Wallenius Wilhelmsen Logistics (WWL) is planning to lay up between 15-20% of its 60-strong fleet as the industry experiences a 30-40% decrease in automotive volumes.
"Like our customers, we have to adjust our capacity,” said CEO Arild Iverson. “Since we do not predict any significant up-turn in the market until 2010, we will start to put vessels in cold lay-up. We are keeping a very close eye on market developments and will be adjusting our capacity in response to this. With our current planning, we expect to have 15-20% of our capacity in lay-up during the year."
Two of the company’s vessels – the Toba and Tapliola – are currently resting at Lyngdal, southern Norway. Further lay-ups will be divided between here and a location in Malaysia. The company says laying up the least efficient vessels and fully utilising the remaining fleet will “significantly reduce the operating costs”.
The company is also pursuing more opportunities in its non-containerised cargo offering – such as high-and-heavy goods and project cargo, including energy components – which makes up 50% of its business.
Fellow Norwegian carrier Höegh Autoliners is also responding to the drop in trade by idling vessels. Olav Sollie, Senior Vice President for Communications, told Automotive Logistics that the company has responded to the reduction of volumes in the first quarter with fleet dispositions. “We have re-delivered chartered vessels, and presently seven vessels are idle, with a few in waiting positions,” he said, adding that one vessel, the Höegh Trinity, is heading for recycling.
Despite these moves this year will see the surfeit of car carriers grow across companies: 95 new vessels with a capacity of 500,000 vehicles are scheduled for delivery in 2009, followed by 90 ships of 470,000 capacity in 2010.
Meanwhile this surplus of vessels in a market hit by low vehicle sales is translating into more of a scarcity as far as ports are concerned. Sources at the Port of Bremerhaven, which handled more than 2m cars last year, told Automotive Logistics that volume had dropped by 50% in January and February this year, while March looked to be down nearly 60%. The port has been hurt especially by the drop in demand for German exports from the likes of Mercedes and BMW, some of the ports biggest customers.
The situation is similar in the US, where last year the Port of Los Angeles handled 10,000 vehicles a month, but this has dropped to around 3,000-4,000 per month for 2009, according to Port of LA spokeswoman Lori Kelman. However, according to a Lloyd’s List report, no carriers have called there for a month.
WWL America is a tenant operator handling Nissan and Infiniti vehicles.
The nearby Port of Long Beach has similarly reported to have had no calls, with a reported drop of 31,534 vehicles in 2008 compared with the previous year.