Stena Line

AN EFFICIENT LOGISTICS NETWORK FOR THE FUTURE

At year-end 2014, Stena Line operated 22 routes in Northern Europe, with 42 ferries. Stena Line also owns five ports and is an important part of Europe’s trade and infrastructure. Managing this business in a cost-effective, safe and environmental friendly way is a daily challenge for our dedicated employees at sea and on land.

In January 2012, Stena Line launched its change programme for meeting the challenges that the European shipping industry faces. This work has been successful in many aspects during 2014. This applies particularly to the company’s efforts to increase freight volumes.

Freight

By offering one of Europe’s most comprehensive transportation network, Stena Line has increased freight volumes by 5%, despite a lack of growth in the underlying economies. One reason is intermodal expansion, with new trains from Poznan in Poland and Verona in Italy to Kiel and Rotterdam, which has been very successful. The logistics network was developed during the year through a partnership with Mann Lines, giving our network a west–east link from Harwich to Turku.

In response to increased demand from freight customers, Stena Line has expanded the fleet, adding two new vessels to the Irish Sea and North Sea routes and replacing a vessel with larger tonnage on the Holyhead–Dublin route. The success is also a result of Stena Line having expanded its efforts to identify new customer segments. Contracts secured include for instance AB Volvo and Volvo Cars on the Gothenburg–Kiel route. Stena Line also purchased the vessel Stena Superfast X during 2014.

Travel

On the travel side, Stena Line has been successful in establishing new and appealing customer concepts. One result has been lower shop prices, which is a competitive advantage, particularly in Scandinavia where shopping is an important part of the travel experience.

Stena Line has launched an updated digital booking platform, which has had an increasing number of visits and a high conversion rate. The platform provides the basis for further development in digital media.

During the spring 2014, Stena Line acquired a route between Great Britain and France. This has given Stena Line an important foothold in the French market and further expanded its logistics network.

Passenger safety and security is always in focus

Operation

Stena Line’s efforts to coordinate purchases and reduce the number of suppliers has continued in 2014, and these have been optimised and systematised through a coordinated approach to purchasing. One example is the collaboration with the Spanish winery Francisco Gomez, where a large purchasing volume of the organic wine Casa Galvis makes it possible to offer customers high quality at a low price.

Great progress has been made in optimising the route network in the form of timetables and capacity. Where it has been considered appropriate, the company has introduced standard tonnage, creating a higher degree of flexibility, while new ships have been placed in service where a sustained increase in demand is expected.

Low cost operator

Systematically improving our operational excellence is a goal that we have worked on since 2012. High-priority areas in 2014–2015 are development of expertise in terminal handling, purchasing, optimisation of on board staffing and simplified shore-based administration. This is a long-term and systematic process aimed at providing Stena Line with an operating model that is cost-effective and delivers reliable and high quality.

Passenger safety and security is always in focus for all Stena Line employees. Safety is developing in the right direction in terms of both lost time incident frequency and the number of observations during inspections and work on safety must never cease. Even so, a tragic fatal accident occurred during the year. The most important aspect of the company’s operation is that it is always carried out with a high level of safety.

The two large sister vessels Stena Hollandica and Stena Britannica, which were taken into service in 2009 on the North Sea routes and have a capacity of 5,500 lane metres, have improved from a low utilisation rate of 30% to a high 50%.

In Scandinavia, Stena Line is challenged by the weak economy, particularly in Denmark. Management must develop the company’s market position to ensure long-term profitability for these important routes to Denmark.

The measures Stena Line has implemented have increased revenue. In addition, the company has reduced costs by just over MSEK 200, which has improved the overall result for 2014. The company is optimistic that it will be able to continue to strengthen results in the coming years.

The new warehouse at the Germany Terminal in Gothenburg handles many of the items offered on board.

“Purchasing used to be decentralised. Now we have a coordinated range. We have moved from purchasing many different products from a large number of suppliers to ­purchasing large volumes from fewer suppliers. Where ­previously we could have more than 20 different brands of coffee on different ships, we now have one. Large volumes and our own transport provide high quality at low cost,” says Per Ola Jönnerheim (right), who is Head of Onboard Services at Stena Line.

Environment

Stena Line’s environmental work is centred on reduction of emissions into air and sea, and has focused on measures to reduce energy consumption for some time. The target is an annual reduction of 2.5% in bunker consumption per nautical mile. The target was exceeded in 2013, but a higher cargo intake, increased displacement and unusually severe weather in the Irish Sea in the first quarter meant that total consumption was only reduced by 1.4% in 2014.

When the threshold value for sulphur emissions in the SECA area was reduced to 0.1% in January 2015, Stena Line was well prepared. The main solution was to switch fuel to MGO (marine gas oil). Another option was to use scrubbers, which clean the exhaust gases. Stena Line will be installing scrubbers on one of its ships in autumn 2015. Perhaps the most exciting measure is the conversion of Stena Germanica to become the world’s first ferry to run on ­methanol. The conversion was completed in March 2015.

Stena Line celebrates 50 years

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Stena Line Freight 2014

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VOLUME TREND, THOUSANDS

1) One freight unit is a truck, trailer or railway wagon

REVENUE PER ACTIVITY

CEO comments

Stena Line continues to be in a challenging situation, with the new tough sulphur emission legislation implying additional costs of about MSEK 500, general cost increases and increased competition from tunnels and bridges. However, the goal is not to have to deliver a negative result in 2015.

To ensure the company’s long-term success, Stena Line must be able to provide competitive logistics solutions for our freight customers, and offer enjoyable experiences to our passengers. Professional and dedicated employees is our most important asset.

Carl–Johan Hagman

CEO, Stena Line

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