Port Strategy January/February 2021

JANUARY/FEBRUARY 2021 VOL 1021 ISSUE 1

portstrategy.com

Freeports and planning | Battery power on the rise | California: roller coaster ride | STS KPIs that work

SHOCKWAVES, VULNERABILITIES AND PREDICTIONS MARMARA PRESSURES BUILD CONNECTED TECHNOLOGIES

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

Calling the shots under covid

Nearly a year of operating under the negative spell of Covid-19 and the ports and shipping sector has adapted rather well to the much-changed business climate.

It has learnt from ‘Round 1’ and going forward has put in place strategies and established goals that promise to build on earlier achievements

At this juncture, it would have been excellent to look at COVID-19 in the rear-view mirror.

We have, however, not yet arrived at this nirvana with new strains of the virus hitting home hard in the UK and South Africa, and growing concern that this a phenomenon that will be repeated in other countries worldwide.

With the roll-out of vaccines only just underway, it is clear that working under Covid will remain a reality for the foreseeable future at least and that this may yet become even more challenging.

Looking back on recent experience, however, it is not all bad news – the ports sector and some elements of the shipping world have managed rather well in the bizarre new world we operate in. Maritime traffic has not fallen back as much as expected by various analysts and notably in the container sector. Drewry, for example, now estimates 2020 global container port throughput as coming in at just over three per cent under the 2019 volume of 801mTEU. This represents a significant upward revision of earlier Covid influenced forecasts.

Generally, the ports and shipping sector has displayed a remarkable versatility in making the best of things under Covid-19 Top of the tree when it comes to making a profit is container liner shipping which through the agile management of available capacity will, when all the figures are known for 2020, likely report its best year yet.

Drewry estimates the sector will achieve an operating profit of US$11 billion for the year, another upwardly revised forecast from the figure of US$9.2 billion reported in June 2020.

The container terminal operating sector has also displayed a high degree of resourcefulness. Across the board, there has been a discernible scaling back of projects designed to add new terminal capacity. Drewry puts a number on it suggesting that over the next five years global container terminal capacity will grow at an average annual rate of 2.1 per cent, equivalent to 25m TEU per year as opposed to the average 40m TEU per annum registered over the previous decade.

Capacity management here too is expected to bolster returns.

There are two other notable trends in the ports sector that PS expects to see advance significantly. The first is digitalisation. Covid-19 has basically acted as a catalyst to diverse elements of the digital world and influential new technologies can be expected to further accelerate its take-up – 5G/Wi-Fi 6, AI, Advanced Data Analytics and Robot Process Automation for instance. Digitalisation will extend its influence right along the supply chain with ports and terminals representing a critical interface in this respect.

Second, there has been little wavering during the pandemic on the part of both port authorities and terminal operators in their commitment to build carbon-free businesses. Activity in this area continues in priority mode from administration through to operations with diverse new initiatives surfacing on a regular basis.

Generally, the ports and shipping sector has to-date responded well under the negative influence of the pandemic. Equally positive, going forward, it has identified clear goals and positive paths via which to achieve them minimising risk and maximising reward in the process.

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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JANUARY/FEBRUARY 2021 | 3

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CONTENTS JANUARY/FEBRUARY 2021 VOL 1021 ISSUE 1

portstrategy.com

Freeports and planning | Battery power on the rise | California: Roller coaster ride | STS KPIs that work

NEWS 16 Douala Wrangle Decisions 16 Italy Rejects EU Tax Ruling 17 China: Oz – Coal War Continues

SHOCKWAVES, VULNERABILITIES AND PREDICTIONS MARMARA PRESSURES BUILD CONNECTED TECHNOLOGIES

On the cover Our cover highlights the advance of modern technologies into the ports sector. It reflects the discussion on p36, authored

by Siemens, where the diverse benefits of optimised connected technologies are discussed.

Image supplied by kind permission of Siemens.

17 ICTSI Completes Manila Expansion 18 Mexico Management Change Proposed 18 MultiCar Auto-Trade Bounces Back 19 Gdansk Targets Larger Marketplace 11 Digitalisation News 13 Equipment News

is a proud support of Greenport and GreenPort Congress

JANUARY/FEBRUARY 2021 FEATURE ARTICLES 16 Shockwaves, Vulnerabilities and Predictions What lies ahead in 2021 – key predictions

19 Freeports and Planning

Planning reforms, scope and benefits

21 Tunnel Vision The Case for the Santos tunnel

22 MultiRio Multi Gains Investment and MSC deal

24 Marmara Pressures Build Supply-demand balance redlining?

26 Combining Past and Future Waterways: new solutions

28 Integrated Port Planning

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

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San Diego’s progressive approach

Piraeus2021

GREENPORT Cruise Congress &

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 Join leading port executives www.greenport.com/congress

REGULARS 14 The NewYorker

Development priorities

14 The Analyst

Plans, radical enough?

Online portstrategy.com 5 Latest news 5 Comment & analysis 5 Industry database 5 Events Social Media links LinkedIn PortStrategy portstrategy YouTube

15 The Economist The relevance of economics

15 The Strategist

Soft finance: the pitfalls

Weekly E-News Sign up for FREE at: www.portstrategy.com/enews

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

30 Rollercoaster Ride Challenges in California

32 Short Haul Rail Assessed

‘Must-dos’ for short haul rail eiciency

34 Baery Power on the Rise

Electric energy storage options expand

36 Connected Technologies

Integrated approach to maximise eiciency

38 STS Cranes: Investment Led

Reduced investment but innovation continues

41 STS KPIs that Work KPI benefits identified

44 A Laboured Path Dinosaur approach

JANUARY/FEBRUARY 2021 | 5

NEWS REVIEW

Douala wrangle decisions Douala International Terminal (DIT), a Bollore and APMT joint venture company, has during 2020 been engaged in a battle for control of the 400,000TEU p.a. container terminal following the expiry of its concession and its exclusion from being able to bid for the new concession offered by the Port Authority of Douala (PAD).

A significant waypoint in this battle was reached in midNovember 2020 when an ICC arbitration tribunal ruled in DIT’s favour on the two main points it brought to the Tribunal, namely: 5 Sharing of parking rights between the Autonomous Port of Douala (APD) and DIT 5 Preventing DIT from participating in the tender procedure launched in January 2018.

Accordingly, the tribunal ordered the PAD to pay DIT damages and to re-issue an open tender notice includes DIT. This latest legal ruling follows on the heels of several Cameroonian court rulings that have similarly ruled in favour of DIT’s main shareholders on the irregularity of the tender procedure for the container terminal concession and the illegality of the public company implemented by the port authority to operate the container terminal.

BRIEFS Contrecouer funding The Government of Quebec is investing C$55 million (US$43.22 million) in the Montreal Port Authority (MPA) Contrecoeur new container terminal project.

Funding remains conditional on obtaining the required authorisations but represents clear backing for the proposed new terminal. The financial support will enable MPA to commence the start-up phase, which will include site preparation and earthworks.

6 | JANUARY/FEBRUARY 2021

ITALY PUSHES BACK ON EU RULING Italy has declared its intention to fight the EU ruling declaring that corporate tax exemptions given to its ports are not permissible.

At the time of the ruling in December last year Commissioner Margrethe Vestager said: “EU competition rules recognise the relevance of ports for economic growth and regional development, allowing Member States to invest in them.

At the same time, to preserve competition, the Commission

needs to ensure that, if port authorities generate profits from economic activities, they are taxed in the same way as other companies. Today’s decision for Italy – as previously for the Netherlands, Belgium and France – makes clear that unjustified corporate tax exemptions for ports distort the level playing field and fair competition. They must be removed.”

Italy nevertheless takes the view that ports should be

considered to be managers of public infrastructure and as such should not be treated in the same manner as private companies.

Accordingly, it has declared its intention to fight its case in the European Court of Justice.

The aims is to maintain the current model which considers local ports as public infrastructure managed by authorities which are neither a private company nor players active in the market

BUENOS AIRES’ STRIKES CAUSE HAVOC Strike actions at facilities in Buenos Aires are causing havoc to terminal users and threatening the logistics chain. Action by tugboat crews closed Puerto Nuevo, the downtown port (amongst others), between December 28, 2020 and January 6, 2021 causing delays to 180 ships, including 35 container vessels.

Patrick Campbell, vicepresident of Centro de Navegacion, which represents the interests of various shipping groups in Argentina, notes that the start of 2021 has been “incredibly difficult for everyone in the liner business”.

“We complained bitterly to the authorities as we had some container ships stuck in port for a week,” Campbell told Port Strategy. “Some had completed loading but were unable to sail.

We have also been very worried about the welfare of the crew onboard, who have not been allowed ashore, and also the risk

of catching COVID-19 by Argentine officials onshore who need to go onboard these vessels.”

He points out that tugs are a requirement for large vessels to transit the narrow channels from Puerto Nuevo out to the River Plate and beyond.

And notes that some vessels, instead of waiting for a new window, are bypassing Puerto Nuevo and sailing to Montevideo, across the River Plate in Uruguay, or to Rio Grande, in the far south of Brazil.

“We need to be very careful with these wildcat strikes,” warns Campbell, who is also the president of ONE Argentina. “A strike without notification causes disruptions for the supply chain not just for days but weeks.”

The Centro de Navegacion executive additionally points out that unloading cargoes in Brazil presents major problems because carriers, especially on the Asia trades, are sailing fully loaded. “If we had notice of strikes then we could re-arrange the schedules.”

Hornsea Three is Go

Ship of the future

Wheat to Newcastle

The UK has given the green light to the Hornsea Project Three offshore wind farm.

Offering new opportunities in logistics and cargo handling, the wind fam, located off the coast of Norfolk and consisting of up to 300 turbines will generate a capacity of up to 2400 mw. Orsted submitted the development consent order for the project in 2018.

Hornsea Project Three is expected to be completed on schedule in 2022.

The first fully autonomous and zero-emission container ship, Yara Birkeland, has been delivered to its owner Yara International, according to Norway-based shipbuilder Vard. The vessel provides 120TEU of container carrying capacity and is now scheduled to undergo testing for container loading/unloading before it moves to a port for further preparations ahead of autonomous operations commencing.

Wheat shipments have resumed at the port of Newcastle, New South Wales, Australia, after two years of drought. New South Wales has had a bumper winter wheat harvest and while domestic consumption will take much of the harvest, the port is seeing a welcome return of exports. The first shipments left Newcastle in late December 2020 for Vietnam, carrying 35,000t of wheat. Newcastle is hoping for up to 60 wheat ships during the export season.

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

NEWS REVIEW

SONORA PORT: THE ALTERNATIVE TO L.A. AND LONG BEACH 8 Location of planned Sonora Port and Freezone

A new port development site on the northern Pacific Coast of Mexico has been launched and has been identified as a long-term alternative to the southern California ports of Los Angeles and Long Bench.

Known as Sonora Port, the 1300ha facility is located in the Sonoran Desert on the coastline of the Sea of Cortez, approximately 250 miles directly south of the USA-Mexico border at Nogales (AZ). The facility is a private port, with a concession granted by the government of Mexico with no federal interventions required or

renewable time restrictions.

The local population of Guaymas and the surrounding communities within 50 miles totals around 200,000 people.

The location is only 80 miles from Hermosillo, the capital of Sonora and, importantly, home to one of the largest aerospace manufacturing clusters in Mexico.

There is 3200m of ocean front available, with access to Federal Highway 15 adjacent to its land boundary and a direct rail connection.

All permits and approvals are in place for the development to commence.

An Environmental Impact Assessment (EIA) has been granted for the entire site and comes with approval for rapid construction.

Bill Tadlock, Management Executive Director, Sonora Port, notes that five users have shown strong interest in the site. These include one container ship operator, one oil company tank farm user, one fertiliser manufacturer, one LNG exporter and one dry bulk material distributor.

COAL WARS CONTINUE UNABATED The coal wars between Australia and China continue apace as a key symptom of the soured relationship between the two countries which arose out of Australia’s support for an international inquiry into China’s handling of the coronavirus pandemic.

A lack of any ships from Australia being handled at China’s ports in early January 2021 is merely the continuation of what occurred throughout all of November and December 2020.

It seems, however, neither side are likely to be winners as a result of this spat with widespread blackouts reported across China and Australia losing a major market for coal sales. There are also reports of rationing starting in Hunan and Zhejiang provinces, while increased production from Chinese producers is certainly not going to fill the void.

China is currently seeking to increase its coal imports from Canada, Mongolia and Russia in an attempt to make up for the missing Australian coal. This could be challenging, especially as Mongolia’s coal exports were

down by 22 per cent in 2020 as internal consumption rose.

The Australian Bureau of Statistics (ABS) has confirmed that Australian coal exports to China have fallen from over A$823.3 million ($640 million) in November 2019 to just A$121.7 million in November 2020.

Moreover, two of Australia’s major export coal ports, Gladstone and Newcastle confirm no export activity to China since October 2020. Australia supplied over 40% of China’s total coking coal imports in 2019, and about 57% of its thermal coal.

There are various estimates about the number of ships waiting off of the coast of China, ranging from anywhere between 70 and 90 ships laden with high-quality

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

8 Australian coal ships wait off the coast of China as the country endures widespread power cuts

Australian coal, amounting to as much as 9.0 million dwt.

At the time of writing, in mid-January 2021, there seems to be no end in sight to the dispute.

China continues to put new tariffs on a range of Australian products spanning gold and alumina right through to foodstuffs. The one bright spot is iron ore sales to China which remain very strong and are helping to offset the overall impact of its coal not being imported. China imports 60 per cent of its iron ore from Australia and with a lack of viable alternatives available it seems this traffic will continue unabated.

BRIEFS NY/NJ Delays

In mid-January, only minor port delays have been reported at the Port of New York/New Jersey (NY/ NJ), with the main cause being vessels arriving off schedule. There are currently no known large ILA labour shortages due to COVID-19 and port terminals are extending gate/terminal hours when necessary to accommodate import deliveries, However, increased dwell times for import volumes and large inventories of empty containers continue to be current factors of concern.

NZ Congestion

Reports of month-long waits to secure cargo bookings, all-time-high shipping rates and carriers additionally passing on congestion surcharges to shippers continue to plague New Zealand’s ports. With Ports of Auckland in the midst of an automation project and simultaneously suffering key staff shortages, the neighbouring Port of Tauranga has become inundated with the overflow and the effects have further reverberated throughout the supply chain. Estimates of late February for the position easing are currently in place.

ICTSI Expansion

International Container Terminal Services, Inc. (ICTSI) has raised annual capacity to more than 3.3 million TEU per annum following completion of a berth expansion project at its flagship, Manila International Container Terminal (MICT). The completed project involved adding a further 150m of quay to Berth 7, which creates a contiguous berth of 600m and along with Berth 6 can accommodate container vessels of more than 8,000 TEU in capacity.

The two berths currently have five quay cranes, with a design for up to six units.

JANUARY/FEBRUARY 2021 | 7

NEWS REVIEW

BRIEFS Napier pulp deal

Napier Port has signed a 10-year contract renewal, with two further fiveyear options, to continue handling export cargo for Winstone Pulp International (WPI). The company is one of the port’s largest customers and handles a range of products on its behalf including pulp and milled timber.

South Port dip

New Zealand’s South Port incurred a year on year 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. The profit dip 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 pandemic lockdown restrictions noted to have particularly impacted forestry exports..

PORT MANAGEMENT CHANGES The Mexican government is actively progressing plans to transfer responsibility for port administration from the civilian Transportation Ministry to military personnel as part of measures designed to overcome port and customs corruption.

In particular, this is reported to be an action designed to rebuff the expanding influence of cartels in the port environment, who are said to be pursuing this course of action as a path to facilitating the movement of class A narcotics through Mexico’s ports.

President Andres Manuel Lopez is a driving force behind the idea which follows public recognition and discussion by him of corruption problems in the

port system. Not all parties have, however, got behind the idea - in mid-2020 Mexico’s Transportation Secretary resigned citing a dispute with the President over port management issues.

The President has also suggested that concession

agreements provide an opportunity for corruption and generally it is clear that he is not in favour of these. In August last year the government threatened to revoke the 100 year lease, held by a private entity, for the port of Veracruz.

MULTICAR AUTO TRADE CORRECTION

PSA: “reset time”

PSA International Pte Ltd (PSA) handled 86.6 million TEU in 2020, a 1.7 per cent increase over 2019. The company’s flagship PSA Singapore operations generated 36.6 million TEU (-0.9 per cent), with the global facilities outside Singapore recording 50 million TEU (up 3.7 per cent). Tan Chong Meng, Group CEO, PSA, notes that 2021 will give PSA the “opportunity to Reset and Reform, as a business and as individuals” following an “extraordinary year” in 2020.

HHLA takes Trieste Hamburg-based terminal operator Hamburger Hafen und Logistik AG (HHLA) has confirmed its acquisition of a 50.01 per cent share of the multipurpose Piattaforma Logistica Trieste (PLT) terminal at the Port of Trieste, Italy. The 270,000m2 facility is to operate as HHLA PLT Italy.

8 | JANUARY/FEBRUARY 2021

Multiterminais, the holding company for terminal operators MultiRio and MultiCar plus inland container terminals in Brazil, reports a positive correction in the auto market by the end of 2020.

