DECEMBER 2019 ❘ VOL. 1019
ISSUE 10
portstrategy.com
INSIGHT FOR PORT EXECUTIVES Melbourne rail shuttle review | Med’ transhipment moves | Chilean port top dog | Climate change impact
TERMINAL TRAFFIC MANAGEMENT Short haul rail: a viable alternative? Australia Test-Bed
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The international magazine for senior port & terminal executives EDITORIAL & CONTENT Editorial Director: Mike Mundy mmundy@portstrategy.com Guest Editor: Mike Mundy mmundy@portstrategy.com News Reporter: Rebecca Jeffrey rjeffrey@mercatormedia.com
MIKE MUNDY ❘ Editor
Regular Correspondents: Dave MacIntyre; Iain MacIntyre; Felicity Landon; Alex Hughes; Martin Rushmere; Stevie Knight; John Bensalhia; Ben Hackett; Peter de Langen; Barry Parker; Charles Haine; Charlie Bartlett; Maurice Jansen; Bob Post; Tero Hottinen
Political appointees – past their sell by date
Production Ian Swain, David Blake, Gary Betteridge production@mercatormedia.com
VIEWPOINT
Political appointees at the top of a port authority – a system past its sell-by date? Weighing up the pros and cons the answer appears to be “yes it is.” More commercially oriented leadership appears the right road to go down today removing many of the traditional problem areas associated with political appointees and providing a more relevant focus overall
Is there any real benefit in having a political appointee sitting at the top of a port authority? It is a system that has been around for years but in today’s world is such a system past its sell by date? The system is in many ways a hangover of the days when port activities were largely wholly undertaken by the public sector in what can be described as “pure public sector mode.” Today, however, the front-line of port activities – cargo handling – is now mainly the province of the private sector. Equally, there has been a strong commercialisation of port management bodies – many, especially in mature markets, are now corporatized entities and at the far end of the change scale there are also now wholly privatised port management bodies. Classic theory is that a political appointee at the top of a port authority is there to represent the interests of government in conjunction with what is regarded as a strategic asset. There is also the reality, however, that there can be a significant element of ‘grace and favour’ about such an appointment – ‘jobs for the boys.’ Experience shows, for example, that politically driven appointments to the post of a president of a port authority can be implemented as a reward for services rendered elsewhere. It can, in effect, simply be a sinecure. Or – as we still see in some emerging markets today – it can be useful for some parties higher up in government to steer port-related events such as concession offers so that they end up incorporating elements that work to their financial benefit. Ultimately the question is do political appointments at the top of a port authority still serve any useful purpose or conversely do they get in the way of rational decision making? Is the system now more of a negative force than a positive one? There is no doubt that the world of ports has changed markedly over recent decades. It is now much more commercial and rightly so. Accordingly, the skill sets required to achieve effective port management have shifted away from the political dimension into a much more commercial realm – a sphere where rational decision-making takes place untainted by wider political considerations. Port management bodies without a political appointee at the top do still have to take account of political factors – not least when seeking public sector funding – but clearly they can act in a much more unbiased way. This is without doubt the most appropriate road map to follow in the future.
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DECEMBER 2019 | 3
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CONTENTS
DECEMBER 2019
16
NEWS
13
FEATURES
17 COLUMNS
17 Anger at Melbourne access fees High terminal access fees at the Port of Melbourne may cause cargo owners to look at other shipping and route options
18 ICTSI future proofs Umm Qasr
23 Melbourne Rail Shuttle Plans Under Review The state Government has been called upon to delay its decision on the Port of Melbourne's proposed A$15 container levy for import units.
16 25 San Antonio the winner in the battle for Chilean ports The Economic The battle for container handling supremacy in Union is in disarray
Two new berths at Umm Qasr means that the Basra Gate Terminal can now receive ships up to 14,000 TEU in size
11 New twist in Puerto Nuevo saga The planned new $1.9 billion terminal may actually now have two operators, not one, says one influential shipping line executive in Argentina
13 Lake of Ducks to surpass 100,000 TEU As the third anniversary approaches of a feeder service offered by Wilport Operadores in South Brazil, the 100,000 TEU barrier is set to be passed
Online portstrategy.com 5 Latest news 5 Comment & analysis 5 Industry database 5 Events
44
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Europe's economic growth is losing momentum and the EU needs to address the issues that caused Brexit in the UK
17 Get loud... to be heard Stakeholders in the U.S. ports business are seeking to unlock some of the stranded money in the Harbor Maintenance Trust Fund for spending to benefit ports
Chile finally has a winner and perhaps a little surprisingly it is not the traditional major port of Valparaiso
35 Susah secure port - securing the vision in Libya A major new port project is underway in Libya and represents an important step in developing much-needed infrastructure to allow the country to be rebuilt
44 Reach pickings offered by reachstackers Talking to some of the major reachstacker suppliers confirms current trends, innovations and benefits, which will bring further benefits to the port industry
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DECEMBER 2019 | 5
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NEWS
The Australian Freight & Trade Alliance has warned that high terminal access fees in Melbourne are encouraging cargo owners to look at alternative shipping routes. Port infrastructure charges have been controversial at Melbourne and other Australian ports, and have angered trucking firms and cargo movers because of the impost on their cost structures. The fees are charged to truckers and are passed on to customers, plus an administration fee. Apart from the fees themselves, this method of charging is resented by trucking firms, who argue they are forced to play the role of “tax collectors”. Since a series of price increases began in 2017, the Victorian Transport Association has calculated that in some cases truckers are paying 2000% more to deliver and pick up laden containers in Melbourne.
ANGER AT MELBOURNE ACCESS FEES
The FTA has also emphasised the size of the cost burden, with one major importer identifying that port access fees are now costing its business over A$3.4 million a year compared to less than $700,000 five years ago. The association recently
8 High access fees angering Melbourne users
convened a workshop with shippers to discuss the impact on their businesses and concluded terminal access fees in Melbourne are substantially
SINES INVESTMENT AS VASCO DA GAMMA ANNOUNCED
higher per container than in Sydney and other ports, which would encourage cargo owners to consider alternatives. “Participants in the workshop believed that the difference will have an impact on investment decisions, and will influence contestable trade,” the association said. The FTA says one local business reported that it had looked at using another port and land bridging cargoes to their Melbourne distribution centres, to avoid the infrastructure charges being charged at its local port. This, says the association, is an example of how port trade volumes will be affected if fee rises continue to spiral. The FTA is calling for regulation of port infrastructure fees, as part of the Victorian Government’s Port Pricing and Access Review. expected to be in the region of €225 million. One potential investor linked to this project is China Merchants Port Holdings, which could enter the race with financial support from China Development Bank. China Merchants has already signed a strategic cooperation agreement for potential investment in port infrastructure in the country with the China Portugal Cooperation Development Fund. As part of this arrangement, China Merchants will contribute know-how and its partner will secure the necessary funding.
PSA International and the Port of Sines have signed a new Terminal XXI concession contract amendment, which will see the operator invest €660.9 million. Of this total, €134.4 million will be spent on infrastructure, with work to take place between February 2021 and the end of 2023. As a result of the new contract, €9.3 million will be spent on the connecting railway line and €154.2 million on new equipment to be purchased by 2027. The Minister for the Sea in Portugal noted that the new investment will generate 900 jobs. PSA International assumed
control of sines in 1999 and Europe Director David Yang says that the company will continue to invest in the port’s future development. In 2004, Sines reported throughput of 20,000 TEU, rising to 1.75 million TEU in 2018, with an average annual growth rate of 37.6% during that period. Separately, the Portuguese government has also issued a public tender for the 50-year concession of the new Vasco da Gamma container terminal at Sines. This will require investment of €642 million. The tender encompasses the design, construction and operation of the
terminal, with potential bidders having almost nine months to assess prospects. An award is scheduled to be made in the final quarter of next year, with work to begin in 2021 for completion within three years. This new facility, which will have a capacity of 3.5 million TEU, will consist of a 1,375-metre long quay, incorporating three berths able to accommodate 24,000 TEU capacity container vessels. Alongside draft will be 17.5 metres and the whole terminal will cover 46ha. The concessionaire will operate 15 quayside gantry cranes, with the overall equipment budget
New Sydney DC
Spanish ports to see €167m funding
Oceania Ports Forge Alliance
Luanda terminal to be re-tendered
In Spain, the Interim Compensation Fund, the Ports 4.0 Fund and the Port Terrestrial Accessibility Financial Fund has confirmed investment of €167.7 million in ports during 2020. The money will be spent on access improvements and infrastructure works, as well as on startup projects and innovation spin-offs, with spending of €7.6 million going to navigation aids, €13.5 million to port authorities and €1.4 million to security upgrades.
New Zealand’s Port of Napier and Lyttelton Port Company have accompanied Pacific ports Fiji Ports Corporation, Samoa Ports Authority and the Cook Islands Ports Authority in becoming external associate members of Ports Australia. The alliance will facilitate communication, enhance trade and strengthen the voice of ports in the development of global regulation, says Ports Australia chief executive Mike Gallacher.
The government of Angola is to launch a new international tender for a concession covering the Port of Luanda’s Multipurpose Terminal. This follows the decision to terminate the existing 20-year concession agreed with a company that allegedly had close contacts with the country’s former president. The facility is accessed via a 610m quay with alongside draft of 12.5m and can handle 2.6 million tonnes per annum.
Sydney is to get a new import, storage and distribution facility aimed at serving the construction and infrastructure industries at Glebe Island in Sydney Harbour for projects such as Sydney Metro, WestConnex and the Western Harbour Tunnel. The Port Authority of New South Wales said there was “a crucial need for Sydney to import critical dry bulk construction materials for concrete production, due to the depletion of local sand supplies”.
For the latest news and analysis go to www.portstrategy.com/news
BRIEFS
DECEMBER 2019 | 7
NEWS
ICTSI FUTURE PROOFS UMM QASR International Container terminal Services inc. (ICTSI), of Manila, Philippines has confirmed a major step forward in the quality of port infrastructure in Iraq. The specialist terminal operating company has inaugurated two new berths at Umm Qasr, which will allow container ships of up to 14,000 TEU in size to be handled, as part of its phase two investment of $250 million at the Basra Gateway Terminal (BGT). Located in Umm Qasr’s North Port, BGT operates a container terminal, plus a range of other cargo facilities covering general cargo, ro-ro, dry bulk and project cargo for the oil and gas sector. The new berths, 25 and 26, offer 14m of water depth and along with the adjacent Berth 27, can provide a continuous berth length of 600m – sufficient for two larger container ships to work simultaneously. The investment undertaken by BGT and ICTSI includes new container handling equipment and IT systems. Three new shipto-shore gantry cranes have been added, each with the ability to reach out across 21 rows of containers on the deck of a vessel. The investment at Umm Qasr and the ability to now handle “New Panamax” class ships of
Port Otago Dispute Settled
14,000 TEU will allow cargo importers and exporters to benefit from improved scale economies of the bigger tonnage. This investment follows other recent terminal upgrades including the provision of facilities for the delivery of value-added services. These incorporate dedicated areas for reefer handling, export container stuffing and secure truck parking. An additional 10-hectare yard expansion will cater for future growth. The largest ships in service in the region at present and calling to Umm Qasr have been around
8 BGT opens the door to higher capacity vessels
6,000 TEU, although MSC recently introduced its New Falcon Service which uses vessels in the 8,000 TEU – 9,000 TEU size range. The investment made by ICTSI via its subsidiary BGT effectively future proofs the port of Umm Qasr regarding its ability to accept the larger capacity containerships up to New Panamax standard. This, in turn, is expected to promote additional direct calls, another positive for cargo shippers..
SPANISH PORTS IMPLEMENTING UPGRADES Algeciras Port Authority has placed a contract to upgrade road connections to its two container terminals, APMT at Juan Carlos I Quay and TTIA at the East Quay of Isla Verde Outer Harbour. Work, which will take place over seven months, will mostly involve reinforcement to the existing carriageway. As a means of boosting regional traffic in southern Spain and to increase the hinterland of Andalucía’s ports, the ports of Malaga, Algeciras, Cádiz, Huelva and Seville have agreed to present a joint offer for the Córdoba Freight Transport Terminal management contract. The aim is to synchronise traffic flows to the ports to encourage intermodal operators to direct more activity. Seville Port Authority has
BRIEFS
released a tender for changes to be made to a 17,000 m2 area of Armamento Quay. Work will enable the port to attract new project cargo. The hope is that new logistics operators will move into the port to help reduce overall costs for large projects. On Spain’s eastern Mediterranean coast, Valencia Port Authority has set itself the objective of doubling rail traffic in the next five years, mirroring the gains it made in the past five years. In 2013, rail handled 990,000 tonnes and by 2018 the figure reached 1.82 million tonnes. Expectations for 2019 are for traffic of two million tonnes. Currently, 8% of the import-export containers are moved by rail, with rail sidings at Cosco’s box terminal being lengthened to 750 metres and a
For the latest news and analysis go to www.portstrategy.com/news
new rail access being built to Sagunto harbour. Inland, Cosco has announced that it is to increase annual capacity at its railway terminal at Zaragoza to 330,000 TEU from a current figure of 165,000TEU. By the end of 2019, the terminal is expected to have handled 110,000TEU, double the figure of two years ago when Cosco assumed control of the facility. Traffic is mainly containerised agricultural products and parts for the automotive sector. Finally, Marin port authority has approved the modification of the concession held by Davila Reefer Terminal S.L, granting an eightyear extension in recognition of additional investment it has made in the existing fruit handling facility to increase storage capacity and handling efficiency.
Members of the Rail and Maritime Transport Union (RMTU) and Maritime Union of New Zealand (MUNZ) “overwhelmingly” voted to accept a revised pay and conditions offer from Port Otago in October, to end a six-month industrial dispute. “The settlement meets our concerns regarding fatigue management and provides for 3% annualised pay increases over three years backdated to expiry – i.e. 3% plus 3% plus 3% totalling 9.27% with compounding,” confirmed Combined Unions spokesperson John Kerr following settlement.
New multipurpose terminal for Ibicuy The Argentinian government has transferred 100ha of land to the province of Entre Ríos to allow a multipurpose terminal to be built at the Port of Ibicuy, which is located on the Paraná River. The province already had 7.9ha allocated to the project. The new facility, which will be located in the southern zone, will have a rebuilt quay and alongside draft of 10.8 metres. This will allow it to accommodate Panamax vessels.
AMP supports new Barú terminal Panama Maritime Authority (AMP) has called for construction of the Barú multipurpose terminal at the Port of Armuelles. The project is backed by Noriel Aráuz, who heads AMP and is both the Minister of Maritime Affairs and Barú’s mayor. Expressions of interest already received are currently being evaluated, while talks with potential terminal operators is also continuing. However, possible sites belong to the Ministry of Economy and Finance, will be making the final decision.
DECEMBER 2019 | 9
10 | DECEMBER 2019
For the latest news and analysis go to www.portstrategy.com/news
NEWS
MONTECON BOOSTS CAPACITY AND SHARE OF MONTEVIDEO WITH NEW MHC 8 New crane to boost capacity at Montecon
Credit: Robert Ward
Uruguayan stevedoring company Montecon SA has upped its capacity by adding a new Liebherr LHM 800 Mobile Harbor Crane and is now forecasting it will handle 450,000 TEU by the end of this year, around 60% of the total of boxes that pass through Montevideo. The latest arrival is the third Liebherr LHM 800 to be installed at Montecon, which operates out of four berths in the public area of the Montevideo port authority (Administración Nacional de Puertos del Uruguay, or ANP), bringing the total number of MHCs up to eight: seven built by Liebherr and one from Gottwald. Juan Olascoaga, General Manager of Montecon, said that the new $6million crane will replace an older, smaller crane that has already been sold back to Liebherr. He told Port Strategy that it was part of a long-term plan to upgrade and modernise all the older equipment currently deployed. “Our annual capacity is about 800,000 TEU per year but new, more modern cranes and
some other infrastructural improvements – including new paving and new storage areas will increase that capacity.” He added that the trustworthiness of Liebherr remains an “important
strategic partner” to the operation. In 2018 Montevideo handled 797,880 TEU, down 14.9% on the 937,427 TEU handled in 2017 (an all-time record), but that was mostly due to more than 100,000
NEW TWIST IN PUERTO NUEVO SAGA
TEU of Paraguayan transhipment cargo switching to Buenos Aires because of cheaper rates being offered and congestion in Montevideo. Montecon handled 445.594 TEU last year (around 56% of the total) with TCP handling the other 352,286 TEU. Montecon competes with Terminal Cuenca della Plata (TCP), which is owned by Belgian outfit Katoen Natie (KN). TCP operates a purpose-built container terminal using four ship-to-shore (STS) gantry cranes but business has not been profitable in recent years and it is understood that KN is planning to sell its 80% share in TCP. (ANP, the port authority, holds the other 20%). TCP opened for business in 2002 and at that time handled more than 65% of the Montevideo market, with Montecon taking the rest. authority for Buenos Aires) remain quiet about delays or changes to the plans for a new Puerto Nuevo but Campbell believes that a new Peronist government will roll back much of what was drawn up in the original plan or at least delay it. Fernandez had Cristina Kirchner Fernandez as his running mate and the Argentine business community fears she will push for state intervention, create uncertainty and impact potential investment.
