Port Strategy December 2020

DECEMBER 2020 VOL 1020 ISSUE 10

portstrategy.com

China – Australia coal wars | Melbourne maps the future | BCT taps COMODALECE

MAKING A CONNECTION BUILDING ROBUST BOX TERMINAL REVENUE ‘HYDROGENISATION’ POWERS ON

PORTSTRATEGY INSIGHT FOR PORT EXECUTIVES

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

VIEWPOINT MIKE MUNDY

Breaking with convention

A new year beckons but signs are that the events of 2020, and notably the consequences of COVID-19, will continue to have a far reaching effect in the logistics sector with all major players, including ports and terminals, having to adapt and innovate to make the best of the new reality

This is the era of breaking with convention. Look at the incumbent sitting in the White House defying the law of gravity!

In a surreal way, are we now living close to the fictional stories depicted in the movie Contagion or in Stephen King’s gripping book, The Stand? The Pandemic is a catalyst to breaking the old rules, conventional wisdom is frequently out the door.

Many more of us now shop online and the smartphone has emerged as the main device by which we achieve this. Despite many of us being in lockdown or furloughed at home, smartphone use has risen, with specialist apps for shopping being a main driver of the trend. Will ravaged high streets and shopping centres ever see a return to normality? Chances are it will be a new normal not the normal of old.

COVID-19 has shown its ability to severely disrupt supply chains, generate massive peaks in demand, imbalances in container supply and force choking congestion on many ports and terminals.

All the signs are that supply chain logistics will change fundamentally going forward. Dependence on China as a source of manufacturing will reduce – a tactic which for some will represent an acceleration of earlier thinking, as other locations offer competitive cost profiles, and for others it will be directly as a result of the Pandemic throwing the spotlight on the pitfalls of ‘placing too many eggs in the same basket.’ Expect nearshoring to increase significantly.

An expanded role for fulfilment centres and warehousing is also foreseen – buffers against disruption to supply chains. There is widespread recognition that critical goods such as ventilators, alcohol sanitiser, face masks and an array of other products will require storage closer to home to guarantee prompt and uninterrupted access. For some ports and terminals with a logistics bent this presents an opportunity.

Also in an upside context, it is hard to ignore the much improved fortunes of shipping lines who are benefitting from the resulting surge in demand following manufacturing lockdowns coupled with the “normal” exceptional factors such as peak season demand. Clearly the lines, the majority of whom are reporting exceptional profits on a quarterly and ongoing basis, have navigated the current crisis much better than the 2008-09 financial disaster. Yes, they have benefitted from other factors such as lower fuel prices but without doubt a key factor in their success is what Soren Skou, Chief Executive, Maersk Line has described as their greater agility in terms of adjusting capacity to demand.

The big question is, will the lines be able to sustain such an approach post trade volatility?

One technological trend that is progressively the recipient of a boost from the pandemic is the increasing emphasis on digitalisation.

Digitalisation is a hot topic and its inherent advantages – increased performance, reduced operational costs, ease of data analysis, safer storage in the Cloud and the reduced possibility of human error – will combine to deliver what can be seen as an entirely new dimension via which greater levels of efficiency can be achieved, not least in the port and terminal sector which fulfils the role of the interface between different transport modes.

As 2020 draws to a close, a year to forget for many, it is unlikely that the events that have shaped it and consequences of these – especially those flowing out of COVID-19 – will fade away.

Diverse old conventions are being broken and a new-normal looms!

For the latest news and analysis go to www.portstrategy.com/news101

News Reporter: Rebecca Strong rstrong@mercatormedia.com Regular Correspondents: Dave MacIntyre; Iain MacIntyre; Felicity Landon; Alex Hughes; Martin Rushmere; Stevie Knight; John Bensalhia; Kate Jones; Ben Hackett; Peter de Langen; Barry Parker; Charles Haine; Charlie Bartlett; Maurice Jansen; Bob Post; Tero Hottinen Production Ian Swain, David Blake, Gary Betteridge production@mercatormedia.com SALES & MARKETING t +44 1329 825335 f +44 1329 550192 Media Sales Manager: Tim Hills thills@portstrategy.com Media Sales Executive: Hannah Bolland hbolland@portstrategy.com Marketing marketing@mercatormedia.com Chief Executive: Andrew Webster awebster@mercatormedia.com PS magazine is published monthly by Mercator Media Limited, Spinnaker House, Waterside Gardens, Fareham, Hants PO16 8SD UK t +44 1329 825335 f +44 1329 550192 info@mercatormedia.com www.mercatormedia.com

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DECEMBER 2020 | 3

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CONTENTS DECEMBER 2020 VOL 1020 ISSUE 10

portstrategy.com

China – Australia coal wars | Melbourne maps the future | BCT taps COMODALECE

NEWS 16 Contship Spending Investment in Italy

16 Digital Plans

Four-steps for IAPH

17 Freeports Excite BPA

Fair process concerns

MAKING A CONNECTION BUILDING ROBUST BOX TERMINAL REVENUE ‘HYDROGENISATION’ POWERS ON

On the cover The Freightliner Pl Dragon locomotive, seen here on its maiden call at ICTSI’s Baltic Container Terminal, brings a greater level of efficiency to intermodal rail operations via its ability to switch from electric traction to diesel power, substantial onboard information processing power and GPS for real time tracking

17 ACCC Action

Newcastle initiative

18 UNCTAD Confirms Dip

Global trade down

18 Clean Tyne Ahead

New green energy set-up

19 Bigger Windfarm Support

Oceandock LX on the way

19 Double Deal for ADP Digital transformation

11 Raising the Bar is a proud support of Greenport and GreenPort Congress

GreenPort magazine is a business information resource on how best to meet the environmental and CSR demands in marine ports and terminals.

Sign up at greenport.com

Piraeus2021

GREENPORT Cruise Congress

New Bruks Siwertell unloader

11 Hydrogen in Roerdam

New tractor power

11 Kalmar Care

Six years in Belfast

Join leading port executives www.greenport.com/congress

REGULARS 13 Rollercoaster

And ride not over yet

Online portstrategy.com 5 Latest news 5 Comment & analysis 5 Industry database 5 Events Social Media links LinkedIn PortStrategy portstrategy YouTube Weekly E-News Sign up for FREE at: www.portstrategy.com/enews

FEATURE ARTICLES 18 Making a Connection

Eective hinterland penetration

20 Building Robust Revenues Service and contractual issues

23 “Hydrogenisation” Big role for ports

26 Crisis? What Crisis?

Panama bucks trend

28 Green Driver or Diversion?

Is COVID-19 helping or hindering?

31 Coal Wars

Souring international relations

33 Swamped NZ ports Congestion and delays

35 Melbourne Maps the Future Development strategy to 2050

36 Over Land or Sea? Thai Canal back, again

&

The Congress is a meeting point that provides senior executives with the solutions they require to meet regulatory and operational environmental challenges.

Stay in touch at greenport.com

DECEMBER 2020

13 BREXIT Spectre

What could possibly go wrong?

15 Reducing Carbon IMO score cards

15 Cargo Sailing Ships

38 Conventional Wisdom

RTGs powering on with innovation

40 Yard Gantries Market

RTG demand up, RMG interest down

44 Postscript

BCT taps COMODALECE

Becoming big business

17 Climate Change New plans and rules

For the latest news and analysis go to www.portstrategy.com/news101

DECEMBER 2020 | 5

NEWS REVIEW

CONTSHIP ITALIA ROLLS OUT INVESTMENT The Italian container terminal and intermodal operator, Contship Italia Group, has launched a number of new initiatives designed to enhance its current port and rail operations.

The company, which is part of the Eurokai Group (which also includes Eurogate), is planning to increase its container handing capacity and boost intermodal rail activities.

For the port business, investment is planned at La Spezia Container Terminal (LSCT), the company’s main container terminal. Here, a new 524m long quay with five ship-to-shore gantry cranes (25 rows across) will add 300,000TEU to the existing annual container capacity, as the facility gears up to serve larger container vessels.

Recent port authority investment means that the Fornelli East quay has a new draft of 15m, with the Fornelli West draft depth now at 14m (with effect from December 2020).

Contship Italia predicts that intermodal activity will comprise 50 per cent maritime and 50 per cent continental/intra-EU trade by end of 2023.

This increase in intermodal rail capabilities means an average additional vessel capacity of 300/400 TEU per vessel call can be offered. These plans are targeted to be in place by the end of 2024. At the same time, 15 years after the announcement

BRIEFS Ownership Change

Timaru Container Terminal (TCTL) founder, the Port of Tauranga, has reassumed full ownership of the business after logistics firm Kotahi relinquished the 49.9 per cent ownership it has held since June 2014. Having worked with the Port of Tauranga to establish TCTL’s “robust position”, David Ross, Chief Executive, Kothai, says it was the appropriate time to move on from port asset ownership.

6 | DECEMBER 2020

8 Investment in LSCT is targeting larger ships but also more intermodal rail capacity

of the concession agreement for Eurogate Tanger (TC2), the new Tanger Alliance terminal

(TC3) in Tanger Med 2, will commence commercial operations in January 2021

The new terminal has eight of the latest generation ship-to-shore cranes (24 rows/54 m under spreader) and an 800m long quay, with an initial yard area of 36ha. Once completed, the terminal handling capacity will be 1.5 million TEU per annum.

EUROKAI GmbH & Co. KGaA holds a total of 83.3 per cent of the shares in Contship Italia S.p.A., Melzo, Italy, the holding company of the Contship Italia Group.

FOUR-STEP DIGITAL PLAN FROM IAPH The International Association of Ports & Harbors (IAPH) has announced a new four-step plan to support and assist ports in accelerating digitalisation.

The announcement follows the first meeting of the IAPH’s newly-established Data Collaboration Technical Committee, drawn from within its membership of 200 ports in 90 countries and more than 150 companies spread across shipping, stevedoring and warehouse businesses.

The four key steps are: 1. Based on the recent IAPH world ports survey on EDI and FAL levels of implementation, create a more permanent dashboard to track progress of ports with digitalisation.

2. IAPH to continue to work with other partners on a guidance

document on FAL implementation, port community systems and port cybersecurity.

3. Two working groups to be established to build on existing work completed – one on cybersecurity (to ensure ports understand and correctly define cybersecurity, conducting a gap analysis and take a step-by-step approach to cyber resilience) and the second to focus on automation (following a recent Port of Hamburg and Fraunhofer report on the impact of autonomous vehicles on port infrastructure).

4. Promoting industry-wide IMO and IHO initiatives to standardise data transmissions by the global community of around 9000 ports and

harbours and 55,000 ships currently served.

Patrick Verhoeven, Managing Director, IAPH, notes: “We have realised when asking ports that the biggest barrier to digitalisation and subsequent emissions reductions is neither the funding, nor the information technology. It’s the willingness of multiple port stakeholders to collaborate and share data and the way in which ships and ports exchange ge data.”

Mexico’s Dry Canal

Igoumenitsa Interest

South Port Results

Mexico is developing a “dry canal” alternative to the Panama Canal. It could eventually consist of a road and 350km railway, linking the ports of Salina Cruz, on the Pacific, and Coatzacoalcos, in the Gulf of Mexico across the Tehuantepec isthmus. The Interoceanic Corridor is estimated to cost US$7 billion and local reports suggest it could open in 2023. In 2019, Mexico shipped 29 million tonnes of cargo through the Panama Canal.

Strong interest is reported from the non-binding bids for a 67 per cent stake in the Igoumenitsa port privatisation process in Greece. There are nine offers, with bids from Aegean Oil, Attica Holdings,a consortium of Archirodon Group/ANEK & Trident Hellas group, along with Grimaldi Euromed and Minoan Lines,Danthia Shipping, MRG Ltd,Portek International, Quintana Infrastructure and Thessaloniki Port Authority.

8 Patrick Verhoeven: “Biggest barrier to digitisation is the willingness to collaborate and share data.”

New Zealand’s South Port incurred a 3.6 per cent decline in net profit after tax to NZ$9.43 million and a one per cent increase in revenue to NZ$44.62 million for the financial year to June 20, 2020 compared to the former FY. The dip in profits was considerably less than the 10 per cent forecast at the start of the year. Total annual cargo throughput dropped 7.2 per cent to 3.27 million tonnes, with COVID-19 lockdown restrictions impacting forestry exports.

For the latest news and analysis go to www.portstrategy.com/news101

NEWS REVIEW

BRIEFS

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Green Light

8 DP World, operator of London Gateway and Forth Ports operating the Port of Tilbury are jointly bidding for a Freeport opportunity – over 10 UK Freeports are envisaged

BPA EXCITED BY FREEPORTS...IF PROCESS FAIR The British Ports Association (BPA) has welcomed the news that the UK Government has launched the bidding process and prospectus for Freeports in England.

The BPA has been promoting a port zoning economic vision to support regional growth – which is akin to a Freeports strategy – for some time. Richard Ballantyne, Chief Executive, BPA, underlines that the Freeport initiative “… represents a key step forward to the establishment of a more advanced model for Freeports than previously seen.”

However, Ballantyne also raises a note of caution: “Inclusivity and consistency around the UK is still something policy makers need to consider, to ensure all regions can benefit.

Our members in Scotland, Wales and Northern Ireland have concerns that dealignment and delays to the policy in the devolved administrations may be disruptive to the ports market, which relies on a level-playing field for free and fair competition,” he says.

To date many, if not all, major ports in England have either

confirmed an interest in submitting Freeport proposals, or confirmed that they are in the process of doing so.

This includes Forth Ports and DP World outlining a joint bid for their Tilbury and London Gateway ports, respectively, and PD Ports acknowledging the importance of a Freeport option in the Northeast of the UK. The UK Government has said that it will consider establishing in excess of 10 Freeports if it receives sufficient high-quality proposals.

ACCC LEGAL ACTION ON CONSTRAINT OF TRADE Australia’s Competition and Consumer Commission (ACCC) has commenced its long-awaited legal action over what it identifies as the constraint of trade in conjunction with the Port of Newcastle, New South Wales (NSW).

The ACCC is alleging anti-competitive behaviour by the State of New South Wales and NSW Ports, on the basis that port privatisation agreements contained provisions that basically require the Port of Newcastle to compensate the NSW Government should it handle more than 30,000TEU per year through a container terminal.

These agreements came about when the NSW Government privatised Port Botany and Port Kembla in 2013.

Port Commitment Deeds were entered into as part of the privatisation process for a term of 50 years.

The ACCC claims that the compensation provisions in the

deeds contravene the Competition and Consumer Act 2010 (CCA). The court’s eventual ruling could be significant for future port privatisation deals in New South Wales and will have an influence over container terminal development in Newcastle.

At the same time, Shipping Australia has accused port authorities in NSW of penalising their customers by double-charging them. The body says the double dipping occurs via the “navigation service charge”, a statutory charge levied by port authorities on ships that enter a port.

Shipping Australia accepts the charge is a reasonable way to charge for access to a port but notes shipping companies are sometimes forced to pay it twice, to the Port Authority of New South Wales and to NSW Ports.

NSW Ports is a private port operator for Port Kembla and is also classified as a

For the latest news and analysis go to www.portstrategy.com/news101

“relevant port authority” in relation to this statutory charge and is therefore allowed to fix and collect it.

In particular, the alleged double charge occurs when a ship is required by port management to temporarily depart the port. It may be required to go elsewhere to load cargo, or in the case of the tanker trades, to load and/or discharge different parcels of cargo.

Shipping Australia says such temporary moves happen at Ports Jackson, Botany and Kembla. However in New South Wales, when a ship returns to a port after being forced to temporarily depart, the shipping company is then forced to pay again even if the vessel is still on the same voyage and even if the ship does not travel to any other port. “At a cost of up to A$60,000 a time, it’s a pretty costly practice,” says Shipping Australia.

