Port Strategy June 2019

JUNE 2019 ❘ VOL. 1019

ISSUE 5

portstrategy.com

INSIGHT FOR PORT EXECUTIVES Championing the community | Step change in labour thinking | Port call progress | European highs and lows

CHINA’S BLANKETING EFFECT Pushback from the ‘spread of red’ on ports

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The international magazine for senior port & terminal executives EDITORIAL & CONTENT Editorial Director: Mike Mundy mmundy@portstrategy.com Editor: Carly Fields editor@portstrategy.com News Reporter: Rebecca Jeffrey rjeffrey@mercatormedia.com

VIEWPOINT CARLY FIELDS ❘ Editor

Fuelling confusion

Ports need to speak up if they don’t want to and can’t afford to offer a vast array of fuels to calling ships

A potentially revolutionary meeting took place in the hallowed halls of the International Maritime Organization last month.

Its Marine Environment Protection Committee met to thrash out how shipping is going to meet the IMO’s lofty aim of cutting carbon intensity from shipping by half by 2050, compared with 2008. While the outputs of this momentous meeting were somewhat of a damp squib – the Member States struggle to prioritise the order of importance of the emissionslashing proposals, let alone agree to them – the meeting still holds great relevance for ports.

Items on the agenda included consideration of a mandatory slow steaming policy for the worldwide commercial shipping fleet and the viability of a plethora of future marine fuels. With the incoming sulphur fuel limit entering into force in just six months, this last point is particularly pertinent. There is, as it currently stands, no one fuel fix for the commercial shipping fleet come January 1, 2020.

Ports can be certain that high sulphur fuel oil will still be needed by the ships that have invested in scrubbers – estimated to be about 20% of the containership fleet by the end of 2020. Low sulphur fuel will also need to be available, along with different lubricants and additives. But will there also need to be infrastructure in place in ports for liquefied natural gas supplies; installation of costly shore power plug-in points; storage and supply means for bio-fuels; and access to hydrogen?

TOO MUCH CHOICE There are very few ports that can fund and fit all the necessary infrastructure for this myriad of different fuelling options, and that’s not the full list of fuel options under discussion for shipping.

While ports are not legislated by the IMO, the decisions being taken at this and future MEPC meetings will have a profound effect on port viability as only those with deep pockets – and possibly little sense – would invest to meet every fuel eventuality. The rest may as well flip a coin and hope that they make the right fuel supply choice.

The expectation is for concrete proposals by 2020. Before these decisions are taken, shipping and the IMO must co-operate with ports to facilitate the transition. Governments need to be ready to open their wallets and fund research and development into technology to ensure viability. This shouldn’t be down to each and every port.

The UK Chamber of Shipping has asked the IMO to come up with guidance for three to four fuel types that ports worldwide will need to offer.

Even restricting the fuel choice to a maximum of four is a scary prospect for ports, especially if one of those turns out to be shore power, which is still prohibitively expensive for most ports and puts increased pressure on already overworked electricity grids.

Perhaps perceived procrastination at this most recent MEPC meeting should be seen as a blessing in disguise. Ports now have until the next MEPC meeting in March 2020 to step up and make their voices heard, either through their country representation at the IMO, or through nongovernmental organisations with a seat at the IMO table. Delay at your peril.

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CONTENTS

JUNE 2019

15

NEWS

8

15 COLUMNS

16 Police loss creates crime window

Call for reinstatement of dedicated port police to help tackle crime

15 Ditching fuel plans for good

18 AAPA urges ‘pause’ on harmful tariffs AAPA presses the US Administration to rescind a decision to hike tariffs on goods exported from China

10 UK ports need to reach higher UK ports need to continue to set themselves higher standards, the country’s shipping minister has said

12 Clear emission focus needed BPA urges that ports are kept front of mind in discussions of emission reducing options

Rotterdam’s 60-hectare ‘food hub’ development at the entrance to Maasvlakte is a laudable and novel concept

15 Welcoming winds of change Offshore wind preparations and support are buoying the US port industry

16 Heading for the rocks Online portstrategy.com 5 Latest news 5 Comment & analysis 5 Industry database 5 Events

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Ports will continue to see increased pressure from shipping lines as they try to keep costs down

FEATURES

35

22 Dream peddling of China’s BRI China has turned down the rhetoric on its global ‘connector’ scheme to overcome criticism of the project’s intentions

26 Building and sustaining community connections When ports focus on community engagement the benefits go both ways

30 Labour shortfall bites Ports must overcome old-fashioned thinking to ensure a viable workforce in the future

35 Overcoming increasing berth bottlenecks Port call optimisation projects have much to offer all parties involved in a cargo move, including ports themselves

49 Dealing with ups and downs Ports in Northern Europe are looking for new opportunities as they wrestle with near-term challenges

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JUNE 2019 | 5

THE STRATEGY

BRIEFS

POLICE LOSS CREATES CRIME WINDOW

Costa Rican port faces collapse The Costa Rican Pacific Ports Institute, Instituto Costarricense de Puertos del Pacifico (INCOP), has claimed that the Port of Caldera has effectively reached a point of collapse, with few options open to it under the existing operations contract. INCOP’s executive president, Juan Ramón Rivera, said that negotiations are underway, as are technical, legal and financial studies aimed at implementing improvements.

Since 2006, the port has been operated by Caldera Port Company as part of a 20-year concession. With seven years still to go, a longer-term extension is under review, as are the terms and conditions of the concession, which only allows the concessionaire to provide handling services, but not make improvements. It is estimated that the port needs around $150m for immediate civil works, with a further $100m within five to six years.

Mixed bag for ICTSI ports The chairman and president of ICTSI, Enrique Razon, Jr, has said that their ports face mixed prospects in 2019.

Speaking in an interview for Bloomberg Television, Mr Razon said that there appears to be “slowdown across the board” in both the company and its terminals. “Overall, we’re looking at growth in the first four months [of 2019] of low single digits across the board,” he commented.

According to Mr Razon, although growth is being observed in Mexico and Africa, in some areas of Africa growth has slowed. Furthermore, a slowdown has hit the Middle East, while growth in Asia and the Philippines is in the low single digits. Latin American growth (with the exception of Mexico) was said to be “pretty slow as well”.

6 | JUNE 2019

8 Seattle has been highlighted for its robust port police force

Canadian ports need dedicated police to help tackle crime including the increasing theft of vehicles which are being exported through ports, a new report has found.

Former senior Royal Canadian Mounted Police (RCMP) officer Peter German’s independent review on money laundering through luxury cars and horse racing, part-published by the Province of British Columbia, said that vehicle theft rings are using ports to export stolen vehicles overseas. But ports no longer have the police presence required to tackle this issue since the demise

of the Ports Canada Police in 1997.

“Canadian ports, including Vancouver, Surrey and Prince Rupert do not have a dedicated police presence. Since the demise of the Ports Canada Police in 1997, it has been left to municipal police to patrol docks and ports. In the post-9/11 world this is a serious gap in our law enforcement umbrella,” stated the report.

Comparing the police presence in Seattle, the report noted a “stark” difference, stating the Port of Seattle Police Department has 150 staff to police SeaTac Airport and the seaport, including numerous specialised units. US federal

DP World has acquired multipurpose marine terminal Fraser Surrey Docks in Vancouver from Macquarie Infrastructure Partners, a fund managed by the Macquarie Infrastructure and Real Assets division of Macquarie Group.

The acquisition provides an attractive platform to better serve customers’ breakbulk and dry bulk requirements, said DP World, adding that its existing facilities at Vancouver and Prince Rupert have enjoyed strong growth in recent years.

Sultan Ahmed Bin Sulayem, group chairman and chief executive of DP World, said: “We are seeing increasing demand from our customers for multipurpose facilities

MACQUARIE SELLS OFF PORT ASSETS in the region and we believe Fraser Surrey Docks has the relevant infrastructure and is in the right location to service this demand.”

Fraser Surrey Docks operates over 1.2 kilometres of berth and 189 acres of yard and is one of Vancouver's major steel import

authorities are also present at the ports, including border patrol and customs officers.

Impact Canada has recommended a joint policeCanada Border Services Agency unit, with secondments from ICBC and IBC. However, the report warned that although an “ad hoc arrangement such as that can target a specific commodity, without long-standing funding commitments and a permanent presence, it really is a temporary solution”.

terminals. It also handles over 1m tonnes of grain and serves several container lines, handling approximately 250,000 teu in 2018.

Meanwhile, PSA International said it has finalised an agreement to acquire Halterm Container Terminal in Canada’s Port of Halifax and Penn Terminals in Pennsylvania, US from Macquarie Infrastructure Partners.

The acquisitions are in the process of securing regulatory approvals from the respective US and Canadian authorities.

8 DP World’s Sultan Ahmed Bin Sulayem highlights Fraser Surrey Docks’ right location and relevant infrastructure

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

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THE STRATEGY

BRIEFS

AAPA URGES ‘PAUSE’ ON HARMFUL TARIFFS

Nod for new Yangon terminal Adani Yangon International Terminal has received approval to develop a second container terminal at Ahlon in Yangon, according to the Myanmar Investment Commission (MIC). “[A] meeting approved the project in port and container yards on build, operate and transfer basic from Singapore. The amount of $90.124m has been approved for above projects which will be create [1,176] job opportunities for citizens,” MIC said. Adani will build Ahlon International Port Terminal (AIPT) (2) under a 50-year build, operate and transfer deal, local media added. AIPT (2) will be developed on 50 acres of land owned by Myanmar Economic Corporation, the operator of AIPT (1), and construction of the new terminal is expected to start in September 2019.

UK ports a force for good Ports are part of the solution, not the problem, when it comes to a range of challenges facing the UK, the chairman of the British Ports Association (BPA) has said.

Martin Lawlor, who is also the chief executive of the Port of Blyth, talked about ports' foundational role in the UK's economy at the British Ports Association Annual Lunch.

According to Mr Lawlor, UK ports constitute important regional economic employment centres in coastal cities and towns and serve as the bedrock of the growing blue economy. “Ports are gateways for numerous maritime sectors, including cruise, fishing, offshore energy, leisure and, of course, general cargo movement, with UK ports handling 95% of the nation’s goods,” Mr Lawlor said during his address.

8 | JUNE 2019

The American Association of Port Authorities (AAPA) has recommended that the US Administration rescind a decision taken in mid-May to hike tariffs to 25% on about $200bn in goods exported from China.

AAPA also recommended that the Administration postpone a process to impose 25% tariffs on the remaining $325bn in Chinese imports.

“AAPA is very concerned about the President’s decision to increase tariffs on Chinese goods and the expected retaliatory actions by the Chinese government,” said Susan Monteverde, AAPA’s vice president of government relations. “We urge the President to put a pause on this action and continue negotiations.

Tariffs harm all Americans as the increased cost of goods imported

and exported are felt throughout our nation.”

Americans for Free Trade members have reiterated that tariffs are taxes, paid by American families, farmers, businesses, workers and communities, and not by the nations or foreign businesses on whose products the tariffs are imposed. AAPA, which is a member of the coalition, said that tariffs have already caused US businesses to make redundancies, raised consumer prices, hurt American farm exports and threatened an otherwise productive economy.

In a letter sent to President Trump last month regarding USChina trade talks, 151 of the coalition’s partners, including AAPA, called for the full and immediate removal of all recently

8 The US association has called for a full and immediate removal of all tariffs

imposed tariffs, including US tariffs and China’s retaliatory tariffs as part of a final deal; a deal that levels the playing field for US companies by achieving meaningful changes to address China’s unfair trade practices that put American technology, innovation and intellectual property at risk; and avoidance of any enforcement mechanism that would trigger further tariffs.

It also called for clarity on how the tariff exemption process will be carried out in the event of a deal; and an economic assessment by the Administration examining the costs of tariffs for American businesses and consumers.

MALAYSIA REFORMS TO IMPROVE COMPETITIVENESS Malaysia is planning to abolish some regulations to make its ports more competitive, especially in the transhipment sector, a senior government official has said. Many of the regulations were created to try to curb smuggling but are now seen as hindering trade.

“Import permits and other regulations which prevented our ports from competing will be abolished and my ministry will hold discussions with other

relevant ministries about the plan,” Transport Minister Anthony Loke Siew Fook said.

“Transhipped goods are not for the local market but only to be stored and repacked here before being shipped out to other countries, so there is no need for us to enforce import permits on them,” he added.

One specific reform being considered is loosening the criteria of Approved Permits (APs) on transhipped goods.

“Transhipment of mineral water here requires APs. I don’t understand why we have such regulations that hamper our seaports’ competitiveness as transhipment hubs.

“We’re looking to remove [AP] regulations to facilitate easier transhipment and put in better mechanisms to keep a check on smuggling,” he told reporters.

Beginning April 1 this year, the government exempted import permits on transhipped vehicles.

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

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THE STRATEGY

UK PORTS NEED TO REACH HIGHER The UK ports industry needs to continue to set itself higher standards and be more imaginative if it is to truly reach its full potential across the upcoming decades, the UK’s Maritime Minister has said.

In a speech at the British Ports Association Annual Lunch, Nusrat Ghani, Parliamentary Under-Secretary of State at the UK Government’s Department for Transport, called for the sector to consider how it can maximise the opportunities coming from geological advantage, explore integrating digital systems and consider the case for dedicated freight routes for export and import.

8 Minister Nusrat Ghani wants UK ports to push themselves

“Later this year, we will begin the process of making some of these things a reality

with the development of our infrastructure route map, our plan for a programme to

prepare for the challenges of the next few decades,” said Ms Ghani.

Ms Ghani also discussed the UK’s departure from the EU (Brexit), saying that she appreciated the “testing” nature of “this unprecedented period of intense activity”.

Ms Ghani said that the UK Government’s priority is to depart from the multinational body with an agreement as soon as possible “to facilitate continued trade with our friends in the EU”.

She also expressed her view that the option of a no-deal Brexit needs to remain “on the table” if the UK is to secure the best agreement possible.

IMO URGES SHIP/PORT COLLABORATION The IMO secretary general has stressed the importance of the combined role of shipping and ports in both world trade and sustainable development.

Speaking at the IAPH Guangzhou 2019 World Ports Conference, Kitack Lim said: “Transport is a chain. No link in a chain can be really effective if viewed in isolation. Actions impacting ships will have an

450m

$

level of Chinese investment in Peru’s Chimbote

BRIEFS Clear fuel choices needed from IMO The International Maritime Organisation should make a clear selection and give guidance on just three to four shipping fuel solutions that ports worldwide will need to offer, the UK Chamber of Shipping has urged.

Speaking at the UK Ports Conference, policy director for safety and the environment Anna Ziou said: “It’s not going to work if we end up with endless fuel solutions everywhere.”

10 | JUNE 2019

impact throughout the entire supply chain, especially on ports.”

Talking about the value of partnerships in tackling the UN Sustainable Development Goals (SDGs), he highlighted the work the International Association of Ports and Harbors (IAPH) has undertaken with member IMO states and NGOs to address specific SDGs. “SDG9 for example is all about building resilient infrastructure.

Nothing could be more important in this context than an effective ship-port interface.”

He specifically commended IAPH’s collaborative work on SDG 13 which addresses climate action. This included IAPH’s work with Canada on a joint

‘‘

We expect an 8% drop in seaport generated employment over the next 20 years just based on innovation and automation

Indra Vonck, Deloitte Port Services

resolution encouraging voluntary co-operation between ports and shipping to reduce vessel greenhouse gas (GHG) emissions.

He also acknowledged IAPH's support to co-develop port emissions toolkits in the IMO-based GloMEEP (Global Maritime Energy Efficiency Partnerships) Project.

Mr Lim pointed out that ships use around 15% of their total fuel while in port or in a harbour. “Ports will be vital to provide infrastructure to supply alternative fuels to power shipping if we are to meet the ambitious GHG emissions targets”, he commented.