The long awaited $1.9 billion development plan for Puerto Nuevo in Buenos Aires may now see two companies rather than one operate at the site for the foreseeable future. That is the opinion of Patricio Campbell, president of the Centro de Navegacion in Argentina (which represents the interests of all maritime and port operators) as well as president of ONE Argentina. “Obviously we will have to wait and see who the new government
appoints as Transport minister to oversee the project but I don’t think the full project will go ahead, especially the plan to reduce three operators in Puerto Nuevo down to one,” Campbell told Port Strategy, adding: “I think the new [left of centre] government will try and protect the number of dock workers currently employed at Puerto Nuevo, so I expect two companies to continue operating and to be given concession extensions.” Campbell said that he now
expects AP Moeller Terminals to be given a renewed contract for Terminal 4 and that would include taking over Terminals 5 and 6 (currently operated by Hutchison Ports) and for DP World-run Terminales Rio della Plata (TRP) to receive the same type of extension Alberto Fernandez took 48% of the popular vote in the Presidential elections on October 28 and takes power from December 12th. Sources at the Administracion General de Puertos (the port
Transformational PoAL
TCP completes expansion work
Draft issues at Colombian ports
Mexican Ports up 5% to end of Q3
Paranaguá Container Terminal (TCP) has inaugurated expansion work costing US$150 million. The facility has increased the length of its quay from 879 metres to 1,099 metres and the width from 40.8 to 50 metres. It has put into service two new ZPMC gantry cranes, to handle three container vessels simultaneously. Capacity has been increased by 60%, from 1.5 million TEU per annum to 2.5 million TEU per annum.
The Colombian Federation of International Trade Logistics Agents (FITAC) says that the restrictive draft of 12.5 metres in the access channel at Buenaventura is insufficient and needs dredging to 14.5m. For the first six months, this port was responsible for 12% of all Colombian port traffic. Also, the Port of Barranquilla has deepened a 22km-long stretch of its access channel to 10 metres.
Mexican ports handled a combined 5.4 million TEU in the first three quarters of 2019, an increase of 5.3% over the same period of 2018. Loaded containers rose 1% to 3.8 million TEU while empty units went up 17% to 1.6 million TEU, accounting for 30.4% of the total, compared to 27.4% last year. Pacific ports handled 3.7 million TEU, up 5.3%, with ports in the Gulf seeing a rise of 5.4% to 1.7 million TEU.
A comparable 24% decrease in underlying profit after tax to NZ$45 million and 2% rise in revenue to NZ$248.1 million was reported by Ports of Auckland (PoAL) in the financial year to June 30, 2019. Container volumes fell 3.5% to 939,680 TEU, with vehicle imports down 14% to 255,252 units and bulk and breakbulk volumes slipping 3.3% to 6.5 million tonnes. PoAL attributed the results to impacts of transformational projects.
For the latest news and analysis go to www.portstrategy.com/news
BRIEFS
DECEMBER 2019 | 11
NEWS
LAKE OF DUCKS TO SURPASS 100,000 TEU As it celebrates its third anniversary, the feeder service that the river port of Triunfo (serving Brazil’s fifth largest metropolitan area of Porto Alegre with 4.4 million people) and Rio Grande do Sul, in the far south of Brazil, is all set to burst through the 100,000 TEU barrier. Operated by Wilport Operadores (part of the Wilson, Sons diversified shipping group) the shuttle service has been posting annual growth rates of over 100% per year in container handling as it connects Contesc to the Tecon Rio Grande box terminal (also part of Wilson, Sons), via the Jacui River and the Lago dos Patos (Lake of Ducks). From the start of operations, in October 2016, until November of this year the terminal has handled more than 99,000 TEU, and with two vessels – the 150 TEU capacity Trevo Roxa and the 170 TEU Guaíba, a converted tanker. With each vessel operating a twice-weekly service. it should comfortably break the 100,000 TEU threshold in late December or early January 2020, especially as it is known to have been operating consistently at more than 90% load utilisation. Wilport operates four weekly trips between the two terminals (Santa Clara Terminal and Tecon Rio Grande), and the feeder service has also boosted throughput for TRG, although the 2018 throughput
EC approves TIL at Liverpool
figure (of 750,048 TEU) was down on the 2017 total due to the crippling truckers strikes that occurred in May of last year. Braskem, Brazil’s largest petrochemical company, is a shareholder in the Wilport and Contesc ventures and has been able to give the service guaranteed import/export boxes from the service’s inception. Rio Grande also produces 22% of Brazil’s chicken for export, and several leading exporters, including BRF Foods, Aurora, and Gramado Avicultura, have now started using the shuttle service from Triunfo. The shuttle service is also attracting shippers from the cities of Farroupilha, Carlos Barbosa, Garibaldi, Caxias do Sul, Veranópolis, Lajeado, Serafina
8 Feeder service from Wilport Operadores in South Brazil goes from strength-to-strength
Corrêa, and, of course, the port base town of Triunfo, among others. Since May 2017, the Wilport shuttle has also operated a warehouse at Contesc, where it can offer additional services, such as stuffing and stripping container services, while also generating savings of up to 20% in cargo transportation, according to Wilport and TRG. In 2018, cargo feedered by inland water transport accounted for 8% of the TEU handled by Tecon Rio Grande, which is the highest total in all of Brazil, according to the Antaq agency for ports and waterways. “This is a highly strategic business for the state of Rio Grande.
TRANSITIONAL LEASES FOR SANTOS Six different companies, including three major terminal operators, are competing to run three key areas in the Brazilian port of Santos for a “six-month transitional” period. The winners will also be in a great position to win all three areas when they are put out for longer 30-year plus tenders next year. The “transitional leases” are for the old Deicmar (break-bulk and car terminal) and Rodrimar (containers and general cargo) areas at the Saboó Pier, on the right bank of the port of Santos, South America’s largest for containers, with around 4.6million TEU forecast for this year. Bidders for at least one of the three areas (two smaller ones are
BRIEFS
ex Rodrimar) are Termares, Brasil Terminal Portuário (BTP), Santos Brasil, Portonave, Set Port, and Reliance. Santos Brasil operates Brazil’s biggest terminal for containers, across the bay in Guaruja, on the left bank, BTP (a joint venture between AP Moeller Terminals and Terminal Link, the stevedoring arm of MSC Line) runs the second biggest box terminal which is adjacent to Saboó Pier and the third major operator, Portonave, located in the southern port complex of Itajai which – since 2017 – is now fully owned by MSC, prompting speculative gossip as to why they are involved in two bids for these sites. According to Casemiro Tercio Carvalho, the president of Codesp,
For the latest news and analysis go to www.portstrategy.com/news
the port authority for Santos, the three sites are likely to be merged next year when the tender goes ahead for an area that has been dubbed the “Santos super terminal”. It is designated for containers and general cargo. Ecoporto Santos and Termares (which are contiguous on the other side of the site) are likely to bid for that expanded concession, but BTP would be the favourites to win it and then create a mega terminal that would probably make best use of the space available, according to a reliable local expert in Santos and Sao Paulo. Codesp says proposal criteria includes feasibility, financial structure and tariff revenues.
The European Commission (EC) has approved joint control of the Liverpool2 Container Terminal at the Port of Liverpool by Peel Ports Group of the UK and Geneva-based Terminal Investments Limited. The EC confirmed that TIL is jointlycontrolled by Mediterranean Shipping Company S.A. and a combination of private equity funds managed by Global Infrastructure Management, LLC. The Commission concluded that the proposed acquisition would “raise no market competition concerns.”
Oakland loses call Wan Hai, COSCO and PIL stopped calls at Oakland from the middle of November in a move to enhance schedule reliability on their respective CP1/SEA/AC5 services. Each of the three shipping lines has said that “alternative service connections” will be offered following the withdrawal of the vessels. Long Beach is maintained on the port rotation, but is now the only port of call on the US West Coast, following eastbound/ westbound calls at Yantian.
GPA fiscal year already up 4.7% Georgia Ports Authority handled 428,400 TEU in October 2019, giving the Port of Savannah a fiscal year-to-date total of 1.6 million TEU, up 6%. Total tonnage was 13 million tons for July through October, a 4.7% increase over one-year earlier. Also, A&R Logistics is to open a new 600,000ft2 packaging facility by late 2020 for export of plastic resins to support the chemical industry. Recently, Plastic Express confirmed $172 million investment in two 1 million ft2 packaging warehouses.
DECEMBER 2019 | 13
Valenciaport
where everything is connected
With its unrivalled strategic location, Valenciaport connects everything in the new digital age. It connects the largest hinterland in the Iberian Peninsula and is connected to over 1,000 ports around the world. It connects the industry's leading operators, the most advanced infrastructure and equipment, innovation, quality, technology, sustainability and, above all, it connects people.
NEWS
NEW GENERATION OF TERBERG YARD TRACTORS
Erratum In the November edition of Port Strategy, the article "The Real Culprit in Miami" was wrongly attributed to Charles Haine. The correct author was Stevie Knight.
New Berth 9 at Pecém
chassis of an entirely new, patented, design and are specifically designed to give maintenance fitters quick and easy access to the mechanical and electronic components. For example, the entire dashboard can be removed or refitted in minutes, while items such as covers, bumpers and windows are easily replaced if damaged. Other improvements to facilitate day-to-day operations and improve productivity include such practical matters as the fuel tank and AdBlue tank both located on the same side and the upgraded hydraulics ensure improved
8 The new generation of Terberg Yard Tractors
functional safety and better control of the lowering of the lifting frame. Additionally, the Terberg Connect software means users can access operational data from the Yard Tractors to optimise fleet management by tracking vehicle movements and schedule preventive maintenance to maximise equipment availability. Terberg supplies working vehicles in over 130 countries to ports, distribution centres, heavy industries, tunnelling sites, shunting yards and airports.
ICTSI PROPOSAL TO DEVELOP ILOILO PORTS Manila-headquartered global terminal operating company, International Container Terminal Services, Inc. (ICTSI), has received a letter of acceptance for completeness from the Philippine Ports Authority (PPA) relating to its plans for the Iloilo Commercial Port Complex and Port of Dumangas. The next step is for PPA to commence an evaluation of the legal, financial and technical merits of ICTSI’s proposal, with the results due within a maximum of 60 days. Christian R. Gonzalez, ICTSI Global Corporate Head said: “We are excited about this development as we know we submitted a fully compliant proposal that will be the most beneficial for Iloilo. We are fully committed to working with the
BRIEFS
Photo credit: Terberg Benschop
Terberg has confirmed release of a new generation of Yard Tractors, which will be easier to maintain and are compatible with all power options (diesel, electric and hydrogen). Greater operating flexibility is also targeted, with the new Terberg YT Series designed for use at ports, distribution centres, industrial sites and airports. Deliveries of the initial models will start in the summer of 2020. The new Terberg YT Series is a multifunctional platform, with power options of stage 5 certified diesel engines, 3rd generation electric drives and, at a later stage, hydrogen fuel cell drivelines. The Yard Tractors also form the new platform for the automated AutoTUGTM. The vehicles will help reduce fuel consumption using state-of-the-art engine technology, and make transport more sustainable. Terberg says that the spacious cab has an ergonomic design to “optimise operator convenience,” with intuitive fingertip controls are placed next to the driver's seat and large slightly angled windows ensures excellent visibility in all directions and prevents distracting reflections. The new terminal tractors feature an innovative galvanised
PPA on this project, and are hopeful to be granted original proponent status (OPS).” He adds: “With the Transportation Department’s recent directive to fast track unsolicited bids for port projects, we are confident that we will be able to assist the Philippine government more in its goals of upgrading the country’s port network; and help Iloilo attain its full potential in facilitating even greater trade facilitation that will improve connectivity for cargo movement within the country.” Over the life of the concession that will be agreed on with the PPA, ICTSI has estimated an investment of over PhP8.7 billion to fully develop the Iloilo Port Complex – including dredging and deepening of the drafts and
For the latest news and analysis go to www.portstrategy.com/news
channel to allow the direct entry of new generation, international vessels; and purchase of modern quayside crane handling equipment estimated to cost around Php1.35 billion. ICTSI is also offering to substantially invest in the development of the Port of Dumangas in order to seamlessly handle the spill over from the city port. The Iloilo-Dumangas bid is ICTSI’s first foray in the Visayas with the objective of providing a national network of ports with ICTSI’s brand of operational synergy that would further improve the country’s supply chain and competitiveness in global trade. ICTSI currently operates 32 terminals in 18 countries and handles more than 10 million TEU per annum.
The north Brazilian port of Pecém is set to receive an operating license for a new berth which will allow the facility to receive 10 vessels simultaneously. Pecém Industrial and Port Complex (Cipp S.A.), which operates the port, said that the opening-up of Berth 9 constitutes the final stage to its second expansion programme. Pecém specialises in fruit exports.
Strong September at Santos In September 2019, the Brazilian port Santos recorded its second-largest monthly container movement in its history, with 386,165 TEU handled, up 9% over September 2018, between its four box facilities; Santos Brasil’s Tecon Santos, DP World Santos, Brasil Terminal Portuaria (BTP) and Ecoporto Santos. The record is August 2018 (387,791 TEU) but that was partly shippers catching up with the backlog caused by Brazilian truck strike.
Second busiest October for LB October 2019 was the second busiest October ever for the Port of Long Beach, with 688,245 TEU handled, a slight decrease of -2.4% on October 2018. Export growth was 9.8% to 131,625 TEU, although imports were down -7.4% to 337,062 TEU. The January to October 2019 period recorded 6.37 million TEU, -5.4% on 2018’s record year. The port said a “lingering trade war” was “creating uncertainty for importers and exporters.”
DECEMBER 2019 | 15
THEECONOMIST COLUMNIST BEN HACKETT
THE ECONOMIC UNION IS IN DISARRAY The European Economic Community made strident efforts to move the bloc to the next level, political union, embodied in the principles of the Economic Union (EU). It has been a hard and rocky journey with some successes. Things like the Schengen Agreement, the Lisbon Treaty, the Euro currency and the European Central Bank but have not been followed by greater fiscal union, which is needed to create a cohesive strategy. Europe’s economic growth is losing momentum. GDP figures showed that the eurozone’s economy expanded by just 0.2% in the three months to the end of September compared with the previous quarter. The decline is led by Germany. Most of the growth in the Euro area has come from consumer expenditure but that is beginning to evaporate as the manufacturing sector stalls. A number of problems can be identified. Individual countries
8 Europe’s economic growth is losing momentum
run their own economic and fiscal strategies. Germany and the Netherlands, with large budget surpluses, refuse to spend to expand their economies. This has an impact on the remaining members.
THESTRATEGIST
Brexit is a nightmare for the Union as it exposes fault lines in other member states. A third problem is the EU budgeting system. With the new members from central and eastern Europe there are a lot of funds
required to bring their economies in line with the richer north. This brings with it corruption. In a recent NY Times article, an estimated $65 billion is spent on agricultural subsidies, around 40% of the total budget. “Europe’s farm program is being exploited by the same antidemocratic forces that threaten the bloc from within.” The Common Agricultural Policy, developed for France but with Germany and the Netherlands signing on as well. is a major problem. For all intents and purposes, the EU Commission has failed to manage the system, not wanting to tackle the corruption of how the funds are shared out. For the EU to survive it needs to address the issues that caused Brexit as well as how it spends its budget and where it wants to go. There is no consensus on any of these.
COLUMNIST
MIKE MUNDY
MED’ TRANSHIPMENT MERRY GO ROUND… Another round of musical chairs appears to be underway in the Mediterranean transhipment business. Maersk and its alliance partner MSC have withdrawn transhipment business from Malta Freeport in favour of a move to the north African port of Tangier Med and Port Said, Egypt. Maersk’s sister company APM Terminals has recently opened its new automated container terminal at Tangier Med II and hence the transfer of transhipment operations to this location represents both a cost saving move and a beneficial one for the parent AP MollerMaersk group overall. Hapag Lloyd also just announced a minority stake investment in the other Tangier Med Terminal being developed under the Tangier II expansion. It has purchased a 10 per cent stake in the new Tangier Med terminal being developed by Marsa
16 | DECEMBER 2019
International Tangier Terminals (MITT) which is scheduled to open in mid-2020. As a result, this new terminal business will now be known as the Tangier Alliance and will feature a new equity line-up comprising: 51 per cent Marsa Maroc, whose parent is MITT, Eurogate International and Contship Italia 39 per cent and Hapag Lloyd 10 per cent. Generally, these two terminals significantly raise the stakes for Tangier Med in the container transhipment business opening the door to the port offering an annual capacity in excess of nine million
TEU, a significant increase over the previous level of 3.4 million TEU/yr. Another game changer is set to be the port of Valencia’s fourth container terminal development – a facility designed to serve the largest vessels in service and foreseen for the future. MSC, well established in Valencia, was the only bidder for the facility and is expected to set up an automated terminal operation there. The facility offers the potential to eventually raise total annual container throughput capacity at Valencia from the current level of 7.5 million TEU to 12.5 million TEU.
Currently, transhipment accounts for around 65 per cent of Mediterranean container demand with growth more or less static due largely to an excess of container capacity driving direct calls over transhipment. But as the excess reduces growth is expected to start climbing again.
MSC, which operates its terminals under the Terminal Investment Limited (TIL) banner and already has one dedicated terminal in the port, clearly has plans to introduce major new container volume at this advanced new facility. No news yet as to where this will come from but it is reasonable to expect that this will also involve its partner in the 2M alliance, Maersk Line. Other Med’ moves from container lines can be expected and particularly as a part of a shift to dedicated terminal operations and as a result of transhipment activity starting to grow significantly in the region again. Currently, transhipment accounts for around 65 per cent of Mediterranean container demand with growth stalled due to an excess of liner container capacity driving direct calls over transhipment. But as the excess reduces growth is expected to start climbing again.
