Hamburg Sud Latin America box services to move from Tilbury to London Gateway

The bitter box port war in the south of the UK has escalated with the news that Hamburg Sud is to transfer its three South American container services from the port of Tilbury’s London Container Terminal (LCT) to DP World London Gateway in May.

The news follows Gateway’s capture of the Southern Africa Express Container Service consortium from LCT last October.

In an announcement late on Friday night, Hamburg Sud said the services to move would be: the SAEC-1 (South America east coast), which it operates with Hapag-Lloyd under its River Plate Express Service; the SAWC-1 (South America west coast, Caribbean, Australia and New Zealand), operated in co-operation with Hapag-Lloyd under its SW1 Chile-Peru Express banner; and the EPIC (North America west coast, India, Pakistan and Middle East), also operated with the German carrier under its IOS Indian Ocean Service.

This represents a loss of three weekly sailings at LCT, prompting a spokesperson at owner Forth Ports to tell The Loadstar: “Clearly we are very disappointed. We worked hard to retain these services at London Container Terminal, but we understand their [the lines] decision was driven by their need to utilise larger vessels.

“Both Tilbury and LCT have a number of strengths, in particular in the shortsea European and African markets, as well as feeder and niche markets. We will focus our efforts on a number of opportunities.”

The largest vessels currently operated by Hamburg Sud at Tilbury are the state-of-the-art 7,100teu Santa Clara-class ships, which include (market-leading) 1,600 reefer plugs and are employed on the SAEC-1 service.

The two remaining services deploy smaller panamax ships of around 4,200teu.

Hapag-Lloyd said in a customer advisory that the transfer was “in the interest of future growth and development”.

It is assumed that Hamburg Sud and Hapag Lloyd are looking to upgrade the smaller vessels, which would have put operational pressure on the deepwater river berth at LCT.

The transfer of the services will follow shortly after the opening of the second berth at London Gateway, scheduled for April, part of the facility’s £1.5bn, 3.5 million teu capacity development.

Meanwhile, LCT’s policy of pitching for short- and mid-sea business is proving to be a success – at the end of last year it won a contract to handle the UK calls for Iberian specialist OPDR and the Germany-headquartered carrier has now completed the transfer of its services from Felixstowe.

It did handle some weather-related ad-hoc calls over the Christmas holiday period, when high winds shut down Felixstowe, although hauliers and agents also told The Loadstar that London Gateway faced some major landside issues relating to the diverted cargo, with anecdotal reports of lengthy delays and systems failures.

London Gateway’s ultimate business plan is to attract the blue chip east-west Asia-Europe services, which are currently shared between Felixstowe and Southampton.

Felixstowe remains the biggest UK port, processing around 3.7 million teu a year, followed by Southampton, with an annual throughput of approximately 1.5 million, while Tilbury expects to have handled 900,000 teu in 2013.

 As we all predicted, the race to the bottom has started. As ports fight for work, pay and conditions will be slashed to subsidise box rates.

London Gateway has now successfully poached three of Tilbury's customers in the last year. In August last year, DP World announced it had reached an agreement with Southern Africa Express Container Service.

DP World Driving down Dockers pay and conditions across the globe.Poor old Tilbury Dockers will soon be lining up outside the gates of London Gateway vying for a shift or two…