Eurogate stands firm despite calls to cut prices
Europe ’s largest terminal operator, Eurogate, will resist pressure from container lines to reduce prices for its services
“Every day we conduct negotiations with lines which want us to reduce our prices,” Eurogate managing director Thomas Eckelmann told Lloyd’s List.
Terminal operators are facing pressure from large container lines to reduce their prices as they seek to cut costs to improve their liquidity. German line Hapag-Lloyd recently announced a €500m ($664m) cost-cutting programme and said that it was talking to terminal operators to negotiate lower prices.
“Our policy is to keep prices stable,” Mr Eckelmann said.
Mr Eckelmann said he supported shippers, who claim that the terminal handling charges that carriers demand from their customers have massively increased in recent months. This situation did not reflect the costs the carriers were being charged by terminal operators, he said.
“Container lines are increasing container handling charges and on the other hand want us to reduce prices,” he said. “These charges are actually meant to cover our charges.”
Mr Eckelmann said that shipowners, container lines, banks and shipyards were to be blamed for the massive overcapacity in the market. “We don’t belong to any of these four groups,” he said.
However, Eurogate was helping lines to reduce costs, Mr Eckelmann said. “There are a lot of cost-cutting measures possible in terminal logistics, especially in the handling of empties,” he said.
Mr Eckelmann said that the industry has reached the bottom of the current downturn.
“I think it will last at least 12 to 15 months to overcome the low. From the fourth quarter of 2011, we anticipate growth could start again but not in double-digit percentage rates,” he said.
Eurogate joint managing director Emanuel Schiffer said that the balance of power between container lines and terminal operators had been shifting and that lines had gained more bargaining power in negotiations with operators. “We consider how to save costs and offer shipowners more service,” he said. “We think this is better than reducing prices.”
Eurogate had responded to the crisis and cut its planned investments. “We decide about our investments from week to week,” Mr Schiffer said. “But we will not touch the investments in gantry cranes as they directly help to improve our performance.”
In the first quarter of 2009, container turnover at the group’s facilities in Hamburg and Bremerhaven went down by a combined 17.7% to 1.6m teu. Box handling in Bremerhaven dropped by 22.1% and declined by 9.4% in Hamburg.
Mr Eckelmann said that both ports have been equally hit by declining cargo volumes.
“Every day we conduct negotiations with lines which want us to reduce our prices,” Eurogate managing director Thomas Eckelmann told Lloyd’s List.
Terminal operators are facing pressure from large container lines to reduce their prices as they seek to cut costs to improve their liquidity. German line Hapag-Lloyd recently announced a €500m ($664m) cost-cutting programme and said that it was talking to terminal operators to negotiate lower prices.
“Our policy is to keep prices stable,” Mr Eckelmann said.
Mr Eckelmann said he supported shippers, who claim that the terminal handling charges that carriers demand from their customers have massively increased in recent months. This situation did not reflect the costs the carriers were being charged by terminal operators, he said.
“Container lines are increasing container handling charges and on the other hand want us to reduce prices,” he said. “These charges are actually meant to cover our charges.”
Mr Eckelmann said that shipowners, container lines, banks and shipyards were to be blamed for the massive overcapacity in the market. “We don’t belong to any of these four groups,” he said.
However, Eurogate was helping lines to reduce costs, Mr Eckelmann said. “There are a lot of cost-cutting measures possible in terminal logistics, especially in the handling of empties,” he said.
Mr Eckelmann said that the industry has reached the bottom of the current downturn.
“I think it will last at least 12 to 15 months to overcome the low. From the fourth quarter of 2011, we anticipate growth could start again but not in double-digit percentage rates,” he said.
Eurogate joint managing director Emanuel Schiffer said that the balance of power between container lines and terminal operators had been shifting and that lines had gained more bargaining power in negotiations with operators. “We consider how to save costs and offer shipowners more service,” he said. “We think this is better than reducing prices.”
Eurogate had responded to the crisis and cut its planned investments. “We decide about our investments from week to week,” Mr Schiffer said. “But we will not touch the investments in gantry cranes as they directly help to improve our performance.”
In the first quarter of 2009, container turnover at the group’s facilities in Hamburg and Bremerhaven went down by a combined 17.7% to 1.6m teu. Box handling in Bremerhaven dropped by 22.1% and declined by 9.4% in Hamburg.
Mr Eckelmann said that both ports have been equally hit by declining cargo volumes.