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Rif Line to launch a new container route connecting China and Italy: it is the right time

September 17, 2021


Abstract : Francesco Isola, CEO of Rif Line, explained the reasons behind the Group's strategic choice. The new route bets on transport which does not last more than 20-25 days, half of the average time. The company has 4,000 containers and is specialized in trade with the Far East.

MILAN, Sept. 17 (Class Editori) -- The first call of the container maritime transport between China and Italy occurred on last Wednesday in the Port of Civitavecchia. The service for container maritime transport between China and Italy was started by Rif Line, the international logistics Italian shipping company that grew constantly over the last few years with a 33-million turnover in 2020 (+ 10% compared to 2019), 54% of which thanks to trade from and to China, where it has four offices. Rif Line is active in 52 countries and is specialized in trade with the Far East. The CEO of the Group, Francesco Isola, explained the reasons and the objectives of the initiative.

Question. The first ship from China arrived in Italy. What are the characteristics of the new service?

Answer. Last Wednesday's docking of Iberian Express ship completed the first Asia-Italy trip, which lasted three weeks. There will be a trip per month since, barring accidents, the journey takes 20 days.

Q. It looks like you want to challenge the sector's giants. Is it true?

A. I believe that a route served by two feeder ships could not be a concern for major international maritime carriers. We started thinking about this initiative already at the beginning of the year and it has a temporal horizon limited to 12 months. Then we will have to assess if the project can be economically sustainable in the long term.

Q. Did Rif Line already organize something similar in air transport?

A. In the past we already organized charter flights and therefore we thought about replaying the same project also as concerns maritime transport, but things have been much more difficult. We were required containers, at least two ships, long-term agreements and loaders' support. One year was the minimum time to start the project and record satisfying revenues.

Q. How much did you invest to buy containers?

A. The equipment availability was part of the paramount aspects to start the service. Considering the ones we have already bought and the ones we are awaiting, we have around 4,000 containers, the majority of which were used, while others are new and come from China since manufacturing them in Italy would have been expensive and would have taken a lot. We invested 30 million euros in containers.

D. Will the new line only dock at Shanghai and Civitavecchia?

A. The two rented ships used for this service can contain 1,200 Teu each and, to date, two ports of call are available, one in Taicang and the other one in Civitavecchia, at Rome's Terminal Container. We could evaluate the addition of another city in southern China, but the problem is terminal congestion. Taicang, being neither Ningbo nor Shanghai, is a port where there are no particular problems, while in major ports ships risk having to wait long times and we cannot afford this. The fewer calls we make, the more regular and punctual the service is.

Q. Is speed of connection one of the factors you mainly focus on?

A. Certainly the fact of proposing a direct  service, therefore without stops at transshipment ports, that guarantees a transit time of 20-25 days is a very important aspect, but not the only one. We have been inundated with requests, but we are only selling to direct customers, not to other shippers. The first two ships left China 100% full since today in the market we do not talk about rates but about cargo availability. Currently, the concern of shippers, even before the freight, is to guarantee space to stock the ships. Shipping companies are going through a tough period from an operational point of view.

Q. Are you defending shipowners?

A. Without a doubt, finding space to board containers on ships has become increasingly difficult in recent months. We were able to launch the new route by securing two small container ships at the early summer prices of 35,000 dollars each, but now freight rates have risen, which means that demand is well above the supply, surely due to a strong recovery in consumption and production. Then, I do not know if shipowners are holding the ships anywhere.

Q. Where did you find the courage to invest in such an expensive and risky adventure?

A. This initiative implied many costs: the purchase of containers, the rental of ships, the financial guarantees required and so on. However, we knew we had a supportive market. If we had to take that decision today the costs would be even higher and, in the meantime, uncertainties about the future of freight rates would have increased. A lot will depend on how long this particular season of high rates goes on.

Q. Could this Rif Line operation become a medium- to long-term project?

A.  After experiencing the pandemic, where the type of goods handled made the difference between closing with or without losses, we can only predict that some areas will become increasingly strategic for the sector. The company is evaluating the possibility of soon increasing the service frequency and the number of ports to be reached. Therefore, the answer is yes, we believe that the project, under certain conditions, can be sustainable even in the medium term.

(Source:Class Editori)

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