A draft environmental impact assessment into the proposed new Port of Montreal expansion at Contrecoeur has given its approval for the development. The report was completed by the Impact Assessment Agency of Canada to assess all mitigation measures relating to the environment.

It represents a major step forward for the project.

DHL LG Deal

DHL Supply Chain is to develop a new 48,000m2 distribution warehouse with DP World at the operator’s London Gateway port in the UK. Construction work is starting in Q1 2021, for delivery in 2023, when DHL will lease the facility from DP World. It will be fully automated and brings the growing number of operators at the port’s logistics park to 10 in total.

Los Angeles high spot

A strong import cargo surge in October resulted in the Port of Los Angeles recording its highest ever one-month total throughput of 980,000TEU – 27 per cent growth over October 2019. Loaded imports were 500,000TEU of the total, which reflects an increase in consumer demand of Asiansourced goods. Throughput was also bolstered by a large number of empties (330,000TEU) moved to support the ongoing equipment re-positioning in the trans-Pacific trades.

FMC Probing

The Federal Maritime Commission (FMC) in Washington DC has launched a probe involving container shipping line activity at the ports of Los Angeles, Long Beach and New York/New Jersey. The focus is on the policies of major liner operators for costs and box availability.

DECEMBER 2020 | 7

NEWS REVIEW

BRIEFS Beirut clean-up

The Government of Lebanon has confirmed it has signed a contract with Combi-Lift, the German heavy-lift specialist operator, to remove 49 containers from the Port of Beirut as part of the clean-up after the deadly explosion that occurred in August of this year. Some of the containers have reportedly been stored in an open-air cargo zone since 2009, the office of the temporary Prime Minister’s office said in an official statement.

Second Zim service for Oz

Zim is launching a second China/Australia service by splitting the previously launched CAX service into two separate loops, effective from the first week of December. Both the existing CAX and new, C2A service, will make the three-port Sydney/Botany, Melbourne and Brisbane rotation. The C2A service will also call to Laem Chabang and Ho Chi Minh ports, in addition to calls in China.

CMA CGM ups Caribbean coverage

During December, CMA CGM is launching its new Flamingo Service to provide increased Caribbean coverage and direct connectivity with the Port of Miami and Kingston. Key components of the new weekly service include linking the Virgin Islands, Haiti and Saint Martin with the Asia, Europe and North America regions, by transshipment, particularly servicing refrigerated and garment exports out of the Caribbean. The Caribbean remains one of the core services areas of CMA CGM and the Flamingo service further enhances the regional coverage.

8 | DECEMBER 2020

UNCTAD: MARITIME TRADE TO FALL IN 2020 Global maritime trade will fall by 4.1 per cent this year because of the impact of COVID-19, according to UNCTAD’s newly published Review of Maritime Trade (RMT).

The review says the pandemic has sent shockwaves through supply chains, shipping and ports, leading to plummeting cargo volumes and significantly hitting growth prospects. Alongside the stats, it says COVID-19 is a ‘litmus test’ not only for globalisation but also for global solidarity and collaboration. Coronavirus has raised ‘existential questions’ about globalisation, says UNCTAD, adding weight to the pushback against outsourcing from distant locations and encouraging a focus on shorter supply chains, including nearshoring and reshoring, with less dependence on just-in-time and lean inventory models.

Speakers at an official online launch said the RMT’s publication came at a pivotal time for the shipping sector.

“If ever there was a time for the global community to understand the importance of a robust and well-organised global maritime sector, that time is now,” said Chad Blackman, Barbados Ambassador to the UN. The UK-based Port of Tyne is developing a new green energy facility to support the renewable energy sector.

The “Tyne Clean Energy Park,” as it has been dubbed, will be located on a 200ha site that is soon to become available. The decision to develop the facility is underpinned

by Equinor’s selection of the Port of Tyne as the operations and maintenance base for the new Dogger Bank offshore wind farm.

This largescale windfarm project is located between 125km and 290km off of the UK East Coast in the North Sea. There are four locations comprising the development and each will have a capacity of 1.2GW, giving a total of 4.8GW overall.

The delivery date of the farms is 2023-2025 and a wellpositioned onshore base is integral to achieving efficient delivery and ongoing support.

8 GPS Group and VARO Energy are developing a new rail handling system and dedicated ethanol storage facility connected to 17 Class 1 tanks at the Port of Amsterdam, the world’s largest trading and blending hub for gasoline and its components

8 Dr Mukhisa Kituyi, Secretary General of UNCTAD

“COVID-19 has laid bare the vulnerabilities of the maritime sector – while many of those vulnerabilities existed before the pandemic, we have now seen the negative effects in a way that highlights the need for states – especially smaller states like ours – to have access to reliable and cost-effective maritime transport.”

Dr. Mukhisa Kituyi, Secretary General of UNCTAD, said a number of lessons have been learned from the pandemic, among them that seafarers are critical workers and that having them stuck at sea for many months, unable to be repatriated, is unsustainable both for seafarers and for the safe operation of ships. They should be designated key workers, regardless of nationality, to ensure that they are not restricted from travelling to and from their ships.

TYNE TARGETS CLEAN ENERGY

8 Tyne Clean Energy Park will allow companies involved in offshore wind projects, like Dogger Bank, to consolidate all operations and maintenance support activities

For the latest news and analysis go to www.portstrategy.com/news101

NEWS REVIEW Windthrust is developing a new self-propelled port and installation vessel for the offshore wind farm market.

The wholly-owned subsidiary of Perth-based National Ports Company is building its new vessel with a 60,000m2 deck area, supported by two 2600-tonne cranes and one 6000-tonne crane. This will enable it to handle a sub-station in a single-lift. There will also be 700,000m3 of underdeck area.

The new vessel is called the Oceandock LX and is specifically designed to support the development of the everincreasing sizes of offshore wind farm market equipment. Mario Lucido, Managing Director, National Ports Company, notes: “The next generation of wind turbines will be larger and heavier in order to keep up with the rapid increase in global demand for renewables. This will require far larger vessels that can offer heavier lifting capacity and increased deck space.

Today’s installation vessels are not fit for purpose, as they simply do not have the capacity to meet requirements.”

OCEANDOCK LX, A BIGGER WIND FARM SOLUTION

Abu Dhabi Ports has confirmed it has signed two different agreements that will support its further digital transformation and increase operational efficiencies across its entire maritime and logistics supply chain.

The first new deal is a Memorandum of Understanding (MOU) with DNV GL, the society of independent maritime and energy experts, in order to help increase the speed of Abu Dhabi’s maritime ecosystem development.

ADP DOES DOUBLE DEAL This arrangement will see a combined approach to deployment of a range of key innovations, such as autonomous equipment, use of artificial intelligence, machine learning and blockchain technology.

A second MOU has been reached by Maqta Gateway, the digital arm of Abu Dhabi Ports, and TruKKer, the largest

digital truck booking marketplace in Abu Dhabi.

The deal will help Maqta Gateway’s digital logistics solution platform, MARGO be integrated into the fleet of trucks across the Mid-East.

The latest double deal is a further step forward for AD Ports in its key aim of establishing premier logistics trade hub

facilities through a diverse range of services and activities.

This is being achieved through constant innovation and a very strong focus on developing and utilising digital and automated equipment throughout all of its investments.

GCT Vanterm Live

Garment Grief

Stockholm Norvik Live

THPA in Sofia

Global Containers Terminals Vanterm in Vancouver has confirmed it has gone live with its new Navis terminal operating system (TOS).

The process is part of a strategic plan to increase capacity at the facility by 25 per cent and follows introduction of the same system in its New York/New Jersey operation earlier this year. All four GCT terminals now operate with new Navis systems.

Oceandock LX is a new, self-propelled vessel designed to handle the larger equipment now being deployed in the windfarm industry

Garment makers in Bangladesh are demanding that the national government acts because shipping lines are applying emergency cost recovery surcharges due to port congestion. The Chittagong Port Authority and Bangladesh Shipping Agents Association (BSAA) state that they are already trying to recover from the impact of the COVID-19 pandemic and this latest move is another setback to recovery.

For the latest news and analysis go to www.portstrategy.com/news101

Ro-Ro operations have commenced at the new port in Sweden. The 12ha site, with 525m of quay and 142 parking spaces for trailers, saw the first vessel from Stena Line on the company’s Norvik-Ventspils routing. The new facility can handle up to 200,000 ro-ro cargo units annually. The two ro-pax vessels in service will be making 24 round trips on a weekly basis and will be looking to target the key industrial hinterlands to the South of Stockholm.

BRIEFS The Thessaloniki Port Authority (THPA) has founded a subsidiary in Sofia, Bulgaria, to expand its hinterland and improve connectivity. The Sofia dry port will be directly linked to the Thessaloniki port by rail, as well as other dry ports throughout the Southeast, East and Central European regions. The move is part of the Greek port’s ambition to increase its hinterland volumes to/from the Balkans.

DECEMBER 2020 | 9

; Operational during lockdown ; Services maintained thanks to the actions of the port community ; Responding to our clients

In 2020, the satisfaction of our maritime and waterway customers was at the heart of HAROPA’s strategy. In 2021, the ports of Le Havre, Rouen and Paris come together to improve yet further our services for our clients’ complete satisfaction.

# HAROPA

EQUIPMENT NEWS

BRUKS SIWERTELL MOBILE SHIPLOADER

BRIEFS Everglades powers up 20-year vision

Three Super Post-Panamax cranes have arrived in support of container handling activities in Port Everglades, Florida. The port has an option for a further three units from manufacturer, ZPMC. The equipment represents a component of the 20-year masterplan/vision for the port which will see US$3 billion invested in equipment, new cargo berths and the energy sector. The new cranes will be operational in January 2021.

The new port-mobile ship unloader from Bruks Siwertell is said to be able to deliver high-efficiency dry bulk handling across diverse commodities including grain, alumina, cement and soya meal sectors.

Jörgen Ojeda, Director, Mobile Unloaders, Bruks Siwertell notes: “The port-mobile unloader was initially launched to challenge the limitations of pneumatic

discharge systems used in grain handling. However, we realised that, as well as ensuring high-capacities, no spillage and close-to-zero dust emissions, it delivers many distinct benefits, such as offering a steady conveying velocity, with no particle collisions or crushing forces, which is in contrast to the cargo degradation concerns that traditionally

8 The new port mobile unloader from Bruks Siwertell is designed to overcome many of the traditional limitations of pneumatic conveyors and is offered in two models, 400t/ hr and 600t/hr versions

accompany pneumatic unloaders.”

The port-mobile unloader is available in two models, a 400 tonnes per hour unit and 600 tonnes per hour machine, with both models able to discharge vessels up to 60,000dwt.

HYDROGEN TRACTOR POWER IN ROTTERDAM Terberg is starting extensive testing of its first hydrogenpowered terminal tractor at the United Waalhaven Terminals facility in the Port of Rotterdam.

The innovative machine has been in development for the past two years at Terberg’s nearby production plant in Benschop, in partnership with technology firm, Zepp Solutions,

and with the support of the Dutch Ministry of Infrastructure and Water Management.

The new tractor will work in conjunction with conventional diesel units, undertaking the same operational activities.

It will be monitored remotely to better understand its performance and reliability.

Terberg has confirmed that the

Kalmar and Belfast Container Terminal Ltd (BCT), Northern Ireland have signed a new six-year Kalmar Care service agreement for Belfast Victoria Terminal 3 (VT3).

The agreement commenced at the start of November 2020 and involves Kalmar supplying maintenance support personnel with a 24/7 presence to ensure operational availability of all

cargo-handling equipment including third-party machines.

In addition to the Kalmar AutoRTGs, the equipment fleet covered includes empty container handlers, forklift trucks and ship-to-shore cranes.

In January 2019, Kalmar won the tender to supply a complete AutoRTG system to the terminal,

hydrogen tractor is designed to provide at least the same (if not more) tractional power than traditional diesel-powered units but with zero emissions and considerably less noise.

Plans exist to conduct additional tests at other locations in different countries before the design is finalised.

KALMAR CARE FOR BELFAST

For the latest news and analysis go to www.portstrategy.com/news101

comprising eight AutoRTGs operated with Kalmar remotecontrol (RC) desks, which continues a 20-year relationship as the major equipment and service supplier to the port.

BCT is the largest container terminal in Northern Ireland and is operated under concession by the Irish Continental Group.

Code exercise complete

Bureau International des Containers (BIC) and DCSA (Digital Container Shipping Association) have confirmed the completion of their joint-venture project to standardise codes used to identify a range of facilities involving depots, container yards, M&R (Maintenance and Repair) vendors and supply-chain container service providers. The two companies now have a clean, machine-readable database of over 11,000 different facilities across 160 countries.

DSP LAB goes live DSP Data and System Planning (DSP) and Ideal Tech Labs (ITL) have created a strategic partnership, offering digital solutions, through a new company under the brand of DSP LAB Pvt Ltd. Based in India, the newco will work for the container and general cargo terminal industry under the brand of DSP to accelerate digitalisation of operational processes through the latest technologies and development platforms.

DECEMBER 2020 | 11

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THEECONOMIST BEN HACKETT

WHEN WILL THE ROLLERCOASTER RIDE END? The sharpest decline in economic activity in Q2 worldwide was followed by spectacular growth in Q3, but Q4 looks like a bust.

The thrill of a rollercoaster ride was experienced in the Summer months between June and September as lockdowns came to an end and economic activity blossomed. The joy of it all resulted in a second wave (and in the USA a strengthened first wave) of the pandemic. Oops! And now Europe has entered a second lockdown, with the USA likely to follow soon. Asia is less impacted but has stringent rules on travel, keeping many borders shut.

As we near the end of a difficult year in terms of health, trade and politics, we have witnessed record-breaking statistics that have been virtually unpredictable.

Trade hit all-time highs this summer and online shopping did the same. Whether similar patterns will continue in the coming months will be influenced

8 It has been an economic rollercoaster ride in 2020 – and it is not over yet

to a large extent by the coronavirus pandemic and whether it will be brought under control by the arrival of expected vaccines next year.

We are witnessing a worldwide retreat from free trade spurred on by the disruptive USA trade policy. It will be years before we see a shift back toward freer

trade. In its latest World Economic Outlook report, the International Monetary Fund projected the global economy will shrink by 4.4 percent in 2020 (an upgrade versus the previous outlook) followed by growth of 5.2 percent in 2021 (a downgrade).

Consumers in the USA and Europe dug deep into their

savings to increase retail sales, primarily in non-textile and clothing sectors. This led to a mini boom in shipping demand, particularly for containerships.

Financial results have been positive. The fact that over 90 per cent of the global container capacity is controlled by three alliances that have managed their capacity rather than fight for market share has been a factor.

The idle containership fleet accounts for 2.2 per cent of the total available capacity, down from 3.4 percent last month.

As the rollercoaster comes over the pinnacle and drops down the steep decline so will the global economy outside of Asia and shipping along with it. The new lockdowns and post Trump policies in the USA will almost certainly guarantee a decline in economic activity. Hold on tight.

THESTRATEGIST MIKE MUNDY

“WHAT COULD POSSIBLY GO WRONG?” The spectre of BREXIT has somewhat dropped off the radar with the massive focus on COVID-19. It does not mean, however, that BREXIT has gone away.

In the UK, at the time of writing, we are hearing that a deal is close – 95 per cent done is the actual phrase! It looks like it will get over the line but that does not mean that all the players will be ready. Mind you in the UK we are used to that. At the beginning of the COVID-19 crisis Matt Hancock, the UK’s Secretary for Health, highlighted the fact that we were well prepared to cope with it. Subsequent events have proved far from it.

