Published by Freight Select Journaal,
September 2006.

MSC may have focussed its deep sea services on its dedicated container terminal at Antwerp, but that hasn't stopped the company offering import and export services via Rotterdam and Amsterdam. Graeme Kirk reports

THE head office of the Mediterranean Shipping Company (Nederland) BV may still be near the centre of Rotterdam, but the city's port is no longer the important hub it once was for this shipping giant.

The company's deputy managing director, Bas Blijdorp, admits that the Port of Rotterdam is now only host to two MSC services each week, one - the Silk Service - serves the Far East with a 9,200 TEU vessel, while the other visits ports on the east coast of South America.

"The vast majority of our services operate from Antwerp now," he said. "We have built our own terminal there and we are very proud of it. It handled 2.6 million TEU in 2005 and we hope to reach 3.6 million TEU this year."

The MSC home terminal at Antwerp was recently equipped with 18 all-new Portal Cranes - 15 of which are Post Panamax - and has a quay 2.2km long with a 16.75m draft.

"Last year it handled more than 500 calls," Blijdorp continued, "and its throughput represented 40% of the total number of containers passing through the whole Port of Antwerp.

"It is certainly the focus of our North European operation at the moment, but we would certainly consider diverting services back to Rotterdam if Antwerp was to reach its capacity."

With such an impressive terminal at its disposal, it's easy to understand why MSC should concentrate its efforts on Antwerp, but what is not so obvious is why the company should then continue to offer container services with Rotterdam, and now Amsterdam, as the collection or drop-off point.

"We consider ourselves an innovative company and if we feel there is a demand for a service from Rotterdam or Amsterdam we will offer it," Blijdorp said. "It might be hard to believe, but it actually makes economic sense to operate the ships out of Antwerp and transport the containers to and from Rotterdam or Amsterdam by other means.

"The cost of mooring and unloading one of today's large container vessels is such that it makes sense to limit the number of ports of call and pay more to move the containers further to get them to the ship."

In practice, this means that a customer might book a container onto a voyage from New York to Rotterdam, but the container will actually be landed at Antwerp and then transferred to Rotterdam by rail or barge.

"The days when the customer would actually want to see the vessel with their container on it in the port are in the past," Blijdorp said. "Now all that matters is that the invoice says the voyage was from New York to Rotterdam and that the container is available to collect when it is expected."

This 'virtual' service began with Rotterdam, but was more recently extended to Amsterdam as well, purely because of customer demand.

"We added Amsterdam as a destination in its own right because a lot of cargo out of the Far East was headed there," Blijdorp added, "and because the area is still the European centre for the cocoa trade from West Africa."

Bas Blijdorp stressed that MSC's ability to meet customers' needs was typical of the company's philosophy, attitude and in-built flexibility.

"In the first six months of the current financial year, we have seen container traffic grow by more than 30% year-on-year," he said. "We are going out and winning that new business in the market place, but I feel that some of our competitors are also contributing to our success through their inflexibility."

Being careful not to name names, Blijdorp suggested that some Far Eastern competitors just couldn't compete with MSC and its flat management structure.

"If we are not able to deal with a customer's issue ourselves, we have direct access to the person in MSC's head office in Geneva who can make an immediate decision," Blijdorp said. "In some companies the hierarchy is so rigid that if someone is on holiday, the issue may not be resolved for a fortnight."

At MSC's Rotterdam office, there is a senior management team of five, and a team of line managers below them working on either imports or exports. On the export side, for example, there are 15 Line Managers, one for each of the company's services.

"Each Line Manager is in direct contact with the shippers and forwarders that use their route," Blijdorp said, "and they are also in close contact with MSC head office.

"These Line Managers are central to our business and their knowledge of the clients and our routes contributes greatly to our success. It takes several years within MSC to be considered qualified to be a route manager. These people are dealing with major European manufacturers and they expect to meet with managers of at least equivalent experience when they conduct negotiations.

"We still believe in personal contact with clients and feel that face-to-face time with our customers is central to our business."

This close link between the MSC team and its customers is one of the main reasons that although the majority of its ships operate through the Port of Antwerp, the company's Dutch base will remain in Rotterdam.

"This is where the vast majority of our staff lives, so this is where we'll stay," Blijdorp said, adding that the company is currently refurbishing its office building to provide more room for expansion and to provide better working conditions for its employees.

Inventive nature

MSC (Nederland) may be part a deep sea shipping line, but it has recognised the importance of other modalities in making its business a success.

The current strategy of selling Rotterdam and Amsterdam as destinations for containers would just not work if the company did not embrace both the inland shipping and rail sectors.

"We now have two dedicated barges - MSC Maas and MSC Poolster - on long-term charter travelling between Antwerp and Rotterdam each day and we have access to a third barge when demand requires it," Blijdorp told Freight Select Journaal. "Each barge carries about 150 TEU and one has the ability to push a second barge to double the capacity to 300 TEU.

"We also make good use of the railway network with two or three dedicated trains each and every day carrying up to 81 TEU depending on the total weight. The trains are more expensive than the barges, but they are faster and have an important role to play."

Another example of MSC's willingness to embrace new ways of working is the company's double-dip system, which allows it to maximise the use of space on its vessels.

"The concept is quite straightforward," Blijdorp said. "In fact we are filling vessels by carrying some containers that will be swapped onto other services at strategic terminal hubs.

"A good example is our Rotterdam to South Africa service that will carry boxes bound for West Africa as far as Las Palmas in the Canaries. There they are unloaded and are held for loading onto our West African-bound service. From Las Palmas, we are using at least six feeder vessels of about 1,200 TEUs each to deliver containers in time at several West African ports."

The benefit of the MSC's double-dip system is clear in that it means that most vessels can run at near 100% capacity, but Bas Blijdorp said that it is only in the past decade that the company has been able to turn the concept into reality.

"It is only possible because we have sufficient market share to give us the volumes we need to make the double-dip system work," he said. "Another important factor is the fact that we have the shipping services that we can route via the hubs to drop off and pick up boxes, but the absolute key to the system is the availability of container terminals that are suitable to run the systems. This comes down to having good, efficient staff working there and the terminals having sufficient storage space to hold loaded containers during their stop-off at the hub."

With its new services paying dividends in terms of increased business, MSC is keen to keep ahead of the curve as far as growth is concerned and Blijdorp revealed that the company has increased the container capacity of its fleet by 23.2% annually in each of the past three years.

It's hard to believe that it's only 30 years since MSC first sailed out of Rotterdam by operating one break-bulk vessel every two weeks bound for Mogadishu and Mombassa.