The company is a leading operator for the Rio de Janeiro conurbation (which incorporates 13 million inhabitants and includes the Sepetiba Tecon box terminal in Itaguai, some 46 miles west of downtown Rio de Janeiro.

After a disastrous ‘hit’ caused

by COVID-19, which saw automobile units fall from 7000 cars per month at the start of 2020 down to just 100 in May – MultiCar recovered to something

like “normalcy” by the year end according to Luiz Henrique Carneiro, President, MultiRio. “During May the car terminal was virtually closed because the car manufacturers closed down their plants for a period but then we went from close to zero in May to just over 7000 units in November and then 7605 units in December so it is beginning to improve as that was about the same number that we had in November and December of 2019,” Carneiro notes.

Final figures for 2020 were 50,435 units, down 26 per cent on the 68,500 vehicles of 2019.

Some 80 per cent of MultiCar’s vehicle throughput is imports and

8 COVID-19 caused a downturn of 26 per cent for MultiCar but a positive correction is underway

exports to/from Argentina and with these transported by car carriers to Buenos Aires and Zarate (90km northwest of downtown Buenos Aires).

However, the 2019 split of 46 per cent imports and 54 per cent exports had almost reversed during the course of 2020 into splits of 55 per cent for imports and 45 per cent for exports.

8 A wider assessment of developments at the MultiRio terminal in Rio de Janeiro is on p22-p23.

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

NEWS REVIEW The Polish Port of Gdansk has confirmed that it will shortly complete a number of modernisation and development projects relating to capacity and connectivity.

Due to complete in mid-2021 is the €163million (US$198.11 million) extension of the road and rail network to the Outer Port, which is part of the initiative to expand its hinterland cargo catchment area. The latter has a strong cross-border element including Hungary, the Czech Republic, Belarus and Ukraine.

Scandinavia, via transhipment is another area of significant interest.

Lukasz Greinke, President, Port of Gdansk, notes: “This investment will streamline transport traffic moving into and out of the port. In total,” he says, “it will see 7.2km of roads, 10km of new rail tracks and seven engineering structures built or rebuilt.”

In addition, the port is expanding access to Deepwater Container Terminal (DCT) Gdansk and reconstructing roads around the North Port with a parking area for trucks.

Further investment of €125 million (US$152 million) will see the development of the inner

GDANSK PLOTS EXPANDED CARGO CATCHMENT AREA

port area as a transshipment hub with a deepening of the access channel and modernisation of quay and terminal operations to allow larger vessels to call.

DCT Gdansk is currently the largest deep-sea container

terminal in Poland. It has plans to expand its flagship container terminal to handle 4.5 million TEU per annum (up from 3.0 million TEU), with the construction of a third deep-water facility adjacent to the existing T1 and T2

8 Terminal 3 is planned for DCT to keep pace with projected demand

terminals. Construction is slated to commence in the second quarter of 2022, with completion in 2024.

A P Moller Maersk is setting up a dedicated team to play a key role in the expeditious achievement of the shipping and logistics group’s decarbonization goals.

The company has set the target of becoming carbon neutral by 2050.

Morton Bo Christiansen has been appointed the head of the decarbonization team and notes that the strategy of achieving net

MAERSK DECARBONISATION TEAM zero is now quite feasible, although requiring a lot of work and effort.

Specifically, Maersk’s two main targets on CO2 emissions are to achieve net-zero CO2 emissions from its own operations by 2050 including having net-zero vessels on the water by 2030, and to field a

60 per cent relative reduction in CO2 emissions compared to 2008 levels.

The establishment of this new team complements significant investment by A P Moller Maersk in research and development to promote the technical and financial viability of decarbonized solutions. It also follows on from

Maersk joining forces, in June 2020, with ABS, Cargill, MAN Energy Solutions, Mitsubishi Heavy Industries, NYK Lines and Siemens Energy to set up the Maersk Mc-Kinney Moller Centre for Zero Carbon Shipping.

Liverpool2 Close

Supercharged

Windy Taranaki

New Tema Call

Peel Ports Group, owner and operator of the Port of Liverpool, has confirmed the arrival of five new cranes for the Liverpool2 project. The new ZPMC units are part of the £400 million (US$544 million) expansion project, which is targeting achieving a 20 per cent share of the UK container market in the next five years.

Liverpool2 will have the capacity to manage the unloading of two 380m vessels simultaneously.

At the Seatrade Maritime Middle East event, Ernst & Young stated that the COVID-19 pandemic is causing a combination of port digitalisation and collaboration beyond the terminal to be “supercharged.”

Consequently, the desire to digitalise port ecosystems, and not just terminal automation within the port, is now a top priority, according to Jonathan Beard, infrastructure advisory partner.

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

A consignment of 81 wind blades, each 54.9m, marked the conclusion of Port Taranaki’s involvement in the Turitea wind farm project. A total of 99 x 64-metre wind blades, 31 hubs and 31 towers for the Waipipi wind farm project were also handled, as windfarm activity in the country continues to increase. The Port of Taranaki continues to seek to diversify its role in cargo handling away from a strong historical reliance on the petroleum industry.

BRIEFS CMA CGM has confirmed a new port call at Tema on its South America-Africa service from the end of January. The schedule change is a replacement for Pointe Noire, which will be served via transshipment over Cape Town moving forward. The present deployment involves 7 x 3,000 TEU vessels. This service connects the Brazilian ports of Paranagua and Itajai with South Africa (Cape Town and Durban) and West Africa (Tema and Luanda).

JANUARY/FEBRUARY 2021 | 9

DIGITALISATION NEWS NOTE FROM THE EDITOR This issue sees the launch of PS’s increased focus on digitalisation.

Going forward the PS news pages will provide regular and comprehensive coverage of the ‘news of the day’ with digitalisation in the ports and shipping sector, The positive impact of digitalisation on the supply chain has accelerated under the influence of the COVID-19 pandemic with a flood of new solutions and innovations aimed at achieving step improvements in front-line and back-up operations and the allied management and administrative functions. PS will report on these key developments designed to drive up efficiency and lower costs

Digitising the Bill of Lading The Digital Container Shipping Association (DCSA), a non-profit group founded by a number of global liner companies, is working to upgrade bills of lading (B/L) into a standardised process fit for purpose in the 21st Century.

DCSA B/L standards are aligned with the UN/CEFACT (United Nations Centre for Trade Facilitation and Electronic Business) multimodal transport reference data model to ensure a global industry framework that accelerates digitalisation through a unified industry effort.

Through its initiatives, DCSA is targeting acceptance and adoption of an electronic bill of lading (eBL) by regulators, banks and insurers, in order to unify communication and processes between these organisations and customers, carriers and all other stakeholders involved in a transaction.

“Digitising documentation, starting with the bill of lading, is key to the simplification and digitalisation of global trade. The alignment we’ve achieved among the carriers is a critical milestone on the way to full eBL adoption.

Paperless trade will benefit all parties involved in a transaction in terms of cost reduction, customer experience, efficiency, growth, innovation and sustainability,” explains Thomas Bagge, CEO of DCSA.

ICTSI JOINS TRADELENS

BRIEFS ASEAN customs

International Container Terminal Services, Inc. (ICTSI) has confirmed that its 31 terminals are joining the TradeLens platform.

Connecting to Tradelens, a blockchain platform jointly developed by IBM and Maersk, means all ICTSI terminals get access to accurate information on cargo movements well in advance of vessel arrivals.

The ability to track containers through the networked exchange of data greatly enhances more efficient asset planning for all entities involved because the information is being utilised in near real time to create better end-to-end data visibility.

ICTSI states that by leveraging a state-of-the-art enterprise data platform the company will manage a single global TradeLens connection that will enable rapid innovation and service improvement.

8 ICTSI has signed up to TradeLens and anticipates major benefits

Brian Hibbert, Vice President and Chief Information Officer, ICTSI, outlines the next steps.

“We are now testing the system and transferring information about the loading/discharge of cargo and berthing of vessels to the blockchain platform. After complete integration of the system, we will be able to optimise work with regulatory authorities, improve our terminals’ visibility to what is coming to them as well as receive updates from the sea carriers online.”

Since launching in 2018, TradeLens has grown to comprise more than 175 organisations, including 10 ocean carriers and encompassing data from more than 600 ports and terminals.

Already, it has tracked 30 million container shipments, 1.5 billion events and roughly 13 million published documents.

FELIXSTOWE SET FOR 5G TRIALS The announcement from the Port of Felixstowe that is has been selected by the UK Government for a 5G trial brings some much-needed positivity to the owner and operator, Hutchison Ports, while also offering a chance to extend use of IT to enhance operations.

The port has confirmed that it is to deploy 5G technology and the Internet of Things (IoT) to upgrade productivity, efficiency and safety across its core operations. A 5G Private Network is being installed by Three UK, as part of the Government’s 5G Trials and Testbeds Programme, to drive investment and innovation in 5G and to support the development of new use cases

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

and commercial deployment.

The £3.4 (US$4.7) million project has received £1.6 (US$ 2.2) million from the Government as part of the “5G Create” initiative, a competition to support innovators exploring new uses for 5G to improve people’s lives and boost British businesses.

Hutchison Ports has confirmed that the project will test the potential of 5G across two areas: 5 Enabling remote-controlled cranes via the transmission of CCTV. 5 Deploying Internet of Things sensors and Artificial Intelligence to optimise the predicative maintenance cycle of Felixstowe’s 31 quay-side and 82 yard cranes.

The Association of Southeast Nations (ASEAN) countries have launched a new system to improve the flow of goods across the region, the ASEAN Customs Transit Systems (ACTS).

This fulfils a commitment made in 2017 when the twin objectives of reducing trade transaction costs by 10 per cent by 2020 and doubling intraASEAN trade between 2017 and 2025 were first made. The system may soon also be available in Myanmar and expanded to Brunei, Indonesia and the Philippines.

New eYard funds

A new round of financing is giving eYARD, an Artificial Intelligence (AI) solution for container terminal operators, the opportunity to focus on facilitating customer integrations and target company growth through key hires. The role of eYARD is to assist terminal operators to reduce costs and improve operational efficiency through direct involvement of AI and data analysis. A total of €800,000 (US$970,000), led by Madrid-based Mundi Ventures VC, with the participation of German Next Logistics Accelerator (NLA) and two maritime groups with a global presence, has been confirmed. eYARD reportedly offers a reduction in unproductive moves and terminal costs of up to 25 per cent.

LA Cyber Centre

The Port of Los Angeles is working in partnership with IBM Security to create and operate a new facility to combat cyber-criminals targeting its ecosystem of users. A new Port Cyber Resilience Centre is aiming to increase the level of protection and better highlight potential threats to all stakeholders.

JANUARY/FEBRUARY 2021 | 11

EQUIPMENT NEWS

DP WORLD ANTWERP INCREASES AUTOMATED STACKING CRANE FLEET DP World Antwerp Gateway is boosting its fleet of automated stacking cranes. The company has placed an order with Konecranes Gottwald for 34 Automated Stacking Cranes (ASC) with the first batch scheduled for delivery in Q2 2022 and the last batch by 2026.

Jef Lambregts, Head of Projects, DP World Antwerp Gateway, notes: “We want to

take advantage of the latest developments in automation technology. We will get improved automated truck handling and remote operation ergonomics.”

The overall design employed in the new ASC order will follow the Gottwald ARMG design concept – complementing the 20 units already in service with DP Word Antwerp Gateway – the

distinguishing feature of this being the rigid guiding beam for container load control.

The ARMGs will stack containers 1-over-6 spanning 9 container rows.

A new trolley design has been developed to support an increased lifting height and it will include a hybrid of existing systems for auto-landing on the truck chassis.

BRIEFS ZPMC package for Tibar Bay

Timor Port S.A., a subsidiary of Bolloré Ports has awarded ZPMC with a contract to supply two ship-to-shore gantry cranes and four RTG yard gantries for its Tibar Bay deep-water port in TimorLeste. The infrastructure for the new port is being commissioned in mid2022. Bolloré Ports was awarded the US$490 million, 30-year concession in 2016 and will operate on a 630m wharf with 16m of water depth.

Kalmar strads to reunion…

8 Hammar has launched a new electric powered sideloader in a push towards green alternatives in the industry. The electric power pack, “ePP”, lasts around 20 consecutive lifts with a 35 tonnes weight and can be charged by the truck while driving and by plug-in (230V). The unit’s lifting ‘staying power’ is complementary to its dual role of handling and transport, limited handling only taking place at the point of pick-up and drop off

GREEN SHIP GROWTH SAYS CLARKSONS London-based Clarkson Research Studies has confirmed an interesting snapshot of the number of vessels, both currently in operation and those under construction, which do not (or will not) use traditional bunker fuels.

The latest Clarkson data confirms that at present 3.5 per cent of the current fleet is using alternative fuels, but it is the tonnage on the orderbook where the changing trend is clearly noticeable, because around 27 per cent of all future vessels planned will not be using bunker fuel oils.

Of the green options, LNG is the existing most popular alternative, followed by LPG. However, numbers of other fuelling options under construction are growing, with 13 ships being built for ethane-sourced power, 11 units to use methanol and a further 7 vessels with biofuel.

The other noticeable line item from Clarksons is that there are currently three ships that will be powered solely by hydrogen.

However, there are still clear challenges that need to be overcome, as Clarkson Research notes.

“The timing, technology choices

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and financing of the investment required to reduce shipping’s GHG emissions (currently includes 800 million tonnes and 2.3 per cent of global CO2) however remains a huge hurdle for stakeholders across maritime,” Nevertheless, there are also trends occurring that can assist the process, with the increase in energy saving technologies (EST).

Notable examples across the industry include rigid sail, bow enhancement, exhaust gas economisers and wind kits, although these will help assist rather than ensure that the overall objectives are met.

Kalmar has confirmed a new order for eight diesel-electric straddle carriers for the terminal of Iles de la Réunion, at the Port of Pointe des Galets (Port Reunion). Four machines are for SGM Manutention and four to Société de Manutention et de Consignation Maritime (Somacom), with delivery scheduled for Q3 2021.

The main cargoes handled at the port, located in the Indian Ocean, include building materials, sugar, grain and food produce.

Annual container traffic is in the order of 350,000TEU.

….and Nokia collaboration

Kalmar and Nokia have confirmed an expansion of their existing collaboration to support automated operations and better productivity for operators of ports and intermodal terminals. The project entails combining their communications and cargo-handling technology expertise in joint research collaboration, integrated solutions options and go-to-market ventures. A first project is introducing wireless 4G and 5G across its equipment range.

JANUARY/FEBRUARY 2021 | 13

THENEWYORKER BARRY PARKER

PORTS: A FRONT ROW SEAT I must confess, over the past four years, I got a little tired of writing about the huge breakthrough “Infrastructure” investment initiatives which, as all boats rise with the tide, would benefit ports throughout the USA. Simply put, it didn’t happen, at least not in a meaningful way. As we are changing administrations, there is again hope for renewed governmental schemes and strategies aimed at “keeping things moving.” Though the “things” these days include electrons and such like, surface transportation (with significant interfaces with ports) would certainly be a key component of any plans that might be coming.

There have been big changes in thought processes over the past few years- and ports need to plug into these external trends. Some are obvious, others less. The interactions of the trends (think of that Venn Diagram with overlapping colours), often less considered, may be where the real action is.

Futurists will tell you that “digitalisation”, already

8 Battery power is on the rise for ports

happening in a big way, will be expedited, courtesy of the horrible pandemic that required less manual input to move things around. For USA ports (and, really all over the globe), at the fulcrums of supply chains, management systems of cargo flows should be future-proofed, as much as possible. It’s difficult to predict what innovations we may see but ports occupy a front

row seat (and, indeed, may be in the control room) to the feverish path towards more supply chain optimization.

Then we have the “E” in ESG. Infrastructure investing, in the USA (and, again, in other countries) will take on a decidedly greenish trend.

Decarbonisation and alternative fuels are the talk of the maritime industry; yet ports don’t always have a really good seat at this table. The optimisers do a tolerable job when the vessels

are out on open waters (inside harbours) not so much. So I would expect much more in the way of dialoguing about how arrival/ departure times, berthing and undocking, and other operational factors (think about security zones and tidal flows) could be better coordinated for fuel savings. For intra-harbour vessels, battery power (and maybe fuel cells, a few years out) are beginning to see uptake in other regions. Plus, as we get more container-on-barge activity, it may be electrically powered.

Maybe, taking an example from one West Coast port, a local utility could donate the charging station.

The “E” part goes further, as well. When the landside vehicles, like yard “hustlers” or drayage trucks, become electrified, in advance of the intra-harbour tugs, then digital control, the handmaiden of “optimisation” is a likely byproduct. Infrastructure investment, defined a little bit differently than before, all fits together in ways that we can only begin to imagine.

THEANALYST PETER DE LANGEN

A STRATEGIC PLAN: TICKS THE BOXES BUT RADICAL ENOUGH? The French Haropa ports of Le Havre, Rouen and Paris are steadily implementing the full merger announced over two years ago and the final step should be ready in June of this year. As an important part of the integration, a strategic plan until 2025 was recently published. It is an interesting read and clearly reflects the changed landscape in the port industry.