The UK’s National Audit Office clearly thinks a similar scenario is in evidence with BREXIT. In mid-November it issued a report on preparations for the end of

the transition period after BREXIT. The report is critical of the UK Government for its lack of proper preparation and specifically for the failure to respond to the predictable administrative consequences of the process.

Interestingly, some parties suggest this lack of preparation was always going to happen as proper and comprehensive action in this respect would inevitably raise big question marks and concerns about the many promises made by Leave campaigners which ultimately suggested that the UK could “have our cake and eat it.” As Brendan Donnelly a Senior Research Fellow at the Global Policy Unit, Director of the Federal Trust and a former Member of the European Parliament puts it: “To have initiated in good time the necessary wide-ranging programmes to deal with the

For the latest news and analysis go to www.portstrategy.com/news101

negative economic consequences of BREXIT would have been an implicit concession of the arguments underpinning the Remain case, which had focused almost exclusively on the economic disbenefits of the UK leaving the European Union. It could never be in the political interests of the Leave campaigners dominating the British government to advertise by obtrusive preparations the wide-ranging bureaucratic formalities BREXIT would bring.”

Right or wrong, what this does is underline the inherent difficulty in getting things done at a practical level – namely making comprehensive preparations for BREXIT – with an intensively political climate in play and not least with negotiations that go to the wire!

The shape of things to come is already plain to see. In

September, eight UK logistics industry groups wrote to UK Cabinet Minister Michael Gove asking for assistance to prevent chaos at the British borders after the Brexit transition period. The letter, coordinated by the UK Road Haulage Association, requested a roundtable with key UK Government ministers in order to address the “significant gaps” in readiness for BREXIT. Equally telling, the UK Government’s Smart Freight System, designed to ensure that trucks are carrying the correct documentation before they arrive at ports, will be operable but only in test mode on 1 January, 2021.

The system will apparently only be fully operational from April 2021.

With the influence of politics underpinning the practical preparations for BREXIT, “what,” as the old saying goes could possibly go wrong?”

DECEMBER 2020 | 13

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THENEWYORKER BARRY PARKER

Ships calling at ports are subject to international regulations drawn up by the International Maritime Organization (IMO), with headquarters on the River Thames but with 170+ member states, and a nearly equal number of hangers-on.

Obviously, the IMO’s actions will impact ports directly - think about waste or ballast reception facilities, scrubber effluents, shore-based power and the like.

In late November, the IMO was drafting amendments to its Maritime Pollution Convention (MARPOL) that would put shipping on a path towards greater energy efficiencies and reduced carbon intensity, with targets out to the year 2050. The amendments, which could come into force in 2023 (all being well), include a new “rating” scheme where vessels will be rated from “A” as the best, down to “F” which is far from good, in terms of meeting of targets for carbon intensity.

Importantly, in a brief describing the meeting held virtually (not along the south

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REDUCING THE CARBON INTENSITY

8 IMO to rate vessels on a grading system for meeting targets of carbon intensity and this is going to become increasing important too for ports

bank), the IMO states: “Administrations, port authorities and other stakeholders as appropriate, are encouraged to provide incentives to ships rated as A or B.” While the IMO sets rules that its members must then put into their legislation, the switch to alternative fuels for shipping will be heavily driven by movements of capital, not only by prescriptive regulations. As

evidenced by its statement, the IMO clearly recognises this fact.

Seaports do have a role to play in pushing shipping’s movement towards 2050.

For ports, even those operating a landlord type business, delving into the ratings of vessels visiting terminals and facilities will become increasingly important.

Consider that the choices of vessels by charterers (aka “other stakeholders”) will be driven by such ratings, as will the flows of capital supporting vessel fleets.

There are a variety of incentives that ports can provide, the most

obvious being discounts on wharfage, dockage and other fees for visits and calls by highly rated vessels. Conversely, the E and F rated vessels might see premiums. As ports discuss investment in shoreside facilities, consider how “win-win” arrangements that reward tenants, the customers of the port in many cases, for attracting the A’s and B’s can be developed.

Perhaps such mechanics could be viewed as a second derivative, but one that helps enable ports to further their environmental objectives.

THEANALYST PETER DE LANGEN

Over the past couple of years, sailing cargo ships have made a bit of a comeback. Driven by ethical entrepreneurs, sailing vessels provide fully sustainable maritime transport services, for specific niche markets where a substantial premium for environmental friendliness is paid.

These include chocolate (fair trade, biological and fully sustainable), olive oil and coffee.

The ‘inland leg’ is in most cases also fully sustainable - an Antwerp chocolate maker got its cacao beans delivered for free from Amsterdam by a group of volunteering bikers…. these initiatives are well received but also easily viewed as a

CARGO SAILING SHIPS; BECOMING SERIOUS BUSINESS? ‘gimmick’ at the periphery of maritime transport.

Well, two news items in the past two months suggests that cargo sailing ships may make more inroads in maritime transport. First, the French Manitou group, specialising in aerial work platforms and earthmoving, has formalised its partnership with Neoline, a new venture set to operate sailing ro-ro cargo ships. They intend to use Neoline’s ships for their exports to North America.

Second, a Swedish venture (Wallenius Marine and two research institutes), announced a concept design for a sailing car and truck carrier, with a

For the latest news and analysis go to www.portstrategy.com/news101

capacity to carry 7,000 cars, called Oceanbird. Primarily powered by the wind the vessel will have an estimated speed of 10 knots permitting it to cross the Atlantic in approximately 12 days, or 50 percent longer than today’s crossing.

These two initiatives have two things in common: the use of advanced technology in the ships and the much larger scale compared to the cargo sailing ships currently in operation. While it remains to be seen whether these ships can be successfully implemented commercially, at first sight, the odds look good.

The attention for environmental footprint is still getting stronger,

with regulations (like IMO 2020) driving up costs of engine powered ships and affluent consumers, as well as governments, willing to pay a premium for environmentally friendly maritime transport.

I can imagine prospective buyers of an electric car will value that the car is delivered with a sailing cargo vessel (which in my view looks spectacular….).

Obviously, it is not to say it will be plain sailing all the way, but these initiatives suggest use of wind may also succeed in other segments of maritime transport; and port planners may want to keep an eye on further developers in the years to come.

DECEMBER 2020 | 15

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BALANCING ENVIRONMENTAL CHALLENGES WITH ECONOMIC DEMANDS

THEENVIRONMENTALIST CHARLES HAINE

On the day the UK Government formally announced a ten-point Climate Action Plan, the mainstream TV news headliner was the investigation into a royal TV interview that took place 25 years ago, followed by consternation about how families may not be able to meet-up at Christmas during a pandemic.

I have never grasped the priorities of broadcasters, and even less so when a widely accepted existential threat to human lives is on the cards. It is in the nooks and crannies of news sources that one needs to go about their due diligence, to find the real, more meaningful snippets that might just lead to societal change.

On Friday 20 November, the EU Commission published the first draft delegated act on the EU Taxonomy – the new system of classifying sustainable economic activities. It’s central to the Green Deal and will funnel money into sustainable activities. Quite important then!

What’s key for us here is that since the last version (TEG report, March 2020), the shipping sector is now included. If you can make net zero emission vessels, you’re going to be eligible. Existing sea freight and passenger vessels that are already hybrid, and those with a good Energy Efficiency Design Index rating, are Taxonomy compliant. Retrofitting and tech upgrades that will save at least 10 per cent of fossil fuels are also included, but only to 2025.

After that year, only sea transport with ‘zero emission vessels’ is going to be regarded as sustainable! That will have a huge impact on the way in which stakeholders view, and financiers, ESG fund managers, and insurers and underwriters take decisions on investment. I found out about this in a publication that you might rather expect to see in the missing captions’ round of the comedy show Have I Got News For You – ‘SEB Climate and Sustainable Finance’.

Rishi Sunak, the UK Chancellor, has also introduced new climate change reporting rules requiring

CLIMATE CHANGE: NEW PLANS AND RULES

premier listed companies and those in the financial sector to make better disclosures about how climate change affects their businesses. The rules are consistent with the recommendations of the Taskforce on Climate-related Financed Disclosures (TCFD) and will be mandatory by 2023.

Inevitably, such requirements are becoming cemented as best practice and will cascade down to smaller organisations.

Here’s the Executive Summary.

When distilled, the TCFD deals with climate risks and opportunities in two categories: physical and transitional. Physical risks relate to changing climate and weather. They can be acute (increasing severity) or chronic (long-term). Acute extreme weather events include heatwaves, extreme rain, hurricanes and storms. In turn, these can lead to wildfires and flooding. Chronic risks are linked to rising (mean) temperature,

For the latest news and analysis go to www.portstrategy.com/news101

increased frequency and variability of extreme weather and sea level rise. The implications for retailers, cargo owners and ports seem onerous when you start to think about supply chains with suppliers, logistics, customers, insurers and financiers all having vested interests in getting stuff from A to B. Transition risks, on the other hand, are those arising as we collectively shift to a lowercarbon economy and net zero emission horizons. TCFD guidance handily categorises transition risks into policy and legal, technology, market and reputation. What would be the effect of an impending tax on a tonne of carbon, a future material price hike in utility costs, and successive waves of Government policy on climate mitigation and resilience? For instance, the UK is bringing forward the ban on the sale of new petrol and diesel cars to 2030.

What are the implications for

8 Pressure is mounting for companies to take more action now and state their goals to meet net zero emission targets

your business when similar targets are set for passenger vehicles, vans, mobile machinery used in ports and HGVs? Then there is the difficult maze of changing demographics, customer demand and preferences for more sustainable products.

Pressure is mounting for companies to take more action now and state their goals to meet net zero emission targets. It’s likely to mean that at some point soon, non-fossil fuel plant, equipment and vehicles, a carbon neutral office building and the creation of your own energy from renewable sources will be amongst the only choices to honour your policies and commitments.

You are going to hear a lot more about TCFD in 2021.

DECEMBER 2020 | 17

LANDSIDE PORT CONNECTIVITY

MAKING A CONNECTION For freight to achieve predictability of movement, port and terminal development has to rise to the challenge of achieving efficient, congestion free, connectivity with hinterland markets. Mike Mundy assesses the road ahead Once upon a time hinterland connectivity was hardly thought of or only addressed in a cursory way but now, in both established and developing markets, it is an integral, and absolutely fundamental, component of modern port development.

It is difficult, of course, when the port concerned has been in place for many decades if not centuries. Invariably the port will be located in close proximity to its host city and at the time of its birth there will have been minimal understanding of how matters would unfold over time and the much increased capacity requirement that this would entail.

Equally, brand new port development must address hinterland connectivity as part of the ‘life blood’ of making the core port development a success and sitting in the context of a regional or national plan is undoubtedly a plus factor.

Today, it has also taken on a new level of importance in that it exerts a great influence over achieving eco-friendly operations and the general drive to reduce carbon emissions.

The level of challenge can also be escalated by the fact that hinterland reach can, and frequently does, entail serving cross green border markets and in certain cases designated transport corridors serving landlocked countries.

HIGHER UP THE AGENDA Essentially, the task of confirming free-flowing hinterland connectivity has risen up the development agenda as port traffic, and especially unitised traffic, has climbed to higher and higher peaks.

For some ports this represents an ironic situation – specifically those that a few decades ago ripped up rail track stating at the time that it was not necessary. Now a number, such as Melbourne with its proposed rail Freight Link into its Webb Dock, are actively planning to reinstate rail service as a path to helping alleviate heavy road congestion which only promises to get worse in line with planned increases in terminal capacity.

For this type of urban port – located close to the host city – there is invariably a big challenge in reconciling commercial objectives with efficiently and sustainably managing landside traffic flow to avoid congestion and all the interrelated problems that this brings. Not least of these is the substantial added cost that this imposes upon import and export operations, a cost that will ultimately pass to business or the consumer if free flowing hinterland connections are not established.

8 India is constructing six high capacity freight corridors traversing the entire country

18 | DECEMBER 2020

Within this development equation there is also the reality that more and more port bodies today base their approach on achieving full cost recovery. There is reduced scope today for the traditional cost-benefit approach from a port managing body, although the assistance of government can be enlisted as well as that of regional bodies such as the European Union given the right project justification.

8 A price tag of US$55 million daily has been identified as the economic cost of gridlock around the port of Apapa, Nigeria’s principal port

ADAPTING TO THE CHALLENGE Recent experience shows, however, that ports and terminals are adapting to this area of challenge, and sometimes with government/third part agency assistance have between them originated a menu of helpful solutions, which if not a total cure can play a part in promoting efficient landside traffic flow. Table 1 provides a snapshot of these solutions and how they can be applied.

CORE FACTORS Concessions Some recent concession agreements have clauses relating to modal split guarantees, the emphasis being on shifting traffic off road onto rail.

Gate Hours Extended gate hours can serve to redistribute the arrival times of trucks to port terminals throughout a typical day.

Providing incentives to use off-peak hours will scale down congestion at terminals, as well as associated roadways.

Truck By offering specific terminal arrival times Appointment or windows, truck appointment systems Systems seek to bring order to truck processing through terminals and thereby deliver important benefits such as reduced queuing. Many appointment systems today are compulsory but they can also operate on a voluntary basis.

Automated An RFID-based automated gate Gate Systems management system – facilitating automated truck access/checking and offering faster processing – is one example.

8 Table 1: Solutions to Optimising Landside Traffic Flow

For the latest news and analysis go to www.portstrategy.com/news101

LANDSIDE PORT CONNECTIVITY

Rail

Offers its own ‘highway’ for freight movement with the ability to manage cargo operations alongside passenger train requirements able to be undertaken in a much more structured way than on road systems. Under certain conditions there is also the potential for dedicated rail freight movements – one prominent example is the Betuwelijn line, a dedicated double track freight railway that runs from Rotterdam to Germany. Around the globe, there are now significant efforts underway to push container traffic from road to rail.

Waterway

Container barge transport on the Rhine is a prime example of what can be achieved by exploiting the use of inland waterways. Intra port movements are also an area of opportunity – as epitomised in Cartagena, Colombia where a barge service provides container movement between terminals and by ICTSI between Cavite and other Luzon ports in the Philippines.

Roads

The potential also exists with truck freight traffic for dedicated roads and/or priority lanes including on-terminal specialist lanes for specific commodities, e.g. reefer traffic. Both priority and specialist lanes can operate 24/7 or within designated hours.

Road Trains

As an example: In New Zealand you can have tractor and trailer combinations on public roads of up to 22m. In Australia Triple and ABB or BAB-quad road trains can have a dimension up to 53.5m, and there are various records of tractor units pulling greater than 100m of trailers. Extended tractor trailer trains are also used in certain ports for container transport between different terminals.

Time Restrictions

A simple measure is to limit road truck movement between certain hours to reduce congestion but drawbacks have been shown with such restrictions, notably the creation of traffic peaks outside the hours of access.

The Role of IT

The greater role of IT in traffic management and right through to infrastructure planning is set for wide adoption with diverse benefits expected. The introduction of autonomous road vehicles, including freight units, is expected to provide a major catalyst towards highly guided transport systems. Rail and barge systems can be seen to have already moved strongly in this direction.

At a lower level there are simple steps that can be taken and play a helpful role, such as receiving traffic alerts and other information via Smartphone.

ICDs

Inland Container Depots or Distribution Hubs can play an important part in staging road traffic movement and evening out flow. Rail shuttles can also be organised between ports and key inland hubs with onward distribution via road.