For the latest news and analysis go to www.portstrategy.com/news
THENEWYORKER
COLUMNIST
BARRY PARKER
For many years, stakeholders in the U.S. ports business have been seeking to unlock some of the stranded money in the Harbor Maintenance trust Fund - some $9 billion sitting in the Federal coffers, and enable it to be spent on dredging and other needed projects that will benefit the ports. The Harbor Maintenance Tax is assessed on cargo handled, at rate of 0.125% ($1.25 for each $1,000 of cargo value). A major step forward occurred in late October, with the U.S. House of Representatives passing H.R. 2440, the “Full Utilization of the Harbor Maintenance Trust Fund Act”. Congress is to appropriate $34 billion over the next decade to restore America’s federal navigation channels to their originally-constructed widths and depths.” Another influential group, the American Great Lakes Port Association (ALGPA), has said: “The net effect is to automatically ‘make room’ in the federal budget for full harbor maintenance spending,
GET LOUD . . . TO BE HEARD
without squeezing other programs.” The ALGPA notes further that the, “… action in the House is significant in that it overcame historic opposition in that chamber.” The AAPA asserts that it looks forward to working with Congressional leaders to help move the bill forward. The next step in the obstacle-
THEANALYST
8 The noise coming from Washington, D.C. has been deafening lately
filled process of pushing towards actual legislation will be in the U.S. Senate, initially its Environment and Public Works Committee, which will draft its version of the bill. At some point, the House and Senate versions are supposed to be melded together into a version
that can be signed into law. This is all well and good, but the usual flow charts of how things work inside the Beltway will no longer apply. The House and the Senate are becoming increasingly distracted by potential actions to impeach President Donald Trump, where there will likely be many twists and turns and shoals (which are impossible to handicap, so I won’t try). Trade Associations (AAPA, ALGPA and others) can certainly keep the pressure on, especially in dealing with staffers who guide their bosses. But this is really a time for everyone involved (dare I say “stakeholders”?) in leadership positions to be in touch with their Congressional representatives in both legislative chambers. The noise coming from Washington, D.C. has been deafening lately - it will get worse. So, to repeat a familiar New Yorker refrain - it’s time to get loud…really loud, to keep being heard.
COLUMNIST
PETER DE LANGEN
PORTS AND EXPORT COMPETITIVENESS In drafting port policies and assessing the benefits of investments in port development, we often stress the link between better ports and export competitiveness. And indeed, various studies demonstrate there is a positive link between the two. Because of the diversity of exporters and export commodities, the relation between ports and export competitiveness is often assessed at the macro level, i.e. not for specific exporting companies. The case of RAK, the fourth largest emirate of the UAE, is a good case to show this link more specifically The port of Saqr, as all ports in RAK managed by the state-owned company RAK Ports, is the largest dry bulk port of the region, with over 70 million tons of dry bulk exports in 2018. The main export commodities are aggregates and limestone, and the two main
exporting companies and the state-owned companies RAK Rock and Stevin Rock. Aggregates and limestone are mainly used in construction projects and are fairly low value commodities. As a consequence, most of the trade flows of both materials are intra-regional. However, given the uncertainty of the regional demand, RAK Rock and RAK Ports have a strong shared interest in serving markets outside the Gulf, such as India and Bangladesh. Very competitive
For the latest news and analysis go to www.portstrategy.com/news
logistics costs are crucial for the ability to serve these markets. Helped by the fact that RAK Ports and RAK Rock are ‘sister companies’ both owned by the state, both companies have recently started deep cooperation with the aim to improve export competitiveness beyond regional markets. Relevant issues include improved operational efficiency in the transport to the port, deployment of larger ships to reduce shipping costs per ton, searching for return cargoes and a
8 Port of Saqr: Case for tight relations between port company and exporter is clear
joint commercial approach to potential customers. This case clearly shows ports matter for export competitiveness. In the case of RAK, the case for tight relations between the port company and exporting companies is clear. Other ports, with less visible large exporters may also benefit from identifying exports and exploring the potential for specific initiatives to promote export competitiveness.
DECEMBER 2019 | 17
SOLUTIONS FOR GLOBAL CHALLENGES ร ร ร ร รซรต รฃ รนรฑรดรฎรฆ รฎรงรฃรฆรงรด รซรฐ รถรชรง รตรฒรงรฅรซรฃรฎรซรตรงรฆ ฤ รงรฎรฆรต รฑรจ รฆรดรงรฆรฉรซรฐรฉ รฃรฐรฆ รฎรฃรฐรฆ รดรงรฅรฎรฃรฏรฃรถรซรฑรฐ รฑรจรจรตรชรฑรดรง รงรฐรงรดรฉรป รงรฐรธรซรดรฑรฐรฏรงรฐรถรฃรฎ รดรงรฏรงรฆรซรฃรถรซรฑรฐ รฃรฐรฆ รซรฐรจรดรฃ รฏรฃรดรซรฐรง รนรฑรดรญรต ร ร ร ร รซรต รฃ รจรดรฑรฐรถ รดรทรฐรฐรงรด รซรฐ รซรฐรฐรฑรธรฃรถรซรฑรฐ รฃรฐรฆ รฐรงรน รถรงรฅรชรฐรฑรฎรฑรฉรซรงรต รฑรฒรงรดรฃรถรซรฐรฉ รฃ รธรงรดรตรฃรถรซรฎรง ฤ รงรงรถ รฑรจ รฑรธรงรด %$$ รธรงรตรตรงรฎรต ร รซรถรช รฃ รตรถรดรฑรฐรฉ รฒรดรงรตรงรฐรฅรง รซรฐ รฃรฎรฎ รฑรจ รถรชรง รนรฑรดรฎรฆ รต รตรงรฃรต รฃรฐรฆ รฅรฑรฐรถรซรฐรงรฐรถรต ร ร ร ร รฒรดรฑรธรซรฆรงรต รตรฑรฎรทรถรซรฑรฐรต รจรฑรด รฉรฎรฑรครฃรฎ รนรฑรดรฎรฆรนรซรฆรง รฅรชรฃรฎรฎรงรฐรฉรงรต รฃ รฉรดรฑรนรซรฐรฉ รฒรฑรฒรทรฎรฃรถรซรฑรฐ รดรซรตรซรฐรฉ รตรงรฃ รฎรงรธรงรฎรต รถรชรง รดรงรฆรทรฅรถรซรฑรฐ รฑรจ รงรฏรซรตรตรซรฑรฐรต รฒรฑรฎรฎรทรถรงรฆ รดรซรธรงรดรต รฃรฐรฆ รตรฑรซรฎรต รฃรฐรฆ รถรชรง รตรฅรฃรดรฅรซรถรป รฑรจ รฐรฃรถรทรดรฃรฎ รดรงรตรฑรทรดรฅรงรต
Dredging and land reclamation Offshore Environmental remediation Infra marine
www.deme-group.com
THEENVIRONMENTALIST COLUMNIST CHARLES HAINE
IMPACTS FROM OPEN LOOP SCRUBBERS Having heard rumours about open loop scrubbers adversely affecting sediment in British harbours this year, it came as little surprise when the media announced a story in late October. The reveal is that these scrubbers pollute the sea – and seabed – instead of the air, despite reaching compliance with the IMO’s requirement to use fuel oil with 0.5% sulphur content (existing is 3.5%). The headline was even more spectacular: “Environmental ‘cheat devices’ fitted to thousands of ships could render UK ports unusable”. Scrubbers work by spraying exhaust gases with seawater to capture sulphur dioxide. ‘Open loop’ scrubbers allow the discharge of the resulting acidic and contaminated (e.g. by sulphite, heavy metals such as lead and zinc, soot particles) wash waters into the sea. In turn, these pollutant wastes settle onto and into sediment and significantly increase the cost of dredging. The global shipping industry has spent a substantial $12bn (£9.7bn) on scrubbers in around 3,700 vessels, with 500 now in service. Despite being heavy units and not helping fuel efficiency, the return on investment is said to be one year. The approach is allowed under IMO guidelines and is cheaper than purchasing cleaner fuel, at $300-500 more, per tonne. Less than 2% (65) of scrubbers are ‘closed loop’ systems that store the extracted wash waters in tanks before discharging to an appropriate waste reception facility on the landside when in port. Problems are guaranteed to occur where dumped scrubber wastewater build-up pollutants after repeat visits in navigation channels, turning circles and berths. Ports are rightly worried that the accumulations of polluted sediment will warrant the deployment of considerable mitigation measures to avoid and prevent the resuspension of contaminants. Those can ingress into ecosystems, and ultimately the food chain. A 2015 study by Umweltbundesamt – UBA (the German environment agency), concluded the use of open loop scrubbers causes
environmental degradation through short-term and spatially limited Ph value reduction, an increase in temperature and turbidity alongside discharge of sometimes persistent materials. With the annual cost of maintenance and capital works dredging already costing many millions, the increased outlay including programmes to manage hotspots of contamination might require an investment that could put a port out of business. Isolating and capturing contaminants underwater is a time-consuming and difficult activity. Likewise, the disposal – usually at dump sites offshore – will require studies, modelling, licences and new contracts with marine contractors. Any instruction to treat or remediate contaminated seabed could prove to be tens of times
costlier than disposing of noncontaminated dredged material. The conundrum comes from ports and terminals being reliant on visiting vessels but now suffering an increase in risk from a new, and potentially long-term pollution source. Port authority engagement with vessels, and terminals, and the policing of ships’ activities are yet another area for attention. Vessels should not be discharging such wastes into the marine environment, let alone in ports. Ports have got to grips with much better water and sediment quality in their harbours in the last few decades and there is shortterm evidence this is now being compromised by vessels with open loop scrubbers. The backlash is underway. China, Fujairah (UAE) and
Problems are guaranteed to occur where dumped scrubber wastewater build-up pollutants after repeat visits in navigation channels, turning circles and berths. Ports are rightly worried that the accumulations of polluted sediment will warrant the deployment of considerable mitigation measures to avoid and prevent the resuspension of contaminants. Those can ingress into ecosystems, and ultimately the food chain
For the latest news and analysis go to www.portstrategy.com/news
8 Concerns over open loop scrubbers in ports
Singapore will ban the use of open loop scrubbers, from the start of 2020, to coincide with the IMO MARPOL Regulations on the topic coming into force. Individual ports in Ireland, Finland, Lithuania, the Russian Federation and the UK are all banning or restricting the discharge of scrubber wastes in their waters. Norway may be considering an outright ban on all types of scrubbers. Environmental and sustainability initiatives in the maritime sector from the Poseidon Principles through to loans for CAPEX expansion projects will undoubtedly prohibit the use of open loop scrubbers in the future. The law of unintended consequences illuminates the perverse unanticipated effects of legislation and regulations. The push to meet the IMO’s 2020 deadline on 0.5% sulphur in marine fuel oil will certainly help air quality, but at a potentially serious cost to the marine environment. The implications for smaller ports that host cruise and/or cargo vessels are potentially disastrous. Anticipate more scrutiny and the need for marine surveys in the aquatic environment to measure and confirm these startling risks and hazards.
DECEMBER 2019 | 19
AUSTRALIA: INTERMODAL RAIL
PORT RAIL PROPOSALS MOVE FORWARD IN AUSTRALIA The rejuvenation of on-dock rail and rail shuttles is moving ahead in several Australian ports, but is not without its challenges, as Dave MacIntyre discovers
8 A rail shuttle entering Port Botany, with the Sydney city skyline in the distance
While rail modal share is being targeted for a resurgence in Melbourne, NSW Ports (Botany and Port Kembla), Brisbane and Fremantle, the debate brings with it the issues such as government subsidies, the potential for double-handling costs at intermodal terminals and, in Melbourne the unfair application of levies on import containers for all stevedores where one – VICT – is not rail-served. The Melbourne issues are discussed in detail in the article on p23 with the wider freight community currently waiting to see whether the $15 per TEU wharfage increase goes ahead. Elsewhere in Australia, however, port rail expansion has big support. In Brisbane, the potential for port rail expansion has been cast into the spotlight by the release of analysis by Deloitte Access Economics, which says a dedicated freight rail connection to the port would be “game-changing.” Brisbane has advocated for dedicated freight rail connectivity to the port, to overcome friction between freight and the passenger rail network. Currently, 98% of freight is trucked to the port through roads in regional communities and city suburbs. In 2018, that equalled approximately four million truck movements, which will increase to 13 million by 2050. The port believes this is not sustainable long-term as SouthEast Queensland grows. It commissioned the Deloitte study, which concludes that an urgent shift from the region’s reliance on road freight is needed to accommodate a freight task climbing from 1.35 million TEUs in 2018 to around 5 million in 2050. The study also identified that a 30% rail modal share to the port by 2035 could deliver 2.4 million fewer truck movements
20 | DECEMBER 2019
and around A$820 million in economic, social and environmental benefits each year. Port of Brisbane CEO Roy Cummins has welcomed the proposal to separate the existing shared passenger and freight rail networks, saying that as Queensland’s population grows there will be future issues. “The way our supply chain is established at present, that means a truck tsunami is heading our way,” he confirmed. Mr Cummins says a dedicated freight rail connection has already been acknowledged by all levels of government as a key priority through the SEQ City Deals proposition. The SEQ is a joint production of the Queensland Government and the Council of Mayors which identifies transformational opportunities for future deal negotiations with the Australian Federal Government. In NSW, rail is a fundamental part of the 30 year-plan for Port Botany and Kembla. The NSW Ports’ Masterplan has a goal to move three million TEU on rail by 2045 because every million reduces the number of trucks on roads around the port by 900 per day and lowers emissions. An ongoing focus on port/rail efficiency has delivered a 52% increase in containers moved to and from Port Botany by rail since 2015. Port Botany now has the largest number of containers moved by rail of all Australian ports at 436,000 TEU. It is the only container port in Australia with on-dock rail at all three stevedore terminals. To further increase capacity and efficiency, NSW Ports has committed $120 million in funds for Stage 1 works to double port-side rail capacity at Patrick Terminals – Sydney AutoStrad
For the latest news and analysis go to www.portstrategy.com/news
AUSTRALIA: INTERMODAL RAIL
from 750,000 TEU to 1.5 million TEU, with $70 million coming from Patrick for new rail operating equipment and technology. A start was made in August 2019 and the project will take place in staged development to allow existing rail operations at the terminal to continue throughout construction. It will be fully operational in 2023. Investment is following at the DP World and Hutchison terminals. NSW Ports CEO Marika Calfas says rail is “fundamental to support the future growth and trade needs” of NSW and construction of additional on-dock rail infrastructure will further enhance efficiencies in the supply chain. In addition to the container trades, since 2018 NSW Ports has moved 350 cement wagons on rail per month at Port Kembla to support the Sydney construction boom. At Port Kembla, rail handles the carriage of coal, grain, copper concentrate and steel for export. The extensive rail yard within the port allows the movement and storage of multiple train sets in excess of 1.2 km. NSW Ports’ also has the capability to offer common-user intermodal rail access in the Outer Harbour. While NSW Ports manages the rail network within the Inner Harbour and the Outer Harbour consisting of rail lines, sidings and loops, the rail connections to Port Kembla from markets in regional NSW are provided by the Illawarra Line and the Moss Vale-Unanderra Line, managed by the NSW Government and ARTC respectively. NSW Ports believes solutions need to be found to accommodate further freight rail demands, such as upgrades to the Moss Vale-Unanderra Line and construction of the Maldon-Dombarton Line.
NSW Ports believes solutions need to be found to accommodate further freight rail demands, such as upgrades to the Moss Vale-Unanderra Line and construction of the Maldon-Dombarton Line Upgrades of the Moss Vale-Unanderra Line to allow longer, heavier and faster trains would improve the line for dedicated freight use, while the Maldon-Dombarton Line could unlock the further potential of Port Kembla and maximise rail transport of bulk products. By comparison, in Western Australia, the state government has a commitment to achieve a 20% share of freight on rail and is putting money where its mouth is by subsidising rail transfers. A record high of 23.7% of freight taken to Fremantle Port Inner Harbour went by rail in April 2019, with the government's policy to raise the container rail subsidy credited with a 30% increase in rail’s modal share. Prior to the increase in the subsidy, rail’s share had dropped to as low as 10.9% under the previous government. Fremantle Ports is currently undertaking a market process to determine who will manage and operate the North Quay Rail Terminal in future, which will help drive further efficiencies in rail operations at the port. The WA state government now has a taskforce planning for a longer-term Outer Harbour freight solution and favours the development of more intermodal terminals in the greater
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DECEMBER 2019 | 21
AUSTRALIA: INTERMODAL RAIL
metropolitan area, which will enhance the efficiency of the rail system and encourage more freight to move by rail. USER VIEWPOINT From the viewpoint of users of Australia’s ports, Container Transport Alliance Australia Director Neil Chambers says there are several issues which arise about on-dock rail proposals. “There are many challenges that will need to be overcome to build rail’s market share and it would most likely require the government to subsidise its use, as they do in Fremantle for instance, which has a $50 per TEU subsidy (i.e. $50 per 20’ and $100 per 40’ container),” he confirmed. The executive added, “One of the tricks to successful port rail shuttle operations will be in attracting import containers to utilise the services. However, many import containers are time sensitive – many importers want their box first day of availability off the ship. This is unlikely to happen if rail is used to shuttle the import container to an urban terminal for subsequent delivery or unpack.” Other issues exist too. “You also have the issue of avoiding shipping line container detention in being able to return the empty container within the detention-free time, before significant charges are incurred. The added time involved in using rail can be an issue in that regard,” he stated. Mr Chambers says the other main challenge is purely price, given that rail always involves additional container lifts, which costs more in container handling. “Intermodal terminal operations come into their own when the container and its contents are dealt with on-site (i.e. value-add at the intermodal
facility). That is the model for example at the Moorebank intermodal facility due to open in Sydney’s western suburbs very soon (to be operated by Qube). However, Mr Chambers provides a key question that needed to be answered. “Will that be the model at the urban intermodal facilities in Melbourne’s west, north and south-east? If the container is shuttled by rail to one of these urban intermodal facilities (one at least only 15km away from the port gate), only to be loaded onto a truck for ‘last mile’ delivery (or vice versa for exports), then what’s the point?”
