Published: January 2007
This study has been commissioned by the Institute of International Trade for Ireland (IITI) to review trade and services on the North Atlantic and to determine whether a direct shipping service between the island of Ireland and North America might be viable. If so the study should not only identify potential ship owners/operators who might supply the service but also the Irish ports to be served.
The client recognises that this study may conclude that the current Irish market conditions cannot support such a service. In this instance the study will identify:
- How the existing service arrangements could be improved
- What facilities a port would need to provide to be able to cater readily for such a service.
- What factors would trigger a re-examination of this issue
2. The economic & trading performance of the island of Ireland 
Since 1994, the Republic of Ireland’s average annual rates of export growth have been the highest among OECD countries. The RoI is one of the most globalised economies in the world with a unique dependence on, and capacity for, international trade. There is a broad consensus at present among the major economic forecasting institutions that, notwithstanding the current slowdown in the US economy, the short-term outlook for the global economy is generally positive. In its autumn 2006 forecasts the EU Commission estimates that Ireland’s export markets will grow by 6.4% in 2007 before slowing to a growth rate of 6.1% in 2008. The Department of Finance, in its recent forecasts,  believes that the prospects for the Irish economy over the period 2007 – 2009 are generally favourable, with an average growth rate (in both GDP and GNP terms) of 4.7% per annum projected over this period.
In recent years the NI economy has grown faster than many other regions of the UK. The correlation between UK overall growth and that of the NI economy is used to make forecasts for the latter. On this basis an average derived growth rate of 3.2% is projected for NI for the next three years; this compares with the RoI’s projected average growth rate of 5.1%. This is a continuation of the trend whereby the RoI’s economic growth has been faster than that of the NI economy. It should be pointed out, however, that the level of forecast growth in Northern Ireland may be considered to be somewhat conservative, given the NI economy’s capacity to grow faster than the UK economy in recent years.
2.1 Trade between the island of Ireland and North America
In describing external trade we have looked separately at N Ireland and the Republic of Ireland only because there is no consolidated source of data. The ports industry is genuinely an all- island business; the hinterlands of the ports are very extensive and do not stop at the border.
Because LoLo traffic moving between Ireland and North America is trans-shipped via ports like
Liverpool, Rotterdam and Antwerp, official statistical sources do not capture these volumes separately in either tonnes or units. We have therefore excluded RoRo and bulk cargoes from the total volumes for 2005 in order to derive the volumes in tonnes that move in containers.
In tandem with this study the IITI also conducted a survey of exporters on the island of Ireland. This provided useful insight into some of the critical cargo flows to and imports from the North
American market from both the RoI and NI. In some instances the survey showed higher volumes of cargo moving to North America than the official statistics published either in the RoI and NI; this may be the result of incomplete returns. The source used is stated in each context.
Table 1.1 Summary of LoLo Exports to North America
RoI Exports: 22,289 TEUs
Source: IITI/IEA Survey. Summer 2006
The profile of Northern Ireland’s exports to North America differs from that of the RoI in that it includes significant volumes of RoRo traffic in the form of machinery and other out of gauge cargo which moves on its own wheels or on low loaders. This manufacturing sector is critical to the NI economy.
North America, especially the USA, is one of the most significant export markets for the island of
Ireland; it is particularly important as a destination for high value manufactured goods. Feedback from the market indicates that trade between North America and the island of Ireland remains buoyant. There is also some evidence that volumes being shipped by air are growing; in the context of trade in high value-added goods, this is not surprising.
2.2. Export Ireland Survey 2006
The 2006 Export Ireland Survey, conducted by the Irish Exporters’ Association revealed a general optimism about export growth. Most of this, however, related to services rather than
manufacturing. The USA was seen to be the most significant market outside Europe. The survey
results underline the importance of efficient transport and logistics in enabling Irish exporters to
exploit the US market which as seen as the market with most potential outside Europe.
3. A Review of Existing Services
Because Irish deep-sea traffic is inevitably routed via either GB or the Continent, the use of feeder services is essential. The IITI/IEA survey suggests that LoLo trade between the RoI and North America is largely trans-shipped through Continental ports, particularly Rotterdam but also Antwerp and Zeebrugge, whereas Northern Ireland traffic has a more even balance between GB ports (particularly Liverpool) and Continental ports, especially Rotterdam. Feedback from the shipping lines suggests, however, that Liverpool is a popular trans-shipment point for imports from North American destined for RoI.
The survey indicates a reasonable level of satisfaction with the existing feeder services insofar as they go, but a strong awareness of the competitive disadvantage, in terms of transit times,
reliability and cost, which this system imposes on the Irish exporter. To secure reliability many
exporters have turned to air services for the shipment of high value goods in particular. The options for moving non unitised cargoes are more restricted. The ACL service out of Liverpool
is the primary RoRo carrier, but market feed-back indicates that this service is often full.
4. The potential for a direct service to North America
The existence of adequate base cargoes is necessary but, on its own, is not sufficient to secure a direct call to an Irish port by a transatlantic service. The other requirements are a port that can handle the appropriate size of ship and a willingness by a MLO (Main Line Operator) to alter an
existing itinerary to accommodate an Irish call. In discussion with several MLOs about this issue a number of interesting points emerged:
- Securing a base cargo is essential and the minimum would be 100 units on and 100 units off (i.e. 170 TEUs each way).
