Kawasaki Kisen sets sail as train car shipper

By Curious

Japanese maritime transporter Kawasaki Kisen will add 15 new vessels capable of carrying rolling stock to its fleet by fiscal 2018, as growing competition squeezes its main business of shipping daily goods and minerals.

A number of train cars, produced by Hitachi at a nearby plant, were being loaded onto a Kawasaki Kisen ship on Thursday at the Kudamatsu port in Yamaguchi Prefecture. They were part of an 866-car contract from the U.K. that will be Hitachi's largest rail-related export project yet. Kawasaki Kisen will handle most of the maritime transport.

Kawasaki Kisen sets sail as train car shipper

Hitachi began shipping rail cars to Britain in January 2015. But most large freighters were unable to enter Kudamatsu's shallow waters, forcing the company to first transport the cargo to the Kobe port on a smaller barge. At Kobe, the rolling stock was reloaded onto a European cargo ship for the journey to the U.K.

Kawasaki Kisen began building a new type of car carrier in July 2015 that draws less than 10 meters of water, allowing it to dock at Kudamatsu. The ships' movable floors also allow for hauling rolling stock.

Shipping directly from Kudamatsu cuts transportation costs by about 20% compared with going through Kobe. Kawasaki Kisen also had the know-how for transporting cars without damaging them, gained by moving vehicles for Toyota Motor and other automakers, which helped it clinch the Hitachi deal.

The marine shipper plans to invest about 80 billion yen ($800 million) to build 10 of these new ships by fiscal 2018 and rent five more vessels in order to deliver Hitachi's order to the U.K.

Kawasaki Kisen is focusing more on rolling stock in response to the sluggish performance of its mainstay shipping business. A global economic slowdown and a glut of shipping providers have weighed down the market. With shipping rates below actual costs, the company is expecting its second straight annual net loss in the current fiscal year through March.

Compared with transporting daily items and minerals at volatile rates, auto shipments are a relatively stable business. But demand may fall as more automakers shift to local production. Kawasaki Kisen is focusing instead on rolling stock in the hope of growing exports under private-public projects.

Car carrier vessels can also move construction machinery and heavy equipment. That type of cargo accounts for roughly 15% of Kawasaki Kisen's car carrier business. Handling such large items is extremely profitable, since it requires special skills that present a high barrier to entry.

"We want to transport more large cargo and find more opportunities to earn revenue," said President Eizo Murakami.

Source: Nikkei