Scotline has had to navigate some turbulent water over the last two years. First it had to contend with the fallout from Brexit, with changing customer logistics and customs requirements. Hot on its heels came Covid, with an initial fall in demand swiftly followed by a major surge. Next the war in Ukraine has resulted in changing trade flows and, of course, pushed already rising costs into a still steeper upward curve.
The shipper, however, has clearly weathered the storm. In fact, it says, it has “forged ahead”. It has continued to upgrade and introduce new vessels, adapted services to meet new customer needs and trade patterns and further developed its terminal operations.
With Brexit, the company became increasingly busy and also had to adapt to the new trading environment.
“Many importers turned to conventional shipments from the usual trailer traffic to avoid customs delays at UK entry ports, as well as costs of customs entry charges per trailer against those per boatload,” said Scotline sales and marketing director Cindy Crancher. “Our terminals at Rochester and Inverness also had to become ‘inventory linked’ and we invested in new software to ensure seamless movement of customers’ goods. We now offer customs clearance at the Rochester terminals, so customers get a fully-integrated, end-to-end service.”
With the initial European lockdowns on the outbreak of Covid in March 2020, volumes of packaged timber ex-Sweden dropped. Scotline has also had to contend with the wider repercussions of the health crisis. This included staff shortages due to the virus and having to bear the cost of added ship downtime, with lead times for spare parts stretching to 16 weeks due to global demand and restricted production, resulting in extended periods in drydock. However, trade rebounded rapidly from June 2020 onwards.
“Volumes increased month-on-month and, in October 2020, we shipped a record volume,” said Ms Crancher. “Our fortnightly sailings ex-Riga increased to every 10 days and then weekly into Rochester and Inverness.”
This growth in demand continued, with Scotline shipping an all-time high volume from the Latvian port in 2021.
Following the Russian invasion of Ukraine, the company this year expects ex-Riga freight levels to be down and the war has resulted in a range of other challenges.
“Since March this year, we have not sent any of our ships into any Russian ports to load or discharge,” said Ms Crancher. “Many customers using our service ex-Riga were also shipping product originating from Russia and Belarus and these volumes have been severely impacted. Some companies are no longer contactable and customers in Estonia and Latvia have had bank accounts frozen, causing huge problems. While we shipped record volumes ex-Riga in 2021, our volume this year will be reduced.”
Another outcome of the war has, of course, been soaring fuel prices.
“We’ve seen the cost more than double since the beginning of March and it’s quadruple what it was in March 2020. And it’s not just the huge increase, the lack of supply in certain areas has also proved challenging,” said Ms Crancher. “As a result, after never applying a bunker adjustment factor (BAF) in over 40 years of trading, we’ve had no option but to add a bunker surcharge to all our rates. The cost of running our forklift trucks also increases the overhead of the terminal operations.”
But Scotline has been able to adapt to the changes in trade patterns due to the conflict.
“Fortunately, we have the flexibility to offer the option to load two ports; to make a full cargo to either Rochester or Inverness, or we can load a full cargo in Riga for a two port discharge,” said Ms Crancher. “As we operate both the ships and the terminals in the UK, we can swap vessels, load ports and discharge destinations to suit the volume we have for shipment. And with regular shipments ex-Sweden and Latvia into Rochester and Inverness we can cover deliveries to England, Scotland and Wales. Additionally we service Ireland ex-Sweden.”
Scotline has continued to see new customers using services, mainly ex-Riga, into Rochester and also introduced new services.
“Relatively recently we started offering a service from Wismar, Germany, sailing to Rochester every six weeks and, in the latest development, we’ve started a new service from Norway into Rochester and we’re confident the volumes will increase in coming months,” said Ms Crancher.
The company’s fleet has also continued to develop, partly to meet demand, partly due to investment in new greener, more fuel efficient vessels to satisfy its own environmental commitment and new regulations.
“We’re continuously investing in new vessels,” said Ms Crancher. “Since taking on the Scot Leader in 2016, we’ve commissioned a further five new builds, with the latest introductions being the Scot Ranger and Scot Isles in 2021. Also, we have two new sister vessels on order with Royal Bodewes in Holland, due for completion in 2023 and 2024.”
The company’s ambition to decarbonise operations has also led to its technical team working on other developments in its fleet and at its terminals.
“We’re increasing the energy efficiency of our sites, moving to greener fuels and developing shore power connections,” said director Rob Millatt. “In the fleet we have one eco vessel and are hybridising another as a demonstrator of how batteries can reduce emissions. We’ve also invested heavily in ensuring that our ships have the latest, most efficient equipment on board.”
At the same time, Mr Millatt stressed, Scotline hasn’t lost sight of the fact that customers see it as a logistics company they can count on, rather than a shipping business.
“First and foremost, they want a reliable service,” he said. “They don’t expect our service level to drop whilst we develop new technologies.”
Additional major investment has been made in ballast water treatment systems for its 11-strong fleet to meet international maritime organisation rules.
“These provide a combination of filtration and disinfection to neutralise and detoxify ballast water prior to de-ballasting,” said Ms Crancher. “All ships engaged in international trade are required to manage their ballast water to avoid introducing alien species into coastal areas, which can cause serious ecological, economic and public health impacts.”
Scotline’s terminal spending has included the purchase of a further Fuchs Turex heavy-duty, high cab, hydraulic crawler type port crane. The company says the Fuchs is dexterous and agile, capable of discharging packaged timber with precision and speed and this is its fourth.
The business says its outlook now is positive.
“The war in Ukraine has caused uncertainty and led to shortages of materials and equipment,” said Ms Crancher. “But we own our terminals and fleet of ships. We have a professional, committed, experienced team and proven long-term relationships with our agents. We are a privately owned, family company with a succession plan in place for the next generation. We’re steadily growing the forest products business with our contract partners and customers and also developing shipments of project cargoes.”
Underlining its confidence, she added, Scotline has further plans to develop its fleet and terminal facilities.
“We’re forging ahead with our investment programme and have an open dialogue with ship builders with an option to purchase a further two new builds,” she said. “We’re also continuously investing in both terminals at Rochester to reclaim areas of unusable land that are suitable for infill and re-surfacing to give more hard standing for timber storage. In addition, we’re always looking for land with river frontage for development.”