In 2015, Le Havre had the ambition to grow container volumes by 50 per cent, to around 4.8 million TEU, but the new plan aims for much more modest growth of 10 per cent, to reach 3.1. million TEU. The plan also acknowledges the inevitable decline of liquid bulk volumes,

14 | JANUARY/FEBRUARY 2021

which account for around 50 per cent of its throughput. As a consequence, the document suggests total maritime volumes (i.e. excluding river transport) will remain fairly stable at around 90 million tons.

The strategic plan ‘ticks all the right boxes’ in the sense that the widely recognised challenges around digitalisation, innovation (eco)systems, sustainability and circular economy are all included.

Based on my experience with strategic plans for ports, which certainly includes some mistakes, in my view the key question to ask about a strategic plan should be, ‘Is it radical enough?’ In hindsight, most strategic plans turn out to be too much based on

business as usual, even if they tick all the right boxes.

Is Haropa’s plan radical enough?

Well, time will tell. I certainly do not have a crystal ball, but here are my doubts. First, like most other ports, and in line with national and EU policies, Haropa aims to increase its share of barge and rail, while reducing the portion of road transport. However, most ports have not achieved modal split targets, and in many countries the share of rail is stable or even declining. The transition to cleaner trucking is well underway and autonomous & assisted driving on the horizon. So it may be time to challenge the value of modal split ambitions. Second, the strategic plan is mostly silent regarding the

diversification of the ‘port business ecosystem’. The experience from other ports is that activities such as mega-yacht building, offshore wind, datacenters, circular manufacturing and even ‘industrial agriculture’ may be valuable additions to the port business ecosystem. Focusing commercial activities on attracting such new investments may be needed.

Third, perhaps the planned transformation of the port/city interface is not radical enough and could include a stronger commercial approach to develop maritime/cruise related leisure.

If Port Strategy is still around in 2025, and I still write an opinion piece for it, I will report on ‘what really happened’ in 2025.

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THESTRATEGIST MIKE MUNDY

It is interesting to note that the latest UNCTAD Review of Maritime Transport highlights what it sees as the plight of small island states (SIDS), buffeted under the impact of the pandemic and subject to regular shocks as a result of climate change. In the latter context, the case of the Caribbean is referenced and the fact that most states in the region have over the past four years experienced at least one damaging category 4 or 5 hurricane.

Overall, the point is made that significant disruption – some structural some operational - to supply chains has occurred, and may well continue to occur, as a result of both factors which has led to increased costs.

The scenario is such, it is suggested, that smaller independent states, face an increased risk of negative growth, particularly over the short-term, and therefore an impaired ability to deliver food and other essential products and materials to their respective populations at a reasonable cost.

It is particularly important

NO TO EASY GATES TO GO THROUGH

under these conditions, underlines Chad Blackman, Barbados’s Ambassador to the UN and Chair of the World Trade Organisation’ Committee on Trade and Environment, that ports in SIDS maintain the ability to field sufficient capacity to absorb exceptional shocks. This includes the ability to upgrade port facilities and have access to the necessary finance to achieve this. Specifically, he calls for, “a very real conversation with financial institutions that will allow countries to build capacity.”

While, however, this suggested

8 Comprehensive vetting needed for all parties wanting finance

approach does have a certain merit to it – as regards the basics of safeguarding the health and welfare of the states concerned - there are certain drawbacks.

A macro factor is the culture of putting in place relatively easily access to soft finance. This is a strategy that most financial outlets – public and private – have backed away from progressively over recent years.

History tells us that too many mistakes have been made. Where

soft finance is available, from regional development agencies etc. this is now usually in a much more specific context.

Specifically, with regard to port expansion, there are also a number of basics to address – for example: Is there really a case for expansion or can the existing port resources be leveraged to offer more capacity? Similarly, is the business model the correct one to base expansion plans on and allied to this is there scope for the greater participation of the private sector as a path to securing finance?

These questions may be particularly relevant where public sector operations are in place – where it is fair to say that as a rule there is more slack in the system. Across-the-board, however, it appears prudent, even in exceptional circumstances, to apply a comprehensive vetting procedure for all parties looking for finance. There should be no easy ‘gates’ to go through! In the final analysis, this can often entail a bigger price to pay!

THEECONOMIST BEN HACKETT

Harping on a familiar subject, we really do need to ask ourselves what relevance economics has on international trade?

Last year we saw the collapse of Gross Domestic Product, (GDP), the measure of a nation’s economic activity, resulting from lockdowns and the COVID-19 pandemic, to a level well beyond what was experienced during the 1930s Depression. We expected trade to collapse because of a drop in consumption. By the end of the year we can say that it did not happen to all intents and purposes.

The stock markets rocketed ahead despite the adverse

THE RELEVANCE OF ECONOMICS ON INTERNATIONAL TRADE AND PORTS? economic situation and the mounting deaths from millions of COVID-19 cases. Perhaps old people dying does not count? In any, case the level of optimism is hard to explain. Clearly the stock market is a poor guide to the economic outlook.

As we entered 2021 things took a turn for the worse. The pandemic worsened and deaths dramatically increased resulting in lockdowns in most of Europe and parts of Asia with only the U.S. refusing to take any serious action.

Lengthy lockdowns will result in dramatic slumps in the GDP again

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in the first quarter, if not in the second as well. Vaccinations will not be a quick fix.

All the bad news had only a short term impact on global trade, the declining volumes were primarily in the first half of 2020.

Supply chains reacted well and there were few shortages for consumers and some short term disruptions for industry worldwide. Toilet paper came into high demand, as always during an economic crisis.

By the end of 2020 trade volumes for the year had virtually recovered to 2019 levels and 2021

can probably be predicted to see further growth in volumes, with the exception possibly of crude oil. China is leading the way in terms of recovery as the country continues to be the main driver of trade regionally and globally, tariff wars notwithstanding.

Looking forward we should pay more attention to consumer demand and the rapid growth of on-line, next day, delivery sales as a guide to trade growth.

GDP has never been a solid or serious predictor of trade for the short term and rarely useful for the long term.

JANUARY/FEBRUARY 2021 | 15

WHAT NEXT?

SHOCKWAVES, VULNERABILITIES AND PREDICTIONS FOR 2021 What lies ahead for the maritime sector in 2021? Against a background of the impact of COVID-19, Felicity Landon highlights select expert views

8 UNCTAD predicts a “grim” time over the short-term

COVID-19 laid bare the vulnerabilities of the maritime sector in 2020 and highlighted challenges around connectivity, financing and the particular difficulties faced by small island developing states (SIDS), said experts at the launch of UNCTAD’s Review of Maritime Transport (RMT) 2020.

The report, published before the end of the year, predicts that global maritime trade will plunge by 4.1 per cent over the full 12 months of 2020, due to the unprecedented disruption caused by the pandemic. It warns that new waves of the pandemic, further disrupting supply chains and economies, might cause a steeper decline, and that the overall impact will also foil growth prospects.

While no one will be surprised to hear of the ‘shockwaves’ sent through supply chains, shipping networks and ports during 2020, we can all be forgiven for hoping for better times ahead. However, UNCTAD describes the short-term outlook for maritime trade as “grim.”

If the pandemic is brought under control, it expects a return of maritime trade growth, with expansion of 4.8 per cent in 2021. However, it urges the maritime transport industry to brace for change and be well prepared for a transformed post-COVID-19 world.

“The global shipping industry will be at the forefront of efforts towards a sustainable recovery, as a vital enabler of smooth functioning of international supply chains,” says Mukhisa Kituyi, Secretary-General, UNCTAD. “The industry needs to continue mitigating the impact of inward-looking trade policies and protectionism.”

As the RMT emphasises, predicting the pandemic’s longer-term impact, as well as the timing and scale of the industry’s recovery, is fraught with uncertainty.

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SEA-INTEL – “UNCHARTED TERRITORY” Alan Murphy, CEO, Sea-Intelligence, told Port Strategy: “I would be comfortable talking about a forecast in any year other than 2021. But any model based on the past is invalidated and we are in completely uncharted territory.”

A year ago, who could have predicted the turbulence of the container sector, with rocketing freight rates, container shortages, port congestion and the tangle of service disruptions and diversions? Faced with Asia-Europe container freight rates that in some cases have risen from around £1,000 to £12,000 in a matter of months, some UK shippers have made the tough decision to halt shipments because the high rates are making low-cost goods unviable. “It is only worth paying that rate if you have a container full of iPhones – not a container full of plastic toys or household goods,” one shipper told Port Strategy.

Murphy says: “We are seeing the wildest time in 60 years of container shipping right now.”

As he explains, the shortage of containers is at the root of the issue – or, rather, that empty containers are in the wrong places, due to the extraordinary ups and downs in supply and demand through 2020.

Chinese New Year 2020 and then China’s COVID-19 lockdown and factory closures, was followed by the precipitous fall in demand across North America and Europe, and then a dramatic peak in demand that started in July “and is still ongoing in January”, Murphy adds.

As lines blanked East-West sailings in response to lower demand, so the empties that would have been returned on those services began to pile up in depots.

“Some areas have seen a fast recovery [in demand] and

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

WHAT NEXT?

‘‘

We are seeing the wildest time in 60 years of container shipping right now….. any model based on the past is invalidated and we are in completely uncharted territory others slower, but containers have seen an absolutely unprecedented recovery and then a boom on top of that,” says Murphy. There has been particularly massive growth on the North America transpacific trades, with container volumes up by 20-30 per cent for the past few months which, he says, is not sustainable and part of a “sham recovery.”

“Much of what was moved in the second half 2020 was lockdown focused – a lot of PPE, home office equipment and furniture, fabric to make homemade clothes, building materials. Consumption has moved from services into longterm durables. But whenever we see a lifting of [COVID-19] restrictions, we will see a sharp shift to services.”

He is reluctant to put a date on that. Many retailers have been restocking and building inventories they say they need to meet massive demand, but there is a danger of everyone in the supply chain building up inventories by 10 per cent more than the actual demand.

“At some point in 2021, this will come to a screeching halt.

Carriers are aware that this will happen. Some are accusing shipping lines of taking advantage. Of course they are. If you are in a market where demand outstrips supply, prices will increase very fast and that is what we are experiencing at the moment.”

While most cargo moves on contract and will not be directly affected by the surging spot rate, when shippers have used up their contracted volumes and still need more, they will find themselves paying a considerably higher price.

We are, says Murphy, seeing a reversal of the longaccepted situation where ocean freight has been such a tiny part of the overall cost of goods that rate increases have minimal impact on the final price. “We are now reaching the level where people have cargo of US$25,000 value and are asking – am I really going to pay $8,000 to move it? It is absolutely pandemonium.”

Meanwhile, ports are struggling to handle the volumes and can’t move the containers fast enough; containers are piling up in terminals so vessels can’t get in to unload and stay anchored outside major ports, waiting for days to get a berth.

Some expect this extraordinary demand to continue long enough to run into the start of the normal annual peak in June/July. That seems optimistic, says Murphy – “but then again, the current high demand has lasted far longer than anyone would have expected”.

IHS MARKIT – THE CLIMB BACK Global recovery in trade is expected in 2021, with particularly strong growth in the second quarter, IHS Markit predicts in its monthly global trade monitor for January 2021.

“Taking into account the first three quarters of 2020, all top economies suffered a decline in exports year-on-year ranging from -0.9 per cent for China up to -21.5 per cent for Russia. This translates to a fall of -10.4 per cent year-on-year for the whole top ten group,” says Tomasz Brodzicki, report author. “For imports, all top economies suffered a decline, ranging from -2.6 per cent for China up to -29.7 per cent for India. The overall contraction in imports for the top ten group is equal to -10.9 per cent,” he outlines.

However, available monthly data for the fourth quarter 2020 has brought optimism. “Overall, trends observed in the real value of exports by the top ten economies point to a gradual improvement of the situation in Q3 and Q4 of 2020 (in particular in Asia). Sharper recovery is predicted for Q1/Q2 of 2021 only.”

Following an estimated 13.5 per cent drop (in value) of global trade in 2020, IHS is predicting a year-on-year increase in the real value of global trade by 7.6 per cent in 2021 and 5.2 per cent in 2022.

UNCTAD UNCTAD’s RMT highlights the plight of small island developing states (SIDS), being among the most affected by climate change and the least connected.

Chad Blackman, Barbados ambassador to the UN and chair of the WTO committee on trade and environment, notes: “During the pandemic we have seen even more the high reliance of SIDS on imports which are critical for food security, pharmaceutical drugs imports and medical equipment, while also relying on effective maritime transport for exporting goods.”

Significant disruption to supply chains, particularly for small and medium enterprises, has driven up the costs of both importing and exporting – and the projected 4.1 per cent decline in maritime trade would cause a “massive impact” on the ability for some member states to provide goods for their populations at reasonable cost, he adds.

The added effects of climate change mean that smaller independent states and countries across the world face an even greater prospect of negative growth, he says. For example, most Caribbean states have experienced at least one Category 4 or 5 hurricane in the past four years, and in a situation like this when most of their food is imported from Miami, “there is a pause or stop in transport of critical food to our economies as a result”.

Stepping up resilience is key but finance is a major challenge. “Many SIDS are precluded from the necessary e to be able to retrofit ports to concessions on global finance adjust to these global shocks.”

Port facilities need to be upgraded, he says, and he called for a “very real al financial conversation” with international untries to institutions that will allow countries build their capacity. Without a financial tor as a mechanism to allow the sector pacity to whole to invest in port capacity preading absorb international shocks, spreading repayment over time, the cost of mically, shipping will increase astronomically, warned Blackman.

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

8 The pandemic has brought pandemonium to the ports and shipping industry and while the first shoots of optimism are appearing strong concerns remain

8 Alan Murphy, CEO, Sea-Intelligence

JANUARY/FEBRUARY 2021 | 17

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UK FREEPORTS

FREEPORTS AND PLANNING Aaron Nelson, Senior Associate at UK-based law firm BDB Pitmans, considers the UK Government’s planning regime for the country’s proposed Freeports The UK’s Freeports will benefit from a relaxed planning regime, the government has indicated. The government aims to create ten or more Freeports across the UK, which it describes as “innovative hubs which boost global trade, attract inward investment and increase prosperity in the surrounding area by generating employment opportunities.”

WHAT ARE FREEPORTS? The core concept of a free port is an area inside a country, typically around a port or airport, which is legally outside the customs territory of that country. This allows companies to bring goods into the port, store or process them, and then import them or “re-export” them outside normal tax and customs rules.

However, respondents to the government’s recent free ports consultation agreed, tariff reform alone would not deliver the wider economic benefits the government seeks.

So to encourage economic activity and growth, the government proposes reforming planning controls within the UK’s new Freeports in order to facilitate development and so attract domestic and international investors looking to start or grow their UK operations.

Three changes to the planning regime are being considered.

WIDER PERMITTED DEVELOPMENT RIGHTS First, ports’ permitted development (PD) rights – in the Town and Country Planning (General Permitted Development) (England) Order 2015, Part 8 Class B – are to be aligned with those of airports, to allow development of “operational buildings” for purposes connected with the provision of port services and activities, without the need to obtain planning permission. Some port operators already benefit from limited PD rights, allowing them to carry out, for example, development required for the purposes of shipping, but the proposed change would allow for a wider range of development and operational activities to take place.

This relaxation will not amount to a “carte blanche” for development. Current PD rights generally only apply to the statutory port operator’s land; a larger Freeport, which might incorporate factories or warehousing, might extend beyond this. PD rights are also subject to restrictions in the case of EIA development and development that is likely to have a significant effect on a European site.

The government has also indicated that the amended PD rights will be “proportionate to support the development needs of seaports while ensuring appropriate planning and environmental protections remain in place”. The detail of the changes will need to be considered against the government’s wider proposals to design a quicker, simpler framework for assessing environmental impacts and enhancement opportunities post-Brexit in order to speed up planning processes while delivering better environmental outcomes.

MORE LOCAL DEVELOPMENT ORDERS Second, the government supports greater use of Local Development Orders (LDOs).

An LDO is an Order made by a Local Planning Authority

(LPA) which grants permission for certain types of development specified in the order. It could, for instance, allow a particular class of development, such as B2 General industrial (excluding incineration purposes, chemical treatment or landfill or hazardous waste) or B8 storage or distribution, without the need for a planning application.

LPAs are encouraged to use LDOs to set the planning framework for particular areas or categories of development where the impacts would be acceptable, and in particular where this would promote economic, social or environmental gains for the area. The advantages are: 5 To simplify the planning process by removing the need for planning permission where appropriate and proportionate.

5 To reduce the pressure on resources for both applicants and LPAs (by removing the need for planning applications).

5 To provide greater certainty and make investment in a site more attractive helping to facilitate delivery of development.

5 To bring forward regeneration faster and avoid delays.

5 Retaining overall LPA control over the nature of development which is permitted (not the case with PD rights which, being statutory, are controlled by the national government) However, there are drawbacks.

First, an LDO will clearly not create market demand where none otherwise exists or it may simply encourage the relocation of existing economic activity into the LDO, rather than encouraging genuinely new economic activity.

Second, an LDO can, if drawn too narrowly and backed by wider planning policy which allocates particular activities to particular “zones”, stymie other sorts of (otherwise beneficial) development on that land.

