Source: Ship and Bunker
January 7th 2015
Rising costs associated with new Emissions Control Area (ECA) rules are expected to hasten the consolidation in Northern European short-sea and feeder markets, JOC reports.
According to the report, the market is bracing for fire sales, bankruptcies of smaller operators, and discontinued services on certain routes.
Consolidation moves are said to be expected with DFDS and Finnlines both reported to be pursuing a takeover of Poland’s Polferries.
DFDS, in particular, has pulled out of deals recently to purchase a Turkish short-sea carrier as well as Baltic operator Scandlines, and is said to be now poised to make early moves.
In addition, Transfennica and DFDS have both recently announced closures to certain of their European routes, citing this year’s tougher ECA rules.
Transfennica last month closed its Bilbao-Portsmouth-Zeebrugge route which started in 2007 after a €6.8 million ($8.2 million) grant from the European Union designed to move road freight onto the sea.
Trucking and rail freight operators are expected to take up the slack from closing sea routes.
Beginning on January 1, 2015, vessels operating within ECA waters must use a marine fuel with a sulfur content no more than 0.10 percent by weight, or use an approved equivalent method of compliance, compared to the previous limit of 1.0 percent.
In practice, it means this year all vessels operating within ECAs will incur additional extra costs.
DFDS recently agreed to maintain a link between Rosyth and Zebrugge only after intervention by Scottish politicians.