IAPH’s initial work with the Canadian government on a joint IMO resolution that invites member states to

encourage voluntary collaboration between ports and shipping to facilitate the reduction of GHG emissions from vessels in ports and harbours resulted in a detailed submission to the IMO. It was tabled for the IMO Marine Environment Protection Committee in May.

A different planning view needed

Brexit has improved port relations

Ports could benefit from a more imaginative take on environmental requirements when it comes to planning, according to Barton Willmore director Lucy Wood.

“Ports are ideally placed to benefit and streamline the process,” she said. “It’s not bending the rules, it’s just being more imaginative with planning.” She added that rather than seeing environmental requirements as a constraint, ports could view them as an opportunity.

Oxera partner Andrew Meaney has praised the development of better working relationships between ports and governments as a direct result of Brexit. Speaking at the UK Ports Conference, he said that ports within the UK and EU are “in a pretty decent place” and that there’s “a lot of reasons to be cheerful”. “Ports today have close working relationships with government that were not there three to four years ago,” he said.

8 Kitack Lim spoke of the importance of effective ship-port interfaces

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

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THE STRATEGY

BRIEFS

“RELENTLESS FOCUS” NEEDED ON EMISSIONS

China to invest $450m in Peru In Peru, the regional governor of Ancash state, Juan Carlos Morillo Ulloa, has revealed that China Communication Construction Company (CCCC) is to invest more than $450m in an upgrade of the Port of Chimbote. According to Mr Morillo, the new concession will involve modernisation of the port to allow larger vessels to call there. He also confirmed that this is a wholly “private initiative”. Nevertheless, according to Peru’s Ministry of Transport and Communications, CCCC only presented its letter of intent in January, so the project is still being evaluated to see whether it will be selfsustaining. If it is, it will receive government approval within 60 days.

One bid for Santa Fe concession Santa Fe-based Mundo Construcciones has been confirmed as the only bidder for the concession to operate a container and general cargo terminal at the Argentinian Port of Santa Fe. Originally, the government had been in talks with four interested parties, but three of them – believed to be overseas entities – were put off by the country’s political situation and overall financial instability. The technical bid, which did not include any partners, will first be analysed prior to scrutiny of the company’s financial bid, which will be opened 20 days later.

Assessing the overall worth of the bid are two members of the Santa Fe stock exchange, two people from the Santa Fe industrial union Unión Industrial de Santa Fe and two members of the government. Around $2m of investment will be needed, divided between basic facilities and equipment.

12 | JUNE 2019

The British Ports Association (BPA) stressed the need for “a relentless focus” on long term emissions measures as the IMO’s Marine Environment Protection Committee (MEPC 74) met in May to discuss key shipping issues.

While the BPA has pledged its support for the UK’s ambitions to move towards zero emission shipping to address climate change, Richard Ballantyne, chief executive of the BPA, said the organisation is concerned that the focus is being shifted on to ports and unproven short-term measures that delay meaningful action.

On proposals focused on port actions to support IMO targets, he

said the BPA was cautious about the presumption towards state investment in specific technologies and infrastructure, especially with limited evidence of effectiveness in reducing emissions.

Mr Ballantyne stated: “Ports should remain the jurisdiction of nation states who know best how their ports can support the transition. The UK has an ambitious 30-year strategy to support this and overly-prescriptive proposals at the IMO are not helpful.”

On tackling climate change, he said: “At a global level, tackling air emissions in a meaningful, long term manner ultimately will require cleaner fuels and

8 The BPA reminded IMO’s environment committee to consider ports when they set emission strategies

significant barriers remain to realising these goals.”

Slow steaming has a role to play, and has already helped bring down emissions, Mr Ballantyne stated, but mandatory slow steaming may have knock-on effects that have not been fully considered. For example, mandatory speed limits could make it more difficult for vessels and ports to plan calls, considering access to ports for certain vessels is often dependent on factors such as the weather and tides.

COLLABORATIVE WORKING KEY TO ‘NET ZERO’ GOAL The ports sector can expect to see innovative concession agreements alongside increased shoreside power and electric equipment usage following the UK Committee on Climate Change’s recommendation that the government adopt a ‘net zero’ goal for greenhouse gas emissions by 2050.

Speaking exclusively to Port Strategy, Charles Haine, maritime technical director, sustainability and climate change team, environment discipline at WSP, said an all-electric port may not be far away from realisation but terminal operators must co-operate with ports and the goals they set to see progress.

“We can certainly envisage ports being much cleaner and fossil fuel free by mid-century,” he said. "We may not be far from an all-electric port although the

terminal operators must play ball alongside lofty goals being suggested by port authorities.

“Watch out for innovation in concession agreements, as exemplified by Port of Rotterdam integrating stringent targets over time.”

The shipping industry is already well on its way to cutting emissions. In 2018 the IMO launched its strategy to reduce the total annual GHG emissions

from ships by at least 50% by 2050, an initiative which involves all stakeholders working together.

“Operating electric cranes and mobile equipment that regenerate energy is a growing sale point for the equipment suppliers already and electric vessels are already running in forward-thinking countries,” said Mr Haine.

He said that despite the capex cost of connections being prohibitive in the uptake of shoreside power, the technology, for which ports have an EU-imposed implementation deadline by 2025, will become standard for vessels while berthed.

“Governments will soon have no option but to mandate this, on local air quality grounds alone,” he said.

8 WSP’s Charles Haine expects to be see more green innovation in concession agreements

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THEANALYST

COLUMNIST

PETER DE LANGEN

Rotterdam’s recent announcement that it is developing a 60-hectare ‘Food Hub’ at the entrance to Maasvlakte is interesting, both because of the concept and of the history of the site.

The industrial site will be developed to offer optimal facilities for ‘agrofood’ companies and will have multiple berths for container vessels and inland vessels, with special facilities for refrigerated cargo. The idea is that containers arriving at the Maasvlakte container terminals will move by ship to the food hub, while direct (shortsea) connections to the food hub are also planned. The intra-port container flow by water is interesting as the road distance between the deepsea container terminals and the site of the food hub is less than 15 kilometres.

The concept also entails locating warehouses and processing facilities next to the quays. The first

Credit: Port of Rotterdam

DITCHING FUEL PLANS FOR FOOD

tenant is a fruit juice company that will produce juice for the European market in Rotterdam, instead of relying on imports.

This development is interesting in that the ‘food hub’ concept is based on a ‘launching customer’ and broadened to create

THENEWYORKER

8 Rotterdam’s food hub aims to attract various food companies

synergies through co-locating related food companies. Thus, the food hub is not a one-off deal for one customer but aims to attract various food companies.

Conceptually, this approach can be positioned as the middle ground between a fully ‘responsive’ port development, in which tailor-made deals are created based on the individual demands of customers, and a ‘design approach’ in which the port development company designs the future land use and tries to attract companies that fit with their design. The in-between approach followed by port of Rotterdam is in my view better than the ‘responsive’ or ‘design’ approach.

The development is also noteworthy given the history of the site: it has been idle for 50 years during which time various potential projects have tanked, including a steel terminal, a chemical plant, an LNG terminal and a large-scale tank terminal.

This history of the site is a very clear case to underline the need for sufficiently ‘responsive’ port development.

COLUMNIST

BARRY PARKER

WELCOMING WINDS OF CHANGE With the 2020 election season heating up in the US, political pronouncements about ‘infrastructure’, are becoming more frequent.

Ports, being chokepoints, are a pivotal part of these discussions, which sometimes devolve into arguments about where the money will come from.

So, looking northeast from my New York perch, it was very refreshing to see a story of a port changing its strategic focus and effectively reinventing itself. And, by the way, the money for this re-invention comes from a mix of state government and private funding – a public-private partnership structure that readers may remember from the pre megaship and mega-port days.

Seabury Maritime LLC, an investment bank combining maritime expertise with an environmental finance capability, was the transaction advisor to

Connecticut Port Authority (CPA) on this seminal deal which melded a strategic initiative with real money.

Connecticut, adjacent to New York, has suffered as people and industrial activity have shifted away from the northeast over the decades. Its main port at New London, approximately halfway between New York and Boston, has remained a niche player on the commercial side with the major commodities handled being refined petroleum products and

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

8 Offshore wind is buoying the US port industry

breakbulk (steel and some lumber). Fast forward to 2019, when offshore wind energy suddenly hit its stride in the US, and rather than chase the fickle raw material and neo-bulk cargo flows, CPA made a bold move towards the wind energy markets.

And those offshore wind currents are flowing fast. A December 2018 Federal lease

auction for slots off the coast of southern New England netted the government more than $400m. A few months earlier, a US arm of Ørsted (the Danish offshore power behemoth) had acquired the US-based Deepwater Wind, a venture capital-backed pioneer in the early acquisition of wind energy sites secured through prior government leasing rounds, in a $510m transaction. Deepwater Wind operates the first offshore wind farm in US waters, off the coast of Newport, Rhode Island.

In their recently announced PPP deal, CPA and terminal operator Gateway will partner with Bay State Wind, a joint venture between regional energy provider Eversource and Ørsted, on a nearly $100m effort that will see the State Pier at New London rebuilt for purpose.

The current is indeed flowing and energising Connecticut in a big way. Memo to other ports: watch this trend closely.

JUNE 2019 | 15

THEECONOMIST COLUMNIST BEN HACKETT

US President Donald Trump announced, in a tweet, that he would raise the 10% tariff on $200bn of Chinese imported goods to 25% and that an additional $325bn of imports would soon be hit with a 25% tariff as well. That about covers all imports from China.

He is also threatening to apply tariffs on EU imports, focusing on the motor industry. Mind you, in May he thought that negotiations with China were going well. Perhaps the pressures from Congress needed diversionary tactics. But bully tactics in the international marketplace rarely work.

Just as we thought that the maritime industry was beginning to see some daylight for its systemic capacity surplus which has pushed freight rates to ridiculously low levels, any hope of reaching some sort of equilibrium seems to be heading for the rocks.

Maritime transportation is theoretically structured to meet derived demand in order to support global trade. GDP per capita remains the primary driver

HEADING FOR THE ROCKS

of this demand but with pressures such as those above exerted on the consumption element it is hard to see how 2019 can turn out to be a good year. Reduction in demand caused by higher costs

THESTRATEGIST

8 President Trump’s May tariff tweet announced more pain for China

due to trade wars can only go in one direction, downward.

The continuing imbalance

between supply (shipping capacity) and demand has been only partially addressed by the formation of super alliances using increased slow steaming and missed voyages tactics to stem capacity. Not helped by a relatively strong orderbook, the industry will surely face another poor financial year.

The ports will continue to see increased pressures from the shipping lines as they try to keep costs down. For example, in North Europe the announcement by COSCO that they were shifting services to Zeebrugge to their own terminal will increase price competition in that region.

However, the capacity of Zeebrugge is limited which will limit the number of services that can be shifted. Further north, JadeWeserPort appears to be making significant inroads into the Baltic transhipment market which will further hit the RotterdamHamburg range of ports.

The excess of port capacity in Asia and Europe will surely take its toll on profitability.

COLUMNIST

MIKE MUNDY

MELBOURNE IMPORTERS HIT YET AGAIN If I were a cargo importer via the port of Melbourne container terminals I would be getting a little hacked off by now with what must seem like the continual flow of new charges coming my way.

The latest price rise on the Port of Melbourne’s agenda is a A$15 per teu increase to wharfage on all full imports with this intended to fund “rail transformation” at the port – essentially getting traffic off the road onto rail by adding new rail capability.

This proposed new charge follows hot on the heels of several rounds of increases to the so-called infrastructure charges applied by terminal operators – a process effectively triggered by DP World who used infrastructure charges levied against loaded import and export containers as a way of boosting annual

16 | JUNE 2019

revenues rather than charging shipping line clients in a highly competitive marketplace. In effect, it was easier to ‘hit’ lots of little guys rather than the increasingly larger power blocs of shipping lines, and thereby negate the risk of losing core shipping line business.

So given the increased wharfage rate Melbourne importers must be wondering: “what was all that hot air talked about in the past regarding introducing new competition on the waterfront and driving down prices, what happened to that?”

The plan itself to boost rail capability at the port is also one that has its fair share of controversy associated with it in terms of promoting a level playing field between competing container terminals in order to

maximise competition to the benefit of importers and exporters.

To achieve on-dock rail the Port of Melbourne plans to buy back leased land from the container terminal and rail terminal operators and then give it back to them free under a licence agreement. As reported by the Freight & Trade Alliance, an industry representative body, the thinking is that the stevedores and rail terminal operators will then pass on those savings to rail users, making rail more competitive. Several flaws are seen in this plan but a significant one is that not all the major terminal

operators will be beneficiaries under this scheme, only the two operators in Swanson Dock and not the new Webb Dock terminal.

Inevitably this will lead to an unbalanced competitive situation.

Traditionally one of the accepted principles of good port management is to create a level playing field between terminal operators in order to deliver cost savings to importers and exporters. But seemingly not in Melbourne which in more than one respect seems set on shooting itself in the foot when it comes to building a competitive profile.

What was all that hot air talked about in the past regarding introducing new competition on the waterfront and driving down prices, what happened to that?

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

THEENVIRONMENTALIST COLUMNIST CHARLES HAINE

BARRELLING DOWN TO NET-ZERO The force is strong at the moment.

The push for immediate action on climate risks from David Attenborough, the BBC, youth protests, and Greta Thunberg (calling out politicians for procrastination) is gaining traction.

Protests on the streets of London from climate activist group Extinction Rebellion through to the clarion call for urgent decarbonisation from the IPPC and the UN biodiversity group are adding to the melee.

As a result, the UK Government has declared a ‘climate emergency’. They didn't do that after simply reading some reports.

The following day, the UK Committee on Climate Change (advisors to Government) published a recommendation for the adoption of a ‘net zero’ goal for greenhouse gas (GHG) emissions by 2050. That is to cover all GHG emissions, not just CO2.

What does this mean? It means that the UK is planning to eliminate net GHG emissions within 31 years. That will require extraordinary changes across all sectors, including aviation and shipping. The Committee insists that net zero can be reached with existing technologies and at a cost equivalent to 2% of GDP. However, it’s more likely that the widely held view that tech and new fuels could cut around 40% of that, but the remaining 60% will be down to other actions, including widespread societal and behavioural change. That's not just buying less plastic packaged chocolates or fruit but no- or lowimpact lifestyle shifts. I’ve heard that buy-in of just 3.5% of a population – approximately two million people in the UK – will be sufficient to reach a tipping point and garner real change.

Ports can help a nation to

meet its low-carbon electricity supply targets, but more authorities and terminals will need to embrace renewable energy generation and energy recovery.

Some already on that path will soon become net energy suppliers and, in the future, energy hubs and even brokers.

If road-going electric vehicles are the only option from 2035, expect the same in mobile machinery and modes of operation at cargo terminals. It goes without saying that in newbuild projects, A-class energy-efficient buildings, non-fossil fuel heating and the provision of shoreside power will be mandated before then.

Ports will also need to consider improved collaboration with logistics companies.

For example, they will need to add many more rapid charging points to port infrastructure to support the hybrid and/or

electrically-powered trucks that will be key to reducing emissions to improve air quality.

International operators in richer nations can do even more by supporting their acquired facilities in developing countries with injections of funding, technology upgrades and low-carbon know-how.

This might all be driven by legislation, loan covenants and/or concession agreements, but will governments incentivise the phasing out of old stock and financially support retrofitting to the same exacting standards?

Political change sometimes brings surprises, but the transport sector as a whole needed this particular kick-start to push it to make truly transformational GHG-related changes.

8 Charles Haine is technical director of maritime, sustainability and climate change at WSP.

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

PLANNING & DESIGN: BELT & ROAD

DREAM PEDDLING OF CHINA’S BELT & ROAD INITIATIVE

Credit: Rehman Abubakr, CC4.0

China has turned down the rhetoric on its global ‘connector’ scheme to overcome criticism of the project’s intentions. Stevie Knight reports on the latest moves

There is, according to Professor Hercules Haralambides of Erasmus University, some scepticism regarding China’s investment targets of its ubiquitous Belt & Road Initiative (BRI). Is it simply meant to optimise trade flows, or is it a grand master-plan to acquire strategic infrastructure around the world, pundits are asking.