8 On-dock rail at Port Botany, Sydney
Cargo / Passenger and Recreation / Military Facilities Core Services Advisory Services Port Planning and Analysis Environmental Services Engineering Services Coastal Engineering Program Management Construction Services Asset Management
wsp.com/maritime Simon Harries Tel: +44 777 322 8338 simon.harries@wsp.com
22 | DECEMBER 2019
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AUSTRALIA: INTERMODAL RAIL
MELBOURNE RAIL REVIEW Fierce criticism of the Melbourne Port Rail Shuttle plans have sparked a review The Port of Melbourne faces all the usual challenges to move container freight from road to rail but has the added major challenge of providing port-side intermodal rail capacity that offers a level playing field to the port’s three container terminal operators. Current Port Rail Shuttle plans do not achieve this – with ironically the disadvantaged party, Victoria International Container Terminal (VICT), being the Webb Dock based operator which is supposed to represent the future of container handling in the port. This reality, combined with fierce criticism of the idea of a A$15 container levy on all loaded container imports moving through the port to pay for the new rail arrangements, has led the Victoria State Government to announce a review of the plan and a related study which is expected to consider port traffic management at a wider level. The study is to be undertaken on a fast-track basis with initial findings expected around March next year. CURRENT SCHEME CRITICISMS The current Port Rail Shuttle plan, which is effectively the first major initiative proposed by the Lonsdale Group the new owners of the port of Melbourne, foresees the establishment of a Port Rail Shuttle (PRS) which will operate between a portside Metropolitan Intermodal Terminal (MIRT) and two suburban terminals, one in the north located at Somerton and one in the south west at Altona. The shuttle trains themselves are envisaged to have a maximum length of up to 600m, a locomotive at each end (push and pull) and a nominal capacity of 84TEU. Five sites have been identified by Port of Melbourne management as potential locations for the MIRT – all of these sites are basically ranged around Swanson Dock where DP World and Patricks operate their respective container terminals. And herein lies the problem in that these two locations will primarily focus on regional rail coverage for Australian exports and as result VICT will be competitively disadvantaged to the point that it will basically be shut out of this market sector.. And to leave VICT without a rail connection – and come to that the other Webb Dock terminals including the new auto terminal – is in the words of many port users ridiculous given that Webb Dock is acknowledged to be the primary location in the port designed to facilitate future traffic growth. VICT, unlike the two Swanson Dock terminals, is not constrained by the air draft restrictions imposed by Westgate Bridge and as such is the only container terminal in the port of Melbourne able to accept the higher capacity vessels being introduced into Australia’s primary container trades. VICT CALLS FOR DELAY Hardly surprisingly, given the foregoing, VICT has called on the state Government to delay its decision on the port’s proposed A$15 a container levy for import units. In a public statement on the issue VICT states: “The Port Rail Shuttle is intended to improve the port’s interface with Victoria rail networks and thereby reduce the number of trucks using local roads. “But as currently planned, the Shuttle does not link with Melbourne’s metropolitan rail network, but rather the regional exports and leaves stranded the port’s Webb Dock growth terminals. This has little prospect of taking trucks off
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8 “It seems crazy that VICT’s customers importing containers should get lumped with an additional cost with no benefit,” contends Paul Zalai, Director, Freight and Trade Alliance
Melbourne’s roads and will not mitigate the much greater truck congestion that is a growing reality today. “The government, VICT argues, “should take the lead to develop a much wider plan to optimise the existing links between the port area and the intermodal freight hubs in greater Melbourne locations such as Dandenong, Camberwell and Altona. Consideration in this review,” it elaborates, “should be given to the wider more efficient management of port traffic including greater utilisation of off-peak periods and more extensive use of high productivity freight vehicles and one-stop freight hubs. This can be done at much more manageable cost, scaled much better and deliver more efficient solutions for the supply chain.” The leading industry body Freight & Trade Alliance, which includes in its membership diverse port users, has also questioned the rationale of the Melbourne port rail plan. Paul Zalai, Director, FTA, speaking to PS comments: “While Australian exporters are the winners from the proposal. There are clearly a range of significant losers. Major importers argue that they should not be subsidising exports and some of those not using rail are questioning why they should be paying any fee at all. “The argument,” Zalai elaborates, “then extends to VICT at Webb Dock that does not have a rail interface. It seems crazy that their customers importing containers should get lumped with an additional cost with no benefit.” And voicing the view of many he concludes “…the proposal needs further consideration and a closer correlation to a user pays basis.”
DECEMBER 2019 | 23
REGIONAL PROFILE: CHILE
SAN ANTONIO THE WINNER IN BATTLE OF CHILEAN PORTS Container handling supremacy has been a long-term fight in Chile but, as Rob Ward discovers, there may finally be one port set to win through
8 Container demand shifting to San Antonio
The Battle Supreme for container handling supremacy in Chile – between the ports of San Antonio and Valparaiso – finally has a winner, and perhaps a little surprisingly it is not the traditional major port of Valparaiso. “This longstanding fight between San Antonio and Valparaiso to become the key port for Chile, and de facto, for our capital Santiago de Chile, is a fight that finally is in favour of San Antonio,” said Ricardo Sanchez, the Senior Economic Affairs Director, Infrastructure Division for ECLAC (the Economic Commission for Latin America and the Caribbean, part of the United Nations). Initially this may be viewed as a controversial comment to make, but now it seems that most other Chilean port watchers would definitely agree with Sanchez. Chile, which is split into nine administrative regions, handled 4,661,469 TEU in 2018, an increase of 7% on the 4,407,772 TEU handled in 2017 and of those boxes, around 55%, some 2,564,145 TEU, were handled by the two Fifth Region ports of San Antonio and Valparaiso. For 2018, San Antonio handled 1,660,832 TEU (up a substantial 28% from 1,296,890 TEU in 2017) while Valparaiso fell 16%, from 1,073,734 TEU down to 903,313 TEU, according to figures released by ECLAC. Although for many years the split between Valparaiso – located some 115km northwest of Chile’s capital Santiago - and San Antonio (100 southwest of Santiago) has been very close to 50:50, the 65% share for San Antonio in 2018 was up from 55% the year before. The latest official figures, covering the period for the first two months of 2019, showed the trend continuing, with Valparaiso handling 147,782 TEU (down 18% on the same period of last year) while San Antonio handled 319,914 TEU (up
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a very large 62% over January to end of February of 2018). The combined figure of 467,696 TEU for Region V tallies to a 24% increase overall and the split for this period is 32% to 68% in favour of San Antonio. A Valparaiso port insider told Port Strategy that for August of this year the dominance of San Antonio had increased still further and was now 80:20 in San Antonio’s favour. Despite coming out ahead in six out of the 13 years since 2006, Valparaiso has seen throughput decline and services drastically lost over the past two years and that trend will be exacerbated with the end of October announcement that Maersk Line pulled its AC1 call (to Japan and China) out of Valparaiso from the end of November. A source at Maersk Line in Chile said that AC1 was being discontinued due to a lack of cargo and Chile will be now be served by just the one string, AC3, which calls at San Antonio’s Puerto Central facility. The departure of AC1 will see around 90,000 TEU per annum pass through Valparaiso. There was initially some speculation that Maersk Line would switch AC1 to Puerto Central (now run by DP World Chile who bought the facility from Puertos y Logística S.A, or Pulogsa, earlier this year) having first started calling Valparaiso back in April 2018. “The frequent recent haemorrhaging of services from Terminal Pacifico Sur (TPS) is seeing volumes plummet,” said one shipping agent who is based in historic Valparaiso. “In fact, from having five regular deep-sea services, TPS now has only one,” which is the Ocean Network Express (ONE) with its alliance partners Hapag Lloyd, Yang Ming and Hyundai Merchant Marine. The operation calls at the SSA terminal in Manzanillo
DECEMBER 2019 | 25
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REGIONAL PROFILE: CHILE
8 DP World and MSC strongly interested in Chile
(Mexico), DP World in Callao (Peru), Iquique (northern Chile). Antofagasta (Chile, fortnightly), Valparaiso, Coroneal (south of Chile) and then back to Valparaiso before sailing direct to Hong Kong, followed by China and South Korea. TPS includes MSC as a 40% shareholder, via its stevedoring arm Terminal Investment Limited, TIL) and handles virtually all containers passing through Valparaiso. In San Antonio there are two terminal operators, Puerto Central (DP World Chile) and San Antonio Terminal International (STI), which is owned and operated by SAAM, the leading Chilean stevedoring group that also operates terminals in Iquique, Antofagasta and San Vicente. SAAM used to be part of Compania SudAmericana de Vapores (CSAV) which was sold to Hamburg Sud back in 2011. One potential upside for TPS is that MSC might soon start switching some of its services from San Antonio to Valparaiso. In 2018 STI handled 1,173,160 TEU which is around 70% of the overall San Antonio total, with Puerto Central taking the rest. Both terminals each have a capacity of between 1.5 million and 2.0 million TEU per annum and plenty of space to expand into, unlike TPI. STI’s concession terminates at the end of 2024 and Puerto Central’s in 2045. Another major issue for port users in Chile is the growing
influence of DP World, not only in the world’s longest country but also along the West Coast of South America (WCSA) as a whole. DP World bought a controlling interest in Puerto Central and Puerto Lirquen in Lirquen (near Concepcion in Region VIII to the south) in January 2019 and is investing more than $100million in the two facilities. Francesco Schiaffino, a shipping consultant based in Santiago de Chile and former CEO at TPS, told Port Strategy that DP World was becoming ever stronger in WCSA. The company also has DP World Callao in Peru and another facility in Ecuador. “With so many terminals along west coast South America DP World can now sell berthing windows not just for one port but for the entire coastline,” said Schiaffino. “This means shippers can now buy one package for the entire coast, and that has fundamentally changed the competition. It’s incredible really.” Although Valparaiso seems to have lost its status as the leading volume port for containers in Chile, it can possibly content itself a little by becoming a more popular port of call with its long history and rambling, cobbled alleyways and colourful buildings for a growing cruise industry and extra tourism. The southern hemisphere cruise season started in Valparaiso in midOctober this year, a few weeks earlier than usual.
Peace recently lost in Chile amid protests Chile is often seen as “the most civilized” of all South America’s 10 main countries and one of the most peaceful, at least since the demise of the dictator General Augusto Pinochet in 1990. This deserved reputation was shelved during violent protests in October and November of this year in Santiago, which left 19 people dead and more than 2,600 injured. The protests were initially triggered by a steep rise in bus and train fares, but then taking in a wide range of variegated issues and resulting in demands for a new constitution. This led to strikes at all the country’s main ports as dock workers showed solidarity by taking part in a national strike organised by the country’s leading trades unions, especially the powerful miners’ unions.
From November 12, leaders of the national port union, COTRAPORCH, persuaded members to stop work for a full 24 hours at 25 ports and terminals, with the only exception being Arica, in the far north of Chile, which also serves as the national port for Bolivia. Several days earlier 6,000 dockworkers at 20 different port terminals went on strike for two shift periods, about 12 hours in total. Several Port Strategy sources in the key ports of San Antonio and Valparaiso said that the strikes had seen close to 100% adherence and that vessels had been delayed for “several hours at a time”. “However, because advance warning was given of the strikes, the delays and dislocation was not as severe as it might have been,” said one port manager, who insisted on anonymity.
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The International Dockworkers Council warned an international solidarity boycott is likely. Representing more than 125,000 dockworkers on five continents, the council expressed concern in a statement about police violence against Chilean protesters and dockworkers. “Should the repression against the dockworker family intensify, we will initiate an international boycott of cargo from ships coming from Chile,” the council said. During one demonstration an estimated 1 million people, about 5% of the country’s population, protested in the capital of Santiago. At the time of writing in midNovember, peace had broken out as President Sebastien Pinera has promised a referendum on a new constitution. However, the situation needs to be monitored.
DECEMBER 2019 | 27
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BALANCING ENVIRONMENTAL CHALLENGES WITH ECONOMIC DEMANDS
PORT PROFILE: MALTA
MALTA PRIORITISES BLUE ECONOMY AND MARITIME CLUSTER When Malta held the presidency of the European Union Council two years ago, the maritime sector was a declared priority. Felicity Landon gauges the position now
8 Malta to champion its maritime cluster
Malta’s efforts in pushing the maritime agenda led to the 2017 Valletta Declaration and laid the path for a more ‘holistic’ and integrated EU strategy on maritime management. At the ‘local’ level, Malta is continuing to develop and champion its maritime cluster, including its role as a container transhipment and bunkering hub, and as home to Europe’s leading flag and a thriving maritime legal sector. Malta Marittima, a relatively new government agency, has been tasked with promoting the whole of the island’s ‘Blue Economy’, focusing on five main clusters: energy, fisheries and aquaculture, logistics, marine engineering and maritime commercial. The blue economy is a way of life Malta, according to Capt. David Bugeja, chief officer of the ports and yachting directorate at Transport Malta. “The EU requires every member state to have an integrated maritime policy – and with Malta being one of the most densely populated countries in Europe, and tourism shooting up, our challenge today is to keep our blue economy sustainable and to appreciate it more. Innovation and progress are smart, but we also need to look after it.” Malta is a member of WestMED, a European Union project with five partner countries in Europe and five in North Africa which is aiming to create a safer and more secure maritime space, encourage a smart and resilient blue economy, and deliver improved maritime governance. Location is an obvious strength for Malta – close to the main shipping routes and with weather also on its side as a major cruise destination and hub for shipbuilding, ship-repair and offshore support and services. Geopolitics has had its impact too. Palumbo Malta Shipyard and the Mediterranean Maritime Hub have both pulled in business supporting offshore fields off Libya since the turbulence in the North African state. In the aftermath of the UK referendum on EU membership in 2016, Malta Ship Registry has gained even more interest as a European flag, because post-Brexit both the UK and Gibraltar would be outside the EU. Nothing, however, can be taken for granted. Malta Freeport
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Terminals (MFT), which had seen a steady increase in volumes over the past few years to reach 3.31m TEU in 2018, will see a decline this year. This is due to Maersk Line’s decision to move some of its services away from the Marsaxlokk hub to its new (APMT) facility in Tangier Med that opened this year “During 2018, a number of new services were contracted, which opened-up new markets and increased the traffic volumes handled by the port from South America to the Mediterranean,” says CEO Alex Montebello. “During 2019, MFT is expected to register a decrease in its throughput, due to several services being shifted from Malta,” he also confirmed. He remains upbeat though. “Maersk Line recently shifted some of the services that called at the Freeport to its own facility in Tangier Med; however, it has retained its presence at MFT through services covering South America and Northern Europe.” On the plus side, MFT has attracted new business in the form of a service between the Mediterranean, Caribbean and United States, “further enhancing the port’s connectivity with the western and southern continents”, says Mr Montebello. Operated by CMA CGM and Marfret, the service links Malta with five additional ports – Pointe-à-Pitre (Guadeloupe), Fort-deFrance (Martinique), Houston, Veracruz and Puerto Moin. “This complements our present extensive network to South America, including Argentina, Brazil, Columbia, Peru and Uruguay,” he says. 8 Malta Maritime MT
DECEMBER 2019 | 29
CONTAINER TERMINALS: Paths to Profitability By Remco Stenvert and Andrew Penfold
Container Terminals: Paths to Profitability
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Trends and Risks in Container Port Demand The Container Shipping Market Terminal Investment Trends Forecast Demand Growth Winning Competitive Strategies Customer Behaviour in the Container Terminal Industry Servicing Customers
5 Effective Pricing for Stevedoring Services 5 Competitive Assessment of Port-Wide Service and Cost Levels 5 How to Make a Comparative Port Cost Analysis 5 Assessing the Real Risk of Losing Customers 5 Competing for Transshipment Volumes 5 Building Revenue Robustness
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PORT PROFILE: MALTA
At present, the port handles vessels from the Ocean Alliance (CMA CGM, Cosco, OOCL, Evergreen), Hambug Sud, HapagLloyd, Maersk Line, Marfret and Sealand. Feeder services are run by Unimed Feeder Services, NileDutch, Tarros Line, Brointermed Lines, Messina Line, Short Sea Line and Sealand. Taken together, the shipping lines calling regularly at MFT provide connections with 111 ports worldwide, of which 54 are in the Mediterranean. Around 96% of the port’s container traffic remains transhipment business. More than €250m of investment has gone into MFT since it was privatised 15 years ago. The Maltese government originally awarded CMA CGM a 30-year concession to operate and develop MFT in 2004. This was extended to a total of 65 years in 2008. Half of the shareholding was sold to Yildirim Group in 2011 and two years later CMA CGM sold a 49 per cent interest in its port operator arm Terminal Link to China Merchants Holdings. MFT’s investment programme is designed to increase capacity to more than 4 million TEU per annum. This year, it has bought 15 rubber-tyred gantry cranes from KCI Kone Cranes, bring the total RTG fleet to 65. “As well as being considerably faster than conventional cranes, the 15 new RTGs are safer to operate, featuring an anticollision system and stack profiling,” says Mr Montebello. “They also feature advanced non-hydraulic design, easy and accurate auto steering and the fastest load handling cycle in the market. They have a variable speed engine, are able to stack containers six-high, and carry out a very stable operation due to a rigid structure and a 16-wheel configuration instead of eight.” A number of environmental features have been incorporated, he adds – the RTGs consume less fuel and are more energy efficient with lower emissions, and they are fitted with white noise sounders that are ‘considerably quieter’ than the alarms in use on old cranes. This white noise technology has also been retrofitted to the 50 RTGs that were already in operation. MFT has also invested in 31 tractors, 36 trailers and two reach-stackers this year and installed additional reefer capabilities so that there are now 1,658 slots between its two terminals. There are plans to buy two more quay cranes to replace two older ones. In November, meanwhile, MFT welcomed the investment by the Malta Pilots Cooperative in a new inflatable boom to contain oil spills, which can also be used in rough weather. This follows MFT’s own investment in a 300-metre lightweight rapid response boom to protect the bay from any contamination. The inflatable boom is stationed at the port and can be deployed in 14 minutes. TRAINING CENTRE The official opening in October of MaritimeMT’s new training centre is a clear illustration of Malta’s ambitions on the global stage. Located in Hal Far, overlooking the Mediterranean Sea, the €4m centre has been funded by the Malta Maritime Pilots Cooperative Society, with EU and other support. MaritimeMT is the already well-established training arm of the cooperative; the new facility has been built to strengthen its position “as one of the best maritime training centres in Europe”, says Capt Jesmond Mifsud, chief pilot. Importantly, the centre is not just aiming at STCW and seafarer training, but also providing courses for shore-based personnel in port operational and related skills – for example, safe mooring or understanding berth allocation. As well as upgrading two full mission bridge simulators, the investment has included purchasing a liquefied cargo handling simulator, a GMDSS simulator and an ECDIS lab. The simulators are in demand for traditional training and also
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for testing and planning ship calls in exercises involving pilots, captains and port personnel. Built in the shape of a ship, with a range of classrooms specifically equipped for maritime training, the facility spreads over 2,300 square metres – and there is room to expand.
