CENTRAL ROLE IN EUROPE'S LOGISTICS NETWORK
When national borders are closed and travel restrictions are introduced, ferry lines are affected severely. Stena Line reacted quickly by introducing a number of tough, but necessary measures.
Stena Line is one of the world’s leading ferry operators, with 37 vessels serving 18 routes in Northern Europe. Stena Line also owns five ports and controls a further ten. The company is an important part of the European logistics network, offering intermodal freight solutions that combine rail, road and marine transport. With its extensive passenger services, Stena Line also plays an important role for tourism in Europe. The goal is to increase value for customers by offering affordable and flexible ferry transport.
REALIGNMENT OF ACTIVITIES
In mid-March 2020, Denmark, Germany and Poland closed their borders to incoming travellers. Soon, large parts of Europe did the same. The week after, Stena Line gave notice to 950 employees in Sweden alone. This was immediately followed by the decision to permanently close the Oslo–Fredrikshamn and Trelleborg–Sassnitz routes. More redundancies followed in several of the countries in which Stena Line is active.
“We were forced to act quickly and take some really tough decisions. The company was losing money,” comments MD Niclas Mårtensson.
“The closure of the passenger-intensive routes is also a consequence of how we in the future will focus on transport of freight and passengers and not offer any pleasure cruises,” he continues.
In 2020, Stena Line’s revenue fell by 27.5 per cent from the previous year, to SEK 10.4 billion. “To some extent, the effects of the loss of passenger traffic were offset by increased freight transport. We also had an opportunity to prove our important role in Europe’s infrastructure and freight flows, in particular regarding transport of food and healthcare equipment. An example of this is that we during the year were responsible for all transport of oxygen gas to hospitals in Northern Ireland,” says Niclas Mårtensson.
During the year, Stena Line continued to focus on increased digitalisation of its operations, using new technology such as Artificial Intelligence (AI) and machine learning to streamline activities and simplify and improve the customer experience. According to Niclas Mårtensson, this is vital for Stena Line’s future competitiveness. “This facilitates the interconnection of every aspect of our activities – from ports to booking systems, pricing and operation – so that, in every moment and situation, we can optimise activities and create added value to our customers,” he says. “In overall terms, the measures we have taken have led to a 25 per cent reduction in the number of employees, reducing costs by SEK 1 billion. We now have a smaller suit, a lower cost base and less complex activities – which are also more scaleable. We therefore have every hope of a substantial performance improvement in 2021,” says Niclas Mårtensson.
STRONGER PRESENCE IN THE IRISH SEA
Stena Line is well on the way to modernising its extensive fleet. New steps during the year included starting the construction of an additional two ferries at the Weihai Shipyard in China. These vessels will be delivered during 2022 as the last of five next generation, energy-efficient and flexible RoPax ferries (ferries adapted for both wheeled cargo and passengers) that are designed and built together with Stena RoRo. The first three; Stena Estrid, Stena Edda and Stena Embla, were all put into operation in the Irish Sea during 2020–2021.
The investment in the three new ferries proves the strategic importance of the Irish Sea operations to Stena Line. During the year, the decision was also announced to strengthen operations in the Baltic Sea in 2021, by implementing two modern, extended RoPax ferries between Nynäshamn and Ventspils in Latvia. This increased this route’s freight capacity by 30 per cent. Meanwhile, an additional two RoPax ferries between Travemünde in Germany and Liepaja in Latvia will increase freight capacity by 40 per cent and also reduce travel time. Today, the two routes, which have been operated by Stena Line since 2012, are an important link in the European logistics network by connecting the Baltic countries, Russia and Central Asian countries with Sweden, Germany and the rest of Europe.
Parallel to this, the port terminal in Nynäshamn was moved to the newly-built, modern Stockholm Norvik Port as an important element of the Baltic expansion plans. “We can see increased demand from our customers for marine transport in the Baltic Sea. This is an expanding region in which we already have a strong presence within both the transport and tourism sectors,” says Niclas Mårtensson.
TOWARDS A REDUCED CLIMATE FOOTPRINT
Stena Line’s ambition is to be a leader within the ferry industry regarding sustainability. The shipping line continues to improve its energy efficiency and is currently ten years ahead of the shipping industry’s international energy efficiency goal. Stena Line also continues to work actively to reduce its carbon emissions.
An important aspect of this is the focus on new fuels and the electrification of both onshore and offshore activities. In December 2020, the first shorepower facility in the port of Kiel was opened, and Stena Line now connects to green shore power on its daily calls in the port. This means that around 40 per cent of Stena Line’s ships are connected to green power at seven terminals in Sweden, Germany and the Netherlands. In overall terms, this reduces the shipping line’s annual emissions by 13,000 tonnes of carbon dioxide, which is equivalent to the annual emissions from 7,200 medium class passenger cars.
“Stena Line’s electrification journey began back in 1989 in Göteborg, when we connected the first ship to shore power. Stena Jutlandica was rebuilt to a hybrid electrically-operated vessel in 2018, on the Göteborg–Fredrikshamn route. By 2030 the goal is to launch a completely fossil-free, electrically operated ferry on the same route – Stena Elektra,” says Niclas Mårtensson.
Earlier in the year, Batteryloop (Stena Recycling’s subsidiary), DNV GL, and the ports of Kiel and Göteborg launched a project to investigate and assess future opportunities to reuse lithium-ion batteries from the transport and automotive industry in port-based energy warehouses, for recharging of electrical ferries or other electrical vehicles. The project runs for two years, partly financed by the EU.
The safety of personnel, passengers and freight is always high on the agenda, with well-functioning procedures and follow-up in place. Stena Line also focuses on gender equality and equal opportunities for everyone, with the aim of increasing the proportion of female managers. In the energy field, the focus is on more efficient fuel consumption, the transition to fossil-free fuels and electrification. To a great extent, the reduction of CO2 emissions in 2020 is related to the increased efficiency of the existing fleet, that two newbuildings and more energy-efficient vessels were put into operation in 2020, and that two routes operating older tonnage were closed as a consequence of the pandemic. For Stena Line, caring for the planet’s resources is a priority area, and the key ratio for materials recycling shows an increase during the year as a consequence of improved procedures and new waste suppliers in some ports. There were more oil spills in 2020 than in 2018–2019, and they were handled in accordance with current safety procedures and regulations.
Share of Total income
Capital employed, MSEK