Either way, one thing is certain: China is playing into the ambitions of those who want to believe in a better tomorrow and its investment choices have led to notable successes – some of which were initiated long before the BRI came into being.

Jason Chiang of RHDHV points out that Colombo’s China Merchant Port Holdings’ concession was one of the first. It was a Chinese and Sri Lankan port authority joint venture which started long before the BRI launch. Last year, Colombo International Container Terminals contributed 2.65m teu – 38% – to Colombo’s total 7m teu record.

In Piraeus, now the second largest Mediterranean port, China Merchant Port Holdings began with a 35-year concession to a pair of its container terminals in 2008 and in 2016 COSCO bought a controlling share in the port authority for $420m.

DEBT TRAP Now, any Chinese foreign investment is tied – whether formally or not – to the BRI project and questions of sovereignty and debt risk have come to the fore. The question of ‘who takes the hit if it doesn’t work out’ has been largely unanswered.

Loans, often tied to Chinese construction companies, have started to get a very bad press, says Mr Chiang. There have been some headlinehitting cases, like Hambantota in Sri Lanka, which was handed over on a 99-year lease after defaulting on repayments, and the term ‘debt trap’ started being bandied around.

20 | JUNE 2019

8 Colombo has benefitted from China’s financial contribution

Despite this, Mr Chiang says it's not a ‘trap’ in the premeditated sense of the term. He says: “China has lent on terms less stringent than the World Bank, IBRD or IFC. Where they back away, China has said ‘yes’, but it's a commercial enterprise. I’d say rather than being a ‘debt trap’, these are just more risky deals to start with.”

Prof Haralambides agrees: “Loans to Hambantota were made at the rather ‘concessionary’ 2% interest rate. Sri Lanka’s real issue has been borrowing from international capital markets to cover persistent fiscal deficits – a ‘payday loan’ problem.

BUSINESS OR STRATEGY Still, while BRI might not be a covert plan to gain control of strategic assets, alarm bells have started to ring for developing regions.

The Kenyan government borrowed heavily from China, $3.2bn in all, to fund a standard gauge rail project. The dream is that it will both speed up cargo moves and lower freight costs, but there's a sting in the agreement with China.

According to Kenya’s Daily Nation newspaper, the terms state “neither the borrower [Kenya] nor any of its assets is entitled to any right of immunity on the grounds of sovereignty, with respect to its obligations”.

Not great, as the loans come to roughly 6% of Kenya’s GDP and the first year of operations saw a sizeable loss; some worry that if the repayments aren’t kept up, the Port of Mombasa – like Hambantota – may be surrendered.

Mombasa has other troubles. According to Kenyan media, project costs for constructing the Kipevu Oil Terminal inflated from the original $147.3m to $393.9m; it is also under investigation for flouting the World Bank's blacklisting of the China Communications Construction Company (CCCC).

8 Erasmus’ Professor Hercules Haralambides points out that China’s economy is slowing

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

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Credit: Skilla1st, CC4.0

PLANNING & DESIGN: BELT & ROAD

‘‘

In the last couple of years, the Chinese authorities went from believing that the BRI would change the world and China’s standing, to realising the connotations have become slightly negative. They’ve toned down the rhetoric a lot.

Investment is continuing, but everyone is a lot quieter about it Jason Chiang, RHDHV

Some, however, are making it their duty to open up the discussion on future relationships, not least Malaysia’s prime minister Mahathir Bin Mohamad.

Malaysia suspended work last year on its China-backed East Coast Rail Link amid accusations that the previous prime minister Najib Razak's high-priced $15.96bn deal had a large slice in it for him. However, the new administration has revised its agreement for construction of the project at a cut-down rate, just two-thirds of the original. Most importantly, China has also agreed to a 50-50 joint venture to operate the 640-kilometre line across Peninsular Malaysia which connects west-side Port Klang with Kuantan in the east before reaching north to Kota Baru near Thailand. This reduces the country’s risk burden, while reaping a larger slice of the profits.

CHINA BACKLASH Other nations have also started to kick back. Kyaukphyu deepwater port, another strategic Chinese investment in the Bay of Bengal, has been heavily trimmed from its original $7.3bn price tag. Now lead developer China's CITIC Group appears to be settling for a $1.3bn initial phase.

This may be because the Chinese really want the asset. It promises direct access to the Indian Ocean which would significantly reduce Chinese energy dependence on the Strait of Malacca, Prof Haralambides points out. In fact, oil and gas

22 | JUNE 2019

8 DP World was forced to “leave the ground clear” for China in Djibouti

pipelines already run from Kyaukphyu to China. “Energy security “is one of the main themes running throughout the BRI”, adds RHDHV’s Mr Chiang. Still, the ghost of Hambantota walks here too: locals worry that Kyaukphyu will also be handed over if payment terms aren't met.

Still, there are signs that Chinese interest will work hard in the background to further develop important trade corridors.

Turned down by the US, the Japanese and the World Bank, Gwadar in Pakistan is to become the lynchpin of a Middle East Gulf-western China corridor that has “drawn in big investment” including a free zone, says Prof Haralambides. It’s the old dream for Pakistan to have a pivotal role in bringing Central Asia’s oil and gas out into the world’s markets.

Gwadar’s development into a big $10bn refinery with assistance from Saudi Arabia might also further China’s energy plans: it, too, will have a pipeline running to China, shortening the Dubai oil route by almost two-thirds.

But there are still questions: Gwadar is on a 40-year lease to China Overseas Ports Holdings, which collects 91% of the revenues, so how exactly is the $55bn to be repaid? It's a lot to expect, even if the poverty-stricken Baluchistan region's economy starts to improve. Moreover, it's been noted that the jobs aren't going to the locals.

LAND ROUTE Despite the overt ‘take the loan and the consequences’ attitude, China isn’t above tilting the table when it suits them.

“The container train from China to Europe sees about 4,000 trips a year now,” says Mr Chiang. “The key is that its price is pitched at around $4,000, siting it between the longer sea route, which is just over $1,000 per box, and air – where it has taken market share – which has a price of $6,000 and up.”

He adds: “It has now become apparent it’s very heavily subsidised to keep it at this sweet spot. If it wasn’t, it appears the price would be very close to airfreight.”

There are also essential differences shaping the current picture compared with the early days of Chinese investment.

“You could say the low hanging fruit has already been picked,” says Prof Haralambides.

Further, according to Mr Chiang, “people are beginning to say, ‘No, we won’t take your loan, but we're happy to take your equity... so you build, you take responsibility’. That’s new.”

BRI is also being shaped by further moves into Europe.

Italy is the first western European country to jump onboard the BRI bandwagon with management deals between the China

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

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PLANNING & DESIGN: BELT & ROAD

EXPECT PUSHBACK However, the Chinese involvement is not sitting easily with the North Europe bloc. The UK’s Financial Times reported the outspoken French President Emmanuel Macron as saying: “The time of European naïveté is ended .... For many years we had an uncoordinated approach and China took advantage of our divisions.”

Germany too has become vociferous in its ‘beware China’ alerts, “despite being one of those that benefited most from Chinese deals”, says Prof Haralambides. He adds that Europe has recently started screening proposed foreign investment, “although it's a lukewarm, advisory effort with no teeth”.

The US’ response has more bite: “It has a secretive Senate commission that looks into all foreign acquisitions,” says Prof Haralambides. Mr Chiang adds that US-based assets currently held by China “are being forced into an outright sale”.

Prof Haralambides explains: “China is getting more expensive, so like many Western countries, it's looking at relocating some of its manufacturing.” Africa is very much in the frame, “with around 200 Chinese projects underway”.

Certain areas seem more than willing to roll over to make the most of the opportunities – and tip earlier incumbents out.

The brazen nature of China’s recent moves at Djibouti made a few audibly gasp. Strategically, it’s important to China, not least because of its geographical location, its vast oil throughput and a government that's allowing military bases for all and sundry.

“It was obvious that despite DP World’s investment in the Doraleh Container Terminal, they’d have to go to leave the ground clear for the Chinese,” says Prof Haralambides.

FEES AND FINES Although following a court case the authorities have to pay DP World $358m, Beijing immediately stepped in with funding

Credit: Make it Kenya, Stuart Price, Public Domain 1.0

Communications Construction Company (CCCC) and the ports of Trieste and Genoa. Connectivity issues are also on the table, as well as an intermodal terminal linking Trieste and Slovakia.

It shouldn’t come as any surprise, according to Prof Haralambides. He says that the Chinese spotted the importance of the southern ports early on: “They started with Piraeus, then they took control of Valencia, Spain’s main container facility. Bilbao followed as it had links to Rotterdam and the North, and they also got hold of two distribution centres. They’ve been steadily moving from east to west.”

Chinese companies willing to take the leap could be getting a good deal from the region. While there's an infrastructure gap, as Prof Haralambides points out, it’s not as if it’s creating something from scratch: “If you put money into a place that's already productive, you have a return straight away.”

for the Djibouti International Free Trade Zones (DIFTZ) at a cost of $15bn.

Despite this, there are some signs that the Chinese are willing to improve their somewhat strained relationship with African host countries, hurt by much-needed construction jobs being outsourced to China. According to China Daily, “95% of the [SGR rail] stations are fully run and managed by local Kenyans .... With time, this will happen for all other departments”.

There is great potential for everyone to benefit, says David Mackay of NSM Shipping. “All large contracts could carry a significant CSR element, for example, 'if you win this tender please outline in detail what your company will do to help develop and train our engineers, architects, pilots, seafaring cadets etc’.”

On the naval front, both Colombo and Djibouti have had Chinese submarines turn up. Gwadar, being close to the sensitive Hormuz Strait, is in an excellent spot to support the Chinese war fleet. Despite public protests and an apparent softening – China no longer speaks so openly about its ‘String of Pearls’ ports willing to berth China’s military vessels – recent tactics against Taiwan seem to suggest that there’s a confident hardcore stance, bolstered by a growing presence in the Indian Ocean.

April’s US/Sri Lanka naval exercises at Hambantota were designed to remind China that the government retains sovereignty, business interests notwithstanding. Whether this works remains to be seen.

8 Mombasa could be under threat from Kenya’s SGR agreement

8 Loans, often tied to Chinese construction companies, have started to get a very bad press, says RHDHV’s Jason Chiang

Switching the soundtrack There are all kinds of pressures building on China to change its foreign investment tune, while a lack of inward investment is also drawing criticism. “[China’s] economy is slowing – it will only make 6% this year and last year three million industrial workers became unemployed”, points out Erasmus’ Professor Hercules Haralambides.

The failures, too, are mounting up.

According to RWR Advisory Group, 14% of

1,674 Chinese-invested infrastructure projects have encountered difficulties that run from labour to finances.

“Plenty of good opportunities exist – if the country borrowing the money does its homework,” says an industry source, but adds there are “allegations that the Chinese tend to be fairly relaxed about 'private payments and incentives’: hence the need for a strong, robust tender system in the host country”. Still, he goes on to say: “There’s generally more sensitivity

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

about obeying local rules and regulations than previously.”

“Public opinion is having an impact,” says RHDHV’s Jason Chiang. “In the last couple of years, the Chinese authorities went from believing that the BRI would change the world and China’s standing, to realising the connotations have become slightly negative.

They’ve toned down the rhetoric a lot.” He concludes: “Investment is continuing, but everyone is a lot quieter about it.”

JUNE 2019 | 25

COMMUNITY: ENGAGEMENT

BUILDING AND SUSTAINING COMMUNITY CONNECTIONS When ports focus on community engagement the benefits go both ways.

Felicity Landon finds out where ports have been putting their time and money

Credit: Suffolk Community Foundation

From beach clean-ups to breakfast clubs, ports support a variety of ‘good causes’ in the community through one-off grants or longer-term sponsorship. But are the benefits worth the effort?

The Port of Tyne has a particular reputation for getting involved in the community and has recently drawn up revised criteria for its supporting projects and initiatives.

“As a trust port it’s in our remit to support our local community and create a great place to do business – we recognise that a thriving business relies on a thriving community for jobs, inward investment, lifestyle, education and future sustainability,” says a spokeswoman for the port.

“However, aside from our status as a trust port, we feel any responsible business should support its operating area.”

Being engaged with the community supports a sustainable business for the port and for its customers and stakeholders for now and into the future, she says.

The criteria set out by the Port of Tyne include helping communities thrive, building stronger local communities, supporting children and young people to thrive, and improving health and wellbeing. The port puts 1% of its pre-tax profit into the Port of Tyne Community Action Fund, which is managed by a panel of port employees who meet regularly to discuss grant applications and award funding.

schools in areas of high deprivation in South Tyneside and North Tyneside.

Overall, the port invests about £50,000 in community sponsorships, supporting an estimated 400-plus organisations and around 500,000 people directly every single year.

Credit: Port of Tyne

EXTRA SUPPORT In addition to the fund, the port supports a number of CSR projects through sponsorship or corporate membership – for example, the Durham Cricket Club Foundation enables more than 1,000 primary school children to participate in projects that inspire confidence, teamwork and wellbeing.

Other projects that have been supported for several years include The Mouth of the Tyne Festival, which adds £1.8m to the local economy and attracts more than 100,000 visitors ever year.

Last year, as part of the port’s 50th anniversary celebrations, it supported the Great Exhibition of the North and invested in restoring the historic timber decking on the Swing Bridge spanning the River Tyne.

This year the port has taken over the lead of the Clean Tyne Project, which it set up 30 years ago with four local councils.

New sponsorships include a football club foundation, children’s holiday clubs and two breakfast clubs, the latter supporting two

8 Port of Tyne sponsors the Durham Cricket Club Foundation

26 | JUNE 2019

8 Felixstowe’s Port Community Fund supports a wide variety of grassroots charities and groups

IMPORTANCE OF PARTNERSHIP The Port of Felixstowe is one of the partners in the Port Community Fund, which supports charities and good causes in Felixstowe, Ipswich and the surrounding area. Administered by Suffolk Community Foundation, the fund marked its tenth anniversary last year.

Other partners include Pentalver, Maritime Transport, Maritime Cargo Processing, Grange Shipping, Freightliner, Coscon, Harwich Haven Authority and Trinity College.

“Since its inception, the Port Community Fund has awarded over £400,000 to more than 200 local grassroots charities,” says Suffolk Community Foundation’s head of philanthropy, Judy Dow. Alongside that, the fund is building up an endowment fund, currently valued at more than £200,000, to generate a long-term revenue stream.

“The enormous positive contribution that the port has brought to the economy of the county is incredible, but this fund is a way for individual businesses to join together to help address the needs of vulnerable people who have fallen through the gaps of all the good things that are going on,” says Ms Dow. “Together, it has been possible for them to make a real difference to people’s lives now and long into the future. We are always looking to increase the number of businesses who contribute and we would welcome conversations from anyone interested in finding out more about how to get involved.

“We are so grateful to the ongoing support through broad grant-making to help address need in Felixstowe, Ipswich and surrounding villages.”

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

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COMMUNITY: ENGAGEMENT

ENGAGEMENT PRIORITY The Port of Seattle has multiple community outreach projects, ranging from specific tree planting projects to environmental efforts with partners such as the Lower Duwamish Waterway Group.

“Community engagement is a priority of the Port of Seattle in both the maritime and aviation divisions of the organisation,” says Perry Cooper, a media relations manager at the port authority. “We have a community engagement group within our external affairs department that works with the local communities for events, partnerships, outreach and equitable development practices. Our goal as a port is to be a public steward with ongoing outreach and engagement, to be a good partner to our communities and stakeholders.”