The measures shown in Table 1 highlight the recognition that a controlled freight environment can help freight get to its destination with greater predictability. As a rule, reliability and predictability of movement are more important to freight than actual journey time.

The highlighted measures also signal recognition of the fact that “no terminal or port is an island” and that coordinated action looking beyond the terminal gate is an essential ingredient in achieving efficient and sustainable traffic flow.

OPTIMISING INFRASTRUCTURE INVESTMENT There is a need for good, uncongested, connectivity between ports/terminals and their respective hinterlands and making sure the right infrastructure is in place is key to this.

Infrastructure development, however, takes time and has to be undertaken in a structured and coordinated planning environment. In the developed world, there is a broad-based acceptance of the process but even so problems can arise due to coordination or funding issues. It is important to have a planning environment that can get beyond these issues.

In the developing world there is an ongoing need to ‘spread the word’ about the advantages of integrated planning – between ports/terminals, road and rail entities etc. – but clearly the main problem is funding. Limited government funds are a traditional problem and many developing nations struggle to achieve a satisfactory level of infrastructure investment from the public purse.

One estimate suggests that over the next decade and

8 Table 1: Solutions to Optimising Landside Traffic Flow (continued)

beyond developing countries will require in excess of US$2 trillion a year to build essential infrastructure, but this is beyond the capability of the public sector. This, in turn, dictates the need for the greater input of private finance and it is refreshing to note that there is greater attention now being paid to how to unlock this – i.e. to create the right conditions where it can be constructively deployed.

One path suggested by the banking fraternity to achieving this objective is a three-step process, namely: 1. Increase the availability of funds (liquidity) from both domestic and international providers of capital.

2. Escalate the scale of investment by bundling together individual projects and providing a portfolio of products in which providers of capital can invest.

3. Address the governance and capability gaps that often hinder private-sector investment.

Steps have to be taken to achieve efficient connectivity between ports and terminals and the hinterland markets they serve. Container traffic will only grow, thus placing further pressure on the need to act positively in this respect.

Doing nothing or too little is not an option – the price will be too high to pay.

One indicator of this is the current situation around the port of Apapa, Nigeria’s main port. The port suffers from regular and severe gridlock and the economic cost of this has recently been estimated to be US$55 million daily. This is a very high price to pay when even for Apapa, based on an island location, effective solutions can be implemented to reduce the severity of the problems.

For the latest news and analysis go to www.portstrategy.com/news101

DECEMBER 2020 | 19

CONTAINER TERMINAL PERFORMANCE

BUILDING ROBUST REVENUES Highly-respected industry analyst, Andrew Penfold, considers service and contractual issues that promote long-term sustainable relations between shipping lines and container terminal operators

8 There are real opportunities for savvy terminal operators to maintain and promote robust revenue streams

SERVICE DELIVERY & LINER VIEW There are clear financial advantages stemming from competing on service offered and this is an approach that can also build robust revenues for the terminal operator. Of course, a distinction is required between the perspectives of the liner/shipper and the terminal operator.

From a purely shipping line viewpoint there is always an understandable bias in favour of prioritising vessel operations.

Depending on the market orientation of the line and the percentage of carrier haulage employed, the landside part of the terminal service is also a critical component. In the case of 100 per cent merchant haulage, the shipping line only pays for the terminal handling (and not for inland transport). The costs involved may be substantial and, therefore, a terminal

operator that structurally performs above average may have a sustainable advantage contributing to the stability of the revenue streams.

This principle is illustrated in Table 1, where hypothetical operator, Terminal B realises significantly higher berth productivity compared to its competitor, Terminal A. In this example, the annual vessel cost saving of higher productivity is significant. Moreover, on each voyage a time saving of some seven hours is achieved. If similar savings could be realised in one or two other ports on the service, then the potential for an additional revenue generating port call becomes available. This can really make a positive difference.

Competing on speed can add to the financial results of the terminal operator’s customers, although this is only a real advantage if speedy handling is both reliable and predictable.

Otherwise the shipping line will have to build significant flexibility into its schedules, thus negating these advantages.

Uncertainties will also impact on overland transporters, leading to potential for increased costs further along the chain, so the shipper (merchant) perspective needs to be considered.

Berth Productivity

Unit

Terminal A

Terminal B

Averaged berth productivity per hour

Moves per hour

90

120

Call size

Moves

2,500

2,500

Hours per vessel

Hours

27.8

20.8

In-port vessel costs per hour

Currency unit

3,000

3,000

Annual vessel costs during handling

Currency unit

4,333,333

3,250,000

Difference – Savings

20 | DECEMBER 2020

1,083,333

8 Table 1 Cost Advantage of Higher Berth Productivity 5QWTEG /WPF[ 2GPHQNF .VF

Securing container lines in a terminal is always a function of offering competitive pricing and service levels. Having reviewed various business strategies to build revenue in the November edition of Port Strategy, the focus now turns to productivity initiatives designed to sustain customer loyalty and market share.

For the latest news and analysis go to www.portstrategy.com/news101

CONTAINER TERMINAL PERFORMANCE MERCHANT VIEW From the cargo owner/forwarder point of view, the sevenhour gain registered in the previous example is likely to be worth much less than to the shipping line. The invoice to the merchant does not change as a result. However, if an onward connection is missed, the costs involved (and damage done) may be significant. This is especially true in cases of high value goods or freight where time-to-market is extremely important or in goods required to supply production or assembly processes. In such instances, the costs involved may be a multiple of the transportation costs. Then, the reliability of the total chain is far more important than the vessel handling speed.

Securing robust revenues are thus most likely to be achieved if a terminal operator offers a steady, predictable vessel performance, short connection times to the next mode of transport and reliable, frequent hinterland connections.

INTENSIVE SELLING Pricing techniques have already been discussed in the Part 1 article featured in the November edition of Port Strategy.

However, it always requires some additional effort to be deployed to actually change container routings and sustain a favourable redirection. Some practical examples of seemingly irrational container flows are highlighted: 5 Container flows may not be optimally routed due to lack of detailed awareness of comparative and modified tariffs.

5 Localised internal company pricing policies sometimes prevent cross-border routings that will be both faster and less costly.

5 Containers do not always follow the most cost-efficient routings – here the terminal operator has an opportunity to highlight differences, especially if it can offer complementary inland distribution services.

5 Lack of transparency or awareness of available hinterland connections may lead to sub-optimal routeings.

5 Inertia on the part of transport operators often prevents searching out and booking better intermodal transportation solutions – especially where longstanding ‘informal’ payments are a factor.

5 The handling and redeployment of high volumes of empty containers between ports and depots often complicates the overall calculation.

All of these situations point to the need for the terminal operator to take an active role in understanding the intricacies of the customer’s business. Only by doing this, can cost advantages be quantified and highlighted. It is very difficult to resist such arguments, if clearly explained.

The people that undertake the actual bookings must be informed of the changes in relative pricing, the shipping line databases providing suggested routings may need to be updated, organisational bottlenecks may have to be removed, intermodal departments may need to be instructed or other communication efforts may be required to put the incentives to work. This goes well beyond typical shipping line-based marketing for terminal operators.

The current economic uncertainties provide a real incentive for achieving cost savings and elimination of ‘bottlenecks’. Choosing the right influencers and decisionmakers is crucial in this process, aiming at decision making unit members that have a basic willingness to evaluate improvement alternatives.

CONTRACTUAL ISSUES With regard to tariff and contractual arrangements, there are a couple of things that can be considered to assist in building revenue robustness, namely:

5 If the importance of each customer is similar, then spreading out of contractual periods clearly offers a degree of security. Of course, as the liner business concentrates this approach becomes increasingly difficult, with two or three very large customers requiring other longer term commitments.

5 The spread of the tariffs themselves should not be too wide. There should be a clear relationship between rates, volumes and service levels. In practice, this is rarely the case and variations around the optimum relation are frequent. This is not too much of an issue if it were not for the fact that shipping lines are subject to mergers and acquisitions and they (shipping lines) do switch between alliances. In this situation, the new combination may have two sets of tariffs. This effectively allows the shipping line to “cherry pick” and it results in tariff erosion for the terminal operator or port.

Timing of contract duration and contract robustness in the event of customer ownership change are, therefore, critical to preserve the interests of the terminal operator.

8 The key drivers of terminal choice by the shipping line must be understood – but higher berth efficiencies provided to ocean carriers must be consistent and reliable

CONCLUDING THOUGHTS Maintaining and promoting robust revenue streams is the central task of the successful terminal operating company.

Given the trend towards liner equity involvement in terminals it has increasingly become the case that container terminals are regarded as a cost centre for the shipping line. This provides a real opportunity for the savvy terminal operator.

By understanding the key drivers of terminal choice on the part of the shipping line – and offering high standard and additional services – the operator has the potential to offer a far higher service level than a ‘dedicated’ facility.

The terminal business is driven by a true understanding of the links between costs and service levels. In times of economic downturns and uncertainties, these measures will constitute a first line of defence when hard times prevail.

‘‘

The current economic uncertainties provide a real incentive for achieving cost savings and elimination of ‘bottlenecks’

For the latest news and analysis go to www.portstrategy.com/news101

DECEMBER 2020 | 21

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ALTERNATIVE FUELS

‘HYDROGENISATION’ DRIVES ON Johan-Paul Verschuure of advisory group Rebel explains what is in store for the port sector as hydrogen continues its upward trajectory across the ports and shipping industry

8 Ports have a big role to play supporting ‘hydrogenisation’ of supply chains but largescale support is needed from both the public and private sectors

Looking back at 2020, hydrogen has continued its upward trajectory in gaining attention. Even though hydrogen seems like a new innovation, the technology is proven, applied in numerous industrial applications and regulation already exists. The large scale production of (green) hydrogen1 and the increasing number of applications are new.

Renewable energy sources from around the world can be linked to consumption centres on the other side of the world using hydrogen, so international cooperation and trade are needed to really make the energy transition happen in the next decades. This is where ports have a big role to play, with lots of opportunities open to them.

Hydrogen plays an important role in most economic stimulus packages. France (€7.2 billion), Portugal (€7 billion), Spain (€8.9 billion) and Germany (€9 billion) plan to invest heavily in hydrogen during the current decade. For example, plans involve the realisation of 6.5 GW2 in France and 5 GW in Germany by 2030. The EU’s overall objective is to reach 40 GW of electrolyser capacity by 2030 (producing some 14 m tonnes of liquid hydrogen).

Ambitious as this may seem, this only represents around 4.9 per cent of EU-27’s current energy demand. Currently, over 12 per cent of the EU’s energy demand is coming from renewable sources. Replacing all fossil fuels in the EU-27 (accounting for over 60 per cent of the current energy mix) with green hydrogen requires over 12 times the hydrogen production which the EU has set as its objective for 2030.

This excludes the potential massive additional demand if the shipping sector makes a similar transition.

PORTS AND AFFORDABLE RENEWABLE ENERGY The majority of renewable energy being developed in European countries could directly replace non-renewable energy on the grid, although no hydrogen will be needed in this process.

However, despite significant upscaling of renewable energy in many European countries there will still be insufficient available to go beyond domestic demands.

Hydrogen can help to unlock the potential of places where renewable energy potential is high, affordable and has little impact on its surroundings.

Importing green hydrogen is essential for achieving the

ambitious net-zero objectives. This requires much more international cooperation than is currently foreseen in the various (national) hydrogen policies, but also on a port level.

Current supply chains for fossil fuels are focused on exporting from a few countries only. However, hydrogen will likely come from countries with supplies of renewable energy (i.e. geothermal, hydropower, solar or wind) and in the case of Europe, from closer suppliers.

This means that smaller vessel sizes can be used to link up hydrogen production and energy consumption centres.

Although economies of scale advantages will be important for hydrogen as well, there may be more routing options for importing hydrogen than for fossil fuels.

For hinterland transportation many more pipelines are needed to transport hydrogen in bulk. This is in addition to assuming hydrogen transport is by short sea and inland waterway transport.

This summer, a vision paper was presented for a panEuropean hydrogen pipeline network. The plans consists of a set of converted gas pipelines and new hydrogen pipelines.

Realising a network of pipelines requires governments and ports to make necessary preparations for safeguarding the corridors. Other administrative preparations, including safety protocols, are also needed.

HYDROGEN BUNKER FACILITIES NEEDED In October 2020, the IMO did not manage to reach an agreement around a CO2 reduction roadmap for shipping.

However, the EU Parliament has voted to include shipping into its Emission Trading Scheme (ETS) from 2022 onwards.

This means the EU is providing a financial incentive for shipping lines to switch to alternative fuels and make use of shore power while in ports. This will make LNG powered vessels more attractive but also ships powered by green hydrogen in the future. In addition, for inland water transport reducing the emissions with hydrogen powered barges can be very attractive, although the adoption of hydrogen as bunker fuel will take a while.

Last year Maersk Line published its view of how the shipping industry should transform to reach net-zero. The shipping line aims to have a commercially viable carbon

For the latest news and analysis go to www.portstrategy.com/news101

DECEMBER 2020 | 23

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Unlocking the potential of hydrogen requires careful balancing between risk minimisation and creating viable (private) investment cases neutral cargo vessel by 2030 and then the transition moves at an accelerating pace.

This means that a large bunkering network is needed in the next ten years. However, in the early stages of the industry’s adoption of hydrogen, vessels need to have a hybrid propulsion system to ensure flexibility in operations and avoid being too reliant on a few ports to bunker – is currently the case with LNG fuelled vessels.

ROADMAPS AND DEVELOPMENT TIMING FOR HYDROGEN ARE COMPLEX Unlocking the potential of hydrogen requires careful balancing between risk minimisation and creating viable (private) investment cases. The timing of developments and investments must be carefully aligned to make sure demand and supply match. This cannot be achieved with national plans only and an integrated international focus from supply through to end customer is required – with ports an essential link in these supply chains and plans.

Various other barriers in the energy transition need to be overcome before hydrogen can be handled at ports on a large scale. The biggest challenge for realising international hydrogen supply chains is the scaling-up of hydrogen infrastructure and production.

However, timing of the scaling up of investments is tricky and challenges exist around financing. Subsidising (or prefinancing) scaling-up of innovations is needed in addition to R&D innovations. Preparing stable institutional frameworks and support knowledge development will support this process further. Changes in the traditional incentive schemes and cost structure of fossil fuels versus renewable energy need to be changed before hydrogen can be used on a large scale.

For all these developments in and around ports, involvement of the financial sector and private investors is essential.

Investments from the public and private side are needed on a large scale and a good risk allocation is essential to unlock investments. Solutions for reducing offtake risk and permitting risk is also essential for financial investors to step in.

8 Johan-Paul Verschuure

HYDROGEN CAN LEAD TO CHANGES IN PORTS The energy transition can reduce the need for fossil fuel storage and transport infrastructure in ports, but the requirements for hydrogen storage infrastructure can use the same areas and facilities. Safety measures and zoning requirement is different compared to some fossil fuels which hydrogen may replace. Crucially, port masterplans must be updated.

Industrial and/or chemical clusters based around hydrogen imports can be an options as well for ports without the ability to attract sufficient large volumes to obtain a pipeline connection. Also, because electrolysers are best situated in ports where supply and demand meet, marine facilities must adjust their own business model and capital structure to adjust to the new risk profile in comparison to traditional fuels and cargoes.

Ports can play an important function in the future supply chain of energy where hydrogen can unlock the potential of renewables from remote locations. Hydrogen can also play a vital role in net-zero ambitions for the shipping industry, but bunker facilities are needed to make this happen. To realise the transition ports, governments and the financial industry need to cooperate more closely to get initiatives off the ground in an efficient and effective manner. Then, ports can adjust their organisations and infrastructure to make sure they are ready when hydrogen berths in the ports are required by supporting ‘hydrogenisation’ of supply chains.