Third, LPA involvement in economic activity inevitably always runs some risk of the public sector “picking winners” or unjustifiably subsidising businesses for “political” reasons.

REVIEW OF NATIONAL POLICY STATEMENT FOR PORTS Third, the government intends to review the National Policy Statement for Ports (Ports NPS) in 2021. Any such review should, in the author’s view, take into consideration the recently-published National Infrastructure Strategy and also that, as an island nation – and as recently highlighted during the pandemic and pre-Brexit – the UK’s ports are a vital component mponent of the nation’s logistics and supply chain.

The he bidding process for Freeport status us in England is live, with a deadline dline of 5 February 2021 for the submission mission of bids. Decisions are expected ected to be made in the Spring ing of this year.

8 Aaron aron Nelson is a Senior Associate ociate at law firm BDB Pitmans.

BDB B Pitmans act for many of the UK’ss port authorities, advising on port developments, elopments, management and operations. rations. Aaron advises on aining or objecting to obtaining elopment consents development

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JANUARY/FEBRUARY 2021 | 19

20 | JANUARY/FEBRUARY 2021

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

SANTOS: PORT ACCESS

TUNNEL VISION A new tunnel is the “best solution” for Port of Santos cross-port connectivity.

In an exclusive interview, Rob Ward talks to Casemiro Tercio Carvalho, a leading proponent of the tunnel option, to hear the case for this option A tunnel is a much better option than a bridge for the Brazilian port of Santos. It is cheaper, almost as quick to build and will allow for bigger ships to eventually berth there, said Casemiro Tercio Carvalho, Director for Port Affairs, University of Santos (UniSantos) and Senior Infrastructure Partner at StonePartners, a consultancy firm in an exclusive interview with PS. He adds that with a new, cheaper tunnel plan and by utilising under-used shipyards in Brazil for fabricating concrete blocks for the tunnel, the Reais2.5-3 billion (US$474.8m-$569.7m) tunnel could be built in around two years. This is a comparable timescale to the competing Reais3.9bn Santos Bridge project, which estimates 18 months to two years for its construction phase.

SPLIT COMMUNITY The port community in Santos has been split regarding whether a tunnel or bridge is needed to connect the two sides of South America’s largest container volume port (Guaruja is on the left bank and Santos is located on the right), or if money can be saved by building neither.

Beneficial cargo owners could have benefitted hugely years ago when multiple liner calls would drop off containers for transshipment that might need trucking from the Santos right bank of the port to the Guaruja left bank, some 40 km and up to 90 minutes (depending on traffic) away, but since then the merging of services means far fewer boxes now make that journey.

However, despite that contraction in cargo, there are solid gains for a crossing for the two port cities, and especially its denizens who work in the port of Santos (which employs directly or indirectly some 60 to 70 percent of all workers) many of whom live on one side of the channel but work on the other. Reliable sources in Santos and Brasilia say that at least one of the projects will move forward over the next year or so for a variety of political and logistical reasons, with Sao Paulo state governor Joao Doria backing the bridge and Brasilia backing the tunnel.

Santos Port Authority (SPA) has called for initial studies for a new crossing to be submitted this month (February 2020).

“There are so many different advantages to be accrued by choosing the tunnel option, and one of them is cost, plus it doesn’t impede the arrival of mega ships in the future,” states Carvalho.

He explains further: “Also, worldwide, ports that are strategically important to a country’s logistics do not have bridges they have tunnels. A tunnel will be a much more efficient connection for the two sides of the port.”

“I’M TAKING THE TUNNEL” Carvalho, who was also the president of the Santos Port Authority (SPA) from February 2019 to May 2020, notes the Vou de Tunnel (“I’m taking the tunnel”) consortium has generated a new plan and reduced the cost from Reais3bn to Reais2.5bn.

Moreover, during the same period the Bridge project, from highway concessionaires Ecovias (which also owns the Ecoporto ro-ro terminal), has increased the size and span of

the bridge (by 700 meters to increase accessibility for maximum size vessels) and therefore its cost has jumped from Reais3bn to Reais3.9bn.

Carvalho, who is advising Vou de Tunnel, says that the consortium is comprised of a much wider group of companies than those backing the bridge project, and it would be a benefit to “all citizens in both municipalities”.

Among the tunnel backers are Tarcisio Gomes de Freitas, the Minister for Infrastructure in Brasilia, and 34 companies and entities including, Van Oord and Boskalis dredging firms, Abratec (which represents many container terminals) Centronave (the association for foreign flag shipowners in Brazil), Sindamar and various others.

Building a tunnel would also “revolutionise” real estate values in Guaruja, the rival beach-front municipality located across the channel from Santos, which has always suffered in the past because it is around 40-50 km by congested roads to Santos - where most of the work is – and the current ferry boat shuttle is time consuming and invariably overloaded.

Carvalho, who likes to think “outside the box,” argues that the tunnel option could benefit from the current moribund state of Brazil’s shipyards and mentioned three – EAS in the northeast, Ishikawajima in Rio de Janeiro and ERG in Rio Grande, in the far south – that could pre-fabricate blocks and save the cost of building a facility in Santos.

Shipbuilding expert Armando Freigedo Rodrigues, Director of Aquapar in Rio de Janeiro, agrees that building blocks from these yards is “definitely feasible” and this location is the best choice at it is closer and, “heavy lift transport of the units will be much cheaper”.

8 The Vou de Tunnel project is comparable to a bridge in terms of both costs and time to construct – the jury is still out on which option will be taken up

OPPOSING LOUD VOICES Despite these strong views from Carvalho there are still loud voices calling for the bridge or to “leave things as they are”.

Carlos Sepulveda, CEO, Santos Brasil, a left bank box terminal, favours a bridge. At the same time, Leandro Carelli Barreto, Managing Director, Solve Shipping, says that from a “cargo point of view” there is no longer any need for a bridge/ tunnel crossing but from a civic improvement position there is an argument for it.

Port Strategy will be looking closely at Santos and its port authority and terminal privatisations in a forthcoming issue.

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

JANUARY/FEBRUARY 2021 | 21

RIO DE JANEIRO: TERMINAL DEVELOPMENT

MULTIRIO MULTI GAINS MultiRio container terminal in Rio de Janeiro has a new terminal operating deal and is gearing up to handle the largest box ships in the East Coast of South America (ECSA) trades, as Rob Ward discovers

8 MultiRio has new cranes, deeper water and is developing an even closer relationship with MSC/TIL, prompting an optimistic outlook for 2021

The arrival, just before Christmas, of a new super post panama crane – costing US$9.3million from ZPMC in Shanghai, China - was just the latest step in the bid by the MultiRio owners to compete with “the big boys” who are dominating container handling in Brazil to the detriment of the once profitable and prolific local Brazilian operators.

To some extent MultiRio has been following the maxim: “If you can’t beat them, join them.” Of all the Brazilian owned container terminal operators in key Brazilian ports only Santos Brasil (in Santos and Vila do Conde), Wilson, Sons (in Salvador and Rio Grande) plus the two mavericks in the jungle port of Manaus (Superterminais and Chibatao), are still independent of foreign ownership.

PANDEMIC AND EXCHANGE RATE PAIN MultiRio is having to deal with potentially plummeting imports due to both the pandemic and the poor exchange rate of the Brazilian currency. (The Real has gone from Reais3.0 to Reais5.3 to the US dollar over the past 18 months, making imports much more expensive).

In 2020, MultiRio handled 232,180TEU, which was eight per cent higher than the 215,105TEU it handled in 2019, (218,079TEU in 2018) and ICTSI Rio 1 handled 186, 783TEU (up from 131,855 TEU the year before after adding new services).

A recovery during Q4 2020 saw MultiRio finish with a decent rise last year considering all the pandemic pitfalls but

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the drop in imports – down 16 per cent to 37,540TEU in 2020 - hurt the bottom line, despite exports, transshipment and empties all showing good growth.

“The problem is that most of our revenue comes from handling import boxes and these were down significantly compared with 2019,” Luiz Henrique Carneiro, President of MultiRio, explained to Port Strategy.

He adds that, with an average import storage time of one week, import boxes bring in at least five-times more revenue compared to export containers.

“It is because here in Brazil the tradition is to charge almost zero for export boxes and to keep fees low but compensate with import fees,” said Carneiro. “So maybe now we will have to look closer at that system and increase the handling costs of export boxes little by little. It’s a process that may be inevitable as this year progresses.”

Sepetiba Tecon, which competes for the same cargoes in the Rio de Janeiro conurbation, saw throughput of 277,431 TEU in 2019, significantly down from the 417,561TEU in 2018, due to carrier calls reducing and switching to Rio de Janeiro with its deeper draft.

GROWING PARTNERSHIP WITH MSC & TIL Part of the reason for MultiRio’s current expansion is a growing partnership with the European liner shipping company MSC Line and its stevedoring arm, Terminal Investment Limited (TIL).

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

RIO DE JANEIRO: TERMINAL DEVELOPMENT MSC has been a long-standing customer of MultiRio since the terminal operator – majority owned by the Klien family took up the franchise of an initial 25-year concession back in 1998 (since renewed early, in 2011, it will now run until May 2048).

Luiz Henrique Carneiro, is President of MultiRio as well as Multi-Car, the ro-ro operation that operates out of the same, close to downtown Rio de Janeiro site, and has been with the company for more than 20 years. He believes the container facility is on the threshold of becoming a major player in the ECSA trades with more chance of gaining transshipment cargoes now that it has boosted its capacity to 700,000TEU per annum and improved both draught and night-time manoeuvring.

“Rio de Janeiro is not seen as a transshipment port yet, as it is more of a gateway port, but we have seen an increase in transshipment cargo over the past few months, since October 2020, and some of that is with MSC, with whom we are seeing a growing and blossoming relationship. We hope that they will continue with those transshipment volumes in 2021 and our aim is to pick up even more transshipment cargo, especially now with our greater capacity,” Carneiro explains.

MultiRio hosts four MSC liner services, to North Europe, US East Coast, US Gulf and the Mediterranean. MSC’s Asia service does not call Rio de Janeiro but Carneiro is “trying to convince them to come but it’s a question of market and strategies”.

Now, with the new gantry crane – bringing the total equipment roster up to five Ship-to-Shore (STS) cranes and three mobile harbour units – Carneiro expects MultiRio to start plugging the gap significantly between current throughput and its theoretical maximum capacity of one million TEU per annum capacity, which would need deployment of two more STS units.

Carneiro explains the logic: “We decided to buy it [the gantry crane] to improve our productivity and we had to move fast to beat the deadline for the removal of the Reporto incentives. The new crane has an out-reach of 24 rows and helps us prepare ourselves to receive the New Panamax class vessels.”

The Reporto legislation, which expired on December 31, 2020, allowed port equipment to be imported without paying the hefty 40 per cent import taxes that are normally due on such purchases. Carneiro said that the purchase was split between TIL and saved MultiRio US$3.7m and was operational during February 2020.

EXCELLENT CO-OPERATION The Rio de Janeiro terminal has also been boosted by an improved draught – down to 13.8m at low tide and 14.6m at high tide - and, much improved night-time manoeuvring for vessels through the Guanabara Bay entrance channel, which can save up to eight hours of idle vessel time.

“We were limited to just 12.6m at the entrance channel with night-time manoeuvres but achieved a major breakthrough earlier last year, in April, when that was improved down to 13.8m draught,” explains Carneiro.

This was brought about by “excellent co-operation between MultiRio, ICTSI Rio, the Brazilian Navy and pilots plus the president of the Rio port authority, CDRJ, Admiral Francisco Antonio de Magalhães Laranjeira, who between them invested in new control systems and buoys, etc.

“This has been very good news for both terminals and the port as a whole,” enthused Carneiro. He is also optimistic that Brazil – which has kept working throughout the pandemic would ride through the pandemic crisis and register a 10 per cent increase in container throughput, with imports picking up 15 per cent over 2020 and exports (already strong from last year) rising by around five per cent.

8 Pandemic and exchange rate pain is hurting higherrevenue imports at MultiRio, but overall volumes are being boosted with MSC bringing transshipment

The Deal with MultiRio & MSC MSC’s port terminal related company, Terminal Investment Limited (TIL), signed an agreement with Multiterminais to take a 50 per cent share in the operations of one of the two berths of MultiRio, the equivalent to 25 per cent of the whole operation.

Luiz Henrique Carneiro, the President of MultiRio, says the Special Company Participation, or SCP, is very similar to a joint venture and has benefits for both parties.

MSC has the security of knowing that it has a dedicated berth for its vessels in the East Coast South America trade lanes and MultiRio is guaranteed regular liner calls and volumes.

“We have been providing services for MSC since we started container operations back in 1998 and more recently we made a partnership with TIL for half of our terminal and it is working out very well for both of us,” said Carneiro, who is keen to emphasise that neither TIL nor MSC had bought shares in MultiRio, and that it was “just an operational joint venture”.

Part of the agreement is that TIL and Multiterminais – which is 87.5 per cent owned by the Klien family and 12.5 per cent by the Gavea Investment Fund – will share the cost of equipment and infrastructure investments in the terminal, such as with the

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

purchase of the new Super Post Panamax Gantry crane.

The Brazilian Monopolies Watchdog, Cade (Council of Economic Defense), took a close look at the arrangement as giving MSC, via TIL, “vertical integration” into Rio de Janeiro may have caused some monopoly issues.

However after looking at the percentage market share of the various competing carriers in 2017, Hamburg Sud group had 30-40 per cent, Maersk had 10 per cent, CMA CGM with 10-20 per cent and both MSC and Hapag Lloyd were deemed to have 20-30 per cent, Cade deemed there was no problem of a monopoly developing.

JANUARY/FEBRUARY 2021 | 23

TURKEY: CONTAINER HANDLING

MARMARA: PRESSURES BUILD Andrew Penfold considers how Turkey’s Marmara Sea container handling market has developed and future prospects including the critical issue of the balance between supply and demand

8 Asyaport has strong support from the 2M Alliance.

Transshipment volumes are expected to increase but so is penetration in hinterland markets

The Turkish container market has remained remarkably stable despite the COVID-19 pandemic, with total volumes handled stabilising at around 11.75 million TEU in both 2019 and 2020, as Figure 1 shows. Average growth has been around five per cent per annum in the past five years. Rapid increases in container capacity have been added in recent years, but there are questions over the future balance of the market.

Although box flows remain imbalanced in favour of imports, the country’s export position has benefited greatly from the weakening of the Turkish Lira, with the number of full export containers almost doubling in the past five years.

With the declining Lira imports have been under pressure.

The Marmara Sea terminals account for around 62 per cent of the total Turkish market, with this share relatively stable over the last fifteen years. The NW Marmara area is responsible for more than half of the containers in the region, but this share has slowed over most of the last decade as strong export growth has stimulated demand in the NE Marmara ports. More recently, the opening of the Asyaport terminal and increased transshipment volumes has seen renewed growth for the NW of the region.

Almost half of Turkey’s imports come from Europe and Central Asia, with Russia, China and Germany being the largest trading partners on the import side. East Asia only accounts for 20 per cent of imports, although the role of China is anticipated to accelerate in the next few years.

Around two-thirds of Turkish exports are destined for Europe and Central Asia, with medium sized vessels dominant on these trades. Full exports via the NW Marmara terminals have been declining. Currently, only a third of the region’s full exports are handled in Ambarli and Asyaport.

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The opening of Yarimca in 2016 changed the profile for full exports. At first the new terminal saw a rerouting of containers from Evyap but overall volumes are now driven by strong regional exports.

INCREASING DEEPWATER CAPACITY TERMINAL DEVELOPMENTS The availability of deep water capacity has seen an increase in transshipment in Marmara, with this sector expanding by around 73 per cent since 2015 to reach 2.65 million TEU. Marmara terminals are playing an increasing role beyond the Turkish hinterland and with continuing over-capacity this is likely to continue.

Ambarli currently comprises three terminals. Marport is operated by TIL (MSC’s terminal operating company) in partnership with Arkas. Local reports indicate that Arkas wishes to exit the terminal sector and is looking to sell its stake. There is clear scope to rationalise the terminal and to increase capacity. A merger with Mardas could offer further opportunities.

Kumport was taken over by China Merchants/Cosco in 2015 and is the focus of Cosco and partner volumes. Cosco states that by using a greater land area and moderninsing operations capacity could be lifted to 3.5 million TEU per annum.

Mardas is losing volumes and this is expected to continue.

The physical setup of the terminal makes operations challenging and the current owners are reported to be unable to agree the best approach to the modernisation process.

Asyaport is also operated by TIL and opened for operations in late 2015. It is currently focused on Black Sea transshipment, but local traffic is increasing in importance especially for Tekirdag and the surrounding Istanbul suburbs. Asyaport has

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TURKEY: CONTAINER HANDLING

THE MARKET BALANCE With so much capacity becoming operational in the past five years, utilisation levels in the Marmara Sea have dropped to an overall level of around 54 per cent. This is an unacceptably low level and clearly represents a degree of over-optimism from terminal investors. The result has generated – unsurprisingly – negative pressure on taris.

In NW Marmara area, capacity utilisation is slightly better at around 61 per cent, compared to the position in the NE and S Marmara regions, which is around 48 per cent and 44 per cent, respectively. These low rates have caused downward pressure on taris, but this impact has varied between subregions. Given the dierent hinterlands of each region this situation will continue.