8 MFT capacity of 4 million TEU targetted
BLUE ECONOMY Realising the full potential of the ‘blue economy’ requires the involvement and participation of all stakeholders, both public and private, in addressing the environmental and ecological sustainability of the oceans, says Alex Montebello at MFT. “In Malta, the blue economy employs around 10,400 people and generates €406m to gross added value, which represents a 4.7% contribution to Malta GDP,” he says. “The retention and strengthening of the Maltese maritime industry’s competitiveness is an important priority of the Malta blue economy.” As well as supporting the aims of Malta Marittima, MFT is an active member of the Malta Maritime Forum. This organisation brings together all the stakeholders in the maritime industry, its objective being to create synergies and expand Malta’s network as an important international maritime hub. The forum is striving to raise awareness of the blue economy’s great potential and of the EU initiatives and legislation which can improve and support the sector, confirms Mr. Montebello. 8 All stakeholders needed for Blue Economy success
DECEMBER 2019 | 31
PORT PROFILE: CHANCAY PORT
NEW PORT COULD BOOST PERUVIAN FRUIT EXPORTS Cosco Shipping is developing its $3billion deep-water general cargo and 1million TEU capacity container port at Chancay. Rob Ward explains further
8 CSP has big plans for Chancay Port
Work on this new port is expected to start by April of next year, a senior executive in Lima confirmed, after Cosco Shipping Ports filed a revised environmental impact study in October. “We can now expect government approval for February 2020, said CSP’s CEO Carlos Tejada.” Cosco Shipping Ports aims to start construction on the US$1.3bn first stage of its Chancay port, which will have 16m depth, by April 2020, he said, adding that the project will boost the Belt and Road initiative to foster improved transportation links between China and Peru plus the rest of West Coast South America. Various sources in Callao, the biggest port for containers along the West Coast of South America (WCSA) and main gateway to Lima and Peru, told Port Strategy that Cosco is already planning to move deep-sea services there to “avoid congestion at Callao” as well as “to bring down costs” and better serve the fast-growing fruit and vegetable exports from Peru. A manager for Inca Lines, one the biggest NVOCCs in Peru, stated that Chancay will be a massive boost for key Peruvian exports such as avocadoes (Peru is third largest exporter in the world), blueberries, guava, oranges, grapes, potatoes, seafood and fishmeal. “The main reason the Chancay project will be such a benefit to shippers is, I believe, that it will help them to drastically reduce costs for many of our important exports,” he stated, adding, “This is especially the case for fruit exporters from the central regions of Peru, who have to take the long journey north to Paita and it could also become an alternative to Callao.” Peru's fruit exports, subdivided into fresh, frozen, canned, and juice, make up over 50% of Peru’s agricultural shipments and they grew by 9.5% during the first quarter of this year compared to the same period in 2018, according to Deputy Foreign Trade Minister Sayuri Bayona, adding pressure onto existing export corridors. The Inca executive added that imports from Asia, especially machinery and mining equipment, should also receive cost reductions and better transport logistics with the development. One Lima based shipping agent, who did not wish to be identified, added that the Chinese and Peruvian governments were keen to bolster relations between the two Pacific countries, especially via infrastructure projects such as Chancay.
32 | DECEMBER 2019
“Peru and China are forging ever closer links and Chancay is a perfect example of that,” said the Lima agent. “We also think this will shake up those setting the box handling charges in Callao and it will reduce pollution in the cities of Callao and Lima if fewer trucks have battle through congested roads of Lima to get to Callao. I think Cosco might be able to move some of their services there by 2022.” He added that Cosco Shipping would probably first drag over to Chancay its Asia to WCSA service, which also includes CMA CGM, Evergreen, OOCL and Pacific International Lines (PIL). It was only in May of this year that Shanghai-based Cosco acquired a 60% stake in the port from Volcan, a Peruvian mining company that exports zinc, lead and silver. Together the two companies now intend to build the four berth US$3bn port facility some 58 km north of Lima, where it will compete with DP World Callao and AP Moeller Callao. The new environmental impact study is being modified to include a tunnel, and an increase to four terminals compared to one in the original project. The companies are advancing all relevant permitting simultaneously and don’t expect delays, according to Tejada, adding: “Our vision is to convert this port into a Pacific coast hub, bring cargo directly from Asia and then distribute it around the region.” As if to emphasize the importance of the Peruvian-Chinese connections, the President of Peru, Martin Vizcarra, attended the Chancy Project Official Transfer Ceremony earlier this year and extolled its virtues. Vizcarra said, “The signing of the closing certificate by companies from Peru and China is a milestone. The companies from China and Peru jointly invested and developed the Chancay Project, which laid a solid foundation for Peruvian economic development, as well as trade cooperation between China and Peru. “The construction of the Port of Chancay will contribute to the regional development and we expect to develop Port of Chancay into one of the most important hub ports in South America and logistics center near the Pacific Coast, which will promote the regional trade and the trade between China and the Latin America.”
For the latest news and analysis go to www.portstrategy.com/news
PORT DEVELOPMENT: SICILY
REWRITING THE SCRIPT For years Sicily has been seen as a problematic location for container port operations but now the tide is turning. The problems with Palermo as a container port have been well documented – back in the bad old days it was the mafia exerting its influence over terminal operations in the port. The beginning of the decade saw terminal concessions cancelled in Palermo for mafia infiltration and new operators appointed who, in turn, were also found to be operating under the influence of the mafia. This era has, however, passed with the mafia generally subdued in Sicily and operating at a level widely characterised as “street gang” status. There have, however, been other problems to confront since this time and particularly lack of investment. Progress has, though, been made this year in this respect with the Western Sicilian Sea Port Authority announcing the award of €39.3 million in order to finance the construction of a basin in the port able to accommodate large vessels. Additionally, funding has been made available to the port for dredging works via the National Operational Program (PON) Infrastructure and Networks 2014-20, provided by the European Regional Development Fund. Improvements have also been made in terms of road access to the port and outside the container sector there are new terminal development plans including a project for a new ro-ro terminal. Further, earlier this year the prospect was raised of the port of Palermo being the focus of a $5.7 billion investment by a Shanghai based investment fund with the objective of transforming the port into a major hub. This project, however, remains very much on the drawing board. It also falls into the category of those projects which there is some concern about in western political circles from the standpoint of China gaining influence through strategic infrastructure investments. As a container port, however, today Palermo has a relatively minor status with this position unlikely to change in the near term – in 2018 it handled approximately 16,000TEU. It is without doubt nowadays a very junior partner in container handling in Sicily with the port of Catania presently occupying pole position but nearby Augusta being prepared to claim this crown before too long. CATANIA/AUGUSTA RATIONALISATION The ports of Catania and Augusta both fall under the management of the Eastern Sicily Port Authority which has recently devised a plan for the future development of both ports in the dry cargo sector. In 2018 Catania handled nearly 60,000TEU, a figure that signals its quite small container terminal is operating at capacity. Question marks also arise over it being fit for purpose as a result of its inability to accommodate the entire length of the larger container feeder vessels along its quay and recent problems associated with the integrity of the quay structure as well as concerns over rising traffic congestion on the landside. The port of Catania is located in close proximity to the urban environment of the City of Catania, Sicily’s second largest city.
For the latest news and analysis go to www.portstrategy.com/news
RESTRUCTURING OF PORT ACTIVITIES It is against this background that the Port Authority of Eastern Sicily foresees a future configuration of port activities whereby the port of Augusta, located in a more industrial area with plenty of available land, will take the lead in the container handling business. The current ITSA terminal in Augusta is capable of offering a container capacity of over 100,000TEU and butts up to a new area under development that can offer major new container throughput capacity. It also has the advantage of deeper draft and unimpeded access on the landside. And being located just under 50km from Catania a relocation of container operations at this location would not negatively impact existing container distribution arrangements in terms of both service and cost. Catania meanwhile, the Port Authority of Eastern Sicily envisages, can grow its role as a cruise port which has seen tremendous growth over the last two years and this year is expected to account for 205,000 passengers, representing growth of over 60 per cent compared to 2018. With the interesting city of Catania on its doorstep, the historic city of Syracuse nearby and overlooked by Mount Etna the port of Catania is a ‘natural’ as a cruise centre.
8 The port of Catania is capacity constrained as a container handling centre – Augusta represents a strong alternative for future operations
Sicily: the port of Palermo is on the comeback trail with new investment now underway. In Eastern Sicily the port of Augusta is being positioned to take the lead in container handling while Catania is in a strong position to capitalise on fast-growing cruise traffic
DECEMBER 2019 | 33
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SPECIAL REPORT: LIBYA
SUSAH SECURE PORT – SECURING THE VISION IN LIBYA A major new port project is underway in Libya, with the developer leveraging a wide-range of complementary skills, as AJ Keyes confirms
8 A major new port planned for Susah
Michael Guidry is used to working in difficult circumstances and getting the job done. A specialist in security services in some of the world’s most dangerous locations, he may not be the obvious choice to develop a new, largescale port and logistics centre, but upon closer inspection of his skills, knowledge and capabilities, then the decision is actually highly logical. Libya is a country that has been beset with political and social turmoil for the past decade and the quality of its ports infrastructure is, unsurprising, poor. However, Mr. Guidry has a vision for this country. “There is tremendous potential in Libya and it just needs to be unlocked – it needs the infrastructure to be able to positively improve its trade position,” he states, adding, “And if we can meet our goals then we will help the country and its people towards a safer, more secure economic and social future.” So, a plan to develop a new port serving the oil and gas industries primarily, before then, in time, handling dry bulks, containers, general and project cargo and ro-ro is certainly a positive step in Libya reconstructing itself and developing economically and socially. Mr. Guidry has a plan that involves utilising his specialist knowledge of security services and applying it to the port industry by developing “Susah Secure Port.” The proposed Port of Susah has been planned since 2007 during the Gaddafi era, but conflict and civil war delayed its implementation. However, the project was finally awarded in December 2015 following an international tender to The Guidry Group on a design-build-operatetransfer (DBOT) basis. a 35-year (plus 5-year additional term) sovereign contract was signed with the Ministry of Transportation in Libya in May 2019.
Mr. Guidry outlines the project start-up in more detail. “Susah Secure Port consists of two phases. To begin with, Phase 1 is expected to include an oil and gas terminal, interconnecting to a proposed new pipeline and tank farm, with a quay length of 1,350m consisting of 3 berths of at least 400m each.” He then explains how the project is expected to develop. “Susah Secure Port will initially support the oil & gas industry, which are the key products that will drive economic development in Libya, with phase two then providing highquality infrastructure for general cargo, container handling and bulk goods.” There are two key questions that certainly need to be clarified here. First, the issue of security and second, whether the cargo demand exists in Libya and to support the project. The first matter is very straight forward. The Guidry Group can successfully show 35 years of security experience, supported by Lloyd Guidry’s extensive capabilities of insurance services gained over more than 30 years across some of the most challenging environments and situation in the world. On this basis, leveraging The Guidry Group’s security capabilities and ensuring that the port operation is secure is clearly a key component, but it will safely enable the facility to be developed and then used. Moreover, if products, like oil are part of the equation and which involve the use of new pipelines, then protection of this additional infrastructure also falls within the remit of the security capabilities The Guidry Group offers. 8 Michael Guidry
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DECEMBER 2019 | 35
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Which leads to the second key factor about whether sufficient cargo demand exists to support the development. Sam Boyd Williams, Associate Director with WSP in London, confirms that the potential and outlook for Susah Secure Port is positive. “Libya’s economy is driven by petroleum, in particular crude oil production. Therefore, oil is the primary market for Libya’s ports and can be the focus of the first phase of Susah,” he states, adding, “The port’s deep water and location put it in a prime position to ship out the crude oil from the Eastern Sirte basin, but it will need a pipeline from the major oil fields.” The pipeline outlined by Boyd Williams is a key component of the planned infrastructure to be developed, with the flow into Susah from other regions where water depth and port capabilities greatly limit the sizes of vessels that can call. This position is limiting the product flow by ship and increasing the waiting time of vessels wanting to call to existing, congested ports. It is also possible to get a good understanding of the potential oil activity that could exist, according to Mr. Boyd Williams. “Prior to 2011, Libya was producing between 86.7-95.0 million tonnes of oil equivalent (mtoe) of crude oil in the period 2005-2010. In 2011, production fell to 22.1 mtoe before recovering to 76.2 mtoe in 2012 after which it was in decline again due to the civil war and then decreased further to about 20.8 mtoe by 2016. In recent years production has improved to 46.1 mtoe in 2017 and 53.4 mtoe in 2018.” Figure 1 confirms these comments and identifies that there is already an existing market that can be tapped into by Susah Secure Port. In addition, it should also be remembered that the volume levels are now being achieved with the current older port infrastructure and pipelines and only limited sizes of ships able to call. These are issues that Mr. Guidry says Susah Secure Port will remedy. There are other clear advantages to be offered by Susah Secure Port, as Mr. Guidry confirms. “With 18m of water depth, the port will be capable of receiving larger tankers, which cannot access existing facilities in the country.” He is correct because Tobruk’s water depth limited to just 9m and a tanker of 170,000DWT requires a draft of 17m, which clearly suggests that the vessels are operating inefficiently below full capacity and/or having to anchor some distance off the coast and then smaller ships are acting as lighters, transferring the cargo – a painfully slow, expensive and potentially dangerous method of operation. It should also be noted that Susah Secure Port will be constructed to the internationally-acceptable construction standards. A new facility, with modern equipment and infrastructure will set it apart from the very old maritime facilities in Libya. The same applies to the pipeline that The Guidry Group plans to construct and secure. By comparison, existing pipelines in the country have seen no investment, maintenance or repair since long before the country’s civil war and are old and insecure – if they have not been destroyed during the recent civil unrest. Add these factors to the new port infrastructure and this port development is considerably more appealing to potential users. Phase 2 of the project is expected to move into other cargo activities and the demand exists, as Mr. Boyd Williams confirms. “Grains are a significant, steady import flow for Libya, with the country importing between three and four million tonnes of agribulks per annum. Given the need for a secure and reliable supply, grains could be a secondary market for Susah Secure port. In addition, general cargo and vehicles and containers on a multi-purpose service are also expected in the second phase, all playing a key role in the rebuilding of the country.” Mr. Boyd Williams further highlights that the other cargo being imported in Libya at present, namely excluding major bulks, totals around 3.5 million tonnes. It comprises
For the latest news and analysis go to www.portstrategy.com/news
Source: WSP
SPECIAL REPORT: LIBYA
construction materials, food, transport equipment and other goods for domestic, commercial or industrial consumption. These commodities are largely transported via general cargo or container, with the key factor once again being the quality of available port facilities. The WSP executive explains further. “Containerised goods include clothing, electronics, consumer goods and food. These are of direct demand for the population of Libya, as the country lacks domestic production capacity. Industry can also demand containerised goods, such as equipment and parts or intermediate goods used in manufacturing.” Libya’s current population is estimated to be around 6.5 million people and the location of Susah Secure Port indicates access to an estimated 25% of the country’s inhabitants within its immediate hinterland. Overall, there is certainly an existing, if somewhat relatively small, local population that needs to be satisfied. Of course, the development and subsequent construction of Susah Secure Port will increase demand for products such as cement, iron & steel and consumer goods to support the anticipated workforce – and this is just for the initial phase. Subsequent development into phase two and beyond, will again boost these important areas of both cargo demand and economic development, while bringing employment to the region and country. Once again, in the early years of the project and then as it subsequently expands and develops, the provision of safe, secure facilities and operations reinforces the key role to be played throughout by The Guidry Group. Mr. Guidry maintains that Susah Secure Port is a “first-of-akind (scale, profile, magnitude), impactful infrastructure and will position Libya in the 21st century with modern infrastructure.” On this basis he is correct, but his vision is clearly longerterm. “We have the opportunity to use this project to generate an epicentre of the oil, gas and other cargoes in East Libya. It can be a regional trade and logistics centre and a future gateway for trade to Sub-Sahara Africa, but more than anything else, Susah Secure Port is an unprecedented opportunity for the economic revival of Libya and for all of its population to benefit.” This is a country that requires better quality port facilities that can receive larger vessels for wet and dry bulks and, in time, container, general cargo and ro-ro ships, along with supporting infrastructure such as pipelines to move essential products like crude oil. Given the recent history of conflict and insurgency, Susah Secure Port represents an important step in developing much-needed port infrastructure in a security conscious and responsive environment that will allow the country to be rebuilt.