1 Green hydrogen is produced with energy without the use of fossil fuels.

Fossil fuels can also be used for the production of hydrogen, which is then referred to as grey hydrogen. As this happens in specific facilities, the emitted CO2 can be captured and stored in order to create blue hydrogen.

When pyrolysis is used for splitting hydrogen from the natural gas, leaving solid carbon as rest product, this is referred to as turquoise hydrogen.

2 1 GW installed power can produce 14 TWh, which is around 1.2 million tons of oil equivalent

Hydrogen – the Catalyst for the Energy Transition Hydrogen can store energy and when renewable energy is used for hydrogen production it results in green hydrogen, which does not lead to CO2 emissions.

After usage the waste products are just pure water and oxygen. In liquid form, hydrogen can be transported over large distances without the use of power cables.

When potential renewable energy sources are remotely located but cheaply available, storing this energy in hydrogen can be attractive. In addition, energy can be stored in cases when demand

and supply do not match. Also, hydrogen is attractive as an energy source for vehicles or anything else not connected to the grid.

However, hydrogen has to be manufactured using electrolysation to store the energy. During this process energy is lost due to inefficiencies. Currently, the known efficiency of an electrolyser is 80 per cent and another 10 per cent can be lost in compressing the hydrogen into liquid state for transportation.

Therefore, using hydrogen results in more

For the latest news and analysis go to www.portstrategy.com/news101

energy losses in the range of 35-60 per cent depending on the application. This generates an overall efficiency of 35-50 per cent from source to use. The overall efficiency will increase when more research and development is undertaken but will remain signficant.

Linking renewable energy sources directly to the grid can result in lower energy losses (depending on the distance covered).

However, in areas with renewable energy in abundance, hydrogen can offer great benefits for grid stability.

DECEMBER 2020 | 25

SPECIAL REPORT: PANAMA

CRISIS? WHAT CRISIS? Despite the COVID-19 pandemic causing economic havoc globally, container terminals in Panama are posting healthy throughput increases in transshipment. Rob Ward looks at the pattern of events

8 PPIT recorded the highest growth percentage for the year end September 2020, further supporting the development of additional container capacity on the Pacific Coast of Panama

Most of the transshipment handling at ports in Panama, probably between 60-65 per cent, comes from the Asia to United States East Coast trade lane, with Europe (North Continent/UK and Mediterranean) to West Coast South America accounting for the rest.

The trans-Pacific liner trades have been booming for much of this year, posting record freight rates (and strong demand through ports such as Los Angeles and Long Beach). The subsequent shortages of space for shippers has had a knockon effect for Panama’s five container handling terminals.

“UNIQUENESS OF THE COVID-19 CONSEQUENCES” A number of shipping and port sources who contributed to this article attested to the “uniqueness of the COVID-19 consequences” and “complexity” of what has affected international cargo flows and kept Panama so buoyant, especially on the Pacific Coast side.

Antonio Dominguez, Managing Director for Central America and the Caribbean (including Venezuela and Colombia), Maersk Line, says that when the pandemic first started to emerge from China at the beginning of 2020 it was very difficult due to logistical uncertainties to work out what was happening with cargo flows.

Only after exhaustive talks with shippers did a clear outline emerge of what measures were taken and why. It began with the threat of Chinese ports and factories closing down and shippers just wanting their cargo “on the water as soon as possible” despite lockdowns starting up, from April in Latin

26 | DECEMBER 2020

American destinations (such as Peru, Colombia, Panama and Central America) where the containers were headed.

“Shippers basically got their cargo out of China in March and realised that there was nowhere for it go so sent it to Panama while they sought new markets,” said Dominguez from his Panama office.

He explains why this strategy worked; “Panama has very impressive transshipment networks, with connections to all corners of the globe, and plentiful storage facilities so that was the ideal resting place while the cargoes were stored before being re-designated or before being eventually dispatched to their original, but delayed, destinations.”

He added that boxes were stored on average for around 30 days – whereas the usual turnaround in Panama was about 48 hours – under a special “detention in transit” status, granted by the Panamanian authorities.

MANIC AFTER THE PANIC Once the initial panic was over the effects of the pandemic calmed down, the demand for “almost everything” was extremely strong. Major USA retailers like Home Depot, Walmart and Target were supporting the American population who found itself working from home or furloughed and with time on its hands and nothing to spend money on due to widespread lockdown and travel restrictions. It was the same story in Europe too.

There also seemed to be a surge in demand for fresh fruit and protein (especially chicken, beef and pork), not only from

For the latest news and analysis go to www.portstrategy.com/news101

SPECIAL REPORT: PANAMA

‘‘

Shippers basically got their cargo out of China in March and realised that there was nowhere for it go so sent it to Panama while they sought new markets Europe and the USA but also from China, which is now the biggest reefer importer in the world.

Such was the demand for transshipment and storage in Panama that freight rates on the main route into the country’s ports rocketed. Freight rate pricing index platform, Xeneta, reported that rates from China’s main ports “rocketed” this year from a low of US$1263 per dry FEU on June 13 to a high of US$5028 per dry FEU on September 16, an incredible increase of 291 per cent in just two months! The average for July was US$1481 per dry FEU, but for September was back around US$5000. In late November it had settled back at US$4841, according to Xeneta.

“The beginning of the year was crazy, it was a nightmare and everyone was rattled, but then things settled down when governments introduced furlough schemes and other support mechanisms and then shipments flourished,” Patrik Olstad Berglund, CEO of Xeneta told Port Strategy.

“In the USA there is now a severe shortage of empties so carriers no longer want to wait 20 days for empties in Asia to be loaded with cheap agricultural goods on the backhaul for US$500 to US$700 a box, they will just get them returned as soon as possible.”

Two additional sources said the current imbalance through Los Angeles and other USA ports was around 3:1 in favour of imports.

MIT LEADS BUT PSA GROWTH THE STRONGEST Leading the way in Panama, in volume terms, is Manzanillo International Terminal (MIT), operated by Seattleheadquartered SSA Marine.

The facility handled 1.9 million TEU during the first nine months of this year, up 4.9 per cent compared to the 1.85 million TEU for same period in 2019, and following on from the 14 per cent full-year growth enjoyed in 2019.

Figures from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC, or CEPAL in Spanish) show that PSA Panama International Terminal (PPIT) on the Pacific Coast recorded the biggest percentage increase, up 31.3 per cent to 916,278TEU for the year to end of September. Of the five Panama facilities, only Evergreen’s Colon Container Terminal (CCT), saw a decrease during the

2020 nine-month period, of just over 10 per cent (from 580,861TEU down to 521,910TEU).

The reason for CCT’s drop seems to have been the closure of the Colon Free Zone (CFZ) for four months from March.

This was due to CCT focussing on intra-Americas cargoes (as opposed to Far East/USEC and WCSA/Europe trades), which were suffering due to the Pandemic spreading through various Latin American countries.

Interestingly, full containers handled at Panama’s Pacific ports increased by an average of 40,000TEU for every month in 2020 to September (compared to 2019), but on the Caribbean side, the increases, also of around 40,000TEU per month, were experienced only to June, before a significant slide resulted in just 360,000TEU handled in total in September, down by 90,000TEU compared to the same month in 2019. This was due to the rail bridge closure.

8 Panama’s ports benefitted from transshipment boxes en-route to the USA, with major retailers providing an online outlet for the expenditure of Americans who were working from home

RE-HUBBING RELEVANT FOR PANAMA One of the main reasons for the success of Panama’s hub ports at present is, according to Ricardo Sanchez, Senior Economic Affairs Officer of the International Trade and Integration Division of ECLAC, the subject of “re-hubbing.”

He explains that a number of ocean carriers have concentrated their transshipment operations into a smaller number of hub ports, with the biggest winners including facilities in Panama - MIT, the two Hutchison Ports operations, PPC Cristobal and PPC Balboa and PSA’s PPIT port.

“Re-hubbing is notorious in Latin America and the Caribbean, as we have so many hub ports, and so we see a lot of it as carriers change their strategies,” Sanchez confirmed in a telephone interview from his home office in Santiago de Chile.

He elaborates: “And this year it has gone crazy, but it has benefited all the Panamanian ports apart from Evergreen’s CCT, which showed a 10 per cent drop in full boxes. It has also been a strange year for foreign trade growth [in the container sector] with only three countries other than Panama [out of 46 ECLAC members] showing growth in container movements and they are the major reefer exporters of Argentina, Brazil and Ecuador (focussing, respectively, on beef, beef plus chicken and pork, and various fruits, namely bananas, in the case of Ecuador).

Panama – by the numbers, but should have been higher Overall Panama’s container handling (including both coasts) came to 5.7 million TEU for the January to end of September 2020 period – up by 5.4 per cent over the comparable 2019 period.

Volumes at Caribbean coast ports were up by just over 1.1 per cent to almost 3.3 million TEU, with the Pacific Coast terminals seeing a strong 10.3 per cent increase to over 2.3 million TEU.

Simon Heaney, at Drewry Shipping confirmed that of the total throughput, 89.6 per cent was transshipment activity in the nine-month period for 2020, up from 85 per cent recorded for the comparable months of 2019.

Dominguez added that the volumes through Panama could have been even more voluminous, if the railroad service connection – covering the 80 km between

For the latest news and analysis go to www.portstrategy.com/news101

Pacific Panamanian ports and those in the Caribbean – had not been severed for four months, between June and the beginning of October, after, a vessel hit a rail bridge causing severe damage. This development led to some shippers on the US East Coast switching from Panama to the Port of Los Angeles and then using the railroad and/or trucking for inland delivery. Consequently, Q3 2020 volumes in Panama dropped.

DECEMBER 2020 | 27

SUSTAINABLE PORTS

GREEN DRIVER OR DIVERSION?

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Has the drive for sustainability been knocked off course by COVID-19? Or might the pandemic actually focus minds on the green road ahead? Felicity Landon reports

There is, it seems, reason to be cheerful. A recent survey has shown that despite COVID-19, the world’s ports are largely moving ahead with planned environmental sustainability projects with no more than minor delays.

The survey was carried out for the Port Economic Impact Barometer, produced monthly by the International Association of Ports and Harbors’ World Ports Sustainability Program to provide analysis of the impact of COVID-19 on ports.

PAINTING A POSITIVE PICTURE When it comes to the commitment of ports to advance the plans that they had made before March 2020, the survey paints a positive picture. Of the surveyed ports, 45 per cent said there had been no delays and that planned investments in environmental sustainability projects were being executed as had been foreseen.

Another 32 per cent confirmed that there had been delays in these investments because of the pandemic but at present these delays were only minor. Major delays were reported by just 15 per cent of ports.

“Even though conditions are challenging, and as a result the percentage of the ports reporting that investments have incurred major delays is not insignificant (15 per cent), only a few ports (two per cent) have decided to shelve or cancel existing investment plans,” said the report’s authors, Theo Notteboom and Thanos Pallis.

Alongside this position, four per cent of ports had decided to accelerate and execute their sustainability project investments faster than initially scheduled, and two per cent had decided to proceed with additional investments, they said. “Evidently, the industry is standing devoted to advancing its sustainability even in conditions of crisis.”

28 | DECEMBER 2020

8 A new IAPH survey recorded a positive picture of environmentally sustainable investment by ports, irrespective of the COVID-19 pandemic

‘‘

The industry is standing devoted to advancing its sustainability even in conditions of crisis PREPARING FOR THE POST-COVID WORLD This year’s Danish Maritime Days included a session focusing on the maritime climate agenda post COVID-19. And here too the importance of maintaining momentum with environmental protection projects was a strong message.

Jenny Braat, managing director of Danish Maritime pointed out, the green transition of global shipping, “will require significant investments in new technology as well as infrastructure.”

Kitack Lim, Secretary General, International Maritime Organisation (IMO) opening the session, said: “The past eight months have shown us how incredibly connected we are and how dependent we are on those networks – and that the maritime sector is at the heart of connecting the global supply chain throughout the world.”

Despite the challenges, ports and shipping kept trade going, he acknowledged. And now the focus must be on finding solutions and preparing for the post-COVID world.

Lim said he was certain that shipping will be at the heart of the economic recovery and emphasised the need for “sustainable shipping for sustainable trade.”

He elaborated further on what lies ahead: “There can be little doubt that the single biggest challenge we are still facing is the battle against global warming and climate change. I believe decarbonisation can and will play a big role in the post COVID-19 recovery process. We cannot shy away

For the latest news and analysis go to www.portstrategy.com/news101

SUSTAINABLE PORTS from the energy transition in shipping which must happen appen to meet the ambitions in the IMO GHG strategy and to ultimately timately phase out GHG emissions from shipping.”

The push for zero carbon fuels present a classic chickenand-egg problem, said Christopher Rex, Head of Innovation novation and Research at Danish Ship Finance.

“Zero carbon fuels are not only an issue for the shipping industry – it is an issue for the global energy infrastructure,” ructure,” he said. “Zero carbon fuels are more expensive than han their carbon alternatives and the industry is already struggling ggling to deliver a return on invested capital that justifies fleet renewal. enewal.”

However, shipowners’ future access to cargo, capital pital and ports could be at risk if they are considered not to be doing enough to reduce their CO2 footprints, warned Rex. CHALLENGES BUT OPPORTUNITES EXIST Ports, of course, have their own challenges in all of this, in terms of providing the necessary refuelling or plug-in facilities – but they can also have some leverage.

Green tariffs are one example. The Port of London Authority was the first port in the UK to offer a discount for vessels with lower emissions – starting in 2017 with a five per cent discount for vessels with an ESI score of 30 or above. The discount was doubled to 10 per cent in 2019, and at the start of this year (2020), the green tariff became a two-tier system, with a 20 per cent discount for vessels with an ESI score of 50 and above, and 10 per cent for those above 30.

Now it is turning its attention to inland vessels. In November, the PLA launched the Thames Green Scheme, to recognise and benchmark inland vessel operators for their environmental performance. The scheme will grant operators bronze, silver or gold accreditation and could be used in the future as the basis for a scale of tariffs, to encourage lowemission, sustainable shipping.

The scheme was launched at a ‘Greening Inland Shipping’ webinar which itself followed up on a conference of the same name in 2019. The PLA has also carried out a ‘roadmapping’ exercise to identify what infrastructure will be needed to support new fuel and energy sources and it is working with wharf and terminal operators to put together green supply chains.

Yes, a lot of businesses are facing severe financial stress, said Robin Mortimer, CEO, but the PLA decided to push ahead with its initiatives for sustainability because “there is a massive urgency and we can’t delay.”

“Some of the investment decisions required to reach targets have to be made pretty much now,” he said. “But the second reason is that we have to see the recovery from this current economic downturn as a period of opportunity to do

8R Robin Mortimer, CE CEO, Port of London Au Authority (PLA). The PLA was the first po port in the UK to offe er a discount for ves vessels with low lower emissions

‘‘

We have to see the recovery from this current economic downturn as a period of opportunity to do things differently and look for opportunities for growth in sustainable technology things differently and look for opportunities for growth in sustainable technology and more sustainable ways of doing things. It is obvious here on the Thames that we can be in the vanguard – in some areas we might be early adopters, in others fast followers – but we are not acting alone and we are learning from elsewhere in the world.”

At the Danish Maritime event, Bo Cerup-Simonsen, CEO of the new Maersk McKinney Møller Center for Zero Carbon Shipping, gave an equally upbeat message: “There is a lot of capital in this world. It is a matter of where that capital goes. I think our industry has an opportunity to make great improvements. I know it is tough to say it because there are a lot of companies that are extremely stressed at the moment, but we have an opportunity to make clear how we are going to make this transition to sustainable energies, to create the confidence that these can be taken on board ships and that we can make a good business out of that.”