There has been some limited recovery in average terminal utilisation levels since 2016, but the balance remains weak and this is especially diďŹƒcult for the largest capacity terminals. The overall impact of these conditions has been minimised for shipping line-controlled facilities, but even here there has been considerable pressure for terminal switching. Given the potential to significantly further increase capacity at limited cost – both for terminal expansion and by improved productivity – it seems certain that over-capacity will remain a structural concern in the region.

SHIPPING LINE STRATEGIES As always, strategies adopted by the container shipping lines are critical to the outlook for any market region and it is no dierent in the Marmara, as the following shows: 5 2M Alliance – Maersk and MSC control ample regional port capacity, with significant volumes handled at Asyaport and Marport. The 2M Alliance will continue to place regional transshipment at Asyaport. Moving forward, it is anticipated that as volumes increase and the size of vessels is steppedup, Asyaport will increase transshipment volumes and also progress the role of the terminal in the hinterland markets.

5 The OCEAN Alliance also has various options. Cosco has its major regional investments in Piraeus and Kumport. CMA CGM (Terminal Link), via its partnership with Yildirim Group, has interests at Yilport, but no direct interests in the

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Supply/demand pressures are already severe in Marmara – any major contraction in demand will push these into negative territory

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further expansion potential by developing a proposed dry port and extending the main quay to the south. With further cranes, capacity could reach 2.5 million TEU per annum.

Yarimca was opened by DP World in late 2015 in NE Marmara. In 2017, Yarimca’s volumes increased strongly and have since continued to expand. The greater part of the DP World terminal’s volumes is driven by locally sourced exports.

Derince opened a dedicated container terminal at the end of 2019. In the first year volumes were estimated at around 25,000TEU, but it is expected that throughput will have exceeded 100,000TEU for the full-year 2020, with MSC the dominant customer.

There has been much discussion concerning the development of a new canal to bypass the Bosporus. This will involve the development of new container terminals and radically modifying the regional position. It remains a longerterm project and will need full support from the Turkish government to proceed.

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European side of the Marmara market. It should be noted that the long-term status of the relationship between CMA CGM and Yildirim Group remains uncertain.

5 THE Alliance has limited involvement in regional container stevedoring. The grouping has a more limited role in these trades and uses generally smaller vessels. These ocean carriers combine a call at Ambarli with use of Yarimca to handle the distinct European and Asian markets. The group also serves the Black Sea with discrete direct services.

Until THE Alliance volumes justify the deployment of much larger vessels this pattern seems set to continue.

It is likely that non-aďŹƒliated services will continue to serve both Ambarli and Asian Marmara ports for European and secondary deepsea trades. The degree to which feeder and shortsea containers can be combined on the same services will be an important issue and operators such as Arkas will continue to primarily follow the large deepsea alliance groups.

8 Figure 1: Total Turkish Container Demand Since 2000 (‘000TEU)

MACRO-ECONOMIC RISK Growth in the Marmara Sea region has been stimulated by loose economic policy in the past few years and the global uncertainties stemming from the COVID-19 crisis remain unresolved. Turkey may well have minimised a severe recession in 2020, but this has been driven by a credit surge based on low interest rates.

This has seen a worsening trade imbalance and downward pressure on the Lira. Given the longer-term record of the Turkish economy there is a structural risk to financial stability.

Recent moves to increase interest rates may well signal an awareness of the need to address these issues.

However, the chances of a hard landing for the economy in 2021 and 2022 remain high. The risk to Turkey’s financial stability is great and the outcome will depend on investor confidence and policy continuity. Notably, external debt is very high and foreign currency reserves very low.

KEY CONCLUSIONS Terminal investors have banked heavily on a continuation of the economic growth noted in the past ten years. However, the position was already weakening in 2019 and the IMF is projecting a contraction of at least five per cent in GDP for 2020. Supply/demand pressures are already severe in Marmara – any major contraction in demand will push these into severe negative territory. While the upside for Turkey is strong, the downside looks acute.

About the author: Andrew Penfold is a leading industry analyst with over 35 years of in-depth, specialist involvement across the ports and shipping industry on a global basis.

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

JANUARY/FEBRUARY 2021 | 25

WATERWAY SOLUTIONS

COMBINING PAST AND FUTURE Richard Crowther, Associate Maritime Engineer of consultancy firm WSP, asks if historic waterways combined with vessel automation, and in some cases integrated vessel/berth design, hold the key to unlocking effective supply chain solutions?

8 DP World’s fully autonomous security boat. Does this type of innovation signal a potential revolution in inland and coastal shipping?

The reliability and efficiency of the supply chain is essential in maintaining the standards of living and levels of accessibility the general population is accustomed to enjoying. Meeting the expectations of the ever-demanding global consumer is a challenge exacerbated by population growth, congestion, limited investments, environmental pressures and aging equipment.

Historically, investment in maritime solutions has focussed on port infrastructure spending, creating larger, higher capacity and more efficient terminals. In doing so, cargo terminals have moved further away from populated city centres, driven by land availability, rising costs, ease of access and environmental issues. However, with this shift comes the demand for reliable connections to the hinterland, which are usually road or rail based. Simultaneously, however, road and rail transportation are also becoming more congested and subsequently contributing to deteriorating air quality and rising carbon emissions – leaving us with the responsibility to look for greener, cleaner and healthier alternatives.

WATER FREIGHT CONNECTIONS With water freight already established as the most costeffective way of transporting goods around the world, we must question why it is not being more commonly used for local distribution within countries, particularly in densely populated areas where last mile delivery is more challenging.

Major European ports, such as Rotterdam are already transshipping large volumes of cargo onto barges, moving goods along the Rhine to destinations in the hinterland, including as far away as Switzerland, without requiring landbased transport systems. Electric barges, or ‘Tesla ships’ are also being developed, suggesting that this trend holds some weight. Cargo that is less sensitive to delivery time (e.g. nonfoodstuffs), can afford this slower yet more efficient transportation solution.

While the concept of increasing the modal split towards

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river and canal transportation is less applicable in places like the Middle East and similar geographic regions, coastal services provide the same advantages. Again, this concept already exists in a form, with feeder services already moving cargo from large port facilities to smaller ports, albeit on a much larger scale, with bigger feeder vessels serving smaller ports. In the United Arab Emirates, for example, DP World’s Unifeeder regional trade solutions can deliver as far afield as India, giving access to a wider customer base. Similarly, the latest feeder service to be announced by Abu Dhabi Ports’, Safeen Feeders, further underlines that this concept is becoming a more critical component of supply chain nodes in the region overall.

These feeder services are utilising larger vessels, but in coastal waters where the sea is relatively calm, such as the Red Sea or the Arabian Gulf, coastal barges or smaller feeder vessels may well be a viable solution.

WATER FREIGHT FOR THE FUTURE By focussing on the development of smaller water-freight logistics solutions, technological developments, which are currently not suitable for the large ocean-going container vessels, can be looked at in more detail. Shipbuilders are attempting to develop the world’s first zero emission, autonomous container feeder vessel. These fully electric and, in some cases, autonomous container vessels have been estimated to reduce diesel-powered truck transport by around 40,000 journeys per year, per vessel.

In fact, autonomous vessels are already in operation in the Middle East, with DP World launching autonomous security boats in 2020. These can be remotely controlled from a central control room, allowing them to function day or night.

With container terminals and portside equipment becoming more automated, it is not an inconceivable step to see largerscale, automated cargo vessels come into operation within the next decade.

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WATERWAY SOLUTIONS

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Efficient and highly integrated vessel and terminal operations are not just a possibility, they are a probability With autonomous mooring and berthing systems already in operation, the berthing of these vessels in a cargo terminal should prove to be technically feasible. These systems, combined with autonomous cargo handling, could allow the entire cargo handling operation to be undertaken automatically. Operational efficiencies and significant safety improvements are also envisaged.

To facilitate a seamless transfer system for goods, careful planning and design is essential to control the interface between a port and a vessel. From an engineering standpoint, one solution may be dedicated infrastructure design. Rather than providing a length of quay that permits berthing along its entire length, the design would be for a specific vessel type. This may be a new concept for container terminals, which are designed for a range of vessels, owned and operated by parties that do not necessarily have an interest in a port. An example of this concept can be seen at ferry terminals, where the vessel owner/operator is often the terminal owner/operator too, thus allowing infrastructure and vessels to be designed to perfectly complement each other.

Scandlines in Denmark and Germany, is a good example, developing port infrastructure facilitating automated mooring and berthing, and therefore extremely rapid loading and discharging of ro-ro traffic and overall turnaround time.

COMPELLING SOLUTION Efficient and highly integrated vessel and terminal operations are not just a possibility, they are a probability. With major operators expanding capabilities in the wider logistics sector,

including feeder services, a look to transport modes of the past could spark a new era of fully integrated, autonomous transshipment services and vessels operating before the turn of the next decade.

As cities and roads grow more congested, resulting in current modes of freight transportation grinding to a literal halt, utilising existing rivers, canals and coastal routes could offer a compelling solution to transport goods efficiently, autonomously, and intelligently. In turn, this could ultimately help society navigate the future and leave logistical and environmental challenges behind.

8 Scandlines has taken the approach of developing port infrastructure to facilitate automated berthing and mooring – another step in a potential automated supply chain

8 Richard Crowther is an Associate Maritime Engineer, based in Dubai for WSP Middle East 8 The Yara Birkeland now under development will be the world’s first fully electric and autonomous container ship, with zero emissions

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JANUARY/FEBRUARY 2021 | 27

USA: PORT PLANNING

INTEGRATED PORT PLANNING Ann Moore, 2020 Port Chair of the Port of San Diego, California, highlights the new integrated port planning process adopted by the port and how this is progressively delivering greater benefits to all stakeholders

8 The Port of San Diego plans to create a dedicated truck route or ‘haul road’ one of a number of innovative solutions that have flowed out of the new integrated planning approach

In Southern California, the Port of San Diego oversees water and land development on a coastline with a rich history and heritage. The port grew rapidly during the heyday of the commercial fishing industry, and over time has evolved with the changing economy. Once called the ‘Tuna Capital of the World,’ the port is now a maritime hub for bulk, breakbulk and automobile cargo – as well as a leading cruise destination and a sportfishing mecca.

The port’s 34 miles of coastal water and land spans the waterfront areas of five cities. This property has been developed gradually, site by site, since the early 20th Century.

Today, the port’s infrastructure represents billions of dollars of public and private investment – from marine terminals to hotels and marinas, along with public parks, boat launches and fishing piers.

However, port management face the modern-day challenge of balancing the redevelopment of aging facilities and infrastructure in a new economy with the preservation and improvement of public access and natural resources by optimising a diverse portfolio of uses and benefits.

To address this dilemma, in 2013 the Port of San Diego made the decision to plan holistically – committing to a multi-year, iterative process informed by public input at every stage. The port’s integrated planning initiative is now in its eighth year and has been extremely successful, with the process followed instructively by other ports.

PORT OF SAN DIEGO’S UNIQUE ROLE The port oversees a waterfront that is public land, held in trust for the people of California. Under California’s Port Act, the Port of San Diego is entrusted with developing this water and land for public benefit. Benefits to the public include the

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economic impact created by waterfront employers, and the port’s stewardship of water and land for fishing, boating, public recreation, coastal access and healthy ecosystems.

As public trust assets, this coastal water and land can be leased for long-term development but cannot be sold outright.

Under a contract termed a ‘ground lease,’ a business agrees to lease a specific area of land or water from the port. The business may invest in structures or other improvements, but at the end of the lease term, those investments revert back to the port.

The term of the lease varies depending on the level of investment needed for a business to be financially viable, and the lease term is capped at a maximum of 66-years – with this length of term generally for a large project such as a shipyard or hotel.

The Port of San Diego oversees nearly 800 business agreements for commercial and industrial business on the water and land it manages.

INCENTIVISING REDEVELOPMENT Aging tenant improvements and public infrastructure may need to be redesigned to meet evolving needs. It takes regular investment to keep the port’s public and private facilities in good repair.

The port has used its lease extension process to incentivise high-quality redevelopment and continuous reinvestment by tenants in their leaseholds before facilities and infrastructure reach the end of their useful lifespans. In addition, the port has leveraged its lease extension process to require tenants to invest in public infrastructure both on and off of their leaseholds.

While the lease extension policy has resulted in high quality development over the years, such redevelopment has taken place on a case-by-case and site-by-site basis.

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USA: PORT PLANNING Consequently, the Port of San Diego realised that it could be missing opportunities to leverage redevelopment as part of a port-wide strategy.

AN OUT-OF-DATE MASTER PLAN The Port of San Diego has a master plan to guide future development of land and water within its jurisdiction, but the document dates back to 1981 and is out-of-date in many ways. As a result, many proposed projects are required to seek an amendment to the Port Master Plan for a specific site. This adds time to the planning process – and the delay brings uncertainty, risk and expense.

Project-driven planning does not always facilitate portwide priorities such as supporting cargo and cruise business lines, and the development of new parks and other public amenities.

While there was broad agreement on the need for a more integrated approach to planning, the idea of planning for the whole port represented a major challenge.

That changed in 2013, when the Board of Port Commissioners launched an initiative to update the Port of San Diego Master Plan from 1981.

‘ONE BAY, RICH DIVERSITY’ The Port Master Plan is essentially the water and land use law for the Port of San Diego. It serves as the primary tool for balancing environmental, economic and community interests along the San Diego Bay waterfront – and its impact spans generations.

Looking at the bay as a whole, the port sought to plan ahead for new development, public access and preservation of natural resources, rather than sitting back and waiting for proposals for individual sites.

Instead of focusing this planning process on the land, the port started with its most valued asset – San Diego Bay itself.

Planners considered the port’s waterside resources first, and then moved inland to the land uses. This simple pivot allowed the port to prioritise water-dependent uses and was a paradigm shift in conducting long-range planning.

The Port of San Diego held hundreds of meetings and forums with the goal of reaching consensus on key values.

The process began with engagement with other governmental agencies, nonprofits, businesses and advocacy groups. Using the principle ‘One Bay, Rich Diversity,’ the goal was not homogeneity but rather a dynamic waterfront that recognises the diversity, character and culture of each unique area.

Port staff worked with leading consultants to develop a vision, guiding principles and a framework report.

At the same time, the port modernised technical elements of the 1981 plan, such as updating old paper-based maps to Global Positioning Systems (GPS)-based maps.

A CLEARER VISION AND SMART POLICIES With direction from the Board, the port developed a new set of policies designed to promote waterfront access, park space, recreation, environmental protection, future development, environmental justice, cargo and cruise business and other priorities.

A first draft of the revised Port Master Plan was released in 2019, drawing more than 4000 pages of comments – demonstrating the great public interest in this process. A second draft was subsequently released in 2020 and addressed areas of community concern, such as view corridors and the preservation of open space.

The revised draft garnered a largely positive reception and community activists praised the addition of thoughtful

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Looking at the bay as a whole, the port sought to plan ahead for new development, public access and preservation of natural resources, rather than sitting back and waiting for proposals for individual sites policies that would not have been possible without integrated planning.

The Port Master Plan Update includes several visionary proposals that arose from the integrated planning approach.

One key proposal would create a dedicated truck route or ‘haul road’ serving the port’s marine cargo terminals.

Currently, the two existing marine cargo facilities create industrial truck traffic through urban areas, which has spurred community complaints about noise, traffic and diesel fumes from the trucks. The proposal will combine a separated truck route for cargo haulers with timed signal, pedestrian and bicycle amenities. The innovative solution will remove a source of conflict for the port with local residential neighborhoods while supporting efficient cargo transport through an enhanced multi-modal corridor.

Another key proposal will provide great public benefits to the port, its neighbors and visitors, while enhancing the port’s cruise business. The Port Master Plan Update sets a vision for adding a new waterfront destination park and public pier in the cruise terminal area, known as the Embarcadero – a popular gathering and tourism area often called San Diego’s ‘front porch.’

Water mobility improvements are embedded throughout the plan, with the addition of ‘water-based transfer points’ for water taxi, ferry or recreational boaters.

Public access is a priority and the plan identifies additional areas for recreational open space and launching areas for paddle boards and kayaks. The plan also adds short-term public docking slips and increases moorings in the port’s popular low-cost anchorages.

RECOGNISED AS A MODEL PROCESS The Port of San Diego’s Integrated Planning initiative has been recognised as innovative, forward-thinking and inclusive, winning notable awards from professional planning, environmental, public affairs and architectural organisations.

In the past two years there have been honours from the American Association of Port Authorities (AAPA) and the California Association of Public Information Officials (CAPIO). ndergoing an A final version of the plan is currently undergoing der California environmental review process. Required under state law, the process typically takes about one year to assess any significant impacts of the masterr plan on environmental resources. mpletion The Port of San Diego looks forward to the completion of the planning process, which will culminate in a final nerations plan that promises to benefit the region for generations to come.

8 Ann Moore is 2020 Port Chair of the Port of San Diego, California and is recognised as a U.S. leader in land-use d-use planning, having been named by the American Planning nning Association as a National Planning Advocate. Moore rton, is a practicing land-use attorney with the firm Norton, Moore & Adams.