Earlier this year the port joined other organisations to launch a public awareness campaign encouraging victims and survivors of human trafficking to get the help they need – expanding a previous effort that had dramatically increased the number of people who called the national hotline for resources, including medical care, financial help and housing.

The port’s office of social responsibility aims to be a catalyst for equity and social impact at the port and in the community; it works to improve communication between the port and the region's socioeconomically disadvantaged communities, including immigrant and refugee communities.

Recent specific projects by the Port of Seattle have included hosting a community tree planting work party to plant 180 trees at a site that had been overtaken by invasive blackberry and ivy, and sponsoring a series of education workshops with the

Credit: Port of Seattle

The Port Community Fund has supported groups as diverse as bereavement programmes and sailing clubs. Its most recent grants panel meeting awarded £2,000 to a Guides group in a deprived area of Ipswich to support girls attending the county camp and the purchase of equipment and resources.

Another £2,000 went to the Felixstowe-based Level Two Youth Project, to expand counselling services for young people, and £2,000 was also awarded to Suffolk Young People's Health Project to provide counselling to young people.

By pooling their charitable resources, members of the fund can do more to support local groups and organisations, says Ms Dow. “The fund offers members the opportunity to increase the effectiveness of their charitable giving, and has established a unique mechanism for companies to give back to their local community.”

Duwamish Valley Youth Corps which led to the creation of a giant mural paying tribute to the Duwamish River. The workshops gave participants a greater understanding of the ecological and cultural history of the river, local industries and the port they live close to. Port staff, local historians and Native American community leaders took part in panel discussions and workshops to help inspire the youngsters’ ideas for creating the work of art.

Mr Cooper says: “The Port of Seattle is a public agency and community engagement spreads the word of the projects we are working on and engaged in throughout the community.

With hundreds of ways in which people get their information today, it’s essential that we find our own ways to reach out to our communities, to let them know not only what we are working on but also how they can get involved to make a difference. Working together as a team has proven to be a successful strategy for the port and the community.”

8 Port of Seattle commissioner Fred Felleman gets stuck in with a community tree planting work party

The right outreach method What works best in terms of the types of projects and the right approach to community engagement?

There are, says Perry Cooper at the Port of Seattle, a variety of ways in which to engage the public: “We work to find what fits best for that particular issue or situation. In many ways, we are engaging with the community involved to find what works best for them and coming up with strategies together. Some are information events, such as specific action opportunities with multiple stakeholders, such as stopping labour and sex trafficking, social responsibility, even murals.”

The Port of Tyne says: “Listening to what

28 | JUNE 2019

impacts our stakeholders, our customers, and our employees most and working with central and local government, one size doesn't fit all and a mixed approach works well, involving our employees in the Port’s Community Action Panel. We are advocates of Maritime 2050, a thread that will also run through our CSR programme to improve skills and education technology, diversity and environmental management.”

Earlier this year, a report commissioned

by DP World concluded that there is substantial potential among private companies in the United Arab Emirates for participation in employee voluntary projects

that could contribute significantly to the achievement of the UN’s Sustainable Development Goals (SDG).

At the launch of the report, DP World group chief executive Sultan Ahmed Bin Sulayem said: “Private sector collaboration plays a pivotal role in helping nations tackle issues such as poverty, inequality and climate change.”

Of companies surveyed, 60% said that volunteering activity was increasing among their employees, pointing to significant growth opportunities for 2019. The report found that 37% of employees already participate in volunteering activities in the UAE.

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

Worldwide performance With a highly professional team Rohde Nielsen A/S operates worldwide, r;u=oulbm] 0;-1_ mo ubv_l;m|ķ Ѵ-m7 u;1Ѵ-l-ঞomķ rou| 7; ;Ѵorl;m|ķ o@v_ou; |u;m1_bm] -m7 0-1hCѴѴbm]ķ -m7 1-rb|-ѴŊ -m7 l-bm|;m-m1; 7u;7]bm]ĺ

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LABOUR: SHORTAGES

PORTS OFFERED NO IMMUNITY FROM LABOUR SHORTFALL Iain MacIntyre finds out how ports have had to overcome old-fashioned thinking to ensure a viable workforce in the future

ECONOMIC GROWTH CONSEQUENCES With the world entering its Fourth Industrial Revolution, Port of Rotterdam (Netherlands) social labour affairs manager Henk De Bruijn and social labour affairs advisor Berith Berflow explain that two factors have predominantly driven widespread skilled labour shortages: the explosion in economic growth after the global financial crisis and rapid change being seen in such areas as robotics, automation, electrification and digitalisation.

“Many companies in the Port of Rotterdam have a shortage of workers and a lot of vacancies,” they say. “The port needs a lot of technicians with a direct information and communications technology (ICT) profile with different educational levels [both] now, but certainly in the future.” Last year, there were around 400 vacancies at container terminals in the Port of Rotterdam and about 1,000 vacancies for truck drivers. Some companies are also looking for mechanics and mechanical engineers.

Further, the construction of Maasvlakte 2 will create many new jobs in the coming years and it is expected that by 2030, there will be a demand for up to 10,000 additional employees.

“The most recognisable direct consequence of not having enough people to do the work is companies not being able to grow as much as they want, because they need more time to do the work with less people,” the pair tell Port Strategy.

“Ultimately, if this will be the case for too long it obviously will affect the economic growth overall.”

They note that “every few months” there appears to be a notable technological breakthrough causing significant disruption: “30 years ago that would be once every five years – and we are simply not really prepared for rapid changes.

“This leaves companies with the following question: what kind of person do I hire? The person I need now may not be suitable for next year and we want to hire for [the] long term.

Companies and recruiters cannot foresee the future as they could in the past.”

30 | JUNE 2019

Credit: Port of Rotterdam

Skilled labour shortages are increasingly afflicting numerous industries around the world and ports are feeling the same heat as countless others. The consequences are already being felt in docks through lengthened cargo turnarounds, vessel berthing window congestion and delays to infrastructure development.

A senior executive from the Port of Corpus Christi (Texas) has gone on record to state that labour shortages have hampered efforts to develop beneficial local energy projects, such as petrochemical processing plants. The executive reportedly said there was sufficient natural gas supply in the state to warrant the building of up to three $10 billion steam crackers near the port to process ethane into ethylene, but lamented “we don’t have the workforce to do it”.

Meanwhile, experts have predicted that in British Columbia (Canada), 17,000 non-residential construction jobs could be needed over the next three years if all proposed major projects for the province – including expansions to its ports – are to progress on schedule.

FUTURE UNCERTAINTY In New Zealand, Ports of Auckland (PoAL) people, foresight and innovation general manager Diane Edwards says the major automation project due to be completed at her port’s container terminal in 2020 is contributing to “some shortfalls in stevedoring areas”.

“It has been most difficult to recruit stevedores when people know that the job may only be for a one to two-year period – the uncertainty around jobs means a number of staff have been looking elsewhere for work and this has meant that it is difficult to train enough new staff to replace those who are leaving,” says Ms Edwards. She adds that the strengthening economy in New Zealand has compounded the problem.

There are additional capacity challenges as a result of the automation project taking place on an already busy, operational site which PoAL naturally does not want to close down. “This impacts stevedoring operations as straddles have to travel further to pick up and drop off containers. Things are exacerbated when ships arrive off window at peak periods. The shortfall in stevedores means we may not be able to have all cranes operating, which restricts our ability to turnaround a ship as fast as we would like.”

Given those circumstances – and with the business also experiencing shortfalls in systems engineering, cyber security and ICT operational personnel – Ms Edwards says PoAL has adopted a more pragmatic recruitment approach. “In the past it has not always been preferable to recruit those who were only seeking a job for a short time, as the time needed to train them made it uneconomical.

We have learnt to be flexible and, with the current shortage, we are open to filling roles with people seeking short-term work.”

Furthermore, Ms Edwards says PoAL is now seeking new employees who are “happy to learn the port business” and who potentially see their longer-term futures in other areas such as

8 Many companies in the Port of Rotterdam report a shortage of workers and many vacancies

8 Auckland’s Diane Edwards says the port has learnt to be flexible and fill roles with people seeking short-term work

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

Partnering P artn artnering r nering n Shap Shape Sh hape tth he the Future Futu F Futur ut re

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LABOUR: SHORTAGES

engineering or IT – both of which are noted to be growth areas in an automated environment.

“We need people who are not just interested in driving straddle carriers and cranes but who are adaptable to other work areas and possibilities. If they are open to changing roles as the port develops, we can offer them a varied and exciting future with us.

“We are also investing in our existing staff by providing training for other areas of the business ... it is key to our retention strategy that existing staff are shown that as jobs reduce in one area, others are created.

“Port executives need to ensure that they understand that automation is not just an IT implementation – it is a complete business transformation that will fundamentally change the mix of skills needed to run a port.”

HUMAN CAPITAL Back in Rotterdam, Mr De Bruijn and Ms Berflow say the business is encouraging collaboration as a means of addressing employment shortfalls.

“We are trying to establish a culture of teamwork between government, companies in the port and education – because together we can cope with the lack of workers, trying to be ready for the future and make sure everyone in the region is included and can be helpful in some way.

“We think that public-private collaboration will be the key to the labour shortage problem. To tackle this problem, we need to work smarter, include everyone (the ones with limitations as well), we need more communication between educational institutes and companies, and companies need to learn from each other and share their knowledge on a few topics.”

In this vein, Rotterdam has joined with a handful of other ports around the world to initiate the Human Capital International Ports Agenda.

“The challenges of the energy transition and digitisation can only be met if we also focus on the social transition. By working together and sharing knowledge and experience in this area with other international port authorities in the Human Port Capital initiative, we are creating a new generation of port employees.”

Additionally, it has partnered businesses in the port, the Municipality of Rotterdam, Deltalinqs and the Shipping and

Transport College in launching a continuous education programme.

“From cradle to quay, we get children, young people and adolescents interested in the port. We want young people to learn the right skills and not leave school without a diploma.

Employees must develop throughout their lives, which is why [the] employers are committed to retraining and additional training,” they say.

“Through digitisation and the energy transition, the port and the work in the port are changing. To remain competitive in the future, it is important to ensure that staff are properly trained.

Because the shortage on the labour market is getting bigger, we see this agreement as an important, concrete step.”

8 Auckland’s automation project is contributing to “some shortfalls in stevedoring areas”

ILO encourages skills focus Skills development is essential to address the opportunities and challenges to “meet new demands of changing economies and new technologies in the context of globalisation”, states the International Labour Organization (ILO).

According to documentation on its Decent Work for Sustainable Development Resource Platform (DW4SD), the ILO’s work in this vein over recent years has primarily focused on: 5 linking training to current labour market needs as well as anticipating and building competencies for the jobs of the future; 5 building quality apprenticeship systems and incorporating core skills into training for young people, and expanding access to employment-related training in rural communities to improve livelihoods and reduce poverty; and

32 | JUNE 2019

5 equipping women and men to work in the formal economy.

The ILO states that skills development strategies should be high on the priority list of countries, “in all stages of development”, for at least the following: 5 skills matching – “to better forecast and match the provision of skills, both in terms of relevance and quality, with labour market needs”; 5 skills upgrading – “to adjust skills development programmes and institutions to technological developments and changes in labour markets so that workers and enterprises can move from shrinking, low-productivity economic sectors and professions to expanding, high-productivity sectors and occupations – such adaptation requires permanent and regular re-skilling,

8 The ILO recommends that skills development strategies are given high priority

skills upgrading and lifelong learning for workers to maintain their employability and enterprises to remain competitive”; and 5 skills for society – “to build up capabilities and knowledge systems within the economy and society which induce and maintain a sustainable process of economic and social development”.

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

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OPERATIONS: PORT CALLS

OVERCOMING INCREASING BERTH BOTTLENECKS

Credit: Port of Rotterdam

Charlie Bartlett explains why port call optimisation projects have much to offer all parties involved in a cargo move, including ports themselves

Ships queueing at a port is bad for everybody. Ships lose money for every moment spent immobile, requiring fuel – often very expensive fuel, in emission control areas – to be burned to maintain their hotel load. Ports get whatever emissions the vessels happen to be putting out; and the repercussions of delays ripple outwards, increasing waiting times for other ships in the queue, and across the port’s other transport modes. Thus, the imperative is to ensure that absolutely every port call is akin to a Formula 1 car pit stop; ideally, each transaction should take place simultaneously and without hitch to ensure success.

In 2014, a task force comprising representatives of Shell, Maersk, MSC, CMA CGM, and the European ports of Algeciras, Gothenburg and Rotterdam, as well as Houston, Busan, Singapore and Ningbo Zhoushan, embarked on a project to identify ways to improve port call efficiency. That project yielded Pronto, a new tool which assigns a port call timeline to each vessel on which all the operations to be undertaken at the port are logged. The tool is still in development but has been used successfully to reduce waiting times and lower CO2 emissions at the participating locations. Rotterdam is now selling the service to other ports, and it is hoped that as more ports join, the greater the efficiencies along a vessel’s route.

BARRIER TO PROGRESS According to Nick Chubb, founder of Antares Insight and head of growth at Intelligent Cargo Systems, the biggest barrier to progress is that with every vessel call at a port, there may be as

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

8 Rotterdam cut waiting times by 20% just by giving everyone access to the same set of information

many as 20 different parties involved, with varying and sometimes conflicting interests. “We need to improve the level of collaboration between different parties in a port call. The way different parties work makes it difficult to effect any improvements. A lot of them are working on a whiteboard in their own offices – bunkering schedules, pilot operations, and so on.

“There are a few interesting projects – Rotterdam being one – to move that information onto digital platforms so it can be shared between all parties. Just by giving everyone access to the same set of information, [Rotterdam] has managed to cut waiting times by 20%.”

Different ports have different priorities, as well. In the same way that a shipowner is hesitant to invest in new efficiencies where only the charterer will benefit, port organisations have traditionally not been forthcoming in implementing changes which will benefit their competitors. Yet a more holistic attitude along shipping routes could bring benefits for all of them, as well as for the lines that call there, Mr Chubb indicates. “Every port around the world has a different definition of their own productivity, making it very difficult to measure objectively. Getting the different parties to agree on the different standards and definitions, data types – this is creating a massive leap forward,” he says.

This calls for standardisation of measures across ports.

“Things like net and gross berth moves per hour,” Mr Chubb suggests. Or, “being able to communicate between the berth and tugs and pilots in a standardised way ... allows everyone to plan the operation much better, and up until recently those standards haven't existed. It goes beyond just productivity.”

JUNE 2019 | 35

Credit: Carly Fields

OPERATIONS: PORT CALLS

STANDARDS MOVE Efforts have been made to introduce such measures. The €43m STM Validation project, partially-funded by the EU, concluded in 2018. Called the Port Collaborative Decision Making (Port CDM), one of the project's aims was to grease the wheels of trade by defining a common language for ports to share information. Thirteen ports participated in the project.

“Everyone has their own idea of what a good port call looks like and how to measure, improve it,” says Mr Chubb. “[The project] tried to get every major seaport in Europe to contribute a level of benchmarking data. Once they got over the initial inertia it became quite successful.”

‘‘

Getting the different parties to agree on the different standards and definitions, data types – this is creating a massive leap forward Nick Chubb, Antares

It has become a cliché to say that digitalisation can and will make everything more efficient, but port calls have perhaps one of the firmest and most tangible cases for implementation of better time management. The trouble is that, as Mr Chubb indicates, the customer base is not in unanimous agreement about what system to use. “The more we scratch the surface, the more we find work to do; we're at the stage of defining the terms of improvements to be made, rather than making improvements.”

Of course, while it may be difficult to get ports in different countries to collaborate with each other in this respect, the common denominator is the vessels which call there. But if rival ports are not willing to collaborate, one way to encourage them to do so is to approach the problem from elsewhere.

previously. With the data harvested, owned and accessed by the carrier, it is painting a frank picture of port performance, whether the port wishes to co-operate with the process or not.

