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Finnlines bets on the trailer revolution

The trailer is a simple piece of kit, but one that can bring sizeable savings for shippers and logistics operators if used intelligently.

At Finnlines we are witnessing what you could call the ‘trailerisation’ of the transport chain: an accelerating phenomenon driven by a desire to circumvent problems encountered by those who over-rely on door-to-door trucking.

Road haulage is in some of our markets struggling under the weight of regulation and sporadic border bottlenecks. Residents in countries such as Estonia are understandably unhappy to see their roadways clogged by heavy vehicles that add little or no value. Heavy-vehicle transit traffic also comes at a cost in terms of urban pollution and car accidents.

Trailerisation

European Union authorities are cracking down on operators that do not comply with rules on maximum driving time, or minimum rest periods. As enforcement of these rules becomes more strict, fly-by-night operators that base their business model on irregular contracts paying just a few euros per hour will find it increasingly difficult to compete.

Trucking unions are fed up with unfair competition, and border authorities are in some cases clamping down on the issuance of licences (such as in Poland, Belarus and Russia).

Increases in the price of gasoline, road tolls, fiscal harmonization (reducing the ability to ‘forum shop’) and even restrictions on fuel tank sizes will inevitably add to operating costs.

Shortsea shipping, for these reasons, is a solution, whether it be for accompanied or unaccompanied loads.

Operators entrusting business to Finnlines benefit from low handling costs and fewer delays. Trailers can either be dropped off at one of our terminals or accompanied on our fleet by a driver who can take advantage of the crossing to rest, as EU law requires.

The operators – our partners – that have ridden this favourable trend by investing in logistics hubs (in Finland, in particular) are gaining market share from their competitors.

Whereas the rise of protectionism on inter-continental trades raises long-term concerns, intra-European traffic remains strong and full of growth potential.

On medium and short routes transportation costs for trailers are often more competitive when compared to the container industry. Terminal tariffs applied on trailers are much leaner and more transparent than container ones, removing the numerous handling, moving, lift-on, lift-off, demurrage freight surcharges usually invoiced on container units. The trailer solution come also with the added advantage of quicker port turnaround times: essential for shippers relying on just-in-time deliveries.

The trailerisation trend, accompanied by an economic upswing in Finnlines’ key markets, has resulted in double-digit volume growth in the first months of this year.

Higher volumes have also happily coincided with our ship lengthening programme. When complete, six vessels will have been lengthened, bringing online another six thousand linear metres of rolling cargo: the equivalent of two sizeable vessels.

Three of these lengthened vessels will connect Europe’s Atlantic coast and Russia, where the economy is benefiting from higher oil prices and therefore increased purchasing power. The St. Petersburg region alone, let us not forget, is home to around 15 million people. Exports from countries like Finland, Benelux, Spain will benefit from these changes.

The Finnlines TransRussiaExpress, first established in the 1990s between Germany and Russia, will also be upgraded by the end of this year. Shippers to and from Russia can use both the Finnlines network and the larger Grimaldi network to plug into markets across the continent and beyond.

Another capacity increase of more than 1,000 lane metres will come online this summer between Sweden and Finland to alleviate pressure for cargo space. Our Finnlines Germany subsidiary, meanwhile, has established a separate logistics office to handle trailer transhipments across different modes.

Meanwhile, another three large green vessels have been ordered from yards and will add up further 17,500 lane metres to Finnlines services.

The container revolution changed trade patterns globally in the 1960s. While modest by comparison, at Finnlines we are betting that a trailer revolution will pay dividends for well-positioned companies, like ours, in the years to come.