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Contship Italia refutes Danish Med analysis

Eurogate subsidiary Contship Italia has said that its terminals are already responding to the substantial downturn in Mediterranean cargo caused by the Covid-19 crisis, and outlines the measures taken to ride out the Corona-storm, following the Med ports analysis offered by Danish consultancy Sea-Intelligence.

Speaking exclusively to Container News, the President of Contship Italia Cecilia Eckelmann Battistello said that the Italian terminal operator had already implemented mitigating measures that will alleviate some of the pressure applied by the slowdown in trade.

Cecilia Eckelmann Battistello says Contship Italia expects a severe impact on its business.Credit: Contship Italia

“La Spezia port is facing a similar situation as other large international gateway ports in the Med which are offering shippers regular direct links with Asian trades,” explained Battistello.

However, she conceded that, “La Spezia Container Terminal expects a severe impact in the next three months and has already reacted by implementing a number of cost-saving initiatives as well as deferring non-essential investments.”

Contship Italia, a part of the Eurokai ports group based in Hamburg, has taken measures to “achieve business continuity” and is protecting its personnel.

“There is legislative financial support from the Italian Government in the form of ‘Cassa Integrazione’, that allows us to implement social mechanisms to support survival, once the pandemic recedes,” added Battistello.

The company is looking ahead to the lifting of restrictions and is looking to make sure that it is in a position to return to its full operational level as quickly as possible, with government support.

“We hope the Italian government will be able to implement as quickly as possible further actions such as concession fees reduction/payment postponements and the reduction of energy products taxation for the handling process in line with oil pricing trends. Our main target is to be as flexible as possible in our cost structure in order to rapidly adapt to market and client strategies,” said Battistello.

In view of the Container News story from 4 May, European ports brace for cargo losses in Q2, Contship Italia’s commercial department also analysed the information from Sea-Intelligence, which the company says was incomplete. Contship Italia believes the Danish consultants had based their calculations “on standard schedule port rotations published by the carriers and simply assessed that each port on the planned rotations should see 13 vessel calls within the quarter.”

According to Contship, the number of blank sailings announced by its clients for the Asia-Med strings in Q2 is actually 33% based on La Spezia date of arrival in Q2.

Eurogate and its subsidiary Contship Italia already operate a terminal with partners in Tangiers and will open a second later this year. Credit: Contship Italia.

“The methodology used by Seaintel, as is well explained in their report, did not consider any additional inducement calls and only reflects the gap between blank sailings announced and the ideal situation where carriers would have operated all services ‘perfectly’ in relation to the standard proforma,” explained the company.

In addition, the lines are offering alternative routings to shippers, for example via transhipment on other deep-sea or feeder services, calling La Spezia. Therefore, the volume decline is not proportional to the number of blank sailings.

“Furthermore, in the North Tyrrhenian Sea, for example, Genoa is covered by the same services calling La Spezia, operated by all three Global Alliances so we’re expecting the same ‘theoretical’ impact compared to Asia-Med trades.”

Correction: In the story published on 4 May Container News stated that Contship Italia operated two terminals at Tanger. This was incorrect. In fact, Med Port 1 has two terminals. TC1 operated by APM Terminals and TC2 which is operated by a consortium, including Eurogate and the European lines MSC and CMA CGM.

Med Port 2 will also have two container terminals. TC4 will be operated by Maersk, and TC3 by a consortium of Moroccan operator Masra Maroc, Eurogate Group and Hapag Lloyd. It is expected that Med Port 2 will be operational later this year.

Nick Savvides
Managing Editor

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