Of course COVID-19 has an impact on companies abilities to invest, he said: “But the opportunities are there, we strongly believe that. We shouldn’t allow the COVID-19 situation to allow us to step back and say, “we have to wait and see when we can afford this again” – that is not an option.”

Other green initiatives European funding is helping Portsmouth International Port to install bespoke air quality monitors as part of its ambition to be one of the UK’s first zero-emission ports. The ‘smart boxes’ measure nitric oxide, nitrogen dioxide, sulphur dioxide and carbon dioxide as well as particulate matter at PM2.5 and PM10.

Shipping information and local weather data is integrated into the system to create a picture of the environmental effect of port operations. The information will enable air pollution to be reduced at peak times.

The project, due to be completed in 2021, is funded by Interreg 2 SEAS funds, from the Ports Energy and Carbon Savings project – and is being undertaken in partnership with the Port of Ostend, where similar sensors are being fitted.

IAPH signs up to GreenVoyage2050 IAPH has joined the GreenVoyage2050 Project, the IMO-Norway global partnership initiative that is aiming to transform the shipping industry towards a lower carbon future.

For the latest news and analysis go to www.portstrategy.com/news101

GreenVoyage2050 supports developing countries, including small island developing states (SIDS) and least developed countries (LDC), to meet their commitments to climate change and energy efficiency goals for international shipping, as set out in the IMO’s GHG strategy. IAPH says its technical committees of port members will work with GreenVoyage2050 partners through to the end of next year (2021) on topics such as sustainable ports and onshore power supply; these workshops will then be rolled out at specific ports in 12 countries.

DECEMBER 2020 | 29

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AUSTRALIA – CHINA COAL TRADE

CHINA – AUSTRALIA COAL WARS Souring international relations between China and Australia are now seriously threatening coal exports from Australia. AJ Keyes assesses what the impact could be on both sides

8 If Beijing refuses Australian coal, then who will step into the gap?

China is adopting a potentially dangerous strategy in refusing high-quality coal from Australia

“China is a big destination for Australia’s coal and it’s a growing market,” said Ed Dawson, Associate, WSP. He explained further: “The share of activity has been rising in recent years and around 35 per cent of the country’s coking coal exports in 2020 are going to China, which is an increase on the 2019 share which was just under 30 per cent.”

Clearly, this is a major trade route for Australia, although it is also an important source of raw materials for China as well, so any issues on this established trade lane will bring serious repercussions.

SOURING RELATIONSHIP The trade dispute between China and Australia has gained momentum during 2020, with the relationship between the two countries worsening since Australian Prime Minister, Scott Morrison suggested that independent investigators should be allowed into the Chinese city of Wuhan to better understand the origins of the COVID-19 pandemic.

The Chinese government objected to diplomatic manoeuvres from its Australian counterpart, stating that Australian support was being offered to the USA in its own trade and security dispute with China.

Irrespective of the rationale from either side, the situation has been escalating. In May, an 80 per cent tariff was applied to purchases of Australian barley, the second-largest agricultural export to China and worth AUS$1.5 billion. Since then, disputes over Australian wine, beef and lobsters were also dragged into the mire.

However, the impact on the coal industry is where the greatest possible concern is focused, especially since it was

reported in October 2020 that Chinese mills and utilities were placed under order to stop using Australian coal.

Consequently, delays are occurring, as David Bull, Senior Analyst of London-based Gibson Shipbrokers confirmed. “We are following these developments. We know that recently around 20 large bulk carriers were anchored off the Chinese port of Jingtang and unable to offload millions of tons of Australian coal – 15 units had been waiting for some considerable time and were then joined by a further five ships.”

This shipping specialist then outlined the latest development. “Many ships originally scheduled to deliver Australian coal to China are now being diverted, with calls to ports in India or Vietnam benefitting. This is regarded as a preferable strategy over waiting for access to Chinese ports because it is not known how long the wait might be.”

IMPORTANCE OF COALTO AUSTRALIAN PORTS IS UNDENIABLE China accounted for around 30 per cent (A$170 billion or US$120 billion) of Australia’s total exports in 2019, with iron ore, coal and gas collectively comprising 60 per cent of the sales.

The country is the largest consumer of Australia’s metallurgical coal and the number two destination for

‘‘

Many ships originally scheduled to deliver Australian coal to China are now being diverted, with calls to ports in India or Vietnam benefitting

For the latest news and analysis go to www.portstrategy.com/news101

DECEMBER 2020 | 31

AUSTRALIA – CHINA COAL TRADE

THE PORT PERSPECTIVE What does this actually mean on a day-to-day basis for the ports and, of great concern, are those facilities investing in infrastructure on the basis that the trade remains in good shape going forward?

Well, on the East Coast of Australia, coal is a leading activity at Abbott Point, Hay Point, Gladstone, Brisbane, Newcastle and Port Kembla. In each instance, the volumes and infrastructure supporting them are substantial.

In the fiscal year of 2018-2019, the Port of Hay Point recorded 118.3 million tonnes for the North Queensland Bulk Ports Corporation (NQBP).

The Port of Hay Point has two separate coal export terminals: Dalrymple Bay Coal Terminal (DBCT) and Hay Point Coal Terminal (HPCT). There are seven berths for both terminals, four at DBCT and three at HPCT. These facilities service coal mines in Central Queensland’s Bowen Basin. The mines link to the terminals via an integrated rail-port network, so the infrastructure is very wellestablished and the logistics network from source to port is in place for Australian coal to be exported. The primary destination is China.

Coal export volumes handled through the Port of Gladstone are currently 58 per cent of Gladstone Port Corporation activity overall, of both import and export traďŹƒc.

In 2019, the port handled 72.5 million tonnes of coal, but with the current capacity at 75 million tonnes, it needs to expand. “The RG Tanna Coal Terminal (RGTCT) has provision for a fifth berth and that will take its annual capacity up to 90-100 million tonnes, annually,� confirmed Dawson.

Coal volumes at the Port of Newcastle currently represent 98.5 per cent of total port activity, so this facility is another good barometer to measure the impact of the trade spat.

The port has released year-to-date figures for coal exports at the end of October 2020. For the first 10 months of 2020, a total of 132.4 million tonnes was recorded. This compares to 137.2 million tonnes for the comparable period of 2019. So, although there was a small decline, to date the trade dispute between Australia and China has not hit too hard.

There is, of course, concern from across the Australian port scene. One executive at another port who would comment but without being named was clear about the issue. “Of course, we are concerned about the trade dispute. The longer it goes on, the more it will impact our export volumes. So far, there has not been too much of a negative impact because we loaded ships and they left for Asia. However, the longer vessels sit waiting for access to China, the longer we may have to wait to load the next ship – then, our export volumes will be

32 | DECEMBER 2020

impacted. We remain hopeful that politicians on both sides see that the current situation is not ideal.�

ONE WINNER FROM THE TRADE DISPUTE? One winner from the Australian coal ban has been Russia. In the first ten months of the year seaborne imports of Russian coal to China have leapt 40 per cent year-on-year.

8 Figure 1: Australian Exports by Leading Commodity in Fiscal Year 2020, in A$ Billions

‘‘

Much of Australia’s coal is high quality and that is why it is needed in Japan and China. It is still clear that despite the trade dispute, there is still a need for this cargo However, Russia does not have the production capabilities to fill in for all of the potential missing Australian coal nor, as Dawson concludes, is the quality of material from this location as high as much of that shipped from Australia. “Much of Australia’s coal is high quality and that is why it is needed in Japan and China. It is still clear that despite the trade dispute, there is still a need for this cargo.�

This view is endorsed by Andrew Penfold, of Mundy Penfold Ltd: “If Beijing refuses Australian coal, then who will step into the gap? Russian coal is not an option for coking coal, so this only leaves Canada and the US - neither are currently on better terms with China than Australia. For thermal (steam) coal there are possible options, South Africa or Indonesia, but once again there are political issues. If this is a long term switch of supply then there will be a need to step up export port capacity. Financing this with current uncertainties will be problematic, however. �

Yet even if the long-haul trade option from Canada and the US serving China is not beset by political issues, the subject of costs (of moving the coal much longer distances than from Australia) is relevant, as Penfold clarifies. “The Canada or US option will add to the CIF price of coal in Chinese ports (longer haul, smaller vessel sizes, higher FOB prices).�

Consequently, China could find itself having to pay more for the coal it needs. Beijing’s potential willingness to destroy a mutually profitable trade relationship is concerning, not only for Australian ports and the coal (and other trades) but also for China’s own requirements too. A potentially dangerous strategy to follow.

For the latest news and analysis go to www.portstrategy.com/news101

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thermal coal exports behind Japan. However, while thermal coal is one of the limited natural resources in which China is self-suďŹƒcient, higher-quality coking coal is very dierent.

This is because the country’s steel plants are highly dependent on supply from overseas and Australia is a key provider of more than half of recent demand. “Australia’s coking coal is of a much higher quality than from other locations, such as Russia. It is a lower-cost supplier of the commodity, so it’s not just Australia and its ports that are potentially losing out here, so are the companies in China that rely on it,� explained Dawson.

To put the importance of China to the Australian coal industry – and with it Australia’s ports – into perspective, Figure 1 confirms the value of the activity in 2020.

Metallurgical and thermal coal combined totalled A$55 billion in fiscal year 2020, so the importance of this commodity to Australian ports – and the trade dispute with China – is undeniable.

NEW ZEALAND: PORT CONGESTION

MAJOR NZ PORTS SWAMPED Iain MacIntyre assesses how a perfect storm of interconnected disrupting circumstances has caused significant congestion and delays at New Zealand’s ports Congestion is rife in New Zealand. Ports of Auckland (PoAL), the country’s major import port is the worst affected, but with knock-on effects being experienced at the Port of Tauranga, the country’s major export and principal container port.

One of the major causes is the ongoing waterfront industrial action on the Australian eastern seaboard.

Generating vessel delays, the rumbling dispute is forcing the rescheduling of berthing windows in New Zealand – in turn triggering further delays.

Also significant, a shortage of labour at PoAL has been compounded by a continuing investigation into the recent death of a stevedore killed while unloading a containership at the port. There are claims that port workers are burning out and becoming more prone to suffering accidents or leaving the workforce, which further compounds the shortage.

Furthermore, terminal space at Auckland is restricted due to a planned automation project which has not yet been implemented.

DELAYS AND PRODUCTIVITY CONSTRAINTS Coupled with these productivity constraints, at-anchor waits of five to 11 days are regularly being reported for international vessels prior to being permitted to enter the port to commence working. As a consequence, some ocean carriers are choosing to bypass and discharge their Auckland-bound containers elsewhere and/or introduce congestion surcharges on shippers to recoup the increased operational costs.

Matt Ball, PoAL. Public Relations and Communications General Manager, confirms there are “multiple issues” impacting throughput.

“COVID-19 lockdowns have disrupted import volumes and patterns, and also stopped us implementing automation in March, the quiet part of the year,” Ball explains.

“The import peak arrived early and automation was pushed into the import season, which meant we could not undertake the work needed to roll out automation to the whole terminal as planned. Then a collection of other issues – weather offshore, Maritime Union industrial action in Australia, congestion at overseas ports and the accident at our terminal in August – have added to congestion. Longstanding labour shortages have made it difficult for us to catch-up on the backlog and we are currently recruiting over 50 stevedores,” he notes.

However, Ball emphasises that neither PoAL’s current berth nor land capacity are at issue or contributing to the issues being faced. “It is the factors stated which are related to throughput,” he underlines.

GETTING IN DEEPER PoAL is planning to deepen its shipping channel, for which recently-granted consents are currently under appeal, Ball clarifies, however, that current throughput issues will not be remedied by the future arrival of 366-metre-long New Panamax dimension vessels, because the matters are “not related.”

‘‘

The Port of Tauranga is being inundated with additional callers that are bypassing PoAL

PoAL has publicly stated it intends to continue infrastructure and service development in line with its published 30-year master plan, albeit while awaiting the outcome of political debate on relocating the business to a new site or having its cargo redirected through expanded operations at Northport and the Port of Tauranga.

8 Port of Auckland is the most congested port in New Zealand and Tauranga is benefitting but also facing challenges

TAURANGA INUNDATED Meanwhile, the Port of Tauranga is being inundated with additional callers that are bypassing PoAL. This, in-turn, has swamped its rail linked inland port operation, MetroPort Auckland located in Auckland, The terminal recently temporarily suspended export container receival. Further, at the time of writing, delays of up to two weeks to secure inbound rail slots are being reported.

A Port of Tauranga spokesperson confirms that both its seaport and MetroPort businesses are handling “record volumes”.

“The cause is severe congestion at Auckland and Sydney ports – import and export cargo volumes are being diverted through Port of Tauranga.”

And he elaborates: “In the past couple of weeks, MetroPort Auckland has received a surge of diverted export cargo for delivery to Tauranga, and we have also accommodated diverted import volumes through Tauranga Container Terminal for rail transfer to Auckland.”

In terms of managing the process, the port is maintaining close liaison with logistics partners. “We have been working with KiwiRail to clear the backlog and we are actively managing cargo flows through volume caps (shipping lines are allowed a certain number of export container transfers based on how many containers they bring in). This ensures rail capacity northbound and southbound is optimised and priority cargo is transferred as quickly as possible,” the port states.

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DECEMBER 2020 | 33

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MELBOURNE: PORT DEVELOPMENT

MELBOURNE MAPS THE FUTURE The Port of Melbourne (PoM) has crafted a development strategy to 2050. And next on the agenda is a so-called ‘tariff rebalancing’ to help pay for it The Port of Melbourne (PoM) is experiencing challenges from a number of issues, including variable vessel schedules, landside congestion and changes to vessel size and port calls.

To meet these challenges, PoM has initiated a number of near-term measures and longer-term goals encapsulated in what is known as its 2050 Port Development Strategy (PDS) Key elements of the near-term development encompass: 5 The expansion of Victoria International Container Terminal (VICT) at Webb Dock East to provide two fully equipped berths and associated landside areas for the simultaneous handling of two vessels of up to 15,000TEU with an LOA of up to 367m.

5 Swanson Dock East: Trials of five large container vessels of up to 325m LOA x 43m beam including Bosphorous Max class vessels were successfully concluded into this Dock in October and November 2019. This opened the door to trials with vessels of up to 337m LOA and 45.6m beam.

Complementing these initiatives, covering the three existing container terminals, PoM has undertaken a dredging programme designed to improve Under Keel Clearance in select areas of the Yarra River Channel and to promote the safe navigation of vessels into Swanson Dock. Access for the larger vessels into Swanson Dock remains, however, subject to compliance with a number of strict criteria spanning: certain berths must be vacant; wind speed below 15 knots, three tugs have to be employed and initially two pilots have to be onboard.

Looking forward to 2035 nine main development objectives are identified in the PDS: 5 Upgrading Swanson Dock East and West Berths 5 Delivering the Port Rail Transformation Project 5 Expanding Webb Dock East container terminal 5 Relocating the Tasmania terminals to Appleton/Victoria Docks 5 Developing a new Webb Dock North container terminal 5 Delivering the Webb Dock Freight Link and Rail Terminal(s) 5 Integrating the Port with the former Melbourne Wholesale Market Site in Dynon 5 Developing new liquid bulk capacity 5 Developing Yarraville land at 221 Whitehall Street By 2050 the expansion of the new Webb Dock North Container Terminal is envisaged.