8 Figure 1: Historic oil Development in Libya, 2005-2018 in m-tonnes
8 Sam Boyd Williams, Associate Director, WSP
DECEMBER 2019 | 37
SPECIAL REPORT: BANGLADESH
BANGLADESH PORTS EXPLORE LINK TO INDIA Michael Mackey investigates the impact of a new deal for Indian goods to transit through ports in Bangladesh India and neighbour Bangladesh have signed an MOU for goods for North East India transit via Bangladesh’s ports – a small but significant opening up of both Bangladesh’s ports and the broader economic relationship between the two countries. “The Leaders welcomed the conclusion of Standard Operating Procedures (SOP) for the use of Chattogram and Mongla ports for movement of goods to and from India, particularly to and from the North East of India, which could create a win-win situation for both economies,” Bangladesh’s Ministry of Foreign Affairs said in a statement issued for the summit between Bangladeshi Prime Minister Sheikh Hasina and her Indian opposite number, Narendra Modi. Chattogram is the new name for Chittagong, Bangladesh’s principal port although it is not the area around it, but further afield, that will be served. “The real purpose is to allow Indian cargo through Bangladesh to India’s North-East provinces,” Jason Chiang, Director with Ocean Shipping Consultants told Port Strategy in an interview. “It has always been an issue for them.” These provinces (sometimes dubbed the “Seven Sisters”) are somewhat isolated geographically and connect to the rest of India via the ‘chicken’s neck,’ a long thin North-South strip with Nepal at the top and Bangladesh on one side. Poor infrastructure makes moving goods along its length time consuming and costly. However, allowing use of a port and then through Bangladesh, makes it so much cheaper and practical. Chiang sees the goods that moved along these trade lanes as being essentially fast-moving consumer goods and household items. “This is to cater for the population that resides there,” he stated. Outgoing goods, according to local media reports are likely to be agricultural products and jute, although India is very much an importing country especially the poorer Northern regions. The significance of the new SOP process is to outlines how goods are to be moved, as well as which routes they can move along and within what time span, although one problem that will seemingly remain is the problematic bureaucratic activities. For example, the Customs Transit Declaration needs to be filed five times with copies to be submitted when exiting India, entering and exiting the Bangladeshi port and when crossing the Bangladesh-India border. One upside is that at least it is a computerised process The other great problem is the strained nature of the ports the MOU covers. Chattogram might be Bangladesh’s gateway port but it is, according to Victor Wai, Consultant with Ocean Shipping Consultants, “heavily congested.” This is because Chattogram dispatches Bangladesh’s booming textile exports but also takes in all the raw materials it needs. In addition is the issue of land side congestion. Mongla, the other port the SOP covers, is less likely to be impacted. It takes
38 | DECEMBER 2019
less than 10% of Bangladesh’s imports as Wai points out and serves mainly the area around Khulna. One major concern remains congestion, with clearing customs a long and often painful four-day experience. Longerterm, there are known plans to increase capacity across Bangladesh’s port sector. For example, Chattogram is looking at having a Bay Terminal operational by 2023, said Wai, with a planned draft of 12m and increased capacity. Payra, is still Master planning its expansion. So, shorter-term, little improvement is expected.
8 Bangladesh ports can benefit from handling Indian hinterland cargo
The Leaders welcomed the conclusion of Standard Operating Procedures (SOP) for the use of Chattogram and Mongla ports for movement of goods to and from India, particularly to and from the North East of India, which could create a win-win situation for both economies What is intriguing, however, is that the terms of the SOP reads like the start of a longer process of what could be ongoing reforms rather than its end. Both Sheikh Hasina and Prime Minister Modi “welcomed the decision to operationalise the Dhulian-Gadagari-Rajshahi-Daulatdia-Aricha Route (to and from) and include Daudkandi-Sonamura Route (to and from) under Protocol on Inland Water Transit and Trade,” according to Bangladeshi Foreign Ministry statement. The pair also underlined the immense potential of movement of cargo using the inland water and coastal shipping trade, it added. Already there is some information that, potentially, could generate possible benefits to both economies of Bangladesh and India from greater use of access to their neighbours ports for transhipment of their respective export cargoes. Plus, on another positive note, the two governments have agreed to expedite discussions on requisite modalities.
For the latest news and analysis go to www.portstrategy.com/news
PORT ENVIRONMENTAL
CLIMATE CHANGE: ISSUES BUILDING AND NO EASY ANSWERS
For the latest news and analysis go to www.portstrategy.com/news
8 Ports “are experiencing more extreme occurrences, more often”
cascading impacts”. In Tasmania, for example, heatwaves and storms left emergency services simultaneously fighting both floods and lightning-strike forest fires. Plus, normal hydroelectric energy sources dried up and the power cable from Australia failed, leaving people reliant on diesel generators. The effect on port throughput can be quantified. According to IPCC research, “System inter-dependencies” reduced Tasmania’s gross state product to 1.3%, well below the anticipated growth of 2.5%. But how can you quantify the associated risks? Mutombo outlines the problem: “It is important to note climate change is characterized by constant uncertainty; thereby making traditional probabilistic risk management methods inappropriate.” Also, issues never arrive on a schedule or even from the direction expected. James Trimmer of the Port of London Authority explains what happened on the River Thames: “We assumed climate change meant more storms and eventual sealevel rise... and we thought it was all decades away,” he explains.
8 “It is important to note climate change is characterized by constant uncertainty” Photo David Baird, cc-by-sa/2.0 geograph.org.uk/photo/3833149
Over half the initial responses to the recent Navigating a Changing Climate (NCC) survey indicated ports “are experiencing more extreme occurrences, more often,” says coordinator Jan Brooke, adding, “Of those reporting on a specific event, nearly half say it was unprecedented.” This has not been the only surprise. When the survey (undertaken by PIANC, IAPH and other partners) was launched, Brooke was “expecting to see the costs of repair as the main problem”. However, while 30% of respondents reported ‘severe’ or ‘critical’ damage, 50% assigned these same categories to closures or downtime – and over a third had experienced a shutdown of 24 hours or more. Chronic issues were not, therefore, limited to those who had had their infrastructure undermined. Drilling into the details, while 14% of respondents said their repair bills came to millions of dollars, closure and downtime also hits ports where it hurts. Of those who could put a price to it, 30% estimated it as between US$10,000 and U$1 million, while another 6% said it totalled above U$10 million. It is a rising issue. While breakaway vessels blocking Durban’s entrance made headlines in 2017, the underlying trend is possibly just as problematic for business. As Dr Kana Mutombo, Climate Change project manager and principal R&D engineer at Transnet National Ports Authority (TNPA) notes, "We are increasingly receiving reports of major climate-induced delays in our ports in South Africa”. While it is reasonable to expect ports to be keeping abreast of this element, “Of those responding to our survey, relatively few can provide a cost-estimate of the port closure or downtime,” says Brooke, further stating, “And this is worrying. After all, how can you argue for resources to strengthen resilience if you cannot put a price on the consequences of not acting?” The real problem that remains behind this position is that ports need to calculate risk - but with very weighted dice on an uneven table. “The trouble is, these effects pile up,” says Don Cockrill of the UK Maritime Pilots' Association. “You do not just get an ‘average’ impact, you get cumulative impacts. More intense summer storms, for example, with more rain adding volume means the current itself will be stronger. That also impacts manoeuvring of the ships.” In fact, swollen rivers closed port of Itajal in Brazil for three weeks and as Adrienne Newbold of the Port of LA explains, on top of projections for sea-level rise “we have to add another two-and-a-half feet” to account for storm surges. “Further, these issues have a multidimensional character, adds Cockrill: “Increased water levels also means a rise in debris,” he explains. While posing a lower risk factor than the events of 2017, this has furnished Durban’s recent incidents with a certain unpleasant factor. Only last spring, rains washed down logs big enough to make it difficult for a handful of ships to move in or out of the berth, along with churning together effluent, sewage and large amounts of litter. The IPCC’s Ocean and Cryosphere in a Changing Climate report also points out that “compound events in turn trigger
Photo: Thomas Nugent, cc-by-sa/2.0 geograph.org.uk/p/2754296
Ports are particularly exposed to the effects of climate change, but sizing up the risk is a tough call, with no easy answers, writes Stevie Knight
DECEMBER 2019 | 39
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8 Half the NCC survey respondents categorised closures or downtime as ‘severe’ or ‘critical’
These stakeholders should include the local pilots, says Cockrill, for they are often at the sharp end of the issues. While larger pressure effects can impact tidal water depths to the point where ships cannot get in as expected, there are subtler challenges, such as wind direction. “A shift in pressure patterns can mean you get more, and stronger easterlies, for example,” he says. This can present challenges for those ports and harbours designed for sheltering against a northwest air flow – and may result in more trouble berthing and unberthing ships.” More extreme weather does not sit well with vessel evolution, says Allan Gray, president of the International Harbourmasters Association. “The new generation containerships are far larger in windage area,” he points out, so 20 to 30-knot winds that may have been merely inconvenient for earlier designs “are now outside the parameters of these vessels”. He adds that the mooring arrangements often have not kept pace with the change in scale, so the resulting forces can push line loads over safe limits. Given all of this, it only takes “high afternoon sea breezes or regular winter squalls” to diminish a port’s capability, says Gray. For those looking at this position with more uneasiness than a clear forward pathway, Brooke recommends collating local data including from local weather monitoring bodies to yield some idea of trends. However, research should not stop there, given the lack of predictability associated with the events
For the latest news and analysis go to www.portstrategy.com/news
8 This year’s litter and sewage wash down made Durban’s clean-up a nasty job
highlighted. Global reports, such as the IPCC document, are essential to help to put things in context. It must be said, this study doesn’t make for comfortable reading and neither is Brooke that bullish about current climate trajectories. “We are currently on track for significantly more than a 2°C rise,” she explains. “Even if we managed a huge turnaround and met the 1.5C° target, impacts such as sea level rise are already locked in for decades.” Chris Cannon of the Port of LA sees practical advantages in thinking ahead and putting in money at the point it can be most effective: “It does not take lot more investment to incorporate climate resilience measures into a new project where you are starting from scratch. It’s much, much more expensive to try to add on measures later. That is why we are being proactive.” Yet as the IPCC report notes “the ratio between risk reduction investment and reduction of damages of extreme events varies” adding that while prevention and preparation “is very likely less than the cost of impacts and recovery”, there’s no final guarantee. Further, there may be no easy answer. “For some ports it may be impossible to justify protecting everything,” says Brooke. “While some measures to improve resilience will be viable, others may prove too much to swallow. As a result, some facilities could simply be left to their fate, potentially earlier than expected. She concludes, “As with other exposed and vulnerable coastal infrastructure, it maybe we have to say, ‘this port in this location will not be viable in 30 years, we cannot afford to protect it so we have to look to relocate.”
8 Hurricane Matthew nears coastal South Carolina
Photo: NASA
Image: Stevie Knight
Photo: Transnet NPA
“However, the very next winter the rainfall went on and on for months and suddenly we had small boat crews being faced with life threatening conditions, or rowboats getting pinned under moorings by the current,” says Trimmer. He adds that a warning flag system was quickly introduced “it brought home the unpredictable nature of these events”. As these events highlight, it is not just about heavy infrastructure investment. Therefore, it is dis-concerting that the NCC survey indicated a significant number of ports still lack basic response procedures. Only 14% reported having an extreme weather assessment, contingency plan and warning system in place, “but it’s even more of a concern that 30% say they have none of these things,” says Brooke: “A contingency plan may not help you avoid closure, but it can certainly help you get back up and running quicker.” Despite this, some are already aware of the need to marshal resources and put together not one, but a range of strategies with different timelines. Interestingly, the IPCC report takes the view that faced with uncertainty, what’s needed is “an integrated approach to ensure trade-offs between short-term and long-term gains”. This seems to be the approach by TNPA, which has formed a climate research group exploring both future resilience and more immediate business continuity initiatives “in collaboration with various identified stakeholders”.
DECEMBER 2019 | 41
CONTAINER HANDLING: BROMMA SPREADERS
BROMMA SPREADS DIGITAL EFFICIENCIES TO THE INDUSTRY Bromma is a leading provider of container frames on a global basis. AJ Keyes understands the company’s continued focus on its digital journey “Approximately 40%-50% of a crane’s downtime is spreader related,” states Lars Meurling, Vice President EMEA & Marketing for Stockholm-based Bromma, adding, “The spreader is critical to the whole container operation, but we believe that operational information and development should come directly from the spreader, not just the crane.” Mr. Meurling speaks on behalf of a company that certainly understands its business. For more than 50 years, Bromma has successfully delivered container crane spreaders to more than 500 terminals in over 90 countries across six continents. Indeed, as the company’s executive confirms, “more than 14,000 crane spreaders and rotators” have been placed into service and Bromma currently manufacturers up to 2,000 (of all types of) spreaders each year. According to Mr. Meurling, the first half of 2019 has been good in terms of orders secured for the company, which is now part of Cargotec, adding that there has been a “significant improvement of both sales and order intake,” especially in Europe and throughout the Americas. He further stated that the focus of the company remains “very global.” This claim is reinforced by confirmed activity for equipment supplied/ordered in the Q1-Q3 2019 period, which he adds shows a “very diverse country mix.” Taking this explanation into account, Table 1 provides a summary of Bromma’s global port partners, based on terminal, port and country locations. There is even an interesting move to 8 Lars Meurling, VP EMEA & Marketing
supporting rail terminal operations, with equipment being supplied to two of North America’s Class 1 railroad operators, Union Pacific and Norfolk Southern, for use in respective inland intermodal facilities. Moving forward, Mr. Meurling is confident about future demand for spreaders across the industry, irrespective of the possible forthcoming threat of economic downturn that several largescale parts of the world may soon be facing. “The optimum life-length of a spreader is normally 10-12 years of use. We saw a very big uptake in purchases in the strong economic period between 2006 to 2008, when many ports and terminals invested heavily in new infrastructure, cranes and
Terminal
Port
Country
Abu Dhabi Terminals
Port Khalifa
UAE
Shenzen Haixing Harbour Development
Shenzen
China
Yilport
Puerto Bolivar
Ecuador
Georgia Ports Authority
Savannah
United States
Port Tanjung Pelepas
Port Tanjung Pelepas
Malaysia
Port of Felixstowe
Port of Felixstowe
UK
HHLA CTA
Hamburg
Germany
MPET
Antwerp
Belgium
Ningbo Beilun International Container Terminal
Ningbo
China
Hadarom Container Terminal Ltd
Hadoram
Israel
MINTT Tanger-Med 3
Tanger-Med
Morocco
Nhava Sheva International Container Terminal Pvt Ltd
Nhava Sheva
8 Table 1: Global Partners in Productivity for Bromma, Q1-Q3 2019
India
Union Pacific Railroad
US – railroad operator
Norfolk Southern Corp
US – railroad operator
42 | DECEMBER 2019
8 Bromma serves over 500 terminals globally
For the latest news and analysis go to www.portstrategy.com/news
CONTAINER HANDLING: BROMMA SPREADERS
equipment. That means that these items are now ready to be replaced and so for the next 18-24 months we are likely to see good sales potential.” He added that planning is the key from a port or terminal perspective with spreaders. “There is an optimum time to replace them, but it is important to plan when this will be. That is part of our role, to help gain the best optimisation before replacement.” After global port capacity growth of 2.7% for 2018 and 2.6% for 2019, Bromma is predicting 2020 will have added a further 3.3% of container TEU capacity worldwide, with 2021 seeing 2.1% more. Thereafter, capacity will see smaller increases in 2022 and 2023, of 1.2% and 0.3%, respectively. “Obviously there will be regional variations,” acknowledges Mr. Meurling, but he adds, “There is no doubt that there is likely to be a need for between 40-60 million TEU of additional capacity over this short-term period.” For a company specialising in providing equipment that is totally integral to the handling of containers at ports and terminals on a global basis, this extra capacity must represent a big target. Yet while the spreader replacement market, and supply of this equipment to new facilities, remains highly-important to Bromma, the company is also committed to enhancing its service offering provided to all global partners. In fact, this is precisely where its “Digital Journey” will continue. Joakim Heijbel, Director, Digitalization and Processes, explains that Bromma began its journey in 2011 and continues to move forward, with one specific area now taking an integral position in all activities. “Data is the hot topic but we cannot just talk on a theoretical level, we need to show the possibilities of what can be done and how it benefits our global partners,” he explains. One key item of focus, development and delivery from Bromma relates to its “Intelligent Spreader” initiative. “This is a new tool we recently launched and it is taking us in what we call an “intelligence direction.” The technology itself was not ready before, but now it is. After all, a spreader is more than just a big piece of steel, it is a high-tech piece of equipment working in an advanced system,” outlines Mr. Heijbel. There are two good examples of how Bromma is introducing technology to spreaders relating to the “Intelligent Spreader” concept. These are its Spreader Monitoring System which primarily focuses on the most efficient use of data and Bromma Hawkeye which greatly improves visual feedback on the spreader in use. In more detail, the Spreader Monitoring System provides an instant view of the health of every spreader operating in the entire fleet, providing immediate notifications of warnings and errors of the equipment. Moreover, each warning also then provides a list of recommended actions to rectify the problem. The benefits here are related to better maintenance planning and access to more (real-time) performance data that allows fine-tuning to achieve more efficient use of the equipment. Mr. Heijbel explains further. “This is where we provide an equipment health overview. We can remotely monitor, from Stockholm, how the spreader is performing. If we see it is green, then it is healthy and there is a very low risk to a stoppage. If the spreader is shown as yellow, then we know that the health of the item is declining. Once we get to red, then it is likely to breakdown or flags-up that a stoppage is likely.” However, it is not just monitoring the health of the Bromma spreader that is being undertaken. The data being collected enables the total moves, total running hours and percentage of healthy life left are all made available for users. Plus, over time, the equipment’s age and hours in use can be identified and related to the port or terminal operator. “We have up to 80 different sensors on a ship-to-shore crane
For the latest news and analysis go to www.portstrategy.com/news
spreader,” confirms Mr. Heijbel, before adding, “Although this is really just the start. The next step is to implement other things like artificial intelligence to help us gain even more feedback and information and look to provide recommended solutions.” Bromma Hawkeye is a platform that enables different kinds of camera configurations to be installed on any spreader, as a way of helping to customise it for different user requirements. For example, there is a video function whereby cameras generate viewing streams that the operator can view on its chosen display monitor plus additional Optical Character Recognition to reinforce the quality of the images. Most importantly, to ensure that the Hawkeye platform can operate on any spreader in any environment, the design and validation has been focused on the harsh environment of an STS crane spreader. Moving forward, Joakim Heijbel is clear about what Bromma wants to achieve. “We want to become predictive and to understand what help spreaders need in advance to deliver optimum efficiency of operation.” Bromma is already on the way to achieving its goal. Through use of its applications, the health of a spreader can be monitored so that it is known in advance whether maintenance is required and when. As both Mr. Meurling and Mr. Heijbel both confirm, no longer is the process to wait for the spreader to break down and then an engineer should be dispatched to ascertain what the problem is. Instead, Bromma “wants to know what is wrong with its spreader before it is physically looked at.” So, while Bromma clearly has several key initiatives to continue to pursue, especially relating to greater use of technology, what are other factors that contribute to its success? Lars Meurling believes that there is a simple answer to this question. “We build trust with our clients and they trust us. We have open discussions and the first thing we always ask is, how can we improve?”