- The Irish port needs to be capable of receiving a deep-sea ship. The present transatlantic ships, while Panamax in dimensions, generally have a capacity of approx 3000 TEUs. Modern panamax tonnage has a capacity of well over 4,000 TEUs.
- The shipping lines do not see the transatlantic market as a discrete market but as an element of a global network. Therefore an Irish call would need to be able to provide potential traffic for all markets, not just North America.
- There is a unanimous view that on the basis of existing schedules, no one has the spare time in their itinerary for an additional call to Ireland. Therefore a complete re-appraisal of their operations by the MLOs would need to be undertaken as a prelude to securing a direct call.
- Ships en route to North America tend to go south about rather than north. Therefore a ship calling to Dublin or Belfast (or indeed Liverpool) runs back on itself. The more southerly route is longer but is more favourable from the point of view of weather. This makes Cork or Foynes relatively attractive for an Irish call.
5. Conclusions & recommendations
The study establishes that there is sufficient LoLo cargo generated by the island of Ireland to justify a call by a transatlantic line. While a number of Irish ports have plans to develop their unitised facilities, there is none which could, at the moment, readily and consistently handle a ship of the size used on the Atlantic run. The MLOs also seem very reluctant to drop a UK or Continental port from their existing itineraries in order to accommodate a call to Ireland. They noted that their rates are already under severe pressure and felt that current established carriers of Irish traffic would react very strongly to the diversion of cargo flows to a new direct service. In other words, while the MLOs acknowledge that the core traffic exists, they anticipate that their attempt to increase their presence in the marketplace would be met by an aggressive competitive response.
We therefore concluded that there is little chance of securing a direct call at the moment. That does not mean that there are no opportunities for Irish exporters to secure an improvement in service quality. Consultation with the MLOs indicated a willingness on their part to review the feeder links to ensure that Ireland has more capacity to trans-ship through ports that are “last out and first in” on the transatlantic itinerary. The recent increase in the number of operators using Liverpool suggests that it may prove a much more feasible trans-shipment port in the future. The use of Liverpool or other UK port rather than Rotterdam would permit Irish exporters to enjoy a shorter and more reliable transit to North America – 10/12 days rather than 17/20 days.
While there are LoLo services linking Dublin and Belfast with Liverpool and Southampton there are none linking Cork and Waterford to these UK ports. Unless this gap is filled, exporters in the West and South West will still have to rely on feeder services to Rotterdam and Antwerp or pay a premium to truck to Dublin or Belfast.
It should also be noted that even if a direct service was available from the island of Ireland it would impose additional transport costs on some cargoes. At the moment the range of feeder services from a number of ports makes it possible to minimise road haulage costs. The establishment of a direct service from just one Irish port would increase road haulage costs for many shippers.
The current shortage of RoRo capacity on the Atlantic is a critical issue for NI exporters. However, our consultations did indicate that there is one line based in Northern European which is willing to consider a call to Belfast to pick up some or all of this traffic. We also established that the RoRo ferry operators on the Irish Sea may be interested in undertaking some dedicated services at the week-end to ship this traffic from Belfast to Liverpool.
5.1 The Next Steps
The consultations undertaken in the course of this study have introduced, to the agenda of the
transatlantic shipping sector, the subject of better services to the Irish exporter. Through the IEA,
discussions with specific operators could be pursued to secure improvements in LoLo feeder services to/from RoI and RoRo and LoLo feeder services to/from N Ireland.
The issue of the ship size was reviewed in this report from a number of angles: reference was made to the increasing size of the world LoLo fleet as well as to the capacity limitations of Irish ports. It is vital for the economy of the island of Ireland that Irish ports are developed to accommodate the larger LoLo vessels which are beginning to be deployed on the feeder services. This is likely to require infrastructural development involving some or all of the following: capital dredging, the expansion of berths and the provision of larger cranes.
In the context of larger feeder ships serving particular ports and the possible eventual establishment of a direct call by a transatlantic service, rail has a potential role to play. It can be
used to move large numbers of containers economically (especially empty boxes from the point of discharge to the point of re-loading or shipment) and in a more environmentally friendly fashion than road. Rail, in conjunction with modern IT/EDI, can also be used to integrate the sea port with an inland satellite port, which also avoids congestion in city centres.
In the absence of confirmation of the market to attract a direct call to Ireland by a transatlantic
service we were asked to suggest what might trigger a re-examination of this subject. A significant increase in traffic volumes and/or a change in the shipping patterns of the MLOs might prompt another look at this issue.
5.2 A note on Statistics
While undertaking research for this study the authors encountered some significant disparities
between the official published statistics and the results of the IITI Survey of exporters; this applied to statistical sources in both the Republic of Ireland and the UK. To ensure that any sources of disparity are identified and eliminated we suggest that this issue is explored further by the IITI with the statistical services building upon the work of InterTradeIreland’s “North/South Trade: A Statistical Ground Clearing Exercise”. We also suggest that it would be helpful if data were published showing the volumes and values of import and export traffic by mode.
 The island of Ireland will be used in this report when reference is made to Northern Ireland and the Republic of Ireland. When reference is made to the individual economies or territories, the acronym “NI” will be used to designate Northern Ireland and “RoI” or “Ireland” will be used to designate the Republic of Ireland.
 Department of Finance, “Ireland – Stability Programme Update”, December 2006. This document updates Ireland’s Stability Programme. It includes macroeconomic projections up to 2009 and takes account of the measures adopted in Budget 2007.
Click here to download the full report: North Atlantic Trade and Transport Study