“We’ve probably started to ruffle some feathers, given that we've managed to collect comprehensive data on port performance,” says Mr Chubb. However, he believes that more ports will seek to leverage this information to improve their operations in the future. “My belief is that this is where the industry will go, and it will increase transparency for everyone,” he adds.

WIDER VIEW If ports do take a holistic view, and collaborate with carriers and one another, the potential gains are extraordinary. Sharing information would allow dual-cycling – placing a container and removing another with every crane movement – or loading groups of containers in one go. “You don't want to lift four boxes if one isn’t for your terminal. But this kind of manoeuvring requires co-operation across a number of terminals. Better data sharing makes things like that possible. Even if it is only a 10% time saving, this is a massive difference in efficiency.”

The savings in terms of emissions are also nothing to be sniffed at. If ports embrace call optimisation, vessels will be serviced much more quickly, and spend more of their time underway, on-hire, rather than sitting idle. “There is, of course, a lot of concern that if you share this data it opens up the terminal to competition,” says Mr Chubb. “But down the line I see the vast majority, if not every port and terminal, connected to and synchronising with these types of platforms. Combining these things together would allow everyone in the wider ecosystem to reap huge benefits.”

8 With better visibility of ship arrival times, queues to get into ports can be reduced

8 Port optimisation schemes aim to improve the accuracy of ship arrival times

FROM THE OTHER SIDE Originally, Intelligent Cargo Systems’ Cargomate was designed purely for the benefit of the seafarers on the vessel and shoreside vessel operators, digitising data which would have otherwise been recorded by hand. “This is information which has been collected for the last 50 years by every ship visiting a terminal, but it has been written down,” explains Mr Chubb.

“We’re not changing the extent of data collected, but rather how – the first step was to digitalise these paper logbooks.

“We would then run them through our algorithm to predict the earliest time the ship can depart. Someone at the fleet management department can then see this data without making calls to the port, and then use it to make the necessary bookings.”

Shifting from paper to digital has afforded the ability to make calculations and compare port calls in a way not seen

36 | JUNE 2019

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

THEOPINION

COLUMNIST

BOB POST, RHDHV

BE ‘PEOPLE SMART’ WHEN AUTOMATING RHDHV’s Bob Post explains how to address one of the biggest barriers to automation of brownfield terminals As the first global wave of implementation activities in automated greenfield container terminals draws to a close after almost 15 years, automation is now entering a new phase. The terminal automation of brownfield sites, also known as retrofitting, is becoming a major commercial focus for terminal operators.

Terminal operators are increasingly embracing the benefits of semi- or fullautomation. As well as providing consistent productivity, new levels of operational predictability and safe working environments, retrofitting can lead to increased yard capacity and utilisation, optimised labour costs and improvements in sustainability when compared with manuallyoperated terminals. Perhaps most

EQUIPMENT BRIEFS ❙ New all-electric

equipment unveiled Kalmar, part of Cargotec, has introduced a fully electric version of the Kalmar Empty Container Handler. The launch represents another significant step on the company’s journey towards offering an electric version of every product in its portfolio by 2021.

Stefan Hultqvist, vice president of forklifts at Kalmar, stressed that electricity is the power source of the future. “We have been developing electrically-powered machine technology since the 1980s, and the Kalmar Electric Empty Container Handler is the latest in what will be a long line of eco-efficient solutions,” he said.

“We know that operational cycles differ from customer to customer, so we're pleased to be able to offer a choice between lead-acid and lithium-ion battery technologies to allow customers to specify the option that best fits their requirements,” he added.

38 | JUNE 2019

to change to operate the retrofitted automated terminal effectively. In other words, assessing the organisational impact of the change.

significantly, retrofitting offers the most cost-effective way to introduce new levels of operational predictability.

Terminal automation vendors too are experiencing increased demand for retrofitting equipment, requests for changes to terminal operating systems and/or changes to equipment control systems. At Royal HaskoningDHV, we also see growing demand from terminal operators for advisory

The all-electric machine is the latest addition to Kalmar’s Eco Range, which already includes the Eco Reachstacker. Kalmar has also already launched fully electric versions of its light and medium forklift trucks, Ottawa terminal tractors, shuttle and straddle carriers, automated guided vehicles and yard cranes. Based on the Kalmar ECG90-180 medium electric forklift, the new machine is designed to help customers reduce overall fuel costs and comply with increasingly strict emissions standards. It can stack containers up to four high and the electric driveline provides full torque immediately, making operating cycles shorter and increasing the potential number of container moves per hour. Fully charged, the battery has enough power to last a whole shift. ❙ Angola opts for Solvo.TOS Solvo.TOS has won a contract from Sogester SA – a joint venture between APM Terminals and GF Sociedade Gestore de Terminais –

8 Include people in automation strategies from the start

services in retrofitting strategies and implementation services.

Within a retrofitting strategy, there are several important project streams, including implementing equipment, systems and networks.

However, the most crucial and often underestimated stream is the understanding and detailing of how the organisational structure, roles and responsibilities will need

to modernise four container and general cargo terminals in Angola.

Sogester currently operates two seafront terminals, Luanda and Namibe, and two inland terminals, Panguila and Viana. Solvo.TOS will manage all operations at these terminals and will install modules to cover vessel, yard, rail, gate management, EDI, KPI, resource planning, and equipment control.

Additional modules to be installed include an automated gatekeeper’s workstation, vessel planner’s user interface, empty container depot management, and mobile harbour crane operator’s user interface. Additionally, a billing module tailored to local law and practices is also under development. A single database will process stakeholders, lines, government agencies and forwarders’ requests. Sogester managing director Frans Jol claimed the new system will provide more accurate data that will make it easier for terminal operators to raise productivity over time.

The system also includes data and

BUSINESS PROCESS MODELLING Such impact assessments start with business process modelling (BPM). This helps to comprehensively analyse the current model of manual operational processes and the terminal’s organisational capabilities – the BPM as-is. Once completed, the desired future operational model – the BPM to-be – must describe and reflect approved terminal simulations.

The difference between BMP as-is and BMP to-be is the zone which can be subjected to gap analysis. It is the results of this analysis that indicate to management teams what needs to be done and how they can guide their organisations to future operational processes, organisational capabilities and new structures.

Developing the BPM as-is

voice communication, CCTV and a container reefer monitoring system.

Full system implementation across all terminals is expected to be completed by 2020. Angola is one of the growing economies not only in Africa but also in the world with a GDP of roughly $124bn. ❙ Khalifa returns

to Bromma Bromma has won a 60-strong order for its all-electric, YSX45E single-lift spreader for automatic stacking cranes at Khalifa Port Container Terminal in Abu Dhabi.

This marks a repeat order following the first phase. Bromma marketing director Lars Meurling said: “The YSX40/45E is by far the most used spreader in automated terminals in the world today. The robust design combined with specific features required in an automated environment makes these spreaders the best choice for automatic stacking cranes.”

More than 90% of Bromma’s current spreaders for RTG, RMG and ASC operation are all-electric.

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

THE OPINION

should start at the beginning of the project and describe all touchpoints, including working methods, standard operating procedures, and so on, between operations and engineering, health & safety, human resources (HR), finance and ICT functions.

The BPM to-be should reflect the future operational model showing the manual processes that will eventually be automated.

This information will help guide the project and HR in retrofitting the organisation.

Being smart with retrofitting means taking the opportunity to rethink, redesign, redevelop and revitalise the terminal operational model, its processes and capabilities. It also an opportunity to prepare for future capabilities and innovations like digitalisation, big data and the Internet of Things.

Because automation will introduce new and changing jobs as well as different working processes and procedures, being smart also means involving HR at the start of BPM as-is and BMP-to be development. Winning the hearts and minds of terminal staff

❙ UAE “no objection” to

open loop scrubbers The UAE Federal Transport Authority has publicly confirmed it has “no objection” to ships using open-loop exhaust gas cleaning systems (EGCS/scrubbers), in its waters. This confirmation was made to the Clean Shipping Alliance (CSA) 2020, who said it has received written approvals and no-objection letters regarding open loop scrubbers from at least 20 port authorities and is in the process of seeking permission from these port authorities to publicly name them.

Confirmation of the administration’s stance on scrubbers comes after the Greater Wellington Regional Council, New Zealand, confirmed it has placed no restrictions on the use of scrubbers. While the Port of Fujairah in the UAE currently has a ban on open loop scrubbers, the CSA said it has presented the air quality benefits that the technology would provide for the port, to show that the “criticism is unjustified”.

“We’ll [show] facts but authorities responsible for ports really need to

here is vital. So, once the BPM is ready and signed off by the management and functional teams, there are four key initiatives that need to be promoted: 1. Regular, consistent communications. Many project failures can be attributed to ineffective communication.

Choosing the right communications tools, approaches and frequency can help but, interestingly, so can over-communicating through reiteration of the key points, direction and vision.

2. Engaging staff. Depending on the level of adaptation needed, resistance to change is not uncommon. Engaging directly with terminal staff from the start is key. Encouraging participation in design and requirements workshops, testing activities and offering early training are all valuable in lowering resistance.

3. Stakeholder management.

There are multiple stakeholders connected in various ways to automation projects. From port authorities, boards of directors, steering committees and

Being smart with retrofitting means taking the opportunity to rethink, redesign, redevelop and revitalise the terminal operational model, its processes and capabilities

terminal staff, to unions, workforce councils, shipping lines and trucking communities, each group needs to be informed closely of project progress and outcomes.

4. Managing change. Strict change management controls are necessary during adaptation.

That includes a total freeze on changes to the organisation and technology a year before starting the project.

BUSTING SILOS Addressing departmental silos and engaging departments crossfunctionally are two of the toughest and most sensitive tasks to achieve on brownfield sites.

Silos create tunnel vision and resistance so removing them is important for ensuring effective communication and getting the

I genuinely believe these projects have the potential to solve important inefficiencies in our industry Cargotec’s Tero Hottinen discusses the startups found through its partnership with the Rainmaking Trade & Transport Impact Programme make their own decision,” said Christopher Fee, general manager, environment and sustainability, fleet management at Oldendorff, a member of the CSA. Alongside Fujairah, Singapore and China have also declared bans on open loop scrubbers. The IMO's Marine Environment Protection Committee (MEPC 74) will consider a proposal by the EU 28 Member States and the European Commission to start international-level discussions on the discharges from open loop scrubbers at MEPC 74 which was taking place from 13 to 17 May. ❙ Cargotec projects tackle

industry inefficiencies Cargotec is to continue its joint projects with multiple startups to address maritime industry inefficiencies introduced to it through maritime startup

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

collaboration platform, the Rainmaking Trade & Transport Impact Programme. The programme aims to address the largest challenges in maritime, cargo transport and logistics and will see Kalmar collaborate with Arundo Analytics, Cogniac and Predictronics; MacGregor partner with Arundo Analytics, Geollect, Intelligent Cargo Systems and NauticAI; and Navis co-operate with Loginno, a logistics IoT visionary. “I genuinely believe these projects have the potential to solve important inefficiencies in our industry,” said Tero Hottinen, director of emerging digital business at Cargotec. “When we joined the Rainmaking programme, our goal was to find partners with whom we could make an impact already in the short-term. A lot of work has been done to get to this

whole organisation to take on project responsibility. It also helps reduce staff frustration and boost project performance.

When it comes to terminal automation, attention should not be solely focused on technology. It should also focus on discovering what can be done together with the organisation and its valuable staff. This is probably the most important strategic advice I can give for a successful brownfield retrofit.

8 Bob Post is director, terminal automation with Royal HaskoningDHV. Bob has international experience in managing the automation project lifecycle from design, simulation, contracting, integration, testing and go-live for operations, engineering and ICT.

point, but what we have found is exactly what we aimed for – several great opportunities to impact international cargo flow together.” Ongoing projects aim to develop Kalmar’s service offering, while Dennis Mol, vice president, digitalisation & business transformation at MacGregor, explained: “Cases with high potential impact are being worked on, ranging from proactive, predictive maintenance to smartlyguided lashing processes, feasibility tested spot cargo scoutings and safer mooring, enabled through a non-connected IoT solution.” An example of the co-operation between Navis and Loginno will be their joint involvement in the Contopia competition, an initiative aimed towards shipping companies looking to connect their containers to IoT producing real-time data.

The winner will equip their fleet with Loginno’s patented asset tracking devices.

8 Be part of disruption or be disrupted – Page 46

JUNE 2019 | 39

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SPECIAL SUPPLEMENT 18-20 June Ahoy Rotterdam The Netherlands

The AGM for Port & Terminal Professionals The Power of Face-to-Face The TOC Europe exhibition is firmly established as the best-in-class business and networking forum for port operators and container supply chain professionals. With more than 180 exhibitors, attendees will come to the event to see cutting edge port equipment, disruptive technology, autonomous vehicles and the latest software. Visitors will also get the chance to be really hands on and close to the action with equipment displays, safety demonstrations and VR simulations.

TOC Europe is used by major equipment manufacturers, digital experts and niche specialists as THE place to unveil the latest technology and will play host to series of world first product launches including Continental’s new radial port tyre, DP World’s new BOXBAY system and a surprise announcement from Kalmar.

Bite-Size Conference & Seminar Content With 3 full days of condensed high-quality seminars and premium conference sessions, covering 8 major themes – participants are actively encouraged to build their own agenda from a new and fully flexible format.

Most of the content is free to attend and speakers include Port of Rotterdam, Associated British Ports, APM Terminals, Port of Gdansk, Haifa Port, Dry Bulk Terminal Group, Maersk, DHL and Caterpillar.

Conference & Seminar Preview Theme: Port Technology Suggested seminar: Disruptive Tech to Radically Improve Terminal Operations Speakers: DP World | BOXBAY Case Study on World First: DP World and industrial engineering specialists SMS group will revolutionize the way that containers are handled in ports. A new and intelligent storing system will be applied for the first time ever at Jebel Ali Terminal 4 next year. Instead of stacking containers directly on top of each other, which has been global standard practice for decades, the system places each container in an individual rack compartment.

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

Theme: Market Intelligence Suggested seminar: The Outlook for the Solid Bulk Sector Speakers: Drewry | BIMCO The bulk market has had to withstand a huge amount of volatility this year as the ongoing trade war between the US and China takes hold and creates market uncertainty for buyers of raw materials.

Theme: Standardisation Suggested session: Driving Digitalisation & Interoperability in the Container Supply Chain Speakers: DCSA The newly formed Digital Container Shipping Association (the newly established association between Maersk, MSC, Hapag-Lloyd & Ocean Network Express) have chosen the Container Supply Chain Conference at TOC Europe to discuss creating value quickly and how to overcome some of the biggest pain-points in the industry. One of the first projects of the association is focusing on standards to overcome the lack of a common foundation for technical interfaces and data.

Theme: Asset Protection Suggested seminar: Cyber Security Speaker: SeaIntelligence Consulting Working with governments and supra-national bodies who are waking up to the threat posed by cybercrime and demanding that vital assets like ports put robust cyber security in place. But how to combat a risk that is constantly evolving and becoming more complex and resilient?

Confirm your attendance Registration is free for the exhibition and seminars – entrance to the Container Supply Chain Conference is free for Shippers and Carriers and fees start from €595.

More information including exhibitor list, full timed agenda and registration options : www.tocevents-europe.com

JUNE 2019 | 41

TOC Europe 2019, Ahoy Ro

www.vahle.com For future ports the VAHLE Group meets the challenges of advancing digitalization with a concept of energy transmission, data transmission, positioning and control systems.

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JUNE 2019 | 43

THEOPINION

COLUMNIST

MAURICE JANSEN, Erasmus University

CALLING ON THE YOUTH OF TODAY Erasmus University’s Maurice Jansen sees value in young professional networks taking the stage in ports around the world Image is everything. Port citizens have got used to the image of port as a gargantuan machine with supersized ships, cranes, container stacks, conveyor belts and other heavy equipment.

