According to Prime Minister of the Republic of Lithuania Algirdas Butkevicius, the new passenger and cargo terminal will produce favourable conditions for the successful extension of sea-transportation services and tourism sector. In addition, the establishment of JSC Central Klaipeda Terminal is highly important to the majority of transportation sectors as an additional intermodal carriage pivot occurs, which has a direct connection with IXB corridor and Klaipeda-Vilnius highway. JSC Central Klaipeda Terminal is able to moor up to 3 ships at a time such as ro-ro and passenger ships, ro-pax ferries and cruise ships. It is capable of handling up to 5 million tons of ro-ro cargo a year and taking up to half a million passengers annually.

General Director of Klaipeda State Sea Port Authority Arvydas Vaitkus states that Port of Klaipeda already stands out with impressive ro-ro cargo quantities as Klaipeda is the leading ro-ro cargo port in the region. The opening of JSC Central Klaipeda Terminal will double the capacities and capabilities of handling ro-ro cargo in Klaipeda. Ports of Baltic States have attractive and tourist-friendly prices in general, so the modernisation of customer services for passengers and significant investment to the infrastructure will boost strategical advantages of Klaipeda in comparison with the other Baltic ports

JSC Central Klaipeda Terminal did the installation work and became the operator of the new terminal. General Director of JSC Central Klaipeda Terminal Benediktas Petrauskas states, “We are proud of this terminal; for the creation of it we invoked cutting-edge solutions, therefore we hope that Central Klaipeda Terminal will be convenient travel destination for both, tourists and those, who are working at sea.”

The layout of JSC Central Klaipeda Terminal was made in 2006, and the construction started in 2010. The terminal was financed by Klaipeda State Sea Port Authority, investments by private sector, and EU support. The approximate total value of the project is around 185 mln. litas. Klaipeda State Sea Port Authority has invested 110 mln. litas and 57 mln. litas was invested from EU funds into the infrastructure of new-built passenger and cargo terminal.

According to the Acting CEO of Achema Group Romualdas Zadeika, “Klaipeda Port can be and has to be a gateway to Europe and the world, therefore we decided to cooperate in creating here an attractive and convetient point for contact development – Central Klaipeda Terminal. Its modern infrastructure will ensure that the project’s benefits will be felt not only in Klaipeda, but also nationwide – expanding sea ferry services and cargo transportation between Lithuania and the other Baltic states.”

It is estimated that the total value of the project is about 185 million. LTL. To the establishment of the new passenger and cargo terminal infrastructure Klaipeda State Seaport Authority invested about 110 million LTL, about half of the amount was allocated by the EU – 57 million LTL of Cohesion Fund.

The P3 partners take note of and respect MOFCOM’s decision. Subsequently, the partners have agreed to stop the preparatory work on the P3 Network and the P3 Network as initially planned will not come into existence.

“In Maersk Line we have worked hard to address the Chinese questions and concerns. So of course it is a disappointment. P3 would have provided Maersk Line with a more efficient network and our customers with a better product. We are committed to continuing to be cost competitive and offer reliable services,” says Vincent Clerc, Chief Trade and Marketing Officer, Maersk Line.

Maersk Line has served China with reliable liner shipping for more than 80 years and remains dedicated to cooperate closely with the Chinese authorities and serve our customers.

“The decision does come as a surprise to us, of course, as the partners have worked hard to address all the regulators’ concerns. The P3 alliance would have enabled Maersk Line to make further reductions in cost and CO2 emissions and not least improve its services to its customers with a more efficient vessel network. Nevertheless, I’m quite confident Maersk Line will accomplish those improvements anyway. It has delivered on those improvements over the last five quarters in the absence of P3 and I’m confident it will continue to do so,” says Group CEO Nils S. Andersen.

The lack of implementation of the P3 Network will have no material impact on the Maersk Group’s expected result for 2014.

About P3

On 18 June 2013, Maersk Line, MSC Mediterranean Shipping Company S.A. and CMA CGM announced their intention to establish a long-term operational vessel sharing agreement on the East – West trades, called the P3 Network (P3). The overall aim with P3 was to make container liner shipping more efficient and improve service quality for the shippers due to more frequent and reliable services.

P3 was intended to be an operational, not a commercial, cooperation.

On 24 March 2014, the U.S. Federal Maritime Commission (FMC) decided to allow the P3 Network agreement to become effective in the US, and on 3 June 2014, the European Commission informed the P3 partners that it had decided not to open an antitrust investigation into P3 and had closed its file.

P3 was scheduled to start operations in the autumn of 2014.

In the same context, it was stated that significant cost overruns related to one ship-to-shore crane project sold in 2012 were found. In an analysis conducted thereafter in this specific project, it has become evident, that this project will result in a higher than expected cost overrun for Kalmar in order to deliver the project. 

Cargotec will book approximately EUR 40 million in project cost overruns in Kalmar’s second quarter operating profit, in addition to EUR 9 million booked in the first quarter. This is estimated to cover the costs for finalising project deliveries.

President of Kalmar Olli Isotalo will take over the operative responsibility of the Automation & Projects division responsible for project sales and delivery besides his current responsibilities. Processes and related controls of the division will be further strengthened. Management of the above-mentioned ship-to-shore crane project has been replaced and resourcing strengthened, and tightened internal controls have been introduced in order to secure project delivery according to plan. In addition, cooperation negotiations have been started to reorganise the ship-to-shore crane business.

At the same time, the on-going profitability improvement programme in Kalmar, targeting EUR 40 million run-rate improvement by the end of this year, is proceeding according to plan.

Outlook for 2014 unchanged

Despite cost overruns in Kalmar’s projects, Cargotec’s outlook for 2014 is unchanged. Cargotec’s 2014 sales are expected to grow from 2013. Operating profit excluding restructuring costs for 2014 is expected to improve from 2013.

The four machines, originally manufactured by ZPMC in Shanghai, have been converted from diesel to electric primary drive in the first project of its kind in Western Europe. The work was undertaken by Kalmar, part of the Cargotec group.

Commenting on the initiative, Paul Davey, Head of Corporate Affairs, Hutchison Ports (UK) Ltd, owners of the Port of Felixstowe, said:

“The Port of Felixstowe is fully committed to providing the highest levels of operational performance whilst at the same time reducing the impact of its operations on the environment.  This pilot project to electrify four RTGs will help us achieve both objectives. The greener machines are the latest in a programme of measures which has seen carbon emissions at the port cut by 12% since 2007, keeping us on course to achieving a target reduction of 30% by 2017.”

The electric RTGs are expected to make a significant contribution to further increase carbon savings. It is estimated that each machine will deliver energy savings of at least 45% compared with conventional diesel machines. With a comparable reduction in emissions, the conversion programme will also contribute to improving air quality in and around the port.

The conversion project involved installing electrical infrastructure along the full 217 metre length of two of the port’s RTG container storage blocks.  The RTGs themselves were modified to install an automatic drive-in collector unit to connect to the electric supply as well as fitting new operator controls and a conductor bar system to supply power to the electric motors.

Importantly, the design allows RTGs to move between storage blocks and connect quickly and easily to a new electricity supply. This retains the inherent advantage of RTGs over rail-mounted alternatives, allowing greater flexibility and an improved ability to match equipment to variable patterns of demand.

The converted machines have also been fitted with an auto-steer function when connected to the conductor bar system through which the electricity is supplied. This system reduces the demand on the driver, minimizing fatigue and allowing him to focus on the efficient movement of containers.