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

JANUARY/FEBRUARY 2021 | 29

USA: PORT DEVELOPMENT

ROLLERCOASTER RIDE IN CALIFORNIA The three container ports in California endured a challenging 2020. AJ Keyes looks at how they performed and priorities for 2021

8 San Pedro ports had a very strong second half of 2020, but it was not without problems, with queuing container ships still there in mid-January 2021. Investment is continuing, irrespective of COVID-19, with Long Beach opening Middle harbour in 2021

“Our terminals and dockworkers are moving an incredible amount of cargo as the San Pedro Bay ports continue to receive an unusually high number of container ship calls.

We’re working closely with our stakeholders and customers to find solutions,” explained Mario Cordero, Executive Director, Port of Long Beach, when asked to summarise the position at the port at the end of 2020.

However, he is quick to add the clear focus for the port otherwise in 2021. “Going forward, our mission will be business recovery and market share growth. This was our focus prior to COVID-19 and it will continue to be our focus as we recover from this pandemic.”

ROLLERCOASTER RIDE Gene Seroka, Executive Director, Port of Los Angeles says in his 2021 State of the Port of Los Angeles annual address that 2020 reflected, “Unprecedented times.”

Seroka expands on the challenges endured in 2020. “It was a year of great difficulty and for the container business it was the most erratic seen,” he explains, adding, “Everybody took a hit, from the lines through to the package vans. There were great hardships for many businesses.”

This is a view that resonated across the industry. “Without doubt, 2020 represented a rollercoaster ride for ports in California. The impacts of the COVID-19 pandemic saw volumes drop, only for them to then rebound strongly and cause serious congestion and the supply-chain to creak under the pressure,” highlights Dean Davison, Technical Director, WSP.

30 | JANUARY/FEBRUARY 2021

The numbers agree with this assertion, with port throughput highly erratic as Seroka at Los Angeles confirms.

“For year-to-date May 2020, we were down by -19 per cent, but a consumer buying surge in the second half of 2020 saw volume up by 50 per cent over the first half of 2019.”

This view is endorsed by the Port of Long Beach. “The COVID-19 pandemic drove down consumer demand for goods during the first half of 2020, leading to a -6.9 per cent decline in cargo compared to the same period a year earlier,” says Cordero, before highlighting how the second half of 2020 was a “different story” with a Q4 throughput record and demand up by 23 per cent compared to Q3 2019.

Bryan Brandes, Maritime Director, Port of Oakland confirms a similar development in North California too. “The Port’s growing import volume in 2020 is a trend that began in June and it remains to be seen how long this trend will continue.”

The key trend in the second half of 2020 was surging imports from Asia, resulting in congestion, especially across the San Pedro port terminal complex. It meant that Los Angeles clawed back almost all losses from H1 2020 to record 9.2 million TEU for the full year of 2020, confirming a subsequent drop of -1.5 million TEU compared to 2019.

Oakland confirms a similar result, with 2020 total container activity of 2.4 million TEU being a -1.6 per cent decrease from the 2019 figure of 2.5 million TEU. With a more balanced import-export trade, the port was able to offset weaker import demand with its export activity.

Long Beach, however, saw a more positive outcome in terms of container throughput. “The Port ended 2020, its

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

USA: PORT DEVELOPMENT busiest year on record, with 8,113,315 TEU moved, an increase of 6.3 per cent from 2019.” The port did experience fewer cancelled sailings than at Los Angeles during 2020 and this was undoubtedly a contributing factor to its full year results..

QUEUING SHIPS REMAIN The import surge and vessels arriving from Asia in the second half of 2020 has not been without problems. At the beginning of December, there were ships having to lay-up and await access to the San Pedro complex.

Davison explains further. “Local reports in Southern California in the second week of December 2020 confirmed there were up to 25 container ships waiting off of the coast of Southern California, with delays (at that time) of up to one week for the vessels to gain access to berths.”

Local reports in Southern California reported that this figure had risen to between 32 and 37 by the end of the second week of January.

In mid-January, informed sources reported that the shipping lines within THE Alliance and OCEAN Alliance were expecting the port congestion to “last until at least February 2020” with 35 ships still waiting at anchor at the end of week one, 2021.

The shipping lines also said that labour shortages were an issue. “Terminals are working with limited labour force numbers, and split shifts due mainly to COVID-19….with labour shortages affecting all terminals, and turnaroundtime for truckers, as well as inter-terminal transfers.”

Hapag-Lloyd provides a similar update, citing what it calls a “lack of terminal space.” The ocean carrier says, “All terminals [at Los Angeles/Long Beach] continue to be congested due to the spike in import volumes and [this] is expected to last until February.”

It is no surprise, therefore, that major shipping lines imposed congestion surcharges (in place from early December 2020), with additional costs of US$350 per container for 20ft, 40ft and 40ft HC units, applicable to all US inland point shipments, with provision of carrier haulage, pre-carriage or on-carriage door service over port rail ramp locations.

Davison explains why there is no relief on the horizon.

“Traditionally, shipping lines do cancel sailings during the Chinese New Year period to reflect lower Chinese exports.

However, as this is not going to happen in 2021, it will not give the terminals a chance to clear some of the congestion and waiting vessels. So the pressure will remain on ports (and supply-chain partners) with imports arriving and the lack of empties returning to Asia will continue.”

So, it is important to know what the ports are doing to improve the position. Cordero explains how the Port of Long Beach has initiatives in place. “We opened STOR (Short Term Overflow Resource), a temporary storage area for empty containers and a staging yard for full containers on vacant land in the Port. Our terminal operators and beneficial cargo owners are making good use of the temporary STOR facility, ty, which gives our retail partners greater control and flexibility ity of delivering containers to distribution centres and transload ad yards.”

This is not the only initiative underway at Long Beach. “We We are collaborating with our marine terminal operators to increase the number of truck moves that pair an export ort container delivery with an import container pickup appointment ent during the same visit. The Port and its container cargo terminal nal operators are working directly with truck drivers and customers ers to improve the appointment system and maximize the number ber of these dual transactions. Dual transactions will balance ce cy inbound and outbound cargo flow, and thus improve efficiency within the supply chain. Our goal is to ensure at least 50 per

cent of the Port’s deliveries are dual transactions, but some Long Beach marine terminal operators are already achieving more than 70 per cent day,” says Cordero.

This is an activity that Seroka confirms is a key target for Los Angeles in 2021 too. “Drayage is inefficient, we see a lack of dual transactions. While we want faster truck turnarounds, we do not want trucks leaving the port empty after dropping a box.”

MOVING INTO 2021 In terms of the key challenges as 2021 progresses, Cordero is very clear. “Our immediate challenge is to distribute the vaccine to the men and women who work on the waterfront.

This is vital to ensuring operations continue during the pandemic, as we do expect to be fully engaged in economic recovery throughout this year.”

In his State of the Port 2021 address, Seroka describes 2020 as being a time to be “responsible, resourceful and resilient” but says there is a need to “work smarter” in 2021.

He outlines specific actions to expand data tools and enable “smarter planning decisions for all stakeholders” of the port.

This is welcome news to one shipping line using the port (who wished to remain nameless) who felt that more needs to be done to resolve the current issues and better support their activities.

There is no doubt that ports in California remain committed to investing, despite the COVID-19 pandemic. “We expect over the next two-to-three years to continue to attract more customers and to improve our service and facilities. Due to be completed in 2021, Middle Harbor combines two aging shipping terminals into one of the world’s most technologically advanced and greenest container terminals.

The 304-acre facility operated by Long Beach Container Terminal will at full build-out have the capacity to process 3.3 million TEUs annually. Construction of the US$1.493 billion Middle Harbor Terminal Replacement Project began in 2011,” notes Cordero.

Seroka agrees. “Capacity is the key to competitiveness,” he said. However, he also challenged the US government as well.

“There must be a more balanced investment in infrastructure.

Federal investment in the West Coast trails other areas.”

LAST WORD The clear short-term objective of all container ports in California must be a return to stability, plus reducing the number of ships queuing, getting boxes out of terminals into the supply-chain, while balancing these containers leaving with boxes (especially empties) returning for export to Asia.

The first step is to increase dual-loads. Moving forward, the need for greater use of IT for better data flow and operations optimisation is clear and accepted by the ports, but the consideration to speed up introduction of automation and environmentally-friendly equipment will require the participation of all stakeholders.

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

8 Mario Corde Cordero, Executive Director, Dire Port of Long Beach B (left) and Gen Gene Seroka, Execu Executive Director, Port of Los Angeles

JANUARY/FEBRUARY 2021 | 31

INTERMODAL RAIL: AUSTRALIA

SHORT-HAUL RAIL ASSESSED A new study commissioned by the Australian Railway Association drills into the viability of getting short-haul rail working in conjunction with Australia’s main containerports.

Dave Macintyre examines the pros and cons

8 Short-haul intermodal rail, the pros and cons, under the microscope in Australia

Short-distance rail shuttles to and from Australian ports can be competitive with trucks but only if there are sufficient payload and backloads as well as prompt turnarounds.

This was the proposition put to delegates at the Australian Maritime Logistics Research Network (AMLRN) 2020 Symposium in November by Tristan Anderson, Market Sector Leader – Transport, GHD Advisory.

In an address entitled, “Impediments to rail mode shift to/ from ports – can we get more freight on rail?” Anderson pinpointed load factors plus quick turnarounds for the shuttles to drive up rail productivity, but also highlighted wider obstacles to the rail mode, such as railheads that are distant from the actual container terminal, even if they are on the port itself.

IMPEDIMENTS TO RAIL USAGE The Australian Railway Association (ARA) commissioned GHD Advisory to undertake research and analysis into the impediments to rail mode shift. This report was released just before Christmas and Anderson’s presentation was based on its findings.

The report examined the challenge for port rail from three perspectives – whether rail could deliver sufficient return on investment; whether there are regulatory and compliance cost disparities which disadvantage rail compared to road; and whether rail service levels can be competitive?

Anderson says the distance of travel to/from a port matters in terms of rail’s competitiveness – the common perception being that rail is only advantaged for long-hauls – but, interestingly, suggests the challenges commonly associated with short haul rail are not insurmountable. What matters most, he contends, is productivity, to offset the high fixed cost rail has in locomotives and wagons.

Consequently, short-haul rail can be productive if the load factor of wagons is high, if there are increased backloads, and quick turnarounds to ensure more return-trip cycles can be achieved in a 24-hour period.

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“LAST-MILE” CHALLENGES The challenges for rail shuttles include potential network limitations, port handling costs and “last mile” costs.

Rail gauges vary across Australia making connections complex. Long distance rail transports may entail transfer to short haul to complete the journey.

If the port railhead is not within the container terminal, the box needs additional handling from the railhead to the terminal, hence handling costs are often significantly higher for rail than road.

As a measure, the GHD analysis finds that an extra handling cost of $10 per TEU may require a 10% increase in train utilisation to retain the viability of rail as a workable option. Generally, however, any increase in port or terminal handling charges is seen to negatively impact on rail, effectively shrinking the catchment area in which a rail shuttle will be viable.

Anderson notes that these last-mile costs make land-use planning important for ports, particularly in preserving space for rail corridors and railheads that feed directly into terminals. He also suggests that ports could consider subsidies to encourage freight to move to rail, removing congestion from roads.

Transport regulators additionally need to review how rail is dealt with, to see whether there are regulatory imbalances between the rail and road modes and to encourage open access to infrastructure.

TIMELY FOR PORTS – ESPECIALLY MELBOURNE The ARA report comes at a time when several Australian ports are striving to increase the percentage of cargo being fed to their terminals by rail. There is a recognition that steps need to be taken to get freight off the road with all the practical and environmental benefits that this brings to metropolitan and other areas.

A notable example is the Port of Melbourne, where the Port Rail Transformation Project is moving ahead, albeit with discrepancies in terms of how different terminals will benefit.

The two Swanson Dock terminals, of DP World and Patrick

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INTERMODAL RAIL: AUSTRALIA

respectively, will benefit from nearby intermodal rail nearly a decade before the Victoria International Container Terminal (VICT) terminal on Webb Dock, which is the most modern of Melbourne’s container handling facilities.

Kirk Coningham, Chief Executive, Australian Logistics Council, recognises this omission, saying it is crucial for the Commonwealth and Victorian governments to preserve corridors and make investments permitting Webb Dock to also be connected to Victoria’s rail freight network – i.e. earlier than current plans envisage.

Brendan Bourke, CEO, Port of Melbourne Corp, recently told Port Strategy that the 2050 Port Development Strategy (PDS) and the Plan for Rail 2020 identifies a Webb Dock Freight Link as a key project to be delivered around 2030 to cater for the forecast increase in container capacity that will be serviced at Webb Dock. Early planning work has commenced in cooperation with the State Government in this regard. This plan is also aligned with the development of a second container terminal at Webb Dock, a project that requires extensive pre-planning to implement.

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

JANUARY/FEBRUARY 2021 | 33

CLEAN ENERGY

BATTERY POWER ON THE RISE

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The list of ports investing in electrical energy storage is rising dramatically.

It is an evolving technology with expanding options, Stevie Knight investigates…

Once considered impractical, batteries are now on course for price parity with automotive combustion engines in the next two years. This signals a wider trend line - even the farslower, and necessarily more expensive maritime market is seeing an eruption of multi-megawatt solutions.

Port management bodies have “become more interested in long-term investment in green technology” explains Anthony Price, Managing Director, Swanbarton, a UK-based energy equipment and solutions company. However, he adds: “It’s now more about how we actually make this stuff work for them.”

That in itself is quite a call – because when it comes to ports, batteries are being asked to answer a rather large challenge.

On the one hand, a swathe of facilities are beginning to take advantage antage of various renewable energy streams.

However, as Price’s colleague Clive Tomlinson says, “These do not always ways produce to order. There are always times when the sun does not shine, or the wind does not blow.”

DRAMATIC C AND DYNAMIC INCREASES At the same me time, the drive for cleaner handling equipment nt is likely to cause both dramatic and dynamic increases ncreases in electrical load. As the Port of Rotterdam dam notes: “We need to maintain the balance between the generation and the consumption tion of electric power – even though both parts of this equation are becoming gly difficult to predict.” increasingly antly, making sure Importantly,

34 | JANUARY/FEBRUARY 2021

there’s enough capacity in the grid, either for direct supply or renewables backup, can be an expensive business.

So, some are turning to battery solutions to fill in the gaps.

At the Port of Long Beach (POLB), a microgrid project includes a 300kW solar installation: energy storage and local sunshine promise to reduce pressure on the utility supply, benefitting both port and community by lowering peak costs and increasing infrastructure longevity.

But these batteries – developed by Schneider Electric – also have another role: the larger 746kWh stationary installation will protect the port’s critical response Joint Command and Control Centre. The other 567kWh mobile unit has a more varied remit, as during widespread outages the mobile battery can be towed out to stormwater pump stations and refrigerated container yards.

The scale of battery installations is also likely to increase in the next decade. By then, Long Beach “may be using four times more electricity than it is today”, say says Christine Houston, Sustainable Practices Mana Manager, POLB adding: “We think microgrids will eventually support all the marine terminals.”

BALANCING ACT Establishing the right battery-bas battery-based energy solution is inherently a technical an and financial balancing act. Tomlinson points out that, “batteries are still expensive” so ther there is a need to carve out appropriate applicatio applications and, as Houston explains, the port “has to find the sweet spot between wh what we can build and what would be useful”.

8 Batteries help power POLB’s Joint Command and Control Center (JCCC) as well as manage the renewable energy input

8 Brent Perry, CEO, of Sterling PlanB Energy Systems: “For cold ironing… very, very few facilities have the energy consistently available”

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CLEAN ENERGY All this requires treating the battery as part of the whole system, not an ‘add-on’. As Brent Perry, CEO, Sterling PlanB Energy Systems (SPBES), notes: “At first, the questions around energy storage were focused on simple functionality and safety. Now, customers are demanding that battery providers are part of an integration package or a system.”

It can be a cost-effective choice, says Perry. One particular location - originally quoted US$350m for new grid links installed a battery to cover backup redundancy, servicing downtime and non-fluctuating, high-quality power suitable for a laboratory, for a tiny fraction of the price. He further adds that this, “Allows shuffling energy from one place to another depending on demand”.

However, it is not just electrical distribution than needs consideration. For example, the location of POLB’s emergency command station was settled mainly because the building already tied together various power and communications connections. However, energy storage can also present considerable, apparently unrelated challenges: according to Perry, one island-based installation demanded hurricane-proof housing “so we had to get into building regulations too”.

WHERE TO START? For ports starting in this area, Tomlinson explains bill reduction is one of the first areas of focus. “You can make use of cheaper night-time tariffs, and grid companies will often pay you for turning your demand up or down when they snap their fingers.

Houston additionally explains that, “if you can shed loads when signalled by the utility company, it improves reliability, especially during peak periods”.

Cold ironing – shore power – is probably the next application that springs to mind, “but very, very few facilities have the energy consistently available or even at all without risking blackouts in the local community”, says Perry.