A place where businesses continually seek higher efficiencies and economies of scale, but also produce high emissions, heavy traffic, pollution and waste.

In this image, people have become insignificant with increasingly less intervention in port operations. Conversely, ports like to consider themselves as an ecosystem, where ecology and economy can live in harmony and where the port provides work and a healthy life for port workers and neighbouring port citizens. Out on the streets, both younger and older generations are protesting, whether it be for a stronger contribution to reduce the impact of climate change or for a better division of economic wealth coming from automation of jobs.

To live up to the promise of a healthy and hospitable place to live and work, ports will have to bring these two opposing images together. How? Young professional networks can play a vital role.

HOME FOR YOUNG TALENT In port ecosystems and maritime clusters across the world young professional networks are stepping up to the plate. While maritime companies were cutting back on their internal human resources development costs during the economic crisis, YoungShip was founded in Norway and offered a low-cost industrywide alternative for young talent who wanted to meet up and get inspired by the stories of others.

Its success was quickly recognised by industry associations, such as the Norwegian Shipowners' Association. In 2011 YoungShip

44 | JUNE 2019

8 Young professional shipping and port networks are stepping up to the plate

International branched out to other port cities in the world such as Rotterdam, Hamburg, Gothenburg, Houston, Helsinki, Dubai, Antwerp, Singapore and Liverpool, and to countries including Greece, Denmark, Italy, Turkey, Cyprus, France, Spain, Panama, Sri Lanka, Tanzania, Portugal and Nigeria.

“Right from the start we wanted to be purpose driven. Therefore, we made a handbook in which we included our core values: innovation and entrepreneurship, sustainability, transparency, diversity and equality,” says Birgit Liodden, founder of YoungShip International. “For the maritime industry, the value of social networks such as YoungShip is that we are engaging with young people and tell a different story. In our interaction with them, we found out the younger generation perceived the maritime industry as a kind of ‘Scrooge’, while we wanted to present the industry as Superman.”

In Port of Rotterdam the tradition of a membership association goes back 80 years and it has had a department for young port professionals since 2009. With over 500 members below the age of 35, it offers a stepping stone for

graduates into an accessible network of people who share the same values and interests. In addition, the department organises all kinds of events: masterclasses, talk shows, company excursions, onboarding programmes, and the annual dance party during the World Port Days.

SHARED VALUES These young professional networks contribute to the shared values of the port ecosystem. For a port city to be an inclusive and attractive place to live and work, these social networks connect a port’s human capital, cultural capital and social capital with the port’s economic capital. Ports thrive by their ability to attract, retain and grow the best and brightest talent.

These young networks mobilise teams of people who are willing to go the extra mile in organising a variety of activities on a voluntary basis. Secondly, these networks make a tremendous effort to connect senior and junior professionals. Stories of the past are carried on to the next generation and tech savvy young people have a platform to broadcast their latest ideas to the entire port community. In fact, these social networks are building bridges between generations.

These crossovers – both horizontally between members as

well as vertically between generations, reflect the social capital of the port ecosystem.

In this 21st century Renaissance, the human factor becomes paramount, followed by technology. This new generation of port workers is already pushing for change within their social networks and will do so even more strongly, more professionally and more persistently. They are the free spirits and creative minds who want to build their future on the shoulders of previous port citizens.

For corporations to thrive in this ecosystem they have to co-exist with this human-centred port ecosystem, not conflict with it.

The accumulated capital – human, culture, social and economic – within the port ecosystem reflects an image of interconnectedness and interdependency. It’s not free for businesses to use this force of change. Fundamentally people of all ages must believe in the ‘do good’ mission to join in company boardrooms’ struggle for survival.

The ‘what’s in it for me’ ideology has to be changed into ‘what’s in it for us’. In the long run, ecosystems live, not machines.

8 Maurice Jansen MSc is a senior researcher and business developer at Erasmus UPT, specialising in strategic management and environment.

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

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THEOPINION

COLUMNIST

DR TERO HOTTINEN, Cargotec

BE PART OF DISRUPTION OR BE DISRUPTED 8 Navigating trade technology mazes

Cargotec’s Dr Tero Hottinen explains why ports need a finger of the pulse of disruptive technology Even though digital disruption is something we have all most probably heard too many times and on too many occasions, it is something that cannot be avoided even in an industry as old-fashioned as shipping.

Many opponents say that maritime and shipping is an industry that is far too asset heavy and multifaceted to be disrupted – a claim that has a good deal of truth in it. I do agree that it may be impossible to disrupt the whole industry with a ‘big bang’, but disruption of smaller parts of the maritime logistics chain is already happening and this will expand into other parts as well.

Freight forwarding is a good example of a part of the industry where disruption has already happened; Flexport has already become a synonym for digital disruption of freight forwarding.

Aside from Flexport there are many other digital startups and young growth companies

disrupting the scene in one way or another, good examples being Kontainers and FAST Applications.

The reason for this disruption is that highly manual and analogue operations can reduce or even eliminate inefficiencies with smart digital service layers, just as the aforementioned players are doing.

The same applies for many other parts of global shipping.

There are many scattered players with manual and uncoordinated operations causing tens of billions worth of waste, some examples being the unnecessary need to wait at anchorage, delays for departure due to a missing service, cargo placed in the wrong place at the yard, or just poor predictability of cargo arrival due to co-ordination issues.

No matter what your role is in shipping, whether you are a terminal operator, an agent, a broker or something else, you should not overlook these signals of digital disruption

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

THE OPINION

Credit - Rainmaking

It may be impossible to disrupt the whole industry with a ‘big bang’, but disruption of smaller parts of the maritime logistics chain is already happening and this will expand into other parts as well

These all are something that call for smart digital service layers – and disruption of traditional business processes.

STARTUP SELECTION I have been in the corporate startup collaboration scene within shipping for quite some years, and have recently been exposed to pretty intensive global scouting through Rainmaking’s Trade & Transport Impact programme.

Based on what I have seen, it is

8 Launch days, Hamburg

evident that there are many players who have recognised and are also acting on the above disruption potential.

As an example, in addition to freight forwarding and booking platforms, port call related optimisation is also becoming a crowded field. Whether that covers berthing management and co-ordinating port call-related services (as Teqplay and Portchain

are tackling), providing visibility to terminal operations and enabling faster turnarounds (as Intelligent Cargo Systems is addressing) or creating enablers for cargo flow visibility and predictability through, for example, connected container fleets (as Loginno is doing), there is no doubt that there are plenty of innovative young companies setting up different types of digital service layers within different parts of the global shipping industry.

So, no matter what your role is in shipping, whether you are a terminal operator, an agent, a broker or something else, you should not overlook these signals of digital disruption.

One big question concerning disruption is how one can be part of it instead of being disrupted. My

advice is that even if you can only do it at a simple level, get out there and scout what is happening to gain insights into microtrends.

Set up concrete win-win collaboration activities with agile innovative companies to gain hands-on experience on what can be done (and how) to challenge the status quo. And, once there, do not hesitate to jump into the unknown just because it is more comfortable to do things “as they have always been done”.

Otherwise, you might find that others have the last laugh.

8 Dr Tero Hottinen is director of emerging digital business at Cargotec and is focused on strategic partnership within Cargotec’s central digital team.

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JUNE 2019 | 47

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AREA SURVEY: NORTHERN EUROPE

DEALING WITH BOTH THE UPS AND THE DOWNS Ports in Northern Europe are looking for new opportunities as they wrestle with near-term challenges. Felicity Landon finds out who’s winning

8 The ports of Szczecin and Świnoujście have major investment plans

The highly competitive nature of the Northern European ports sector means that all those involved are used to ups and downs, wins and losses.

This year started well for the Port of Hamburg, for example, with Hapag Lloyd’s decision to switch its US services from Bremerhaven, a move expected to deliver about 550,000 teu additional throughput for Hamburg.

Zeebrugge, meanwhile, is expecting a significant increase in containers this year as a consequence of COSCO taking over the former APM Terminals’ terminal at the port; Zeebrugge is now on two of the Ocean Alliance’s East-West loops.

But there is one overwhelming force that has the potential to add volumes or undermine them – and that is Brexit. For mainland European ports handling large volumes of UK trade, the continuing impasse and uncertainty relating to the UK’s departure from the European Union is a common thread and a major frustration.

Zeebrugge has taken a number of steps in response, says chief executive Joachim Coens: “Mostly it has been about creating awareness among exporters and production companies that exporting to a ‘third country’, not an EU country, is totally different, so they [can] prepare themselves.

“The second thing is that the government has created some additional customs controls and veterinary food controls. There is also a whole mobility plan in place in case of congestion due to checks and controls, and we have created some extra parking space.”

DIGITAL ANSWER However, he says, the most important move has been the creation of a digital platform which could cope with customs and other controls if needed. Zeebrugge has set up a data-

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

sharing platform called RX/Seaport to deal with the expected increase in customs and other administrative formalities arising from Brexit; the port authority says it expects import and export declarations to increase by 14% and 47% respectively.

“We have also talked to the UK government and the EU authorities at various levels to avoid an uncontrolled [hard] Brexit.”

Frustration isn’t far beneath the calm exterior, however. “At least we should know in advance what game we are playing – and that is still not the case. The only thing that happened is they all agreed that a hard Brexit would not make sense. But it still isn’t clear what will happen and when.”

Mr Coens reports that in the first three months of 2019, Zeebrugge saw a huge increase in volumes as shippers filled the UK’s warehouses in case of a ‘no deal’ exit from the EU. Then volumes dropped dramatically in April. And after that – will it all happen again in the run-up to an (at present) October deadline?

“Possibly, although if there is a feeling that there will be a kind of agreement, then it would be smooth. With a possible ‘no

‘‘

In allowing the port area to be used as a real-life testbed, Antwerp Port Authority is doing more than just loading and unloading goods. This is a role we are picking up more and more as an innovation port Luc Arnouts, Port of Antwerp

JUNE 2019 | 49

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deal’, people are concerned about shortages of products.”

As to volumes post-Brexit, he says: “If the UK is leaving the EU and the Customs Union, that creates additional barriers and that is not in favour of trade. At least what we expect in the beginning is some disturbance in trade. Any import duties would make EU products more expensive in the UK and if confidence is lower in the UK, there is a reduction of buying power. Of course, we have seen that in the last year – car sales in the UK dropped 10%-12% and that means fewer cars to be transported to the UK.” The Port of Zeebrugge had a good year in 2018, with volumes rising 8% to reach 40.1m tonnes. “This came after a few years of volumes going down, due to the decrease in the container sector,” says Mr Coens. “Containers were not yet back last year but they are coming this year with COSCO.” The CSP (COSCO Shipping Ports) Zeebrugge terminal was using 37% of its available capacity at the start of the year and that is set to increase.

Liquid bulk volumes grew 63% to 6.7m last year, due to LNG volumes rising 257% to 3.5m tonnes. LNG deliveries from Sabetta started in 2018 and volumes from Qatar rose after recent decreases. Zeebrugge also supplies LNG bunkering via a vessel in the port, in an agreement with Fluxys.

“We have UECC car carriers already powered by LNG and this will grow in the coming years; we know more newbuilds using LNG are coming, including car carriers, container ships, cruise vessels and tugs.”

The port is also a landing point for a large amount of offshore wind generated energy; it is looking into the possibility of using some of this power to create hydrogen from seawater. “We have LNG as a ship fuel for the next few years but the hydrogen idea is for the future.”

CARRIER WIN The Port of Hamburg is expecting a 5%-6% increase in container volumes this year thanks to Hapag Lloyd’s shifting of US volumes to the port.

Credit: Port of Zeebrugge

AREA SURVEY: NORTHERN EUROPE

“This is quite significant,” says Axel Mattern, chief executive of Hamburg Port Marketing. “All the cargoes are for the hinterland, not for transhipment; this is very important for Hamburg as our hinterland system is very sophisticated and getting better and better.”

The really major development, however, is that the deepening of the Elbe is finally going ahead after a saga lasting around 18 years.

“The first work is happening – creating the passing places so that the big ships can pass each other within the navigational channel,” he says. “This will be finished by the end of this year, giving the possibility to handle twice as many ships of the largest size as we were able to do up to now. The additional depth will be finished in 2021 and involves a lot of construction works throughout the river.”

The focus is inevitably on attracting more cargo to Hamburg, especially heavy cargo which can be difficult to handle with the current draft restrictions.

There is plenty of interest in the future possibilities, says Mr Mattern – especially from the chemical industry, keen to have this option as an alternative to the usual Antwerp/Rotterdam.

8 Zeebrugge has started supplying LNG bunkers via a vessel in the port

8 Zeebrugge’s Joachim Coens has been educating shippers about the impacts of Brexit Credit: jandarthet, Port of Zeebrugge

Poland steps up its game Major investment plans at the Polish Seaports of Szczecin and Świnoujście include the construction of a new liquefied natural gas (LNG) loading quay and a new container terminal, creating completely new port operations on the Ostrów Grabowski Peninsula, and extending and upgrading bulk handling, general cargo and ferry operations.

The twin ports handled record volumes last year, with cargo increasing 12.5% to 28.6m tonnes. Coal imports and exports rose 61% to 3.4m tonnes, while ore was up by 30% and fuel by 18%. However, container handling was down by 13%, described by Szczecin and Świnoujście Seaports Authority as a big surprise.

Dariusz Słaboszewski, president of the authority, says: “The figures are very encouraging to continue the development of the ports of Szczecin and Świnoujście.

They are the result of creating the best possible conditions for business in the ports and implementing a robust and

far-reaching plan focused on the development of port infrastructure.”

Szczecin and Świnoujście form a port complex that can handle virtually any kind of cargo, says Mr Słaboszewski. “The high quality of services provided has been appreciated by shipowners who listed the two ports as the best ones in handling dry bulk in the 2018 BIMCO Report. The ports enjoy an excellent geographic location with access to environmentally friendly modes of transport, including sea, inland and rail. We have good road transportation links to the hinterland, while the Świnoujście ferry terminal is the leader in the south Baltic Sea regarding services to Sweden. Almost every hour, a ferry leaves Świnoujście heading to ports of Ystad or Trelleborg. Additionally, Świnoujście operates an LNG terminal.”

Plans for the next two years include building a new 300-metre Norweskie quay and modernising two others, with increased depth alongside of 12.5 metres; widening the Debicki

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

Canal to 200 metres and deepening to 12.5 metres to increase general cargo capacity; and land reclamation of the unused Notecki Basin using material from dredging the Kaszubski Basin, to extend bulk cargo handling facilities.

At the ferry terminal, berths 5 and 6 are being combined into one longer berth for vessels up to 270 metres. New yard areas and a flyover are being built, as well as rail facilities to allow intermodal transport.

Further ahead are plans to build an LNG loading quay in the external port in Świnoujście to enable the distribution of LNG within the Baltic Sea region as well as for bunkering, and a container terminal to the east of the outer port in Świnoujście to be operational by 2023.

On the Ostrów Grabowski Peninsula, three new quays are planned for containers, conventional cargo and heavy lift, and three more for bulk cargoes, while the 25-hectare central part of the peninsula would provide for logistics and port-related activities.

JUNE 2019 | 51

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‘INNOVATION PORT’ The Port of Antwerp, in a first quarter where total volumes fell by 3%, reported that March was its strongest month ever in container volumes. Extra MSC traffic from April is expected to continue pushing box throughput higher in the coming months.

“The port is doing very well,” says Luc Arnouts, vice president, international relations and networks. “Ineos, which is already present in the port, is to invest €3bn in two new factories and that is a very strong sign. We love cargo flows and even better is, of course, to attract investment that anchors cargo flows to the port. Together with other projects such as Borealis [the petrochemical company is to build a propane dehydrogenation (PDH) plant on its existing site in the port area], a total of €5bn is being invested in the chemical cluster at Antwerp, so we are particularly optimistic for the future.”

Alongside cargo handling, ports and port authorities must take up their responsibilities when it comes to topics such as climate change, energy transition and innovation, says Mr Arnouts.