8 Bromma spreaders to become predictive
8 Joakim Heijbel Director Digitalization and Processes
DECEMBER 2019 | 43
CONTAINER HANDLING: REACHSTACKERS
REACH PICKINGS OFFERED BY REACHSTACKERS John Bensalhia talks to major reachstacker suppliers to discover current trends, innovations and assess the potential benefits for users
8 Reach pickings offered by reachstacker producers
An over-riding trend of the modern reachstacker is, as Chris van de Werdt, Product Strategy Manager, EMEA Big Trucks, Hyster Company, observes, decentralisation. As boxes are moved inland, closer to the last mile of the journey, this reduces cost and CO2. This is then driving several other trends. The first of these trends is Lowest Total Cost of Operation (TCO). “We are finding that more customers are focusing on productivity rather than the fuel savings they can achieve,” says Chris van de Werdt. “This is because fuel savings alone do not bring costs per container down - it is a combination of factors. We estimate that typically for the European and US market (excluding the tyre costs), just 16% of the total cost to run a reachstacker is the fuel cost, 20% is maintenance costs, 20% is depreciation and a full 44% is operational costs, including the driver.” Hyster's approach to fuel savings has always been about the best balance to support busy operations. Mr van de Werdt says that tests indicate that the Hyster reachstacker can be up to 12% more productive than a comparable product: “That’s 12% more containers moved per truck per hour, which quickly adds up.” He further elaborates, “With telematics, terminal operators can also get better insight into their daily operation or maintenance. It is possible to use telematics such as the Hyster Tracker to get more productivity and move more boxes without increasing cost.” The second and third notable trends of today's reachstacker concentrate on the environment. In the case of noise reduction, this is particularly important for any terminal close to cities and residential areas.
44 | DECEMBER 2019
“We are finding that more companies are willing to invest in reducing noise from both the machine and the spreader landing on the container (or when the container is put down),” says Chris van de Werdt. “Hyster Company ensures padding options for the spreader to dampen the noise, which work in unison with sensors that detect a container and automatically reduce the lowering speed just before contact.” Peter Olsson, Director, Business Development, Counterbalanced Container Handlers at Kalmar, says that co-efficiency and sustainability is a major trend. “Especially CO2 emissions by optimising systems efficiency through increased digitalisation and interconnectivity between the terminal and the equipment. There is also resource efficiency, which can be accomplished by extending equipment lifetimes through service and maintenance, upgrades and recycling of parts.” Many ports and terminals are keen to utilise electrification, with serious investigations underway about how to achieve this aim. Hyster has projects the Port of Los Angeles in the US and Valencia in Spain which have raised significant interest. Chris van de Werdt explains that this interest is being driven by the ports themselves and with pressure from some governments. Yet he questions whether ports have the infrastructure to implement practical solutions. “Discussions are often about planning or re-planning the terminal and how the port needs to be laid out in the future, allowing for hydrogen fuel for example.” Hyster zero-emission reachstackers incorporate electricity at high voltage as the main energy source to power fully electric motors. “The issue is usually about managing long working days in busy ports, which is where hydrogen fuel cells come in as a range extender.”
For the latest news and analysis go to www.portstrategy.com/news
CONTAINER HANDLING: REACHSTACKERS
Meanwhile, the Hyster electric Container Handlers in development feature a large lithium-ion battery which is recharged by two onboard fuel cells during operation. “This approach suits the challenges of heavy-duty terminal operations, reducing planning complexity or charging issues,” says Mr van de Werdt. “It means that continuous operation is possible if hydrogen is available from the on-board hydrogen tanks.” More ports and terminals are looking for flexibility to use reachstackers in more ways rather than just container handling. Hyster has, for example, developed quick change options so operations can swap to steel or coil handling or tubes and pipes. “When one truck can do lots of things, the terminal is then able to adapt and offer additional services,” explains Chris van de Werdt. “Multiply that across a large fleet and operations could diversify and even reduce their fleet size. So, when ports are looking for new business, they can potentially get more from different customers by handling different materials.” Terminal operators want to reduce damage and improve efficiency when handling containers on the second rail. Hyster recently developed a reachstacker with a new hinged elevating operator cabin which helps operators have direct visibility of the top corner pockets on the second rail containers, even when there is a high cube container on a railcar in the first rail position. “Previously, the use of cameras or staff, known as spotters, to direct the operator had their limitations, putting extra time on the operation and increasing the cost per container moved,” says Mr van de Werdt. With all these trends in play, ports are seeking a complete package with respect to the right reachstacker. Patrik Lundback, Director, Sales & Distribution, Konecranes, BU Lift Trucks, explains further. “Reachstackers are further increasing focus on safety, quality, uptime and environment, with great interest in electrification, hybrids and digitalisation.” Mr Olsson explains that most of Kalmar's customers are also looking for lower total cost of operation and ownership, maximised uptime and machine availability, lower emission levels as well as quieter and safer machines. The reachstacker is a multi-purpose truck and Kalmar has developed a reachstacker with an HVT transmission, which drastically reduces fuel consumption while offering improved productivity. “This provides lower operating costs and better total cost of ownership for the customer and a smaller carbon footprint for the environment.” Growth in different quarters is also reflected in 2019 trends. “We are seeing a growth in vessel size,” says Patrik Lundback. “In addition, transhipment from these mega terminals to smaller ports will continue to grow. Inland cargo traffic is shifting from road to rail, barges and other modes of transport.” One consideration for ports is to assess whether the reachstacker will need to block-stack higher and wider. This decision has met with mixed reactions for reachstacker manufacturers. Konecranes has, so far, had no requests to go higher than 6 for laden containers. “There are not really any limits for reachstacker operations if block stacking, but 5 is still the most common height for laden reachstackers,” says Patrik Lundback. Chris van de Werdt says that container stacks are not necessarily going higher. “The problem applications have with going higher is that 'selectability' goes down, resulting in more dead picks, and with that comes higher productivity costs.” In some cases, Kalmar has received requests to have machines with a capability to stack higher: “Therefore, we developed a machine that can stack 6-high vs. normal 5-high,” explains Peter Olsson. “However, not all customers are looking for this, since many of them have limitations on how high they can stack due to local requirements. With the mega trend of urbanisation and
For the latest news and analysis go to www.portstrategy.com/news
limited space for many existing terminals, we see a demand for higher stacking capabilities.” Kalmar can offer up to 6-high for laden containers and 8-high for semi-laden containers (up to 12 tons). “These new high capacity types of reachstackers have been available for five to six years.” Mr Olsson adds that another notable consideration is local restrictions. “At the same time, many inland terminals are in rural areas where a lot of space is available but also where local restrictions are considered regarding the stacking height up to 5-high. To get more containers in the same yard, the amount of block stacking tends to go from two or three rows deep to three or four rows deep (per aisle).” The modern reachstacker has been designed to withstand wear and tear, and, the elements. Rain, wind or snow, the reachstacker can perform in all elements that are thrown at it. “Reachstackers are typically used 365 days a year and are asked to work in any weather conditions,” says Peter Olsson. “Therefore, a reachstacker must be designed to meet the harshest conditions, withstanding cold climates and the hottest weather.” This is a view shared by Patrik Lundback. “Konecranes reachstackers are used to harsh weather and are prepared, with special heaters for extreme cold weather or for special coolers for extreme hot and/or humid climates.” He sums up why the reachstacker is the most flexible container handling solution for small and medium sized terminals too. “For green field terminals, the entry ticket/investment needed is very attractive and could be started in a relatively short time-frame. Reachstacker operations could easily be converted in to RTG operations in the future.”
8 Ports want the complete reachstacker package
8 Designed to withstand wear & tear and the elements
DECEMBER 2019 | 45
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CARGO HANDLING: MOBILE CRANES
MOBILES : BIGGER AND BETTER FOR BUSINESS Ports are investing in bigger and better mobile harbour cranes as means of consolidating and expanding business. John Bensalhia reports
8 Efficient and flexibility wanted by ports
Congratulations – your port performance has shone in the past year! Boosted levels of growth and efficiency are cause for celebration. But how to build on that success? With ports achieving impressive figures, the next step is to seek ways of making sure that the statistics are even bigger and better the next time around. In accordance with this notion, crane manufacturers are also providing bigger and better innovations. Take the mobile harbour crane, which is capable today of achieving heavier load and greater distance capabilities. Belfast Harbour recently took delivery (via Cooper Specialised Handling) of a Mantsinen 300M crane. With 2018 growth (the harbour handled over 24 million tonnes of cargo), Belfast Harbour looked to a machine that would be capable of handling that level of demand. The 300M – mounted on six axles and 24 rubber tyres – is capable of handling high levels of cargo (bulk and breakbulk) for vessels that reach up to 36000 deadweight tonnage. Michael Robinson, Port Director, Belfast Harbour, praised the impressive facilities of the Mantsinen 300M, explaining that the investment would help the port's aim to provide its customers with “highly efficient and flexible cargo handling solutions”. The Port of Philadelphia's Packer Avenue Marine Terminal is also looking to the future. Packer Avenue is the Philadelphia Port's main container terminal, and is currently undergoing improvements which are said to be worth US$300m. As part of the investment, two new ZPMC Zhen Hua 16 cranes were acquired, with another one set to follow. The new cranes can tackle container vessels of considerable size, even Ultra Large Container Vessels of up to 18,000 TEU.
For the latest news and analysis go to www.portstrategy.com/news
Greater vessel size is one of the chief considerations of mobile crane manufacturers. Sennebogen's Port Mobile Crane 9300 E is an example of equipment that can manage massive vessel sizes of up to Panamax class. Distance is not a challenge with the 9300 E, as it encompasses a working radius of 40m. It is also a crane that can reach up to two rows higher than other cranes. The 9300 E's port-cab allows the driver a good deal of flexibility. An adjustable facility results in whatever view of the surrounding port environment the driver wishes. The mobile crane also considers the environment, most notably in its electro-hydraulic drive that provides emission-free usage, while at the same time reducing operating costs by up to half. Speed is an essential consideration when selecting the right mobile crane. It is one of the reasons why Ership Terminal in the Spanish Port of Cartagena recently took delivery of the 2000th Mobile Harbour Crane from Konecranes Gottwald. Gonzalo Alvargonzález, CEO of Ership, cited the reliability, high performance, solidity and speed of the cranes as reasons for the choice of mobile harbour crane. “That helps us to serve our customers, who expect their cargo to be unloaded quickly. Time is a very important factor in our work. So, the faster a ship is unloaded, being careful with the cargo, the better.” The milestone delivery of the Model 6 Mobile Harbour Crane occurred in May 2019, and will be used for the terminal's handling of bulk, project and general cargo. Heribert Barlage, Senior Vice President, Konecranes Mobile Harbour Cranes, explained that the company's offerings provide added value for the port industry, with the 2000th delivery signifying its commitment to this field. “But just like every other important milestone we reach, this one is also an incentive for us to
DECEMBER 2019 | 47
CARGO HANDLING: MOBILE CRANES
constantly develop our cranes and in so doing, make them fit for the future.” At the time of writing, another port had ordered the Model 6 Mobile Harbour Crane from Konecranes to boost its cargo handling output. New Zealand-based Northport wanted the crane for its deep-water facility, which is due for delivery and commissioning in the first quarter of 2020. The continued interest in the mobile harbour crane again comes back to port desire to grow and expand, and Northport is no exception. The New Zealand port is looking to increase the facility's container, general and bulk cargo handling capacities. The new Konecranes model will work in tandem with the port's existing Konecranes Model 4 mobile crane, which has been in operation since 2015. The new crane will be able to handle container vessels of up to post-Panamax level, as it boasts a maximum lifting capacity of 125 tons. A welcome bonus is that the machine fully complies with New Zealand's environmentally-conscious guidelines on the use of sustainable energy. Not only does the Model 6 crane feature an ecologically sound diesel electric drive, it also includes an external power source feature, which provides the alternative option of potential back-up power. Northport's CEO, Jon Moore said that Konecranes has given “outstanding support” since it began handling containers. “They’ve provided a high-performance crane that gives us wide flexibility in handling any kind of cargo. Once we had decided to expand our capacity, it was an easy decision to work with Konecranes again.” Flexibility is a key factor to the Florida-based Port Canaveral, which opted for the Liebherr LHM 600 crane, regarded as the biggest of its kind in the US. Having started work in the second quarter of this year, the LHM 600 is employed to help increase Port Canaveral's handling flexibility and supporting the rise in port cargo levels. Growth is also occurring at Mozambique's Port of Maputo. Having reaped the rewards with the performance of the port's original Liebherr LHM 550s, two more of these were acquired in May 2019 to drive greater productivity levels. The recent double investment was augmented by special training for both operators and technicians with respect to handling and maintaining the cranes. A similar situation of two LHM 550s is relevant to West Africa Container Terminal. Like the Port of Maputo, Onne Port's West Africa Container Terminal has been experiencing constant volume growth, with a 21% rise in 2018 (from the previous year). With ongoing cargo growth (due to the continuing volume growth in the Nigerian market), a pair of Liebherr LHM 550 mobile harbour cranes arrived at the terminal in July 2019 – part of its infrastructure upgrades, which are expected to come to fruition next year. Planning for the future is what all ports have in mind and the acquisition of equipment like a mobile harbour crane can helps to secure that future. Like many of the other ports discussed in this article, the Port of Esbjerg invested in a new Liebherr crane (the LHM 800) to tackle higher volumes of cargo. The purchase took place in August 2019, adding to its range of five Liebherr mobile harbour cranes. Dennis Jul Pedersen, CEO of Esbjerg Havn, expressed his delight at the expansion of the port's crane capacity. “We need to be able to handle more and more larger cargo volumes in the future and therefore we need to rearm. I am also pleased with the fact that only few ports in the world have a similar crane because it shows that the Port of Esbjerg is a heavyweight internationally.” Esbjerg's new Liebherr crane can tackle largescale cargo successfully, with the ability to lift 308 tonnes. This lifting capability is matched by the equally formidable height (48m)
For the latest news and analysis go to www.portstrategy.com/news
and boom length (66m). The addition of the LHM 800 means that the port can now carry out tandem lifting in conjunction with another Liebherr mobile harbour crane, taking the total lift capacity to an impressive 448 tonnes. Kristian Holst, Managing Director Liebherr-Danmark Aps, added: “We are happy to be able to deliver yet another crane to the Port of Esbjerg, which already has five of our Liebherr mobile harbour cranes. The fact that it is a crane of this calibre, with the ability to lift a whole new type of high and heavy cargo, shows that the scale of activities is growing rapidly at the Port of Esbjerg.” The mobile harbour crane is a vital tool in the handling of greater quantities of port cargo. As crane manufacturers continue to come up with innovative solutions for boosting efficiency and productivity levels, this means that ports can wisely invest in a product that can help to lift cargo in fast time. With extra features such as energy efficiency and driver comfort, the modern mobile harbour crane remains bigger and better than ever before.
