Japan, Mexico and RORO Evolution

A new generation of RORO vessels will enter service next year. These post Panamax pure car and truck carriers (PCTC) will be capable of carrying over 7,000 cars, and vessels capable of carrying 10-12,000 are being talked about.

K Line and NYK have both ordered more than five such vessels each, and Höegh Autoliners has ordered six due for delivery in 2015 and 2016. Höegh’s New Horizon design will be the world’s largest PCTC with a carrying capacity of 8,500 car equivalent units (CEU).

For NYK, their new vessels will bring efficiency, the ability to handle a wider variety of cargoes and considerable environmental benefits. One example is the 7,000 CEU Aries Leader built by Shin Kurushima Dockyard and Japan’s first post Panamax car carrier. It was delivered in May this year and features energy saving technology firsts for this vessel type including an air lubrication system and a hybrid turbocharger.

ROROs are a varied class of ship defined by the option to transfer cargo horizontally on to the ship. The deepsea RORO market of the 1960s, 70s and 80s included a range of vessel types that had varying capacity for vehicles, project cargoes and containers. As the dedicated container ship grew in popularity, deep sea ROROs have focused more on rolling cargoes. 

The majority of the PCTS that have been built in the last 20 years feature up to four heavy RORO decks with car decks above. “These vessels have not grown in size like container vessels because the major Japanese car exporting ports limit length of vessels to 200 metres,” says Theodor Strauss, guest lecturer for the STC Group Master Course in Rotterdam and South Korea and past managing director of K Line (Nederland). “So they are getting wider rather than longer. This could be an advantage, as they will need less water ballast, thus reducing invasive species risks.”

The top three operators of PCC and PCTC by fleet number are WWL with 126 ships, MOL with 124 ships and NYK with 121 ships. There are around 50 vessels on order with 23 of those to be delivered this year.

Outside the top players, there are other carriers are pushing forward in the market. Last year, the South Korean company Hyundai Glovis claimed the world’s first car carrier with a capacity of 7,300 cars with the delivery of Glovis Spirit.

Once it was rare to see PCTCs outside the Japan to U.S. and Europe trades, but now they are tracking newly emerging car export nations such as Brazil, Mexico, South Africa, Thailand, Morocco and others. Many car manufacturers have been aggressive in building and enlarging plants in Mexico, and it is estimated that automobile production will increase there by over 10 percent per year for the next few years. Around three million vehicles were produced in Mexico in 2013, and about 80 percent of those were exported.

With the expansion of production and consumer locations globally, the RORO market has become more segmented, but many analysts see the large, new generation ROROs as the future nonetheless. Rather than leading to an increase in smaller vessels, it is likely the market will adapt deployment of these larger vessels across a number of trades. 

The countries that are growing in importance in to the car production scene are also increasingly exporting a variety of cargoes including project cargoes, trucks and construction and agricultural machinery. In response, the post Panamax vessels ordered by K Line and NYK have greater capacity for high and heavy cargo. More liftable decks will mean more storage capacity where height can be adjusted to suit the growing variety of rolling cargoes these vessels will carry in the future.

Apart from the world of car carriers though, there are ROROs specifically operated with these larger rolling cargoes in mind, says Strauss. These companies include ACL, Nordana and Messina. They have ROROs but cater for quite a few different cargoes that are either wheeled by themselves or put on wheels through the use of mafi-trailers. This includes trains, helicopters, boxes, heavy lift pieces, tractors and bulldozers, says Strauss.

“These deepsea ROROs have ramps which are much larger in capacity than the PCCs since they wish to load heavy cargoes. They seldom if ever have the side ramps that the PCCs do,” he says.

Like the PCTS, these deep sea ROROs are a specialization that emerged in the 1960s as an important offshoot of general cargo vessels. In this segment, the top players by fleet number are Grimaldi/ACL with 36 ships, NYK Bulk and Projects with 20 ships and WWL with 11 ships.

For Strauss, one of the smaller companies of interest is Farrell Lines. Farrell is a U.S. flag RORO company that provides international end-to-end transport services to the U.S. government as well as commercial customers. The company has seen periods of growth and decline since the 1960s and currently operates four ships in partnership with Höegh Autoliners and its U.S. affiliate Alliance Navigation. Their efforts currently focus on transits between the U.S. East Coast and the Gulf of Mexico to the Middle East and Southwest Asia. 

Farrell Lines has been able to sustain its tradition of leadership by participating in the Maritime Security Program (MSP) and the Voluntary Intermodal Sealift Agreement (VISA), both important programs designed to support the Department of Defense in its sustainment of U.S. military forces in the event of emergency deployment. The company’s ships have militarily useful space of over 115,000 and 140,000 square feet, although they have capacity of over 170,000 and 200,000 square feet that can accommodate most military vehicles.

Unlike the PCTCs, the conventional deepsea RORO vessel fleet has shrunk by 86 units since 2009, a compound average growth rate of minus 5.7 percent. Companies that have reduced their involvement in the market include Delmas, NileDutch, Seaboard Marine and Tropical Shipping.

However, new ships continue being built, and they feature multi-purpose RORO and container/RORO designs. They are generally larger than earlier generation vessels, and some include onboard cranes. Some of the companies making the investment include Bahri, Grimaldi, Messina and Nordana.