Antwerp Port Authority has recently formed a consortium of five companies which will develop a demonstrator for an energy to methanol project. This is seen as taking the next step in the transition to alternative energy sources and a carbonneutral port.

“We have a lot of green energy in the port – mainly wind, and some solar,” says Mr Arnouts. “There is the potential to store the excess in batteries but this has its limitations. So the idea is to use this green energy to make hydrogen from water through

Credit: Henderyckx, Port of Zeebrugge

“They would like to have the possibility to send cargo by train to Hamburg – this is heavy chemicals in bulk containers,” he says.

Digitalisation continues to be a key focus for Hamburg, which started out early to establish itself as a smart port and is presently a test area for 5G. “5G is installed already and now we need practical examples to be handled in the port,” says Mr Mattern. “We need to see what really can be done in terms of logistics solutions – for example, with drones being used in the port for maintenance, checking bridges and locks, and underwater ROVs checking the river bed, quay walls and even ships' hulls. In order to be able to do this they need this 5G because they need transmission of heavy volumes of data in a very smart and fast way.”

electrolysis. That hydrogen can be combined with CO2 – of which we have a lot in our chemical clusters – to create methanol. It is a way of storing energy in a chemical component which can be used in two ways – as a source of energy or in the chemical cluster, where a lot of processes are using methanol which is now imported.”

The port authority is also involved in the SAFIR consortium set up to demonstrate integrated drone traffic management.

SAFIR will carry out studies and demonstrations which will include surveillance flights in the Port of Antwerp. “For one full day in June, we will make the whole port area available as a test zone for companies developing drone technology, for simultaneous testing,” says Mr Arnouts. “In allowing the port area to be used as a real-life testbed, Antwerp Port Authority is doing more than just loading and unloading goods. This is a role we are picking up more and more as an innovation port.”

8 Zeebrugge is expecting a significant increase in containers this year

Bold aims of inland ports The three Dutch inland ports of Zwolle, Kampen and Meppel have seen container volumes climb steadily since they signed an agreement five years ago to work together.

In 2014, the ports, which share the same network of inland waterways, handled 35,000 teu; last year the figure was 138,000 teu. That may sound small compared with giant neighbours such as Rotterdam but Jeroen van den Ende, managing director of Zwolle since 2016, has his eyes on something far bigger.

At present, the focus is on getting containers off the roads and on to the waterways by transporting them by barge to and from the ports of Rotterdam, Antwerp and Amsterdam, supporting the logistics of major manufacturers in the region.

However, the ports have been lobbying hard for investment in the upgrade of

8 Zwolle has aspirations to be a shortsea port

the Konwerderzand lock, which would improve access to the IJsselmeer and effectively make them ‘inland sea ports’ with the possibility of handling shortsea shipping, says Mr van den Ende.

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“Together, we form quite a big inland port, handling 138,000 teu and 7m of dry and liquid bulks in 2018. The widening and upgrading of the locks would give a tremendous economic boost for the region and would make Zwolle a shortsea port. The decision hasn’t been made by the government – we wait for that. But in the meantime, it is unique that three cities and two provinces are working together in one port community, and we will do more to handle our administration and tariffs as one port.

“We have close co-operation with Rotterdam, Amsterdam and Antwerp, and we have regular container services, daily to and from these ports. We think container numbers will grow again this year as companies recognise that cargo handled by water is more sustainable than by roads.”

JUNE 2019 | 53

PORT PROFILE: OSTEND

TAKING REINVENTION TO THE NEXT LEVEL Ostend was hard hit by the loss of major ferry operations, but it came back and is now striving for diversity. Felicity Landon reports on the port’s revitalised ambitions

TARGET FIVE The port has identified five market segments on which it will focus: the blue economy, bulk and project cargo, cruises and ferry, circular industry and the fishing industry.

The first of these dominates at present but all five have potential and will be cherished equally, says Mr Declerck.

“In the blue economy, Ostend wants to establish itself as the most important port in the North Sea for the offshore wind industry. We have a cluster already and companies active in the industry already established. But of course we want to grow that and make it more stable and less susceptible to economic fluctuations – making sure there are reasons for these companies to stay in the future.”

Among current initiatives the port has established, in partnership with the University of Ghent and the Province of West Flanders, the Ostend Science Park, which offers accommodation to maritime-related companies backed up by the offer of research assistance from the university.

Within this, a maritime research centre is being built, to include a towing tank for simulating and testing manoeuvring and other operations, and a 30x30 metre wave pool for researching the impact of waves, tides and wind on ships and objects at sea.

As well as strengthening marine scientific research in the region, the centre will support the development of the port: “It will reinforce what we have and anchor companies in the port by ensuring that they benefit from each other,” says Mr Declerck.

54 | JUNE 2019

Credit: Port of Ostend

When ports refer to growth, they generally mean more tonnage. But the Belgian port of Ostend is taking a different approach.

“When we talk about growth, we are talking about growth in employment. That is why we want diversity. We want to invest more and ensure continuity,” says Port of Ostend chief executive Dirk Declerck.

Ostend was best-known for decades as a major ferry port, with its ro-ro links first to Dover and then to Ramsgate. The last service ended in 2013.

Today the port is better known for its role in supporting the construction and operation of offshore wind farms, through its REBO base. However, that is just one part of the overall picture, says Mr Declerck.

Ostend is in the process of reinventing itself, based on five key sectors, a new financial structure and a slimmed down board with less political influence. It has been transformed from a municipal company into a PLC and its board – previously 18 members, 11 of whom were politicians – is now reduced to 13, of which six are politicians, six are drawn from industry and science, and one is the chief executive.

“The main driver for the change is to have less political influence, more entrepreneurship and a more agile board able to make decisions quickly,” he says. “We really have a strong board ready to tackle the challenges of the future. Also, it is good to have strong people to challenge what the management decides. I am not afraid of that.”

Among other initiatives, the Nemos maritime testing platform is being built 500 metres from the port; this will provide a base for testing conditions at sea, with the focus on wave, wind and tidal energy as well as topics such as corrosion research and cable manipulations.

Meanwhile Blue Power Synergy (BPS) is testing a selfsupporting energy pontoon in the port. Part of the European PECS project (Ports Energy and Carbon Savings), the pontoon is based around a container with solar panels and wind turbines to generate energy which can transform seawater into drinking water.

Ostend has one particular advantage – a landbank with 50 hectares of available space: “We want to develop this for companies involved in maritime activities,” says Mr Declerck.

The port’s bulk operations include major sea-dredged sand terminals, supplying the construction industry; in the circular economy sector, there are a number of companies active in recycling and the port wants to develop a more integrated cluster in which companies reinforce each other’s activities.

The loss of major ferry operations at Ostend in 1997 was a big hit for the port and local employment. “Lesson learned – you should never be a one-product shop, as a company or a port,” says Mr Declerck. “Hence our drive for diversity.

Fortunately, we have this landbank, which is an opportunity to attract more activity and new companies.”

8 The Nemos research station is one of many initiatives underway at the port

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DARK CLOUDS PERSIST ON ECONOMIC HORIZON Carly Fields hears that a global economic recovery is far from assured in 2019, despite assurances from industry to the contrary

8 The future looks murky

While the sky “isn't falling in”, as one speaker put it, there was a definite air of negativity concerning the global economic outlook at TOC Asia's conference in Singapore.

Alan Murphy, director for Asia at Sea-Intelligence Maritime Analysis, led the charge for the doubters, stating that he was “relatively pessimistic on demand growth”.

With the first two months of the year off to a bad start, Mr Murphy pointed to an “outright contraction” in demand growth. Noting this is not a “good thing”, he added: “If you are giving away money every time you move a container you are no longer a company, you are a charity. This is not a long-term survival strategy.”

Mr Murphy’s doubts echo the International Monetary Fund’s cut to its outlook for global growth, pitching it at its lowest since the global financial crisis. It now expects the world economy to grow 3.3% this year, down from the 3.5% it forecast for 2019. The IMF puts this down to a weaker outlook for the majority of advanced economies. The IMF's chief economist Gita Gopinath described this as a “delicate moment” for the global economy and warned that a pickup in growth next year is far from assured.

But other panellists at TOC Asia, while acknowledging a slowdown, were less convinced that things were as bad as Mr Murphy made out.

Amazon executive Jim Lim agreed there was pessimism in the air, but was quick to remind listeners that one quarter does not represent the whole year. A “good balance of supply demand” could well drag the sector back to more palatable levels, he noted.

Ocean Network Express (ONE) chief executive moved further along the spectrum stating that he expects “relatively steady demand growth for years to come” and while he conceded that

56 | JUNE 2019

the market is facing a slowdown in economic activity, he said that he doesn’t believe it is a slump.

SMART THINKING When the discussion moved to smart ports, there was an expectation that the mood would be lifted. But instead there were more stark warnings on not undertaking digital projects lightly. First up, Jonathan Beard, a partner in the infrastructure advisory at EY, was quick to note that digitalisation offers many more opportunities to connect parties, but, he warned, if “it goes down, it goes down badly”. He advised that tech solutions be driven by customer need rather than by a solution looking for a problem. “Future-proofing is far from easy,” he added. “It’s not easy to see where the return on investment is.”

Mr Beard asked ports whether they should “do the same a bit better, or reach for a paradigm shift? First mover if you get it right is great. If you get it wrong, it’s embarrassing. Be careful of being too clever.” He told delegates that ports of the future will ultimately need to do more with less.

‘‘

If you are giving away money every time you move a container you are no longer a company, you are a charity. This is not a long-term survival strategy Alan Murphy, Sea-Intelligence Maritime Analysis

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

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TECHNOLOGY DIVERSION Another panellist pointed out that having the best technology in the world is not going to control how much freight a port handles or how much activity will pass through the port.

Additionally, said David Wignall, chairman of Seaport, port

authorities need to be able to justify big ticket spending on infrastructure and technology if big ships shift ports. “Ports need to think for 30, 40, 50 years, not just five years because these are major capital investments and major strategic decisions.”

He asked the audience to think about whether mega containerships might go the same way as cancelled Airbus A380 super-capacity airliners. This would lead to a shift from larger to smaller ships which are much easier for ports to handle.

Rotterdam has been pioneering moves to boost collaboration and co-creation between like-minded ports, hoping to engender that forward thinking. In fact, Raoul Tan, business manager of digital development at the port issued a call to arms at the event, inviting all delegates to “collaborate, connect ... and explore how we can strengthen each other”. His

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8 ONE predicts a slowdown but not a slump

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And smart isn’t just about automation. It’s about a change of mindset, according to Jeroen Overbeek, senior project manager for maritime and waterways at Royal HaskoningDHV. Speaking at the event he said that a port might invest in an automated crane, but that does not make it a smart port.

“Digitalisation is a means to an end,” he said. “It should be something that helps you, not just be smart or sexy. It’s not just about smart and useful hardware.”

Mr Overbeek urged the use of a ‘digital twin’ to help optimise layout, describing this complete digital model as the “holy grail” to help optimise your operations.

There was discussion also on what the port of tomorrow will look like. The general consensus was not all that different.

However Mr Overbeek predicted some fundamental changes that will need to be considered. “It will look a lot like the port of today, but it will be operated in a very different way, by different people with different skill sets and by equipment that runs very differently,” he said. Therefore, port designers and operators need to think about where they want to go from here. “All these building blocks are here, but there are so many and unless you have an idea of where you want to be, what you want to do and how you want to measure that, you can invest in lots of nice toys and never get anywhere,” Mr Overbeek said.

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team is actively looking at how to create business value for a community while at the same time reducing carbon footprint and increasing efficiency.

Today, one in every two ships is delayed, one in every four trucks on the road is empty and for a single transaction there can still be a need for over 20 parties and over 200 documents. “This was one of the key drivers for the port of Rotterdam to start a

digital innovation lab where we, together with customers, develop smart solutions based on data optimisation,” said Mr Tan. Summarising the feelings of the panel, he added that no port can be a smart port on its own; ports must connect with other connected ports to build an “end-to-end digital chain where there is huge potential for saving carbon emission and increasing efficiency”.

Stop overvaluing data worth When it comes to creating smart ports, authorities need to be realistic on the true value of their data – or risk losing out altogether.

A panel discussion at Singapore Lloyd’s List Forum came to the conclusion that ports are often in the dark on data ownership and mistake the worth of the data they do hold.

Rajesh Unni, founder and chief executive of Synergy Marine Group, said that the biggest challenge that his group faces is that most people who ‘own’ the data don’t really own that data, “and they think that maybe if I give you the data I’m cannibalising my own data.

“That’s not the case,” he said. “It’s more about the mindset to find some value

that’s hidden under the data. We are in a never-ending conversation on sharing data.”

Cris DeWitt, senior technical advisor of marine/offshore cyber security at Cyber Mariner, added that now that big data is “sexy and cool” people want to hang on to it.

Mr DeWitt also questioned whether smart is a reality. “It’s going to take time,” he said.

“This is a very complex ecosystem.” He asked ports to think about what is actually being communicated between all the systems and warned of the danger of creating really complex systems. “I think software providers have to work to create systems that talk to each other,” he said.

Mr Unni suggested that if a port could just

get two different systems to talk to each other and then get one to add value to the other, a port would be on the road to becoming smart.

“If we can demonstrate the value it will happen – it’s about value creation,” he said.

When asked what the financial incentive is to share data, his response is “let’s create value first”.

“We need people to sit in a room and not be selfish and see how we can create value.

Technology should be looked at as how you can unlock potential.”

And while there are ports investing in transformation, he called for more companies with collaborative mindsets to join the fray to really drive the revolution.

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JUNE 2019 | 59

REGIONAL SURVEY: SOUTH AFRICA

GETTING SOUTH AFRICA’S HOUSE IN ORDER

Credit: Transnet

South Africa is facing up to the problems at its biggest port while maintaining its role as the conduit for Southern Africa, says Martin Rushmere

A lifeline for Southern Africa, fellowship with other African ports and the most efficient logistics network in the continent are the overarching guidelines for South Africa. But while the government and private sector both recognise this, the government is yielding to intense popular pressure to provide more jobs and take more control – which means that relations with the industry are as prickly as ever.

Some quarters are optimistic, contending that the authorities “are at least listening” about worries over declining port throughput performance and capital replacement and investment. They support their arguments with a recent declaration by Transnet Port Terminal chief executive Nozipho Sithole about Durban container terminals. With the port facing a storm of criticism for slow truck and vessel turnaround times and inefficiencies, Ms Sithole said: “I will not shy away from saying our operations are poor.”

An indication of this is that rail cargo from the port can take three days to travel the 400 miles to Johannesburg.

Ms Sithole said that consistency was poor and this was partly a result of planning and skills levels but Transnet was working to fix this. Most cheering for the optimists was Ms Sithole’s admission that “tariff growth is not going to work” to reduce operational losses.

GOVERNMENT INVOLVEMENT Speaking to Port Strategy, Mike Walwyn, ports and maritime operations manager of the Association of Freight Forwarders, says that as the ports are all government-owned, and the container terminals are government-operated, it goes without saying that government involvement is almost total in South Africa.

“In the absence of any comparators, it’s difficult to say to what extent this hampers efficiency, but we are certain that efficiency and productivity would be improved if the ports were privatised, as we come across inefficiencies and high pricing on a regular basis,” he says. “The Ports Authority is regulated

60 | JUNE 2019

8 Durban container terminals have been criticised for slow truck and vessel turnaround times and inefficiencies

and so their pricing is held in check to some extent, but the terminals are not.”

Mr Walwyn says capital investment is up to speed “and as things stand, South African ports are well-equipped with modern equipment. The deficiencies we see are more in terms of a lack of planned maintenance and over the next few years, we foresee that the availability of capital will be constrained.”

RAIL DRAWBACKS While the immediate hinterland is described as “fairly accessible”, there is too great a reliance on road transport because the rail system is dysfunctional. “This in turn leads to bottlenecks, particularly at Durban, where trucks can stand for many hours before discharging or loading,” says Mr Walwyn.