ROAD MAP The PDS is designed to provide a roadmap for how PoM will expand its infrastructure to support increasing trade volumes, with a strong focus on meeting the pressures bigger container vessels put on terminal facilities. This means working out how it can best use its assets in conjunction with the most efficient timescales for investments providing capacity when required. Getting more out of the existing land footprint of the port is an important associated goal.

Interwoven with these goals, however, are important parallel objectives such as alleviating truck traffic through the residential areas nearby the port and configuring infrastructure and port systems generally to meet the changing requirements of modern supply chains – an issue that has risen to the fore in conjunction with Covid-19 experience in Australia.

The planned new Webb Dock North Container Terminal is identified as a highly capital intensive exercise and one that will entail a significant reorganisation of port facilities.

Notably, the PDS states: “The substantial expansion of Webb Dock container capacity requires Tasmanian trade to be relocated to the Appleton and Victoria Docks.” Planning for this, PoM underlines, has already commenced and not least in recognition of the importance of providing a strong base for servicing Tasmanian trade.

The timeline for the development of the Webb Dock Freight Link (rail) is put at 2030 with this expected to play a part in supporting the subsequent delivery of the Webb Dock North Container Terminal.

8 VICT will soon be able to work two vessels simultaneously of up to 15,000TEU with an LOA of up to 367m

TARIFF REBALANCING A so-called “tariff rebalancing exercise” is seen as necessary to help provide funding for the diverse infrastructure and other projects planned. This, says PoM, will involve consulting with stakeholders, reviewing the regulatory framework and using the feedback to inform its future tariff structure to achieve efficient cost recovery for services.

The current wharfage fee for full inward containers could be replaced with a ‘larger vessels’ wharfage tariff at a higher rate, for ships that exceed either 300m LOA or 40m beam, with a ‘standard’ wharfage tariff at the historical rate for smaller ships.

The wharfage fee for full outward containers could be reduced to encourage export trade growth.

After assessing feedback, PoM intends formalising its rebalancing application to Victoria’s Essential Services Commission (ESC) by the end of this year, with the ESC making an interim decision in March 2021. If the rebalancing application is approved, it will come into force from July 1, 2021.

The PDS is intended to drive 10 years of development activity and projects, with planning work commencing in FY 2020/2021. The plan will be reviewed every five years to ensure it continues to meet the needs of port users.

For the latest news and analysis go to www.portstrategy.com/news101

DECEMBER 2020 | 35

MARITIME ACCESS: CANAL/LANDBRIDGE

OVER LAND OR SEA?

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It could result in more earth being moved than both the Panama and the Suez canals combined - and it won’t pay for itself. Stevie Knight asks if the Thai Canal is still worth consideration?

The Thailand Canal is a potentially attractive idea. It would reduce the shipping distance, emissions and journey times by avoiding Singapore and the busy Malacca Strait, but it has never truly gained any traction. Indeed, it has “moved on and off the table, since the 17th Century,” says JohanPaul Verschuure of the Rebel Group.

The concept is currently gaining new traction. While the former Shinawatra government’s attempt at a feasibility study ended with the 2006 military coup, in more recent years the Thai Canal Association, a group of the country’s ‘movers and shakers,’ has been pushing hard to make it a reality.

UP AND DOWN THE MAP The project appears to have gained a new breath of life, with Thailand’s Premier recently ordering the National Economic and Social Development Council to push ahead with public hearings and feasibility studies, and making room for them in the national 2021 budget.

However, this idea has not just been on and off the table, it has also moved up and down the map. A proposal in the 1990s for a short-cut across the narrowest part of the isthmus costing around US$20 billion triggered an avalanche of alternatives, such as Phang Nga to Bandon Bay and Pak Bara to Songkhla Port. While the north has mountains to cross, there is another issue too - cutting a canal would create a ready-made border for the Islamic Malaysia insurgency in the south.

That is a real problem, adds Darron Wadey of Dynamar: “If you build a road through a community, there is an immediate sense of severance, but after that fades, you do get two communities, not one. So, domestically and politically, it is a difficult move.”

While social cohesion and environmental concerns are highly relevant, “inflated land sales” have also not helped, says Free Zone lead Tony Restall. Wadey adds: “In Thailand, you can have 500 different owners for a 10km stretch. So, speculation puts up the cost considerably.”

36 | DECEMBER 2020

8 The Thai Canal is a massive development and the location could have equally huge environmental impacts – the landbridge option is cheaper and will not incur the same issues

The currently preferred (though still not finalised) option — Route 9A — starts near Ko Lanta in the west and crosses to Ranot, Songkhla on the eastern side. It could be 125km long, and to accommodate two lanes of containerships, be 350m wide and 30m deep.

There is a substantial price tag attached. “The 9A route was pegged at US$28 billion five years ago, but it might be more like US$35 billion for just the construction by now,” explains Restall.

WHY IS IT WORTH CONSIDERING? “The canal alone will never pay for itself,” says Restall: “Unlike the Panama and Suez canals, it will not provide significant, direct financial returns.”

Verschuure adds that “questions remain” about how to get such a massive development moving for a range of reasons, from financing and environmental concerns to politics.

So, why is it worth considering? The answer may be in the free zones at each end. Restall’s experience in helping create the first of Jebel Ali’s Free Trade Zones (and others) has convinced him that access to global trade can set the stage for manufacturing and investment. In his estimation, free zones could create between four and five million new jobs and “establish a significant economic boost.” He further explains that, “Employment and a better life tends to have a neutralising effect on insurgence.”

NOT INTO THE ARMS OF THE CHINESE There are also concerns about not “running into the arms of the Chinese,” says Restall, explaining, “If it is viable, a project will stand on its own.”

Thailand’s neighbour, China, certainly has an interest in the project. “When it comes to supply chain security, the Malacca Strait is a chokepoint,” says Wadey.

While physical constraints mean the largest oil tankers already go through Lombok, if China continues to pursue increasingly assertive policies it will be aware that transiting

For the latest news and analysis go to www.portstrategy.com/news101

MARITIME ACCESS: CANAL/LANDBRIDGE

‘‘

either the strait or the colossal Indonesian and Philippine archipelagos could become that much harder.

While the Thai Canal might answer China’s so-called ‘Malacca dilemma’, not everyone is happy about it: “China was waving money under the Thai government’s nose, but there is a legitimate wariness,” says Restall.

“There is stiff, very public criticism around China’s handling of investment issues in other host nations, so people are scared of a debt trap,” says Wadey. Chinese-backed rail and Chinese-built submarine programmes have been delayed or worse, with Thai authorities citing excessive costs and lack of transparency. He adds: “There is now a question about how willing Thailand will be to accept another Chinese-led project.”

Wadey also explains that it may be “pure mischief” but a Thai politician has recently said there is interest from Australia, India, and the US, so that could be a way to deny China a route.

DISTANCE SAVINGS – BUT CHARGES ARE KEY Answering project viability concerns means looking at what the route will save and who it will be serving.

Wadey explains further. “A Japanese study, looking from the Gulf of Thailand and southern Vietnam to the Indian Subcontinent and all points west, showed a 1300km saving.

Coming from South Korea, Japan, mainland China or Hong Kong, then the saving is only 900km and from Manila it is not even 700km”.

So, some distance advantage, but transit charges are still key and the precise charging mechanism is not known. “A toll should be less expensive than sailing around Singapore,” explains Verschuure, but adds that further tolls will reduce the canal’s advantages and make “generating enough direct revenue from the canal challenging.”

“It requires a large amount of money to build,” Verschuure adds, although he does feel that indirect benefits through predicted free zone revenues and other economic developments could “generate confidence to underpin the investment.”

Restall is of a similar opinion. “The free zone is the carrot for the investor and gets the watermill turning with other

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The canal has vocal proponents, but also a number of supporters. It is an idea that has been coming back to the table since the 1600s – but the current traction may be the strongest yet

elements adding traction. The indirect revenue, the housing, the influx of domestic goods... that can yield more than 10 or 15 times the initial spend. It magnifies the economic effect.”

8 Settling on the final location of the projected Thai Canal route would be a good first step

WIDER IMPLICATIONS This new canal could certainly influence the shipping balance in that part of the world. “If it went ahead, India might be drawn into putting more investment into ports on the Andaman and Nicobar Islands,” says Wadey. “Not only would this put a foot against the door of unrestricted Chinese access to these waters, but a transshipment port would not look like a bad idea.”

In fact, he points out that last year India asked for expressions of interest in developing a US$1bn transshipment port on Grand Nicobar Island, potentially putting itself ahead of the game - a subject Port Strategy considered in the November 2020 edition.

“Malaysian ports like Penang and Klang do have a bit more to lose,” says Restall. “But Malaysia is very successful as an exporting country, so it can still generate its own cargo.”

The canal has vocal opponents but also a number of supporters. It is an idea that has been coming back to the table since the 1600s – but the current traction may be the strongest yet.

The Landbridge option There is another option. In a rare show of unity, a cross-party decision was taken earlier this year to study both the canal and an alternative - in the form of a 120km landbridge connecting ports at Chumphon and Ranong with highways and dual-track rail links.

There are strengths and weaknesses to the landbridge concept. “You don’t need to dig a very expensive canal – with heavy environmental and population

consequences, although the downside is double-handling on each side,” explains Verschuure.

The nature of the traffic on Thailand’s east and west coasts is relevant here. “Double handling does not impact long-haul economics that much because each end has a different character. The eastern side of the landbridge will be supplied by smaller vessels on Vietnam or Thai cargo feeds, plus one big loop from Shanghai. On the west

For the latest news and analysis go to www.portstrategy.com/news101

side a deep-sea pool can take the longerrange vessels,” he suggests.

The landbridge idea is gaining some traction. Local media are estimating costs at around US$5.5 billion, including US$500 million for port upgrades.

This is a fraction of the canal’s price, with potential for multiple joint, private-public sector investment - an attractive proposition for a government struggling to reshape the economy.

DECEMBER 2020 | 37

CONTAINER HANDLING: RTGS

CONVENTIONAL WISDOM John Bensalhia assesses the rubber tyred gantry sector identifying positive demand and ongoing design innovation including for what can be dubbed “conventional units”

8 The rubber tyred gantry market is powering on with design innovations underpinned by strong demand coupled with new user requirements

Leading manufacturers are reporting consistent demand for rubber tyred gantries (RTGs). “There has been good demand in North America, Southern Europe and West Africa,” says Svend Videbaek, Marketing Specialist, Konecranes.

Liebherr is also seeing strong interest in its RTGs and has taken orders for over 70 machines in the past three years reports Trevor O’Donoghue, Marketing Manager, Liebherr Container Cranes Ltd: “The majority of these orders have been for conventional machines. They are a mixture of diesel, electric, and hybrid powered machines, with both cable reel and busbar power. The machines are for both green and brownfield sites and demand is from across the globe.”

This year, Liebherr has supplied 20 variable speed diesel RTGs to King Abdullah Port in Saudi Arabia. “These latest RTGs bring the number of Liebherr RTGs at the port to 68 units. King Abdullah Port is one of the world’s fastest growing ports and a fleet of modern, productive and reliable RTGs is a key component in driving the port’s productivity and growth,” O’Donoghue states.

“MARKET IS THERE,” IRRESPECTIVE OF COVID-19 Marko Rasinen, Product Manager, RTGs, Kalmar, says that the market for conventional RTGs is there – despite the COVID-19 pandemic.

“Of course activity is being affected by the COVID-19, but the market is still there. The share of new technologies, such as hybrid RTGs and automated RTGs is increasing, but there is demand for conventional manual units as well,” he explains.

Rasinen says that Kalmar has seen good activity in the port sector – especially in North America, Europe and Africa. By comparison, activity is low in South East Asia. He further notes that Kalmar has recently concluded an agreement to supply Marsa Maroc with a total of three RTGs for use at its TC3 container terminal, in Casablanca, Morocco. “The order,

38 | DECEMBER 2020

which,” he explains, “includes an option for an additional two cranes, was booked in Cargotec’s Q3 order intake. Delivery is scheduled for Q2 2021. The three new Kalmar RTGs will join 11 other units delivered to Marsa Maroc in 2016 and 2018.”

Four Kalmar SmartPower RTGs have also been selected as part of a capacity expansion in Cambodia at the Phnom Penh Autonomous Port (PPAP) LM17 Container Terminal. The order, booked in Cargotec’s Q3 2020 order intake, is scheduled for Q3 2021. “The four new Kalmar RTGs to be delivered at LM17 are part of the terminal’s infrastructure expansion programme, which aims to support the company’s growth plans helping them double terminal capacity,” says Rasinen.

Due for delivery in Q1 2021 are six RTG cranes for Dar es Salaam port in Tanzania. “The Kalmar RTG combines the best of diesel and electric technology for fuel savings, low emissions and easy maintenance,” claims Rasinen.

CONTINUOUS IMPROVEMENT Conventional RTGs are the subject of ongoing design enhancements spanning diverse aspects from safety to environmental efficiency. O’Donoghue, cites a number of design aspects as evidence of this commencing with the eightrope reeving arrangement all Liebherr RTGs now employ.

“This effectively eliminates sway, provides load stability, faster positioning, exceptional productivity, responsiveness and safety,” states O’Donoghue. “Simultaneous drive motion and productivity aids,” he elaborates, “further boost productivity and safety on conventional machines. With the compact arrangement of eight rope reeving, it allows the driver’s cabin to be in the optimum position relative to the load. Strength and stability are inherent in the Liebherr portal design and the cabin design and location ensures maximum operator visibility. A series of cameras, sensors and monitors increase safety in the operational area,” he says.

For the latest news and analysis go to www.portstrategy.com/news101

CONTAINER HANDLING: RTGS

‘‘

Of course activity is being affected by the COVID-19, but the market is still there.

The share of new technologies, such as hybrid RTGs and automated RTGs is increasing, but there is demand for conventional manual units as well O’Donoghue identifies auto-steering, guided via RTG ground transponders together with anti-collision features and a truck anti-lift system, as key productivity and safety features included in a recent order of 10 wide RTGs for the port of Montevideo, Uruguay.

He continues: “Mains powered RTGs offer an Active Front End (AFE) allowing regeneration of power and eliminating emissions while reducing noise. Busbar configurations are also available and were supplied on a recent order of 10 RTGs for Montreal. Embedded fibre optics and Liebherr’s open architecture ensure efficient communications and future proof the RTGs,” he underlines.

For driver safety and visibility, the introduction of remote control and/or automation to port operations is a popular choice, as Rasinen highlights: “They improve safety by moving the crane operators away from the yard into the office environment. With conventional designs: “Visibility improvements are being introduced on manually controlled cranes by adding more and more cameras to improve driver’s visibility into places where visibility is normally very limited,” he states.

Videbaek highlights how smart features are becoming standard in all Konecranes’ RTG deliveries including autosteering, Truck Lift Prevention and Gantry Collision Prevention. Also, he states more customers want the Stack Profiling smart feature. And adds: “Our remote operation capability with RTGs is an important step towards full automation, and interest in it is growing. More and more customers are considering manual RTGs with a cabin and Remote Operating Station as a first step towards automated RTG operation.”

ECO-EFFICIENCY EMPHASIS Videbaek notes that another interesting development is that around 50 per cent of RTG deliveries from Konecranes are

now either fully electric RTGs (busbar, cable reel) or hybrid RTGs. “This is an excellent development in the area of ecoefficiency, and it shows that our Ecolifting philosophy is becoming accepted,” he says.

The environmental side of RTG development is seen in three ways according to Rasinen: “First, in the field of electricpowered RTGs becoming more and more popular, second, hybrid technologies becoming popular, and third, diesel engines becoming greener due to the increasing emission classes. For example, in Europe,” he elaborates, “at the moment, Stage 5 engines are used on RTGs and the emissions of these engines are lower compared with the engines in use a few years ago.”

