4 BULKDISTRIBUTOR Tank Containers
January / February 2022
Another year of headaches ?
The tank container industry is likely to experience another unpredictable year with significant operational challenges . In a webinar hosted by insurance mutual TT Club in November 2020 , William Leigh-Pemberton , strategic development director at Bertschi , and chairman of the ITCO operators division , said the outlook 2022 could be a year of further headaches for everyone in the tank business . The challenges are less likely to be financial as demand for tank container shipments has remained strong throughout the pandemic . But the operational challenges and uncertainty of the past couple of years look to set continue . “ The outlook for 2022 is not a pretty picture ,” Leigh-Pemberton said . “ Space problems on-board ships are likely to persist , and there is definitely a priority being given to carrier-owned containers ( COCs ). Feedback from carriers is they are not particularly interested in proposing long-term offers and capacity to shipper-owned containers , including ISO tanks . So it looks like we will be fighting for limited capacity on-board .” He added that the tank industry generally also faces a shortage of depot capacity , particularly in Asia-Pacific where a lot of cleaning depots have closed , largely due to enhanced environmental regulations and controls . Stricter environmental controls are , of course , positive , he stated , but the rate at which modern , properlyrun depots are replacing ones that have been shuttered is not keeping pace with demand . Trucking companies also face a shortage of drivers , and even when it comes to renewing their vehicle fleets , waiting lists for new trucks can stretch to a year . These challenges have largely arisen from the fact that the tank business has grown significantly over the past decade . The number of tanks in daily use has doubled in the past seven years and at end- 2020 stood at 680,000 . This was driven by a number of factors , he went on . In general there has been a large-scale migration of bulk liquids transported by parcel tankers to liquids in ISO containers of various types . This has allowed shippers to benefit from the inherent flexibility of containers that allows the supply chain to be fragmented into multiple collection points at short notice . However , within that segment the past several years have seen the replacement of , say , 20 IBCs or 100 drums packed into a dry van container by less packaging-intensive techniques , namely tank containers and flexitanks . Figures from Drewry suggest that between 2011 and 2020 , the share of bulk liquids carried in flexitanks trebled , albeit from a very low base , while those carried in tank containers went up by about half . Nevertheless , Leigh-Pemberton predicted that further volume growth in flexitanks could be in doubt due to rising concerns over the consumption and disposal of plastics . “ Cargo owners are increasingly uncomfortable about shipping product in a flexitank , which represents about 40kg of plastic , equivalent to roughly 7,000 shopping bags ,” he said . “ In theory ,
The scramble for ship slots is likely to continue this year
recycling is possible but the efficacy of this is coming into question . A key message from the COP26 conference was that rather looking to recycle plastics , society should move faster towards their nonconsumption in the first place .”
And then came the virus
But against the background of rising demand for tank container shipments , the start of the global pandemic in 2020 made life more complicated . There was a surge in demand as businesses looked to make their supply chains less vulnerable by diversifying from singlesource to multi-source , he went on . Ironically , however , revenues for many tank operators also went down because tanks were being unloaded and discharged of their cargo immediately , rather than being left in storage . “ In pre-pandemic times the normal course of events would be for a tank to arrive at a destination port , say , and then go into storage for a few weeks until the cargo was needed ,” he explained . But , by mid-2021 the tide had changed significantly . Ladenstorage times lengthened as procurement managers caught up with inventory requirements . Many shippers then seemed to abandon just-in-time ( JIT ) processes to procuring as much raw material as
they could lay their hands on and keep it in store . This in turn generated some of the best-ever demurrage figures for tank owners and operators . To complicate matters further , though , there was a hiatus in the migration from bulk tankers caused solely by the shortage of slots on deepsea container vessels . Nevertheless , Leigh-Pemberton believed all the adversities the industry has faced in past 12 months have had some interesting and maybe positive outcomes . “ More generally , what has definitely happened is that suppliers , whether of manufactured goods or logistics services , have seen their status elevated from a dispensable supporter in an over-capacity environment to that of valued partners acknowledged for being indispensable ,” he said . “ Competently executing logistics chains in a safe manner that protects the reputation of all involved has been working in the background for many years . But now this is being recognised as something of value – and something that costs .” As a result , manufacturing customers are now taking a deep dive into their supply chains . Cost down is in retreat as safety and resilience have overtaken price , Leigh-Pemberton said , while there is
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