8 Mobile harbour cranes remain vital to ports
DECEMBER 2019 | 49
PORT COOPERATION
NEW PACIFIC & AUSTRALIAN PORT CO-OPERATION COMMENCES Pacific and Australian ports are increasing cooperation in response to new challenges. Michale Mackay explains The rise of China and climate change are the two most noticeable factors being faced by Pacific ports. Leading the movement towards greater regional cooperation is Ports Australia, which in a precedent-setting move has welcomed five individual facilities and associations from across the region as its newest external associate members. Fiji Ports Corporation Limited, Samoa Ports Authority, Cook Islands Ports Authority signed up along with New Zealand’s Lyttleton Port Company Ltd and the Port of Napier. While these are small ports, each has a strategic importance especially given the scale of the Pacific and the trade volumes involved, with maritime resources a key asset that ports can develop collectively. This latest development involving greater cooperation is first time a group of members from one region in the area have affiliated. It also looks like it may by the start of a process that could lead to something much bigger in the future according to those involved. “While Ports Australia has many Associate Members who operate on a global scale as service providers to ports, our newest members are the first international ports to be signed as External Associate Members,” a spokesman the Australian trade body told Port Strategy. Moving forward, these new members are not likely to be alone. “Ports Australia has not signed any other Pacific ports since the October announcement, but we are eager to continue building partnerships between our organisation, our members and the wider region going forward,” the spokesman added.
While Ports Australia has many Associate Members who operate on a global scale as service providers to ports, our newest members are the first international ports to be signed as External Associate Members There are two main concerns driving the region’s ports together and to co-operate with Australia facilities - one is the increasing power of China the other is the (common) issue of the environmental crisis. The latter is especially relevant to South Pacific countries which are particularly vulnerable to the rising sea-levels climate change brings with it Ports Australia’s relationship with these organisations is expected to retain a strong focus on sustainability, it said in recognition to the problems the industry faces in an era of global warming. One concept moving forward, according to Samoan Prime Minister Tuilaepa Aiono Sailele Malielegaoi at the 44th Pacific Maritime Transport Alliance conference is to build ports to service the community into the future and to encourage dialogue with that community on developments that will affect them. In addition, Ash Sinha, Policy & Operations Director, also highlighted issues such as the IMO 2020 low sulphur fuel regulatory impacts and the building of resilient infrastructure in the face of climate change.
50 | DECEMBER 2019
The other vulnerability ports throughout the Pacific are facing is the increasing role China has generated for itself in the region. Around the same time as Ports Australia was announcing its new associate members there were press reports that China had leased Tulagi, prized for its natural deep-water harbour in the Solomon Islands on a 75-year basis. That claim has since been squashed by the government of Islands but in some ways the idea is now common knowledge - China is clearly looking to build its own string of ports across the Pacific. Both Ports Australia and the Australian government appear to be cautious, although concerns exist. “Bringing the industry together and sharing knowledge will strengthen the voice of our region, as well as making it a more competitive player across the world’s maritime sector,” said Ports Australia – a hint perhaps that those joining are seeking “safety in numbers” and looking to swap information to improve performance.
8 Samoa Ports Authority is one of five new external associate members joining Ports Australia
Bringing the industry together and sharing knowledge will strengthen the voice of our region, as well as making it a more competitive player across the world’s maritime sector “All parties investing in the Pacific should act transparently, uphold international standards and meet the genuine need of citizens of the Pacific,” was the limit of comments from Australia’s Department of Foreign Affairs and Trade when contacted by Port Strategy.
For the latest news and analysis go to www.portstrategy.com/news
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Westicker Str. 52, 59174 Kamen, Germany
Email: port-technology@vahle.de Web: www.vahle.com
BLOK cuts Shipping Line pollution: increases safety and productivity in Port • BLOK Spreader – lifts 4x40’ empties • BLOK Rig – automatic twistlocking • BLOK Trailer – 8 teu
52 | DECEMBER 2019
Liebherr-MCCtec Rostock GmbH Liebherr provides advanced maritime cargo handling solutions with a focus on quality, innovation and performance. With more than 50 years’ experience in vessel handling and container stacking, Liebherr supplies premium port equipment for highly efficient port operations across the globe. Liebherrstraße 1, 18147 Rostock Rostock, Germany +49 381 6006 5020 maritime.cranes@liebherr.com www.liebherr.com
CERTUS provides Automatic Container Recognition systems in ports and terminals all across the globe. Our systems have consistently demonstrated high reliability and overall high OCR accuracy, streamlining customer operations. Check out our Mobile OCR! www.certus port automation.com +31 78 6815196 The Netherlands
S IDELIFTER/SIDE LOADERS
Schwartauer Str. 99 D-23611 Sereetz • Germany Tel:+49 451 398 850 Fax: +49 451 392 374 soj@orts-gmbh.de www.orts-grabs.de
Gerbestr. 15, 6971 Hard, Austria T: +43 5574 6883 0 sales@kuenz.com www.kuenz.com
CAMCO Technologies NV Visual- and Micro Location- assisted process automation solutions for container, ro-ro and rail terminals worldwide. Accurate crane, gate & rail OCR systems and Gate Operating System software helping terminals accelerate terminal and gate activity. Technologielaan 13 Leuven, Belgium +32-16-38-9272 +32-16-38 9274 info@camco.be www.camco.be
ShibataFenderTeam Group ShibataFenderTeam is one of the leading fender manufacturers with 50+ years of group experience and an extensive global network. As a specialist for customized fender solutions, they focus on vertical integration with in-house manufacturing and full scale testing, offering high quality products at competitive prices. SFT offers the full range of marine fender products. info@shibata-fender.team www.shibata-fender.team
P OWER TRANSMISSION
Over 40 years experience constructing and manufacturing a wide range of grabs, including electro-hydraulic grabs (with the necessary crane equipment) radio controlled diesel hydraulic grabs, 4, 2 and single rope grabs all suitable for bulk cargo.
Künz GmbH Founded in 1932, Künz is now the market leader in intermodal rail-mounted gantry cranes in Europe and North America, offering innovative and efficient solutions for container handling in intermodal operation and automated stacking cranes for port and railyard operations.
I T PORT AUTOMATION
Orts GMBH Maschinenfabrik
90 Fenchurch St London • EC3M 4ST Tel: +44 207 204 2635 london@ttclub.com www.ttclub.com
Tel: 00441926611700 enquiries@blokcontainersystems.com www.blokcontainersystems.com
G RABS MRS Greifer GmbH Grabs of MRS Greifer are in use all over the world. They are working reliably and extremely solid. All our grabs will be made customized. Besides the production of rope operated mechanical grabs, motor grabs and hydraulic grabs we supply an excellent after sales service. Talweg 15-17, Helmstadt-Bargen 74921, Germany Tel: +49 (0)7263 - 91 29 0 Fax: +49 (0)7263 - 91 29 12 info@mrs-greifer.de www.mrs-greifer.de
The TT Club is the international transport and logistics industry’s leading provider of insurance and related risk management services. TT Club specialises in the insurance of liabilities and equipment for multi-modal operators.
VISY Oy VISY takes pride in solving operational problems, specialising in gate automation and access control solutions in ports and terminals. Their solutions streamline processes resulting in saving money and increasing productivity. Tel: +358 3 211 0403 Email: sales@visy.fi Web: www.visy.fi/
M ARINE FENDERS
info@alimak.com www.alimak.com
BLOK Container Systems Ltd
SANY offers reliable quality container handling trucks. Benefit from the experience of over 4,000 reach stackers build over the last 12 years, with up to five year full machine warranty. Sany Allee1 D-50181 Bedburg Tel: +49 2272 90531 100 Email: info@sanyeurope.com www.sanyeurope.com
I NSURANCE
Alimak, the leading manufacturer of rack and pinion elevators, have been successfully servicing ports since the early 1970s with close to 3,000 elevators installed, providing easy access for crane drivers, which enhances productivity and profit. Today, the company’s crane elevators are installed in almost 100 countries around the world.
H ANDLING EQUIPMENT
E LEVATORS
Alimak Group Sweden AB
Sany Europe GmbH
I T PORT AUTOMATION
Verstegen Grijpers BV
VAHLE is the leading specialist for mobile power and data transmission VAHLE provides the solutions to reduce the carbon footprint while increasing the productivity. RTGC electrification including positioning and data transmission making RTGC ready for Automation.
H ANDLING EQUIPMENT
G RABS
E LECTRIFICATION SOLUTIONS
VAHLE PORT TECHNOLOGY
Conductix-Wampfler The world specialist in Power and Data Transfer Systems, Mobile Electrification, and Crane Electrification Solutions. We Keep Your Vital Business Moving! Rheinstrasse 27 + 33 Weil am Rhein 79576 Germany Tel: +49 (0) 7621 662 0 Fax: +49 (0) 7621 662 144 info.de@conductix.com www.conductix.com
Hammar Maskin AB Hammar Maskin AB is developing, manufacturing and marketing Sideloaders, also known as Sidelifters, Swinglifters or Self loading trailers, under the brand name HAMMAR™. Buagärde 36, Olsfors 517 95 Sweden Tel: +46-33 29 00 00 Fax: +46-33 29 00 01 info@hammar.eu www.hammar.eu
For the latest news and analysis go to www.portstrategy.com/news
PRODUCTS & SERVICES: DIRECTORY
5 Sir Gil Simpson Drive Christchurch 8053 New Zealand PO Box 20152 E: info@jadelogistics.com W: www.jadelogistics.com
Navis understands that as ships get larger and operational processes become more complex - efficiency, collaboration and productivity are essential. As a trusted technology partner, Navis offers the tools and personnel necessary to meet the requirements of a new, and ever-evolving, global supply chain. World Headquarters 55 Harrison Street Suite 600 Oakland CA 94607 United States Tel: +1 510 267 5000 Fax:+1 510 267 5100 Web: www.navis.com
Prinses Margrietplantsoen 33, 2595AM, The Hague, The Netherlands Tel: +31 (0) 702-051-709 Email: sales@solvosys.com www.sovosys.com
TGI Maritime Software is a Terminal Operating System editor and integrator specialized in the support of Small to Medium Terminals. Its expertise is built on 34 years of experience within the maritime sector. TGI provides comprehensive services to its customers all along their projects. OSCAR TOS and CARROL TOS have already been successfully handled by 40 container and RoRo terminals worldwide. Tel : +33 (0)3 28 65 81 91 contact@tgims.com www.tgims.com
9 JUNE Southampton 112020 United Kingdom TO
www.mcceexpo.com
Providing complete solutions for your container cranes Refurbishments & Upgrades – Maintenance – Training – Inspections & Audits – Safety Lashing Cages – Spares & Service Support www.wcs-grp.com/ info@wcs-grp.com T: +971-4-8838980
T RACTORS
Master Terminal TOS from Jade Logistics solves the complex problem of managing a variety of mixed cargo within one system, providing the agility you need to manage your port. Designed to cater for all cargo types, it is the TOS of choice for mixed cargo terminals.
Solvo Europe B.V. Solvo’s software solutions such as TOS or WMS help container and general cargo terminals take full care of their cargo handling processes and make sure the clients expectations are exceeded.
T ERMINAL OPERATING SUPPORT
ELME Spreader AB ELME Spreader, world’s leading independent spreader manufacturer supports companies worldwide with container handling solutions that makes work easier and more profitable. Over 21,000 spreaders have been attached to lift trucks, reach stackers, straddle carriers and cranes. Stalgatan 6 , PO Box 174 SE 343 22, Almhult, Sweden Tel: +46 47655800 Fax: +46 476 55899 sales@elme.com www.elme.com
The Brain of Logistics With more than 30 years experience in IT Solutions and Business Operation Consultancy DSP offers a large portfolio of professional services and products to support terminal operations processes and system. DSP Data and System Planning SA Via Cantonale 38 6928 Manno, Switzerland Tel: +41 91 230 27 20 Fax: +41 91 230 27 31 info@dspservices.ch www.dspservices.ch
T ERMINAL OPERATING SYSTEMS
S PREADERS
Bromma Conquip Bromma is the industry’s most experienced spreader manufacturer, known worldwide for crane spreaders of exceptional reliability. Today you find Bromma spreaders operating in 97 out of the top 100 ports worldwide. Malaxgatan 7 , P.O. Box 1133 SE-164 22 Kista, Sweden Tel: +46 8 620 09 00 Fax: +46 8 739 37 86 sales@bromma.com spareparts@bromma.com
T ERMINAL OPERATING SYSTEMS
S PARE PARTS
TVH PARTS NV TVH supplies every part you need for heavy forklifts, reach stackers, container handlers, spreaders and terminal tractors. As a one-stop shop, the company offers a full service in spare parts and accessories for container handling equipment, with a guaranteed fast delivery at a competitive price. Brabantstraat 15 BE-8790 Waregem Tel: +32 56 43 42 11 Fax: +32 56 43 44 88 info@tvh.com www.tvh.com
MAFI Transport-Systeme GmbH Specialised in the development and production of heavy-duty equipment for transporting containers, semi-trailers, cargo/roll trailers and special container chassis in ports and industry.
Hochhäuser Str 18 97941 Tauberbischofsheim, Germany Tel: +49 9341 8990 sales@mafi.de www.mafi.de
Terberg Special Vehicles develops and manufactures customised tractors. Our terminal, RoRo, industrial and road/rail tractors operate in ports, distribution centres, shunting yards, industry and construction sites worldwide. We believe efficient operations depend on high quality, easy maintenance and operator comfort. Benschop – The Netherlands Tel. +31 348 45 92 11 terbergspecialvehicles.com
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For the latest news and analysis go to www.portstrategy.com/news
DECEMBER 2019 | 53
POSTSCRIPT
SHORT HAUL: STILL IN ITS INFANCY
Expect more short haul container rail initiatives with a commensurate increase in innovation in this area designed to promote system viability – Australia now particularly being a test bed for the system
54 | DECEMBER 2019
Rail is seen as a solution to alleviating fast growing truck volumes moving to and from port gateways. Sometimes it is the logical solution, providing the most efficient and cost-effective means of moving cargo to or from a given port. Key influential factors in this respect are usually an on-dock rail capability and practically speaking a rail system that works in terms of track quality, capacity and the right equipment to haul containers and other cargo. There is also the reality that the viability of putting cargo on rail usually increases the longer the distance involved. When it comes to short haul the level of challenge goes up substantially. This is an issue now being confronted with some vigour in conjunction with the main ports in Australia, all of whom tend to have big metropolitan clusters around them. Brisbane, Melbourne and Fremantle are all good examples. The port of Brisbane foresees a container rail shuttle service with the existing Acacia Ridge Rail Terminal and potentially between other new hubs such as on the north side of Brisbane. Melbourne has plans for a port rail container shuttle to serve two suburban hubs, Somerton in the north and Altona in the South West. Fremantle, operating with the benefit of a government subsidy of A$50 per TEU, has already made good progress in building container volume by rail – 16 per cent of the port’s container volume was carried by rail in year 2017-18. The North Quay Rail Terminal (NRQT) in the port of Fremantle provides a direct rail link to the Forestfield Intermodal Terminal, a short haul away sited in an industrial area and offering freight forwarding services and close to inter-state rail facilities. Also eligible for subsidy are containers moving between NRQT and the Kwinana Intermodal Terminal, a facility slated for expansion and ultimately intended to serve the new Outer Harbour development in Fremantle. Bottom line Fremantle’s success to-date has undoubtedly benefitted considerably from the positive influence of the A$50TEU government subsidy. As Western Australia’s Department of Transport (DoT) readily acknowledges: “Short haul rail services, such as the port shuttle between Forrestfield Intermodal
8 Interest in short-haul rail as a path to taking port-related truck traffic off the road is building but making it work effectively is still an area of considerable challenge
Terminal (FIMT) and the North Quay Rail Terminal (NQRT), are more costly to operate on a commercial basis than trucking operations. Rail has higher fixed costs, and rail services incur additional costs associated with multiple staging points,” states the DoT. VARIABLES TO CONSIDER Getting the formula right for effective short haul rail operations does, however, not just come down to price, there are many variables to consider, not the least of which are the following: 5 Total journey cost – short haul services offered without subsidy can significantly add to total journey cost. And can be negatively impacted by the additional transport legs a rail movement can generate. 5 Timing – speed is not always optimal via short haul rail because of the additional number of container transfers and journey legs plus the general issue of whether the rail solution offered dovetails with overall supply chain requirements. 5 Level playing field - providing port-side intermodal rail facilities that offer equality of service to competing container terminal operators, now a big issue in Melbourne. Short-haul container movements are conducted in conjunction with various ports around the world. The take-up of this system – as Australia currently demonstrates – has the potential to grow significantly in today’s increasingly congested road traffic conditions and in a much more environmentally conscious world. Short haul container rail systems can nevertheless today still be regarded as in their infancy. Measures to boost efficiency and reduce costs – for instance public sector investment in infrastructure, automated container transfer and computer driven loading/pick-up and train scheduling arrangements have, together with a wide range of other initiatives, to continue to be explored and harnessed to the benefit of short haul rail in particular. The reality is that the truck still dominates in short haul container movements and it will take a concerted effort to narrow this position.
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