And he makes the general point: “Before we start thinking about which RTG driveline is the optimal choice in terms of eco-efficient operations, there are several other design details that can help to achieve big gains in fuel efficiency. Kalmar RTG design principles,” he explains, “favour reliable, simple designs with less components. This – together with carefully chosen and tested components – ensure the long lifespan of the crane and its parts contributing to less material usage.”

8 The majority of the circa 70 orders received by Liebherr over the past three years have been for so-called conventional RTGs but today’s unit of this type offers many more design options

Smart Solutions Kalmar has a selection of process automation solutions that reportedly facilitate more efficient container movement with reduced negative environmental impact.

“Solutions of the SmartPort product family track containers and container handling equipment all the way from gate to the quay, states Rasinen. Productivity, equipment utilisation rate and eco-efficiency are increased by optimising travel paths and waiting times by triggering dispatching and job instructions based on the location of container handling equipment,”

On energy efficiency, he says: “The relatively low energy efficiency of conventional RTGs often results from the need for the diesel engine to be running even when the requirement for power is very low. For example, in an RTG operation there are moments when the actual power consumption is only about 10kW, but the large diesel engine (on conventional RTGs the engine output is typically around 400kW or so) has to be running, as there is no energy storage from where the power could be taken.”

For the latest news and analysis go to www.portstrategy.com/news101

Rasinen explains that a smart hybrid RTG in this operational scenario is very different. “All the power needed for the RTG operation comes from the lithium-ion batteries. The diesel engine is running only when the batteries need to be charged. And once charging, all the power that the engine produces is converted into electricity and supplied into the batteries. So the categorical “engine idling” which is the number one reason for inefficiency on conventional RTGs can be eliminated completely, when choosing the smart hybrid technology.”

DECEMBER 2020 | 39

YARD GANTRIES: MARKET REVIEW

RTG DEMAND UP, RMGs DOWN PEMA recently released its 8th Annual Yard Container Survey report. AJ Keyes looks at the results offered from this association of port equipment suppliers According to information recently released by the Port Equipment Manufacturers Association (PEMA), there was a 34 per cent increase in RTG deliveries in 2019 on a global basis compared to 2018. There were more units delivered in every geographic region, with the (perhaps surprising) exception of China.

However, RMG deliveries for 2019 were down by a substantial 40 per cent, indicating that there is a potential shift occurring towards RTGs over RMGs. PEMA said that it gathers its data from 12 port equipment manufacturers around the world, with the objective of the annual survey to “determine market size and scope by equipment delivery volumes for yard container gantry cranes.”

Providers of the information include Kalmar; Konecranes, Liebherr, Sumitomo/Mitsubishi, Mitsui and ZPMC. In more detail, the items of equipment reviewed include: 5 Rubber-tyred gantry cranes (RTGs) 5 Electrified rubber-tyred gantry cranes (e-RTGs) 5 Rail-mounted gantry cranes (RMGs) 5 Automated stacking cranes (ASCs)

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Share

China

111

17%

Other Asia

165

25%

Europe

95

14%

North America

108

16%

Latin America

21

3%

Mid-East

63

9%

Africa

104

16%

3

0%

670

100%

Australasia Total

8 Table 1: Global Yard Deliveries by Location, 2019

40 | DECEMBER 2020

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8 Figure 1: Total Number of Yard Gantry Gantry Delivered, 2009-2019

DEMAND IN 2019 UP - AGAIN Table 1 provides a summary of the share of deliveries made by geographic regions identified by PEMA in its new publication.

A longer-term profile of the volume of yard gantry crane deliveries is also presented in the report. A summary is shown in Figure 1. It can be seen that the impact of the Global Financial Crisis was noted in the 2010 and 2011 years, followed by a subsequent rebound.

More recently, the trend has been for growth in units, with the 2017 total of 630 units rising to 636 in 2018 and rising again in 2019 with 670 new yard cranes introduced globally.

The potential impact of COVID-19 on deliveries is not expected to occur in 2020 figures, due to order lead times but a possible decrease in 2021 cannot be ruled out.

8 Founded in 2004, PEMA has more than 120 member companies representing a broad cross-section of organisations active in the design and supply of equipment, systems and technology that support port and terminal operations with cranes, equipment and component manufacturing, automation, software and technology.

Further information about PEMA and its other publications, including ship-to-shore container cranes and mobile port equipment, is available via www.pema.org 5QWTEG 2'/#

Number of Deliveries

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Special attention was also placed on the investment in eRTGs. Here, PEMA reported that of the 526 RTGs delivered, a total of 53 cranes were identified as eRTGs. However, an important note was also added by the organisation. “It is possible that the number of ASCs and eRTGs is understated because some manufacturers did not identify ASCs in their RMG numbers or eRTGs in the RTG totals.” PEMA explained.

MORE YARD GANTRIES – TRENDING AWAY FROM RMGs Studying the information released in more detail, PEMA says that in 2019, a total of 670-yard cranes were delivered overall, which compares to the 636 for 2018. Interestingly, the figure for RMG units supplied to terminals around the world was just 144, whereas for 2018 the number was considerably higher at 243 items. A trend away from RMGs is evident.

Further insight from PEMA relates to Automatic Stacking Cranes (ASCs). Here, manufacturers were asked to specifically iden¬tify these items, with confirmation provided that a total of 68 ASCs were delivered in 2019, which compares with the higher number of 124 provided in 2018.

Specific deliveries of these items, according to PEMA, were undertaken in Europe, North America, the Mid East and Africa (and, notably, Morocco – the Tanger-Med expansion), but not to Asia. This indicates that these other regions are more heavily targeting greater use of ASCs, whereas Asia is investing less in this equipment due to a combination of factors including less emphasis on automation in countries where employee costs are competitively priced.

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8 Confirmation of yard deliveries for 2019 offered

by PEMA, sourced directly from manufacturers

Final Report 2019 Yard Container Crane Deliveries| Content

01

Port Equipment Manufacturers Association

8th ANNUAL YARD CONTAINER CRANE SURVEY GLOBAL DELIVERIES 2019 This survey covers 2019 global and regional delivery volumes and 2006-19 global and regional delivery trends for Yard Container Crane.

Researched and authored exclusively for PEMA by Brian Robinson.

Published August 2020

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www.pema.org

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Email: neuero@neuero.de Tel: +49 5422 9 50 30 neuero.de/en/

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G-SERIES

Dellner Dampers is an innovative Swedish company that supplies solutions to mitigate vibrations and absorb kinetic energy. Standard and customised buffers and dampers for port side applications such as cranes, spreaders and more. All designed and produced in Sweden.

Tel: +46-(0)157-45 43 40 Email: info@dellnerdampers.se

As one of the leading manufacturers of quick connector systems, Stäubli covers connection needs for all types of fluids, gases and electrical power. +41 61 306 55 55 ec-ch@staubli.com www.staubli.com/en-ch/ connectors/

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D REDGING

SAMSON Materials Handling Ltd specialises in the design and manufacture of mobile bulk materials handling equipment for surface installation across multiple industrial segments. Designed for rapid onsite set-up and continuous high performance SAMSON equipment provides an excellent return on investment.

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Specialist for pneumatic ship unloaders and mechanical ship loader. NEUERO follows the MADE IN GERMANY quality tradition.

Now with more than100 years of tradition in the manufacture of reliable and high-quality conveyor systems worldwide.

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DEME is a world leader in the highly specialised fields of dredging, marine engineering and environmental remediation.

The company can build on more than 140 years of know-how and experience and has fostered a pioneering approach throughout its history, being a frontrunner in innovation and new technologies.

Port Strategy Directory

LASE offers innovative and productive solutions for ports by combining state-of-the-art laser scanner devices and sophisticated software applications. We are specialised in the fully automated handling of containers, cranes or trucks.

Rudolf-Diesel-Str 111 D-46485 Wesel, Germany Tel: +49 (0) 281 - 9 59 90 - 0 info@lase.de www.lase.de

D REDGING EQUIPMENT

NEUERO Industrietechnik GmbH

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14/07/2020 10:56

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C RANE COMPONENTS

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Taylor Machine Works designs, engineers, and manufactures more than 100 models of industrial lift equipment with lift capacities from ,000-lbs. to 125,000-lbs.

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A/S Cimbria Cimbria is a global leader in the conveying, drying, processing, sorting and storage of grains, seeds, food and bulk products. Cimbria designs, manufactures and services customized high-tech solutions, from stand-alone machines to large turnkey plants. Our broad experience ensures our clients the targeted advice and range of solutions they need to grow their business.

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B ULK HANDLING

Bedeschi S.p.A For more than a century, Bedeschi is providing effective and reliable solutions in a wide variety of industries (bulk handling, marine logistics and mining), capitalizing on synergies and cross competences.

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Port Strategy Directory Contact Tim Hills or Hannah Bolland +44 1329 825335 www.portstrategy.com

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VAHLE PORT TECHNOLOGY Rohde Nielsen A/S Specialising in capital and maintenance dredging, land reclamation, coast protection, Port Development, Filling of Caissons, Sand and Gravel, Offshore trenching and backfilling Nyhavn 20 Copenhagen K. DK-1051 Denmark +45 33 91 25 07 mail@rohde-nielsen.dk www.rohde-nielsen.dk

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.

Westicker Str. 52, 59174 Kamen, Germany

Email: port-technology@vahle.de Web: www.vahle.com

DECEMBER 2020 | 41

PRODUCTS & SERVICES DIRECTORY

BLOK cuts Shipping Line pollution: increases safety and productivity in Port • BLOK Spreader – lifts 4x40’ empties • BLOK Rig – automatic twistlocking • BLOK Trailer – 8 teu

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.

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

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

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.

Marconibaan 20 Nieuwegein Netherlands 3439 MS Tel: +31-30-6062222 Fax: +31-30-6060657 info@verstegen.net www.verstegen.net

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

Port Strategy Directory

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.

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CERTUS Port Automation B.V. Rietlanden 3 3361 AN Sliedrecht The Netherlands t: +31 85 006 8800 www.certusportautomation.com

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.

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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

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!

ShibataFenderTeam Group

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Contact Tim Hills or Hannah Bolland

I T PORT AUTOMATION

Verstegen is worlds leading manufacturer of rope operated mechanical grabs for the dry bulk industry. Stevedoring companies and ports are using our grabs for handling all kinds of bulk materials.

Port Strategy Directory

Gerbestr. 15, 6971 Hard, Austria T: +43 5574 6883 0 sales@kuenz.com www.kuenz.com

Liebherr-MCCtec Rostock GmbH

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Visy systems reduce VISY Oy expenses, optimize safety & security, and increase throughput capacity via process automation. Our singleplatform gate operating system and OCR solutions manage all cargo, assets & personnel movements via quay, rail or road to keep operations moving.

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I T PORT AUTOMATION

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I NSURANCE

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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.

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Bruks Siwertell is a market-leading supplier of dry bulk handling and wood processing systems.

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42 | DECEMBER 2020

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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.

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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.

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T RACTORS

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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.

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T ERMINAL OPERATIONS SYSTEMS

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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.

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T ERMINAL OPERATIONS SYSTEMS

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S PREADERS

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

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.

Tideworks Technology provides comprehensive terminal operating system solutions for marine and intermodal terminal operations worldwide. Tideworks works at every step of terminal operations to maximize productivity and customer service. info@tideworks.com +1 206 382 4470 www.tideworks.com

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POSTSCRIPT BCT TAPS COMODALECE FOR ENHANCED INTERMODAL RAIL

‘‘

COMODALCE is expected to facilitate the next major uplift in the efficiency of intermodal rail operations

44 | DECEMBER 2020

The Baltic Container Terminal (BCT), Gdynia is harnessing the powers of the EU’s COMODALECE project to deliver a major uplift in the efficiency of intermodal rail operations.

The Baltic Container Terminal (BCT), Gdynia, Poland, is presently heavily engaged, along with nine partners from other key European countries – Italy, Germany, Slovenia and Hungary - in researching and implementing the EU project COMODALCE. The COMODALCE project, co-financed by the Interreg Central Europe Fund, takes its abbreviated name from its stated goal, namely, “Enhancing COordination in multiMODAL freight transport in Central Europe.” Specifically, it has a strong focus on the digitalisation of the procedures for rail transport at a transnational level in Central Europe with the scheme sitting under the larger umbrella of the so-called “Docks of the Future” project.

BCT is conducting pilot project work in conjunction with COMODALCE which aims at achieving an electronic data interchange platform for rail wagons and the associated unit load handling. At its core, this entails achieving integration with BCT’s Terminal Operating System (TOS), the systems of other involved players – rail carriers and intermodal operators – and the INCOS element of the Gdynia Port Community system, now under construction, that covers container rail operations.

BCT states: “A key challenge is the transfer of old-fashioned and complex processes presently conducted by using traditional paper documents, phones, faxes and mail communications into a modern electronic format able to process at speed, large volumes of data between multiple partners.”

Allied to this is the challenge of system integration and BCT points out in this regard that: “The INCOS platform offers easy, flexible, low cost connection and data interchange with its TOS and the operating systems of other stakeholders.”

Generally, the goal is said to be feeding the platform with data using electronic messages circulating from system to system. Where partners are not ready for digital data exchange then the platform will offer a web user interface able to achieve the high-volume upload and download of excel spread sheets.

COMDALCE is intended to meet and service the needs of all participants in the intermodal supply chain with diverse parties including intermodal operators, railway carriers, terminals, freight forwarders and shipping lines having access and providing their operational data. Speed, accuracy and common understanding are among the major benefits. Data can be uploaded and downloaded without long waiting times or the requirement to re-write data. The platform will, in effect, deliver a clear and efficient operational plan with online participants having a highly accurate picture of the current situation in real time.

8 Freightliner PL’s Dragon locomotive with its flexible diesel electric design and onboard I.T/GPS also represents a step forward for intermodal rail – seen here at BCT in October

These operational benefits will, in turn, drive cost and qualitative efficiencies across the board.

STRONG FOUNDATIONS BCT’s current project with COMODALCE builds on earlier work designed to accommodate and promote growing intermodal rail volumes which currently account for up to 30% of its annual volume.

The terminal has seen significant investment in its on-terminal intermodal rail facility with this now featuring three rail tracks served by two rail mounted gantries which service on average 200 intermodal rail services on a monthly basis. As well as the physical development of intermodal rail infrastructure and superstructure it has also implemented comprehensive performance related remuneration schemes with its intermodal workforce as another rewarding path to consistently pushing up efficiency levels.

Following on the heels of these positive developments, COMODALCE is expected to facilitate the next major uplift in the efficiency of intermodal rail operations.

Equally, BCT cites the actions of other partners in the intermodal chain as also holding significant promise in this regard. As an example, it points to a new service operated by Freightliner PL between Brzesko (60km east of Krakow) and the ports of Gdynia and Gdansk. The service, which called at Gdynia for the first time in early October, is operated by the DRAGON modern, diesel-electric locomotive.

Its ability, BCT points out, to switch from electric traction to diesel power negates the need for the locomotive to be swapped for a smaller shunting locomotive at the Gdynia Port Station. As such, it arrives directly to BCT omitting the need for a time-consuming and costly shunting operation.

Equally, benefits are expected to accrue from Freightliner PL’s policy of equipping all locomotives in its fleet with laptops enabling the origination and printing of all necessary documentation directly in in the locomotive. GPS is also onboard which enables remote access for continuous monitoring of train journeys and much enhanced coordination with all involved parties.

For the latest news and analysis go to www.portstrategy.com/news101

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