routing at $1,924 per 40ft high-cube container and a transit time of 32 days, which is on
par with Hamburg, from where the rate is about $20 more. But on the route via Hamburg there are more
operators offering more frequent departures especially to Kornwestheim. Despite having to barge to
Rotterdam, the route via Antwerp is the fastest with an overall transit time of 30 days. However, at a cost
of $2,071 per 40ft high-cube container, Antwerp is $148 more expensive than Rotterdam and $126
more than Hamburg.
In terms of resilience, Hamburg is again in the lead with operators offering five weekly departures with
an A-B transit time. Rotterdam follows next with three weekly departures of A-B transit. While cargo from
Antwerp connects onto the same trains, it needs one extra day for the barge shunt.
$-
$500
$1,000
$1,500
$2,000
$2,500
RTM HAM ANR GEN SPE KOP TRI
Cost from Shanghai to Stuttgart / Heilbronn ramp ($)
Rail
Sea
0
5
10
15
20
25
30
35
RTM HAM ANR GEN SPE KOP TRI
Transit time from Shanghai CY to Stuttgart/Heilbronn ramp (days)
Rail
Sea
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Ulm
Ulm is only served via Hamburg and Trieste.
Via Hamburg, the rate is $1,944 per 40ft high-cube container, which is $176 less than via Trieste. Also
the average transit time via Hamburg of 33 days is one day faster but this is based on Trieste only
having one train per week to Ulm. Since that train connection is fast, if the ship connects well with the
train, theoretically a transit of 31 days is possible. Still few shippers will be inclined to pay $176 extra for
the shorter transit time bearing in mind that if they miss the train they will have to wait until next week's
train or pay for a full truck move.
$-
$500
$1,000
$1,500
$2,000
$2,500
RTM HAM ANR GEN SPE KOP TRI
Cost from Shanghai to Ulm ramp ($)
Rail
Sea
0
5
10
15
20
25
30
35
40
RTM HAM ANR GEN SPE KOP TRI
Transit time from Shanghai CY to Ulm ramp (days)
Rail
Sea
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Nuremberg
The Nuremberg logistics cluster is only connected by rail with the Northern Gate ports of Hamburg and
Rotterdam. Cargo via Antwerp will use the barge service to Rotterdam to connect with the rail there.
The routing via Rotterdam is the cheapest, at $1,891 per 40ft high-cube container, while the routing via
Hamburg costs $89 more and via Antwerp $141 more.
The superfast transit on 2M gives Antwerp a transit time advantage of one day over Hamburg and two
days over Rotterdam; however, this comes at the expense of lower resilience: while Hamburg offers five
connections per week with A-B transit time, Rotterdam offers the same frequency with A-C transit time,
and from Antwerp the barge shunt makes it an A-D connection.
$-
$500
$1,000
$1,500
$2,000
$2,500
RTM HAM ANR GEN SPE KOP TRI
Cost from Shanghai to Nuremberg ramp ($)
Rail
Sea
0
5
10
15
20
25
30
35
RTM HAM ANR GEN SPE KOP TRI
Transit time from Shanghai CY to Nuremberg ramp (days)
Rail
Sea
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Tracking relative ocean freight rates by port range Spot rates volatility reached new heights in 2015. Monthly indices for the Asia-North Europe trade, as tracked in
our Container Freight Rate Insight (CFRI), had a standard deviation of $545 per 40ft. So if you were trying to
predict the next month’s rates based on the one from the current month, you had a 30% chance that the rates
went up or down by more than $545. With such stormy rate developments, some may have missed noticing the
crumbling of a few long-held truths. One of them being that the cheapest route for Asian imports into Europe is
via Northern European ports, when comparing port-to-port rates. What we have seen is that the cheapest route
for Asian imports into Europe has shifted in favour of the Mediterranean ports.
Indices for Asia-North Europe and Asia-Med
Figure 3: Weekly spot rates on Shanghai-Rotterdam
and Shanghai-Genoa
Figure 4: Weekly spot rates on Shanghai-Rotterdam
and Shanghai-Genoa
Source: Drewry’s Container World Index
Figure 3 shows a two-year time series of weekly spot rates on Shanghai-Rotterdam and Shanghai-
Genoa as tracked in our weekly World Container Index (WCI). Rates on both trades are highly
correlated, but rates via Rotterdam (Northern Gate) have historically been lower than those in Southern
Gate, despite the longer sailing distance because of higher volumes and scale economies.
Figure 4 zooms in on the last quarter of 2015 where the Southern Gate was the cheaper option in 10 of
the 14 weeks.
Therefore, clearly the Southern Gate is closing the gap it has historically had with the Northern Gate in
terms of sea freight.
Well-informed shippers closely tracked the spot rate market and selected the cheapest routing every
week, saving 11% of their ocean-spend
Also on the land side, several South European intermodal operators are developing exciting and
competitive concepts. These efforts will be boosted when the Gotthard Base Tunnel (GBT) opens in
June. The GBT will be the world's longest traffic tunnel and will allow rail operators to improve their
efficiency by increasing the length of the trains and reducing the travel time when crossing the Alps.
Once this translates into cheaper rail rates, the area where the Southern Gate can compete will expand
further North.
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Shanghai-Rotterdam Shanghai - Genoa
0
500
1000
1500
2000
Oct-15 Nov-15 Dec-15
US
$ p
er
40
ft C
on
tain
er
Shanghai - Genoa Shanghai-Rotterdam
drewry.co.uk
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