Containerised batteries could provide the answer – one option being floating them on a fleet of barges to the ship’s side: “You can effectively offer a microgrid on a short-term lease every time a ship arrives,” says Perry. Interestingly, SBPES’ CanPower is a ‘cartridge’ system, so the cells can be swapped out, avoiding the investment necessary for batteries large enough to service full daily cycles.

CLEVER CUTS COST Still, the investment calculation can be complicated. It is not just the power density (how hard it can punch) or the energy capacity (storage capability) that defines the investment. It is also lifetime and utilisation.

As Perry points out, a battery is a flexible unit able to yield a few times its rated power, if only for brief periods. So, if there’s an emergency back-up requirement, it’s possible to increase the draw as long as this has a defined, short-term constraint. That, in turn, allows more applications to be brought within the battery’s remit, although it needs intelligent handling.

This subject is being directly addressed by the Port Energy Systems Optimisation (PESO) project, funded by Innovate UK. Firstly, the business case has been assisted by a dualchemistry solution. “Lead-acid technology is great, it is environmentally sound, recyclable and it is cheap,” says Tomlinson and adds: “It’s good for long, slow charge and discharge, but it’s not so useful for sudden high rate cycling.”

Therefore, the battery brings together Yuasa’s lithium-ion cells as well as its standard ENL chemistry.

However, commercial viability means “hanging as much from it as possible,” from making the most of local renewables to smooth out the loads and even vessel recharging. That requires “fine-tuning the batteries to act like a storage tank... so it can serve a wide range of purposes,” says Price.

Tomlinson explains that all of this “can pull in different directions”. Therefore, the PESO team, with funding from Innovate UK, is developing a smart AI system that reviews the loads from minute to minute and makes the most economical use of the battery’s capacities.

Notably, Simon Powell, Operations Director of PESO organising body Marine South East, underlines how, “control technology is storage agnostic; the AI can be applied to different chemistries, so we are not wedded to a lithium and lead hybrid”.

This 250kWh capacity is initially “pilot sized” adds Powell, citing an application at the port of Portsmouth, UK in conjunction with the port’s solar installations. “But,” he notes, “we’ve been working with Yuasa, so it is designed for scaling up.”

“We are exploring possible activities: workboats, patrol craft and even domestic electric ferries,” adds Tomlinson: “Maybe even charging cross-channel-size ferries later on.”

Some energy storage installations are going the whole way and becoming independent of the grid. In Los Angeles, Pasha Stevedoring is collaborating on the Green Omni Terminal which features a 3MW photovoltaic installation on top of a warehouse, charging two “very big batteries” totalling around 2MWh, says Chris Cannon, Director of Environmental Management, Port of Los Angeles.

The amount of power is needed to support all the terminal’s handling kit, including yard tractors, heavy-duty forklifts and longerrange drayage trucks. Moreover, this microgrid “will allow operations to continue even if there’s a widespread power outage.”

And “that is valuable for the region in any emergency,” Cannon explains.

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Battery power for teminal operations

8 Pasha Stevedoring is using batteries and renewables to become completely grid-independent

The Omni terminal is not the largest of operations in Los Angeles, but the concept is expected to grow. “Our plan is that all the terminals will be electrified in 10 years,” says

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Cannon, and while there’s an array of approaches under investigation, “the other terminals are watching the battery developments very closely”.

The move toward decarbonisation is likely to change power generation modes even further, but it is difficult to predict what’s ahead – bio-gas, LNG, ammonia, renewable hydrogen and fuel cells are all in the frame – and it may well depend on what’s cost effective or easily available in any given location. Given this, batteries provide “the ideal network” says Price.

Flexible energy in ports offers a very diverse picture, but it does endorse one definite thing for sure - change. Price summarises the current position well: “We are now only limited by the scale of our imagination.”

JANUARY/FEBRUARY 2021 | 35

CONNECTIVITY: NEW FRONTIERS

CONNECTED TECHNOLOGIES Lynsey Jeffers, Smart Infrastructure Sector Lead – Ports UK, Siemens, explains how an integrated approach to planning, installation and service can help ports exploit their full energy efficiency potential

8 There is a big push for ships to ‘plug in’ to shore power to reduce noise, vibrations and emissions. It sounds simple to shift from diesel to electrification, but where is the power coming from?

Ports are naturally keen to promote the range and reliability of their connections, usually referring to the physical shipping services they handle. But in today’s increasingly complex, high-pressure, digitalised, carbon-conscious world, there is another kind of connectivity to consider – the emergence and optimisation of connected technologies.

While new technology is, of course, an accepted virtue these days, ports need to educate themselves on all the options available and pay attention to the entire package together with the individual detail. Applied intelligently, connected technologies can deliver huge efficiencies, cut costs, increase safety and push down emissions. They can also create new opportunities and even generate income streams.

To say that ports are facing major challenges is stating the obvious. Environmental pressures have never been so high, with tough new emissions regulations to meet, alongside the need in any case to keep the local community ‘on side’ by minimising noise, smells, pollution and other disturbances.

MATCHING AMBITIONS Supply chains and logistics solutions continue to become increasingly sophisticated – they rely on ports and terminals to match their ambitions. The urgent need to reduce emissions is despite the fact that ports are handling everincreasing volumes of cargo. Trade volumes may have slowed initially during the COVID-19 pandemic in 2020, there will soon be a rebound and a return to growth.

Digitalisation is gathering pace – in mid-2020, port and shipping industry partners launched a joint ‘call to action’ to accelerate the pace of digitalisation to cope with a post COVID-19 ‘new normal’. The World Trade Organization’s Trade Facilitation Agreement (TFA), which entered into force four years ago, has called for the streamlining and simplification

36 | JANUARY/FEBRUARY 2021

of trade procedures and processes, with the emphasis on IT and the elimination of paper. However, this cannot happen without reliable wi-fi and power.

SMART PORT AND CONNECTIONS Then we have the “Internet of Things”. A smart port is all about connections and the exchange of data – between equipment, infrastructure and people, to ease bottlenecks, predict congestion, improve efficiency, plan berthing, predict maintenance needs and optimise cargo flows. Consequently, connectivity has never been more vital.

Often the ‘understanding’ is that any ‘green’ moves must be made despite the commercial pressures, separated entirely from the need for efficient, swift and cost-effective services. That is a misunderstanding; all of these factors are connected. The right technology should unlock huge potential and create smart, responsive, low-carbon, lower cost port operations.

Perhaps the best place to start is with the ability to create a digital twin. Mapping the entire port operation helps to understand cargo flows, work out how and why operations are running the way they are, predict how they might change in the future, and optimise the way in which power and integrated technologies could drive the operations of the future.

All of this can be achieved, risk-free, before any investment in physical assets or equipment. Digital simulation of port operations can provide an ideal platform, either reducing CO2 by optimising individual energy sources, or making the logistical processes more efficient (fewer, shorter movements of containers). Siemens plant simulation and discrete event simulation software is ideally suited for this application, with many successful ports-projects over the past two decades.

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

CONNECTIVITY: NEW FRONTIERS UNLOCKING THE REAL MASS OF DATA There is plenty of talk about the mass of data generated by ports and terminals – but what is the point of that, if its value is never unlocked? Feeding real data from existing cranes into a simulated digital copy provides a ‘try before you buy’ opportunity to test cranes and software risk-free in all conditions, to pinpoint the best solutions and productivity options before taking the investment leap.

Bringing together the ‘real’ and the ‘virtual’ allows ‘virtual commissioning’, so that it is possible to explore and simulate what can be done, identify any errors and problems, and make sure the entire system works in the way you want, before the real thing.

In parallel, a full training simulator can enable operators to gain experience in the virtual world, training for routine and also emergency situations so they are well prepared in advance.

Automation and digitalisation are key to swift, safe, smooth cargo flows of some of the world’s busiest container terminals. At the Port of Singapore’s newest terminal, Pasir Panjang Terminal (PPT), 56 stacking cranes are handling containers without any physical human intervention.

Moreover, remote controls allow one operator to handle up to six cranes. Siemens worked with crane manufacturer ZPMC to engineer and commission the electrical and automation systems, which have provided benefits in productivity, safety and cost per move.

The yard cranes automatically move more than 30 containers per hour and the person controlling the equipment only has to intervene in exceptional situations. Again, connections are vital.

THE BIG PUSH On a global basis there is a big push for ships to ‘plug in’ to shore power to reduce noise, vibrations and emissions from vessels’ engines running in port, a mass shift away from diesel and towards electrification of equipment, vehicles and workboats. It sounds simple – but where is the power coming from?

There are numerous questions here. When multiple giant container cranes swing into action, is the grid capable of

‘‘

Supply chains and logistics solutions continue to become increasingly sophisticated – they rely on ports ts to match their ambitions providing the huge peak in power required? When the yard’s shuttle carriers need plugging in, is the power available?

What is this going to cost? Is the whole operation making the best and most cost-effective use of the power available? If the power drawn is being generated by fossil fuel at a power station miles away, is the whole effort merely shifting the carbon footprint elsewhere?

There are several relevant aspects to answer these question - the need for resilience and security of power supply, with certainty over costs, and the drive for more green power.

The COVID-19 pandemic has certainly made clear the vital role that ports play in keeping populations supplied with the food, fuel, pharmaceuticals, medical equipment and other items they need. Losing power and stopping operations just is not an option.

Siemens’ Totally Integrated Power (TIP) is designed to help port bodies exploit their full energy efficiency potential – on an eco-friendly basis, too. It is known that many ports are developing as important support hubs for the construction, operation and maintenance of renewable power projects, particularly offshore wind farms.

This requires investment in infrastructure to bring that power ashore and to where it is needed; it also requires new skills and is providing exciting new career opportunities. At the same time, ports are installing their own ‘green’ power sources, from onshore wind turbines to solar panelling.

An integrated approach – from planning and installation to services – helps ports and harbours exploit their full energy efficiency potential.

8 Lynsey Jeffers, Smart Infrastructure Sector Lead – Ports UK, Siemens

8 The need for resilience and security of power supply, with certainty over costs, and the drive for more green power are relevant aspects of ensuring sufficient connectivity

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JANUARY/FEBRUARY 2021 | 37

CONTAINER HANDLING

STS CRANES: INVESTMENT LED The Ship-to-Shore container gantry sector is experiencing a lower level of demand but the order pipeline and design innovations continue. John Bensalhia reports

8 Two STS units, part of a multi-crane order, delivered fully erect to Tanger Med Alliance by Liebherr

Driven largely by a desire to reduce operating cost, many container terminal operators have shown an interest in remote controlled and/or automated STS cranes. However, Juan Jodar, Director, Ship-to-Shore (STS), Kalmar, says that only a few global terminal operators are definitely going ahead with this. “It is not easy to move from a conventionally manned onboard operation to an automated or remotecontrolled operation in an existing terminal. Therefore, new greenfield projects are more likely to see automation from the very beginning. On the other hand, it is still not clear that the remote-controlled STS productivity can be higher than the conventionally manned ones.”

Jodar adds that it is expected that in the coming years the number of automated terminals will increase and consequently the number of automated STS cranes requested.

Svend Videbaek, Marketing Specialist, Konecranes, says that automation in STS cranes is increasing right through from operator assisted design features up to remote operation and semi-automated operation of dual trolley STS cranes. “The customer will have certain preferences related to their terminal operation, which will dictate the level of automation. Recent trends indicate that preference for STS automation is growing, and higher levels of automation will be built into STS cranes in the future.”

December 2020 announced Camco Technologies’ supply of its BoxCatcher crane Optical Character Reader (OCR) technology for five ZPMC STS cranes which are due for installation at Beibu Gulf Port Qinzhou, China.

The BoxCatcher technology will be used to register and identify containers during the loading and discharging of vessels. The cranes it is fitted to will be installed at the first automated container berths at the greenfield Qinzhou terminal.

38 | JANUARY/FEBRUARY 2021

Trevor O’Donoghue, Marketing Manager, Liebherr Container Cranes Ltd, agrees that demand for automation and remote control will continue for the foreseeable future with 2021 and beyond seeing continued growth in the utilisation of remote and virtual tools for operations, maintenance and commissioning. “Liebherr has been supplying semi-automated STS cranes for many years. 2021 sees this trend continue with Liebherr delivering advanced STS cranes with both automation and remote control,” he notes.

RIGHT BALANCE Interestingly, to achieve the right balance between crane weight and structural strength, STS crane suppliers have adopted slightly different approaches.

“Our approach is customer-centricity, where we do not jeopardise ease of maintenance or the crane operator´s comfort during STS operation, with the latter specifically related to structural strength and rigidity,” says Videbaek.

“With this in mind, we have developed an STS product platform that incorporates certain parameters that are paramount: key structural parameters being crane rigidity and durability against fatigue. This gives the customer smooth, predictable and precise behaviour of the crane, and fewer surprises when considering structural fatigue over time.”

“As cranes have increased in size, Liebherr’s unique design has evolved over the years to provide the optimum weight/ stiffness ratio whilst maximising crane size for operations and reducing wheel loads,” explains O’Donoghue. “The utilisation of high tensile steel and a lattice boom and beam in the Liebherr design ensures that the crane has inherent strength and stiffness, optimised weight with a low centre of gravity.

These design features are ideal for large cranes.”

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

CONTAINER HANDLING In the last few years, Kalmar has seen that most of the requests and tenders for STS cranes are for Malacamax or Triple E STS size cranes: cranes capable of handling and operating the biggest container vessels.

“The main challenge is that most of those cranes will operate at existing berths that are not always ready to receive these huge cranes due to the limitations of the maximum allowable wheel loads,” explains Jodar. “Therefore, the first issue is to comply with the maximum allowable wheel loads at the operating berth. This means that although the crane size is bigger manufacturers cannot increase the weight of the crane as much as we want.”

Jodar says that Kalmar thinks that it is a must to provide a crane with a very good structural behaviour: meaning that it can provide structure strength and rigidity at a good level (>0.7 Hz in trolley direction). “Our mono-box design helps us to achieve these goals (huge cranes, accurate wheel loads, rigidity). We can provide a comfortable, stiff crane design with virtually no deflection when in operation.”

LIFT AND SPEED With respect to lift and operational speeds under load, Videbaek says that there is a growing trend for higher hoisting distances and longer trolley traversing distances, which calls for higher operating speeds. “However, these parameters cannot increase indefinitely since yard operations can put an upper limit on quayside crane productivity. There is also a limit in terms of the physics of the gantry steel structures of STS cranes. Konecranes carries out simulations for such cases, based on the specifics of the container terminal in question.”

O’Donoghue observes that STS cranes have recently undergone significant changes in outreach and lift height to keep pace with the evolving size of container ships. “Fifteen years ago, the majority of STS cranes were smaller with large megamax cranes only beginning to make their presence felt.

Today, cranes with outreaches in excess of 70m and lift heights well above 50m are commonplace. Increased speeds, particularly in hoist and trolley are noticeable.”

Although STS cranes have been getting bigger, hoist and trolley speeds have kept at the same level for Kalmar Super Post-Panamax STS cranes (19-22 rows) and Malacamax/ Triple E STS cranes (>23 rows).

“The main reason is that these speeds are already quite high and there is a crane operator onboard in the cabin,” explains Jodar. “In practice, the operational speeds are lower as the operators ask to limit them or to define flatter acceleration ramps. So, there is in fact a gap between the lifting/trolley speeds and the operational ones.”

Jodar adds that this gap can be reduced when considering semi or automated STS cranes. “In these cases, there is no operator on board, so the automatic part of the cycle can be performed at maximum acceleration and higher operational speeds.”

“Another reason for not increasing the lifting/trolley speeds is that normally STS cranes are not the bottleneck of the container operation at the terminal, so there is no reason to specify and request higher speeds for the STS cranes.”

ENVIRONMENTAL IMPACT REDUCTION From the point of view that they are electrical machines fed by electricity, STS cranes are environmentally friendly, with technology helping with more efficient electrical engines, drives, and control systems that provide a more accurate power consumption for an STS crane.

“Grease and oils are still needed in STS cranes, but their use can also be reduced with a good design,” says Jodar. “In

Kalmar, we keep hydraulics to the minimum. We design in a way that secondary functions are electrically driven, instead of hydraulically driven, as much as possible. Oil usage can also be reduced by implementing a centralised and automatic lubrication system which provides the necessary oil quantity in the needed points of the crane installation.”

“Through digitalisation, we offer advanced tools to improve the productivity, serviceability and lifetime of our STSs,” says Vidbaek. “The environmental impact can also be reduced by applying modernisations and retrofits to existing equipment.

One of the most significant environmental impacts of the STS crane is its energy consumption during use. We’re also always looking for more eco-efficient solutions to make maintenance easier, by minimising the need for hydraulic systems for example, and in some cases by lowering the noise produced by the crane with the aid of special technologies.”

The Liebherr STS lighter weight crane design, with a lattice structure boom and beam, has a reduced wind sail area, meaning that the crane subsequently uses less power during operations. O’Donoghue further notes: “Airtight sealed members are utilised during the manufacture of the portal structure reducing overall paint requirements. Liebherr designed, fully regenerative drives with an active front end and liquid cooling allow for optimum power efficiencies/ regeneration and a much quieter drive. This helps reduce AC power requirements and noise emissions, delivering industry leading power consumption per box move.

