Does speed matter?

In today’s slow-steaming environment, is there still a place for fast freight ferries?

Not long ago, ro-ro operators were talking about the prospect of high-speed ro-ro services offering hauliers a timely and cost-effective alternative to long-distance driving on Europe’s roads. Boulogne was positioning itself to become a freight hub for high-speed ferries when it opened its state-of-the-art ro-ro terminal in September 2009.

The aim was to connect the French port with Drammen, in Norway, Sheerness, Santander and Vigo, and all these ports had signed agreements to adapt their equipment to the needs of high-speed vessel designer BGV. And Chikara Shipping signed a contract worth several hundred million euros for a fleet of BGV high-speed, freight-only vessels, capable of 35 knots when fully loaded with 94 semi-trailers.  

Chikara owner John Paul Airs was accused of being a fraudster on the BBC’s Inside Out programme in April 2008. It revealed how Chikara Shipping had secured loans from investors and presented fake bank bonds worth £100m (US$162m) from Banco do Brasil as collateral.

So, until now, the only fast-ferry service to set sail from Boulogne has been LD Lines’ Incat 112 catamaran Norman Arrow to Dover.

However, less than a month after deploying the vessel on the route last September, LD decided to lay-up the ship until Easter and increase freight capacity on the route by introducing a conventional ferry. The Norman Arrow will be redeployed on the Portsmouth-Le Havre route in April, primarily as a passenger ferry.

The Norman Arrow

Does this mean the fast ferry freight concept is dead in the water? Do operators and manufacturers still see a market for developing fast freight ferries? The answer from LD Lines and manufacturers Incat and BGV appears to be “yes”.

Jean-Louis Romanini, a spokesman for BGV, believes that for short distances there is a market for conventional freighter ferries, but to compete with road on longer distances, faster vessels are needed. “You can have a turnaround time of one day, instead of a conventional ferry’s two, on longer distances of 1,000km, such as northern France to Spain or Scandinavia,” he explains. “Fast ships can offer the same transit time as road.”

BGV’s fast ships are designed to be powered by LNG. “Based on today’s fuel prices, it would be even more economical,” says Romanini.

But operators like LD Lines maintain that in order for the fast freight ferry concept to work, the vessels need to be able to carry passengers and freight. But the BGV design concentrates on freight-only transport. Christophe Santoni, MD of LD Lines, says: “There is no business model where you can make money on competitive routes like the Channel, if you carry only passengers or only freight.

“You need to be more flexible to combine freight and passenger. If they [manufacturers] do that there is a great future for fast-ferries because people love them – they save time, they are easy to drive onto and off and you get a fantastic view around the ship.”

Admittedly rates are more expensive – “you always put a premium on speed", says Santoni, but adds that because high-speed ferries have primarily carried passengers, operators have to have a higher yield as most of the money can only be made in the summer months. “But if tomorrow you could combine freight in the winter months with passenger traffic, the economies would benefit passengers too.”

Romanini argues that Santoni’s argument may be valid on the Channel, but not for longer distances. “It also depends on the freight market you are servicing," he says. “If you look at most foodstuff shippers, which are our potential clients, they still use road transport. Our view is that gradually the maritime industry will have to have ro-ro freighters and passenger ships.”

Despite industry optimism, BGV has yet to receive any orders for vessels. The BGV passed all its tests three years ago, says Romanini, but it takes time to mobilise finance. “At that time, Brittany [Ferries] and P&O were interested in conventional ferries, but not so sure about fast-ferries. Then the bad times began.”

He says: “Maritime transport has faced terrible problems over the past two years. The consequence is that no shipping lines are ready to mobilise capital into new ships.”

He believes this will change when the market picks up, and Robert Clifford, founder and chairman of Australian vessel manufacturer Incat Holdings, also believes there is a potential market. “Ships are getting older,” he says, and adds that new vessels are needed on routes such as the Irish Sea.

Incat has a new fast-ferry on the drawing board, which will offer twice the freight capacity of its latest Incat 112, which can carry up to 30 freight units.

“Size counts,” Clifford says. “The bigger the vessel, the more economical it is. Until now, fast-ferries have not been large enough to carry significant volumes of freight.”

The new vessel will be able to do 28-29 knots, which is 10 knots faster than conventional ships, says Clifford. Conventional ships have slowed down to between 22 and 18 knots, so this has increased the margin with which fast-ferries can slow down and save fuel, he explains. The design also means the new vessel will also be able to turnaround more quickly – in less than half an hour – and this can make up for the fact that it is a little slower.

So why has LD Lines, clearly interested in the fast-ferry concept, not invested in any? There is an important technical issue to solve first, says Santoni. While Incat and Austal, another major manufacturer of high-speed ships, have succeeded in designing bigger vessels, there is an engine issue: the design means there is not much room for them, so they are small.

“We told Incat and Austal we needed bigger craft. This is not the problem,” says Santoni. He has worries over future environmental concerns. Today, high-speed engines are heavy burners, but burn gasoil, not heavy fuel, and comply with the 2015 reduced sulphur regulation.

Indeed Clifford believes more environmental restrictions will further the cause. “We are already using the highest quality fuel, so it is more expensive than operating conventional ships. But in the future, conventional ferries will also need to burn high-quality fuel or invest in new equipment. Fast-ferries don’t burn the same amount of fuel as conventional ships, so, economics will start to favour fast-ferries.”

However Santoni believes that future rules from the EC and IMO mean there will be more constraints. “When you operate a ship for 25 years, you have to take this into consideration.

“Fast-ferries will really take off if and when they combine larger capacity with smaller bunker consumption and better environmental ratios,” he says. “I think there is room for fast-ferries for freight and passengers, subject to a solution of the engine issue.”

The success of the fast-ferry concept is commercially possible, he believes, but he believes it will depend on a cleaner engine, such as an LNG-powered solution, that can combine speed, capacity and environmental complicity.