Much focus has been on shipping and logistics during the global pandemic, with disruption, soaring prices and lack of availability being issues experienced during the last 18 months.
One of the UK’s major forest product shipping businesses is Scotline, based out of Rochester, where it also operates two terminals, as well as operating a site in Inverness. It is running regular routes from Sweden, Ireland, Denmark, Germany, Norway and the Baltic states.
Scotline managing director Peter Millatt said 2020-21 had been an extremely busy period for the company.
He said while April 2020 had been a poor month due to the onset of pandemic restrictions, May picked up and in June things “took off”.
“Q4 last year was absolutely tremendous,” said Mr Millatt.
“In December 2020 our shipments from Sweden were nearly three times what we shipped in the previous December. Brexit came into it and everyone was pouring timber into the country as there was a massive shortage over here.
“This year has been pretty much the same – very high volumes. The DIY and garden product sector has been extremely busy – I have never seen so many sleepers and so much decking.”
Mr Millatt said it had been “interesting times” but described the ports industry generally as having been in a state of flux for various reasons.
He said this was due to some ports struggling with manpower due to Covid-19 isolations, while others were stocked to capacity with timber and it was a challenge to distribute the wood onwards quickly enough. There have been reports at some ports of ships taking several months to discharge.
“These problems with the ports have made people have second thoughts about which ports they’re working with and who they can rely on,” said Mr Millatt.
He added that Scotline had been lucky with coronavirus isolations – recording just one person over the period who went home with suspected Covid-19.
“Last year ended up being a record year for us and this year is probably going to be a record year in terms of timber volumes. We could have taken a lot more timber but just don’t have the port capacity for it.
“Last year our sawn timber volumes from Sweden to the UK and Ireland was up 8% on the previous year. Varberg last year did about 1.15 million m3 – it was also a record year for them as well.”
Scotline is now operating its biggest fleet ever with 12-13 ships on just sawn timber.
“We own the freehold of our terminals and employ everybody and work seven days a week and have absolutely no problems other than we don’t have enough land. If we could buy more land, I would buy more land.
“I was hoping with the recession last year that some land would come on the market but with Brexit that didn’t transpire. Brexit has been very good for us and I think it will continue that way.”
Scotline has been receiving a lot more calls in the past year from timber companies wanting landed stock, stockholding facilities or quay facilities, especially due to some ports being completely full of timber.
“Everyone is asking to bring more timber in, which is OK if it comes in and goes out. We have had three people approach us in the last month to ask if they can do stockholding at Rochester but we have had to say we can’t handle that at the moment.”
Existing customer volumes, including many small companies bringing in garden products from the Baltic states means it is difficult to be accommodating to everyone.
“It’s easy to say yes we’ll bring it in but it just creates problems all the way down the line, especially with the haulage problems. Even if the volume went down by 20% it would not bother me because I can keep our volumes up with people who want to come in and have a stock facility.”
The biggest headache at the moment in the industry is trying to find sufficient haulage.
“A year ago we sat back and all the hauliers phoned us – now we need to chase them. We are still doing a lot of lorries every day. Pricewise some costs are absolutely ridiculous while others want just a decent increase.
“Talking to one or two of our drivers you hear the supermarkets are paying big bonuses to attract drivers.”
And Amazon drivers are being paid high fees – higher than timber haulage for some journeys. “We are competing against people who are desperate to get the lorries at any rates,” added Mr Millatt.
Another major consideration for ship operators is the price of fuel. Mr Millatt predicted steady fuel price levels.
“Last year fuel rate came down to a very low rate in June and then went back to nearly what it was before the pandemic. I think it will be steady at this level.”
He pointed out the airline industry’s vastly reduced fuel consumption levels over the last 18 months have a factor on the fuel market.
On the renewable energy front there is talk of electric ships in the future and switching ships onto shore power when they get into port. Scotline’s most recent ship – Scot Isles – has a battery pack which means in ports the generators can be switched off.
But Mr Millatt sees prospects of building wide scale shore power facilities at ports unlikely in the short-term due to the expense.
Increasing restrictions on emissions have already seen heavy fuel oil’s sulphur content reduce from 3.5% to 1% worldwide and down to 0.5% in northern Europe.
There is further talk and some small trials of adding ethanol and ammonia to the fuel mix.
