Shipping adjusts to industry globalization

There is more to shipping than moving vehicles or containers – the service has to be flexible and integrated into the systems of the manufacturer.

One of leading shippers in the field is Höegh Autoliners, which is one of General Motors top 82 global suppliers – for the eighth time. Founded over 80 years ago in 1927 by Leif Høegh, Höegh Autoliners is today one of the world’s leading operators in the Ro/Ro and vehicle transportation segment and holds contracts with many of the world’s largest vehicle manufacturers. 

The company operates around 50 pure car and truck carriers (PCTCs) across the globe for its customers, which include most of the big names among automobile makers as well as manufacturers of heavy machinery and rolling goods. Höegh Autoliners says that it carries around two million car equivalent units (ceu) and makes about 3,000 port calls annually. In addition, it is a leading carrier of second-hand vehicles as well as ‘High & Heavy’ construction equipment and other rolling stock.

The Norwegian company prides itself on its fleet which is designed for maximum flexibility to cater for the variety of rolling stock carried in the various trades. The company has expanded its carrying capacity through acquisitions, new buildings and lengthening of existing vessels, and has contracts for further new buildings for delivery in 2011. The current fleet includes owned and long term charter PCTCs with capacity ranging from 2,300 to 7,800 ceu for deep-sea trades. In addition, Höegh Autoliners is partner in a joint venture which is supplying three purpose-built Ro/Ro vessels on a long-term charter to Airbus for transporting aircraft components and subassemblies in Europe.

Automotive Industries asked Steinar Løvdal, president of Höegh Autoliners based in Jericho, New York, what are some of the unique products/solutions offered to automotive manufacturers?

Løvdal: Höegh Autoliners operates a global network of deep sea trades, supported by regional feeder networks, which enable us to offer our customers transportation solutions to and from virtually anywhere. Our deep sea services are operated by highly flexible vessels, which in addition to cars can cater for a wide range of High & Heavy cargo. Together with our partners Damco and Maersk Logistics, we can offer a wide selection of logistics services, and by working with only the best logistics providers, we secure high quality throughout the logistics chain for our customers. For strategic customers like GM, we tailor make total logistics solutions (terminal services, inland transportation etc.) to fit their specific needs. 

AI: What did the General Motors award mean to Höegh Autoliners?

Løvdal: We are extremely proud to have received this award for the eighth consecutive year. This is a testimony to the fact that GM is our most important customer globally, and a confirmation of the strong partnership that exists between Höegh and GM. By working closely with GM we have been able to develop services that are tailor made to GM’s needs, and we will continue to do so. The award is also a confirmation that the job our staff across the globe does for GM on a day-to-day basis is recognized and appreciated, and inspires us to continue doing our best to meet and exceed GM’s expectations.

AI: Tell us about the quality and environmental standards Höegh Autoliners has set for itself – and how do they translate into the services you offer?

Løvdal: Seaborne transportation is by far the most environmentally-friendly mode of transportation today. It accounts for about 90% of all global transportation work, but is responsible for only 3% of total air emissions. However, we still constantly try to reduce our carbon footprint. Through an extensive project that has run over the last two years, we have realized a reduction in fuel consumption of 11% per ton mile.
Much of what is done to reduce emissions also works to improve the service we offer our customers, such as improved voyage planning and weather routing, which ensure even safer voyages with predictable transit times. Significant resources go into developing cargo handling routines that ensure safe handling of cargo, and through close cooperation with customers we are even able to influence how cargo is designed and manufactured so that it is fit for safe transportation. 

AI: What are some of the innovations Höegh Autoliners plans to introduce in the near future (new services, routes etc.)?

Løvdal: The globalization of the automotive industry has led to significant changes in sourcing patterns for vehicles, and production is being moved around much faster than before. Driven by growth in the South American market, we are now increasing the frequency of our sailings from Asia to the west coast of South America. Also based on a growing demand from our customers, we are introducing regular sailings from India to Africa and Europe as well as from Thailand and China to Africa. We believe these will be key growth areas going forward, as Indian and Chinese manufacturers are increasing their export volumes. We are also in the process of extending and strengthening our short sea network in Europe, which will give our customers a greater choice of both inbound and outbound ports. On the IT side, we are developing an online track and trace system that will be rolled out early next year, and will offer our customers full visibility of their cargo at all times while in our care.

AI: Is the North American automotive market showing signs of growth?

Løvdal: The North American market is showing clear signs of improvement, with US sales up 20% compared to last year for the first four months of the year. Shipments from Europe to the US have been particularly strong, and also from Korea and Japan volumes are up from last year. Volumes from Japan have of course been hit by the earthquake and tsunami tragedy in Japan, but we are confident they will rebound when Japanese production is back on track. Export volumes from the US are also developing positively. In Central- and South America the positive economic development is translating into growing vehicle markets, and both import and export volumes are increasing.

AI: Tell us about the used car sector of your business.

Løvdal: Used cars are a very important segment to us. By ensuring a healthy combination of used and new cars onboard our vessels, we are able to maintain competitive prices to our core customers, such as GM. High volumes of used cars move in a multitude of trade lanes worldwide, and generally used- cars is a cargo segment that pays better than new cars. Höegh Autoliners is the largest operator in the trade from the US to the Middle East, moving more than 100,000 used cars every year. We also have a sizeable market share of the used car market from the US to West Africa. We believe this market segment will increase after a growth in the new car market in the US causes used car prices to drop and availability to increase.