“The Liebherr mechanical anti-sway, supplied with all cranes, leads to improved efficiency and reduced power requirements per cycle, whilst LED lighting as standard, further reduces operational costs,” he says.

8 Sector rationalisation is also underway with Kalmar and Konecranes joining forces

FUTURE PROSPECTS Looking to the future, Jodar notes: “As the coronavirus issue will continue to prevail at least in the short-term, we expect that the market will recover somewhat from the year 2020 figures, but probably not as much as one might hope for. We will have to wait a little bit more to see if the terminal operators re-activate their investment plans within this year or not.”

O’Donoghue concludes: “Our observation has been that in some cases, the pandemic has caused a degree of caution when it comes to investment decisions. We continue to efficiently deliver cranes, sign new contracts and work with our clients through the challenges and uncertainty in the market.

“In 2021, we are certain that more stability and certainty will return and this, in turn, will drive more investment decisions.”

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

JANUARY/FEBRUARY 2021 | 39

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SHIP-TO-SHORE GANTRIES: PERFORMANCE MEASUREMENT

STS’ KPIs THAT WORK A new methodology of applying key performance indicators to ship-to-shore container gantry operations offers dual benefits. AJ Keyes highlights the study’s principal findings A newly-released Study* identifies the primary areas where key performance indicators (KPIs) can be applied with ship-to-shore (STS) container crane operations in order to optimise performance and reduce costs.

The Study – has been co-authored by Jung-Hyun J (Department of Maintenance and Repair, Hutchison Port Busan) and Sihyun Kim (Department of Logistics, Korea Maritime and Ocean University) and was released in December 2020.

APPROACH, DATA AND FOCUS Data was collected from 14 STS cranes located at Hutchison Korea Terminals (HKT) between 2013 and 2018. It was then collated into 19 different crane performance calculations and applicable key measures such as total time for preventative maintenance, emergency maintenance, time taken for twistlock activities, hoist/trolley actions and all other elements of the container-handling cycle by an STS unit.

This information enabled key outputs of the actual time worked by each crane. Allied to this was the man-hour component, namely the amount of work performed by the average worker in one hour, which, in turn, allowed the calculation for an estimation of the total amount of uninterrupted labour required to perform a task. Man-hours excluded the breaks that a crane operator takes such as rest, refreshment, etc.

‘‘

Dispatching manpower by predicting resource requirements correctly will deliver cost savings The content and conclusions of this Study are focused in two key areas – what the authors regard as the “Representative and the most import indicators for container terminals,” namely: 1. MTTR – Mean Time to Repair – this KPI indicates the efforts by the engineering department at a container terminal to reduce this element. The Study authors underline that this requires technical workers to have the requisite expertise and skills, and general grasp of the characteristics of the equipment on a crane in ongoing use.

2. MMBF – Mean Movements Between Failure – this KPI measures how much time and resource the engineering department invests in preventative maintenance.

MAN-HOURS AND MAINTENANCE RISING The authors note that a key industry-wide trend is an increase in the maintenance requirement and man hours spent in conjunction with STS cranes. This is attributed to a combination of a rise in heavy load operations and increased volume/throughput at terminals.

In terms of the assessment approach, the Study explains that it undertakes a calculation of both MTTR and MMBF based on hours accumulated through the motion of a crane, without the “intervention of humans” which it then says allows a better understanding of the time spent on equipment maintenance.

POTENTIAL BENEFITS – COST SAVINGS In terms of the potential benefits that can be derived as a result of applying the KPIs, the Study concludes that these are obtainable on an individual container terminal basis.

“If each container terminal produces results on a monthly basis by setting target figures for MMBF and MTTR, it could identify from month to month decreases in MMBF based on actions taken.

“MTTR would identify which areas have experienced multiple failures and this allows corrective action to be taken so that there will be no disruption to the vessel operation and the intended productivity of the vessel operation,” explain the authors.

In addition, it is pointed out that appropriate placement of manpower can ultimately lead to cost-savings. They underline: “MMBF and MTTR are directly related to manhours. Dispatching manpower to the right place where preventative and/or emergency maintenance is required, backed by data analysis correctly predicting resource requirements, ultimately facilitates cost savings.”

Increased output as a result of increased crane reliability due to effective maintenance represent a winning combination for terminal operators.

8 A new study plots the optimisation of KPI usage in conjunction with STS container cranes

Citation: Jo, J.-H.; Kim, S. *Key Performance Indicator Development for Ship-to-Shore Crane Performance Assessment in Container Terminal Operations. J. Mar. Sci. Eng. 2020

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

8 Data was collected over five years from 14 cranes operating at Hutchison Korea Terminals

JANUARY/FEBRUARY 2021 | 41

PORTSTRATEGY INSIGHT FOR PORT EXECUTIVES

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YOU CAN DEPEND ON BIG RED! 3690 N Church Avenue Louisville, MS 39339 USA +1 662 773 3421 CONTACT?SALES TAYLORBIGRED COM www.taylorbigred.com

14/07/2020 10:56

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

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Scheldedijk 30, Haven 1025 2070 Zwijndrecht, Belgium +32 3 250 52 11 info.deme@deme-group.com www.deme-group.com

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

E LECTRIFICATION SOLUTIONS

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

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

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Cimbria Directory.indd 1

LASE Industrielle Lasertechnik GmbH

D REDGING EQUIPMENT

Faartoftvej 22 7700 Thisted, Denmark Tel: 0045 96 17 90 00 cimbria.holding@agcocorp.com www.cimbria.com

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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.

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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.

C RANE COMPONENTS

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A/S Cimbria

Over a century of port industry experience. A strategic group of ‘best in breed’ people, partners and solutions, capable of delivering holistic, turn-key, advanced port-centric solutions for any brown and greenfield terminal around the world.

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27/01/2021 11:29

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.

When experience really does matter!

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Taylor Machine Works, Inc.

Tel.: +49 2521 240 E-mail: info@beumer.com Web: www.beumer.com

Beumer Directory Jan 2021.indd 1

D REDGING

Overland Conveyor Pipe Conveyor Stacker & Reclaimer Shiploader

Gemini House Cambridgeshire Business Park, 1 Bartholomew’s Walk, Ely Cambridgeshire CB7 4EA England, United Kingdom (UK) Tel: +44 1353 665001 Fax: +44 1353 666734 sales@samson-mh.com www.samson-mh.com

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The BEUMER Group is an international leader in the manufacture of bulk material handling systems:

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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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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P4.1 e-chainÂŽ Energy chain with optional intelligent wear monitoring for double the service life, travels of up to 1.000 m, speeds of up to 10 m/s and fill weights of up to 50 kg/m. igusÂŽ GmbH Spicher Str. 1a D-51147 KĂśln, Germany Tel. +49-2203-9649-0 info@igus.eu igus.eu/P4.1

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

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

JANUARY/FEBRUARY 2021 | 43

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.

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Tel: 00441926611700 enquiries@blokcontainersystems.com www.blokcontainersystems.com

01/02/2021 13:12

MRS Greifer GmbH

Künz GmbH

Orts GMBH Maschinenfabrik

Liebherr-MCCtec Rostock GmbH

Over 40 years experience constructing and manufacturing a wide range of grabs, including electro-hydraulic grabs (with the necessary crane equipment) radio controlled diesel hydraulic grabs, 4, 2 and single rope grabs all suitable for bulk cargo.

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.

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

CAMCO Technologies NV Visual- and Micro Location- assisted process automation solutions for container, ro-ro and rail terminals worldwide. Accurate crane, gate & rail OCR systems and Gate Operating System software helping terminals accelerate terminal and gate activity.

Technologielaan 13 Leuven, Belgium +32-16-38-9272 +32-16-38 9274 info@camco.be www.camco.be

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!

Sany Europe GmbH SANY offers reliable quality container handling trucks.

Benefit from the experience of over 4,000 reach stackers build over the last 12 years, with up to five year full machine warranty.

Sany Allee1 D-50181 Bedburg Tel: +49 2272 90531 100 Email: info@sanyeurope.com www.sanyeurope.com

Visy systems reduce VISY Oy expenses, optimize safety & security, and VISY takes pride solving via increase throughputin capacity operational problems,Our specialising process automation. singlein gate automation and system access platform gate operating control solutions in ports and and OCR solutions manage all terminals.

Their solutions cargo, assets & personnel streamline via processes resulting movements quay, rail or road in saving money and to keep operations moving. increasing productivity.

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

Tel: +358 3 211 0403 Email: sales@visy.fi Web: www.visy.fi/

ShibataFenderTeam Group ShibataFenderTeam is one of the leading fender manufacturers with 50+ years of group experience and an extensive global network.

As a specialist for customized fender solutions, they focus on vertical integration with in-house manufacturing and full scale testing, offering high quality products at competitive prices.

SFT offers the full range of marine fender products. info@shibata-fender.team www.shibata-fender.team

S HIP UPLOADERS

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

Liebherrstraße 1, 18147 Rostock Rostock, Germany +49 381 6006 5020 maritime.cranes@liebherr.com www.liebherr.com

20/01/2021 10:50

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Founded in 1932, Künz is now the market leader in intermodal rail-mounted gantry cranes in Europe and North America, offering innovative and efficient solutions for container handling in intermodal operation and automated stacking cranes for port and railyard operations.

I T PORT AUTOMATION

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.

4F., No. 298, Yangguang St., NeiHu Dist., Taipei, Taiwan +886-2-8797-1778

M ARINE FENDERS

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

Verstegen Grijpers BV

RuggON is here to offer high quality and future-proof one-stop rugged computing solutions, ranging from rugged vehicle-mount computers, mobile tablets and data terminals, to similarly durable data-capture accessories, for a safer and more efficient automated port and terminal operations from quay, yard, gate, and all the way to warehouses.

RuggON_Directory_40x58.indd 1

Grabs of MRS Greifer are in use all over the world. They are working reliably and extremely solid. All our grabs will be made customized.

Besides the production of rope operated mechanical grabs, motor grabs and hydraulic grabs we supply an excellent after sales service.

Talweg 15-17, Helmstadt-Bargen 74921, Germany Tel: +49 (0)7263 - 91 29 0 Fax: +49 (0)7263 - 91 29 12 info@mrs-greifer.de www.mrs-greifer.de

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

I T PORT AUTOMATION

G RABS

Fogmaker Directory.indd 1

BLOK Container Systems Ltd

I NSURANCE

Tel: +46 470 77 22 00 info@fogmaker.com www.fogmaker.com

H ANDLING EQUIPMENT

F IRE SUPPRESSION SYSTEMS

Fogmaker develops, manufactures, and markets fire suppression systems for engine compartments with high pressure water mist. Fogmaker is a market leader for automated fire suppression systems with 200,000 installations in more than 50 countries since 1995.

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

With thousands of installations worldwide, our machines handle your raw materials from forests, fields, quarries and mines, maintaining critical supply lines for manufacturers, mills, power plants and ports. www.bruks-siwertell.com sales@siwertell.com service@siwertell.com

Siwertell Directory - Ship Unloaders Category.indd 12/05/2020 14:12 1

44 | JANUARY/FEBRUARY 2021

Certus copy June 2020.indd 1 Fornew the latest news and

11/05/2020 11:06 analysis go to www.portstrategy.com/news101

PRODUCTS & SERVICES DIRECTORY

+44 1329 825335 www.portstrategy.com

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.

Prinses Margrietplantsoen 33, 2595AM, The Hague, The Netherlands Tel: +31 (0) 702-051-709 Email: sales@solvosys.com www.sovosys.com

TGI Maritime Software is a Terminal Operating System editor and integrator specialized in the support of Small to Medium Terminals. Its expertise is built on 34 years of experience within the maritime sector. TGI provides comprehensive services to its customers all along their projects. OSCAR TOS and CARROL TOS have already been successfully handled by 40 container and RoRo terminals worldwide.

Tel : +33 (0)3 28 65 81 91 contact@tgims.com www.tgims.com

T RACTORS

Contact Tim Hills or Hannah Bolland

Navis understands that as ships get larger and operational processes become more complex - efficiency, collaboration and productivity are essential. As a trusted technology partner, Navis offers the tools and personnel necessary to meet the requirements of a new, and ever-evolving, global supply chain.

World Headquarters 55 Harrison Street Suite 600 Oakland CA 94607 United States Tel: +1 510 267 5000 Fax:+1 510 267 5100 Web: www.navis.com

Solvo Europe B.V.

T ERMINAL OPERATIONS SYSTEMS

Port Strategy Directory

The Brain of Logistics With more than 30 years experience in IT Solutions and Business Operation Consultancy DSP offers a large portfolio of professional services and products to support terminal operations processes and system.

DSP Data and System Planning SA Via Cantonale 38 6928 Manno, Switzerland Tel: +41 91 230 27 20 Fax: +41 91 230 27 31 info@dspservices.ch www.dspservices.ch

T ERMINAL OPERATIONS SYSTEMS

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T ERMINAL OPERATIONS SYSTEMS

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

Hochhäuser Str 18 97941 Tauberbischofsheim, Germany Tel: +49 9341 8990 sales@mafi.de www.mafi.de

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POSTSCRIPT A LABOURED PATH

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The price of doing the same old thing is far higher than the price of change Bill Clinton

It is interesting that during a time when there was a clear need to “pull together,” 2020 featured a number of high-profile port labour strikes – in Australia, Argentina, Canada, France, Portugal amongst others.

Further, it is notable that the majority of the strikes were nation-wide and in one or two cases have the potential to rear their heads again.

To strike in protest at employment conditions, pay rates and other basics is, of course, a fundamental right given that the action is implemented according to the ‘rules of engagement.’ But with the powerful impact of COVID-19 during 2020 and the increased importance of maintaining efficient supply chains the scale of the action taken in certain quarters is surprising!

There have been several voices raised against the inappropriate nature of the timing of strikes – a prime example being Scott Morrison, Prime Minister of Australia, who commenting on the Maritime Union of Australia’s (MUA) strike action in key ports in the second half of 2020 said: “We cannot have the militant end of the union movement effectively engaging in a campaign of extortion against the Australian people in the middle of a COVID-19 recession. This is just appalling behaviour.”

He puts forward a strong argument – the MUA ‘s starting point for negotiations with three major stevedores – DP World (DPW), Patricks and Hutchison – was to ask for a six per cent wage increase per annum over four years with associated objectives such as improved rostering arrangements, minimisation of the casual workforce and increased superannuation arrangements.

This was clearly a ‘juicy ask’ too rich for the employers’ respective budgets and as things stand now the MUA has reached an accommodation with DPW regarding Enterprise Agreements for its Sydney, Brisbane and Melbourne terminals, and negotiations are ongoing with Hutchison and Patrick.

The Patrick negotiation also appears to signal that the MUA’s initial bargaining position was simply that ‘taking a position’ as part of a process designed to achieve a lesser result but nevertheless the one targeted.

When in October 2020 Patrick applied to Australia’s industrial tribunal, the Fair Work Commission (FWC), for a ban on all industrial action, the MUA responded with what it dubbed as a ‘peace deal’. Central to this was the proposition of a rollover of the existing agreement for two years with a 2.5 per cent wage increase per year and a commitment that there would be no industrial action for 12 months. Patrick countered this offer stating that if existing work conditions were to remain in place its annual wage increase offer would be 1.5 per cent.

ON BALANCE, FAIR? So, is it fair to say that the MUA leveraged the situation concerning COVID-19 to assist in achieving its goals?

On balance, this looks to be the case with diverse parties proffering this view and not least importers and exporters and trade representative bodies.

46 | JANUARY/FEBRUARY 2021

8 The Fourth Industrial Revolution presents challenges for labour but also opportunities

There is a recognition on the part of these entities that the MUA has a history of confrontation on the waterfront and is a union body permeated with militant elements who have no hesitation in leveraging more-or-less any situation to achieve its objectives.

This recognition, for example, is reflected in the concern that the Freight and Trade Alliance (FTA) and Australian Peak Shippers Association (APSA) have expressed about the possibility of further Protected Industrial Action. The FTA feels so strongly about this that it suggests the Federal Government should step-in and implement measures that will guarantee the reliability of the supply chain.

As a measure of comparison to the Australian industrial action situation, it is interesting to look at the mid-year strike that took place in the port of Montreal, Canada in 2020. As in Australia, the strike was essentially about workforce contract arrangements with rates of pay at the centre of this but also employee scheduling arrangements. The strike period, comprising periodic and permanent strike arrangements, ran from late July into the second half of August. At this point port employers and dockers agreed to a seven-month truce, to run up until March 2021, during which time the general view is that a new agreement will be reached.

This action was inherently shorter and sharper than the approach adopted in Australia. Arguably, it also had a much stronger justification for being launched in the first place in that dockers had been working without a contract since the end of 2018. Equally, it steered away from making the action highly political in character – a feature of the Australian action was the claim that employers were seeking to increase the use of casual labour and generally undermine the position of permanent dockers on a number of fronts. In effect, it was yet another occasion when the MUA adopted an entrenched position, one that takes no account of fundamental technological changes or new market requirements.

The latter position is what some call ‘a dinosaur approach.’ An approach that is manifestly at odds with getting the best out of the new era of the so-called fourth industrial revolution.

The bottom-line reality is, however, as Bill Clinton succinctly puts it: “The price of doing the same old thing is far higher than the price of change.”

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