Also, there are real problems with connections with other countries. “We have quite substantial traffic to and from countries to the north of us, and there the picture is not pretty,” he adds. “For example, the queue of trucks in Zambia trying to get through the Democratic Republic of Congo border can stretch back over 70 kilometres (40 miles), and there are other borders where major delays occur.

“One of the problems is that there is no continuous rail link, due to the plethora of different rail gauges in different countries.”

Transnet plans to bring in foreign operators to improve efficiency at its terminals, but so far it has released no details.

But the involvement of Chinese operators is bringing in its own problems.

In a recent report, Fitch Ratings noted that Chinese construction firms are responsible for building 50% of new infrastructure projects in sub-Saharan Africa. Identifiable infrastructure investment flows averaging $12.6bn over 20122017 from China via commercial banks, policy banks and corporations eclipse the next largest sovereign investment flows from France which average $2.2bn, according to the Infrastructure Consortium for Africa.

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REGIONAL SURVEY: SOUTH AFRICA

LOOKING AHEAD Beyond domestic and international concerns, South Africa’s industry needs to make up its mind on its longer-term practical strategy. A hub-and-spoke system for transhipment used to be in contention, but then fell out of favour. Now, it is being reconsidered.

Some analysts believe that South Africa should avoid going down this route because of the geologistics and the costly ramifications of changing the established hinterland network.

Peter Besnard, chief executive of the Association of Ship Operators and Agents, points out that South Africa's container terminals operate under the Navis system, while the ro-ro/car terminals operate under the G-Cos system. “Both are constantly being upgraded and have simplified electronic working. SARS/Customs also operate scanners and is in the throes of introducing a National Customs Act Procedure (NCAP) that is not fully operational but will in time see penalties for noncompliance enforced.

“The NCAP system has a number of components and is

Credit: Transnet Freight Rail

Says Fitch: “A primary challenge for Africa will be balancing new infrastructure development with successfully implementing already funded projects. It would also involve balancing genuine infrastructure needs with sound economic rationale.”

Local industry is said to be incensed by Chinese involvement as they state that there are local companies with powerful international connections who already have the know-how to operate the terminals themselves and boost job creation at the same time. slowly being released into the EDI system that every operator has to be compliant with,” says Mr Besnard. “In terms of efficiency, labour is a distinct drawback on efficiency by way of their mindset and manner in which they apply themselves.

“In terms of cost it is largely felt that SA ports are the most expensive in the world but this is arguable in terms of our volatile currency,” he adds.

Given the stack date system operated in all container terminals, TFR (Transnet Freight Rail) operates a pretty good service but has lost market share to truckers largely due to the time it takes by rail versus road.

“If a container is uplifted by a trucker it can be at a company in Gauteng by 0800 hrs the next morning,” says Mr Besnard, “versus 27 to 30 hrs by rail. The downside of this is of course the wear and tear on national roads. Trucking has certainly grown but rail generally has seven to eight trains per day both ways to Gauteng. Overall, we are pretty well covered for the movement of containers and other commodities, be it bulk, cars, or steel and so on.”

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8 Transnet Freight Rail runs a good service but has still lost market share to truckers

REGIONAL SURVEY: SOUTH AFRICA

Nationally, total cargo handled for March was 18.673m tonnes, 1 million tonnes less than the previous month. Predictably, Richards Bay, the main bulk â&#x20AC;&#x201C; especially coal â&#x20AC;&#x201C; and breakbulk port, handled the most at 46% of the total.

Saldanha Bay (iron ore) was second at 28% and Durban third at 15.6%. The smallest port, East London, accounted for less than 1%.

Durban finished 2018 with a throughput of 2.9m teu, up from the 2.7m in 2017, while the national total was 4.8m teu.

Richards Bay volumes increased to 103m tonnes, up from 100m tonnes in 2017. Coal accounted for 73m tonnes.

Capital investment plans for Transnet include three new dredgers, estimated to be costing $15m, to be operational in Port Elizabeth in July. Berth expansion and deepening at the Durban container terminal will continue once governance issues are resolved. Management problems have been bedevilling Durban for some time, along with continual industry grievances about

Credit: Transnet Port Authority

Making smart investments

8 Richards Bay monopolises South African cargo volumes

widespread corruption. Malcolm Hartwell, a director of international law firm Norton Rose Fulbright and head of transport in Africa, has called for South Africa to â&#x20AC;&#x153;attract direct foreign investment before any of our neighbours do so and permanently relegate us to being a local transport hub. This requires policy certainty and

absolute assurances from government that any investment in this country will be protected.â&#x20AC;?

Devlyn Naidoo, a facilitator and customs mentor at the privately-owned Maritime School and Transport College, has called for greater investment in smart technology.

Writing in a regional publication, Freight and Trading Weekly, he advocates "taking a leaf out of certain European smart ports like the ports of Hamburg, Rotterdam and Valencia".

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JUNE 2019 | 63

OPERATIONS: GIS

CROSS-PORT BENEFITS OF GEOSPATIAL TECHNOLOGY The benefits of modern GIS systems do not need to be restricted to just one or two experts in a port. Alex Hughes finds out who else can put geospatial data to good use Ports making smarter use of geographic information system (GIS) digital platforms to store information about land and assets are benefiting from improved geospatial data management throughout the business, within budgets that don’t break the bank.

From its base in Los Angeles, NSGIS, a geospatial systems integrator specialising in ports, has worked on GIS projects with ports in Los Angeles, Long Beach, Oakland and Tacoma, among others. Its role has “varied greatly” with each, according to company president and chief executive, Daniel Elroi.

Most ports tend to focus on “static” data, defined as data that rarely changes or only changes slowly, such as port infrastructure, legal boundaries, or topography. Some so-called static data does change more frequently, especially bathymetry and aerial photography, but fewer ports integrate these with their GIS. But the most sought-after data to be rendered in digital format is related to utilities, structures, leases, and waterfront infrastructure, says Mr Elroi.

Dynamic operational data can also be digitalised. This includes vessel location and information, cargo, police vehicle, health safety and security data, movement of vehicles in and out of terminals, or people in and out of buildings, weather, tides, and security camera feeds. All of this data is spatial in nature, and NSGIS has helped a number of ports to integrate this into their map viewers, their situational awareness systems or other operational systems.

BEYOND INSTALLATION UK-based OceanWise has worked on various geospatial systems integration projects. Managing director Dr Mike Osborne comments that installation of a GIS system alone will not deliver simple and rapid access to cartographical information.

“The key to successfully implementing GIS is by developing and implementing data governance and a geospatial data management strategy. GIS is software, just like Excel or Word, and is nothing without the policies and procedures that underpin it,” he says.

Any strategy, he adds, should be proportional to the port’s business and operational requirements. In fact, this has been a common factor across all of the projects OceanWise has successfully delivered, coupled with small steps but with a view on what can be achieved overall.

“Pretty much every department within a port could benefit from GIS, even ones where this might not be immediately apparent. An example is where OceanWise personnel helped a port migrate a spreadsheet of its 50+ private vessel moorings to a geospatial database and then linked that database to its finance system, so ship and owner details could be managed in a more joined up and hence efficient way, saving time and money, and reducing the risk of errors occurring,” says Dr Osborne.

Mr Elroi agrees that end-users should not have to spend inordinate amounts of time learning systems in order to get to the information they need quickly.

64 | JUNE 2019

EASIER ACCESS Nowadays, the primary means for end users to interact with GIS is through Web GIS and apps that engage a broad range of users where and when they need specific information, analysis or outcome.

“The reason that GIS has seen a resurgence in applicability to ports is that not only have the apps become easier to use, but the approach to using them has changed in the past few years,” notes Mr Elroi.

He points out that in the past staff were presented with a highly complex map viewer, with many buttons and options that required training and constant reinforcement through repeated use. Today’s Web GIS-based approach seeks to provide “just in time” apps that deliver less overall functionality per app, but greater focus on each end-user’s immediate challenges. These can be identifying potential underground hazards prior to excavation; quickly collecting the location and information about an accident at a terminal; confirming that two hazardous cargoes were not placed closer to each other than regulations permit; determining a port’s properties’ overall occupancy at a particular moment; identifying underperforming leases; or communicating the next window for a bathymetric survey boat to have clear access to a dock in a busy container terminal.

“In these examples, the aim is to put geospatial information and analysis at the hands of management and regular staff, rather than keeping it the exclusive domain of one or two GIS experts in the port,” says Mr Elroi.

He claims that, when properly planned and deployed, GIS can and should be an enterprise system, meaning that it sits at the same level as ERP, email, and document management systems.

8 Apps for GIS have become easier to use

8 Geospatial information and analysis should be in the hands of management and regular staff says NSGIS’ Daniel Elroi

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OPERATIONS: GIS

8 Every department within a port could benefit from GIS

“When sponsored by an executive, governed by a directorlevel steering committee, managed by a technical committee and fully supported by a port’s information management professionals, GIS can impact on every department of a port,” he says.

CROSS-PORT USE Even departments where there is no obvious use can benefit from GIS. Human resources, for example, could use GIS to identify employees who can carpool to travel to work together; the business development group can use interactive “story maps” to improve the telling of their port’s story to potential shippers; and the legal team can use digital maps to determine potential boundary conflicts between leases.

“When it is deployed well, the executive team can use mapenabled dashboards to determine at a glance the current

operational or even financial health of the port’s facilities and asset portfolio,” says Mr Elroi.

One interesting use of GIS technology has been in regional security and operational co-operation, with ports in Western Canada and the US leading the way. Some are proactively collecting and disseminating information that helps shippers get their cargo faster, truckers make more money, and keep the environment cleaner. Others are sharing security information with both local and regional stakeholders, thereby helping to reduce crime, fight against human and contraband trafficking, and step up efforts to thwart terrorist activities.

Dr Osborne notes that ports OceanWise has worked with have seen tangible benefits. At Peel Ports, for example, it helped migrate dredging and licensing data to a geospatial database and, using OceanWise’s GIS-based tools, Peel Ports personnel are nowadays able to complete work on dredging

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OPERATIONS: GIS

plans and returns in one to two hours when it used to take one to two days.

“Savings across all GIS projects are achieved by users having immediate access to key information, so their time is not spent finding, requesting, retrieving and sometimes reformatting data to meet their requirements,” notes Dr Osborne.

SECURITY BENEFITS Mr Elroi recalls one port that had invested heavily in security cameras and a video management system, but the value of the investment was limited primarily to the security department. By linking live video feeds to GIS maps, the security personnel were able to have better situational awareness, access information about tenants and infrastructure in response to incidents visible to the cameras, and also share limited aspects of the video with non-security port operations staff.

“This greatly increased the value that the port realised from their investment,” he says.

Another port uses their cloud-based GIS subscription to bring their promotional materials to life, with interactive maps that allow their business development staff to present their port more effectively to potential shippers and thus win business for the port.

“The data was already there, but only used for engineering purposes. With this approach the business development staff were able to squeeze more value out of that information.”

Mr Elroi says that port authorities can not only reduce cost through GIS deployment, but also reduce risk.

Reducing costs comes from eliminating repetitive and time-

consuming tasks, such as digging around in a paper records room, avoiding unnecessary expenditures (such as paying a contractor to resurvey prior to construction, when that survey has already been performed recently by another contractor) and reducing wasted efforts, such as using map-based work orders so that repair staff go to the correct asset and bring the right materials the first time. “In the area of records retrieval, for example, we have heard of reduction in time in the order of 90%,” he says.

In the future, Mr Elroi says that use of GIS for strategic asset management is potentially the most exciting area.

“This is a data-driven, risk-based, multi-faceted approach to decision-making in a port, where multiple factors are used to help decide investments in new assets, repairs to existing assets, or disposition of failing or redundant assets. GIS can play a major role in building strategic asset management systems, and this is an area where ports are finally showing real interest now,” Mr Elroi says.

According to Dr Osborne: “If done right, proportionally and carefully over time, then there are no areas where digitalisation cannot help ports develop. But it needs to form part of an overall data and information infrastructure to deliver real benefits.”

Here, he soberly concludes that GIS poorly implemented is worse than no GIS at all.

8 OceanWise’s Dr Mike Osborne believes the key to successful implementation of GIS is good governance and an appropriate strategy

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BULK HANDLING: PESTS

TRADE WINNING LONG-FOUGHT BIOSECURITY BATTLE Iain MacIntyre investigates the pioneering programmes at ports that have waged war against invasive species and pests

reefer containers, the equipment needed to keep them cold, the folks to maintain that equipment – and possibly more new cold storage investments.”

Additionally, increased reefer business could mean more USDA inspectors in the market and having that availability could create efficiency and be a factor in driving that business in Virginia. When that equipment, support and infrastructure is readily available in the market, it can create opportunities for exports, allowing all stakeholders to become more competitive on that side of the business.

“So, when we combine all of these elements with our investments to handle refrigerated cargo, we see real potential to expand in this area of business,” says Mr Harris. “In short, this is an opportunity for us and we are out there aggressively courting this business.”

BUILDING SAFETY BONDS Mr Harris emphasises that The Port of Virginia’s approach in facilitating this new cargo into the domestic market has been that “safety must be built into the supply chain ... it cannot be in addition to”.

“That said, the federal and state government inspectors are critical partners in the movement of this type of cargo and they are leveraging technology and sharing data to drive efficiency.

The more closely we work with these partners to understand, develop and install processes, the more efficient and predictable the flow of cargo will be.”

In addition to benefiting shippers and consumers through lower transportation costs and a longer shelf life for this timesensitive cargo – as well as reducing transportation-related emissions – Mr Harris sees the increase in import volumes providing additional spinoffs. “[It] could create opportunities for Virginia-based cold storage warehouses and distribution centres to be transload destinations for this type of cargo – the cargo comes to a local warehouse (versus one in the northeast), gets loaded into trucks and moves to its destination.

“An offshoot of that is more equipment in the region – the

AUSTRALIA’S SWASP In Australia, a collaborative initiative between five port authorities and the Western Australian Department of Primary Industries and Regional Development is said to have added a significant layer of protection to marine-introduced pests invading the state’s coast.

Claimed to be a world-first use of molecular techniques by a collaborative marine biosecurity surveillance network, the State-Wide Array Surveillance Program (SWASP) involves 11 ports and spans 11,000 kilometres of coastline.

Described as an “early-warning system”, the multi-awardwinning initiative entails comprehensive sampling and testing of the ports’ waters in order to detect and enable early eradication of pest species arriving via vessel hulls.

Ports Australia chief executive Mike Gallacher describes SWASP as a “fantastic example” of ports and a regulator working together to develop innovative and cost-effective means of managing biosecurity threats.

“I am aware that other state regulators are looking to implement this approach because of its effectiveness, simplicity and significant financial savings compared to existing systems,” he says.

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

Credit: U.S. Department of Agriculture, CC BY 2.0

Ports are proving that their business interests can be both protected and enhanced while simultaneously minimising the potential for pest infestations destroying their local habitat and economy, despite the inherent challenges posed by increasing global trade.

A case-in-point is the Port of Virginia, which recently gained approval to import perishables from South American countries after completing the United States Department of Agriculture (USDA) Southeast In-Transit Cold Treatment Pilot programme.

Such containerised imports are now permitted to enter the port directly after completing a two-week cold treatment process as a safeguard against fruit flies and other pests, as well as having secured required unloading clearances prior to a vessel’s arrival.

Already established as the United States East Coast’s leading vegetable exports port, the approval positions the business to reach the same status with imported fruit, explains The Port of Virginia spokesperson Joseph Harris.

“This development will add value to our larger effort to grow the amount of reefer and frozen cargo moving across the Port of Virginia,” he tells Port Strategy.

“As we embarked on the (combined) $700 million expansion of [our] biggest container terminals, part of the plan was to develop more on-terminal infrastructure to handle this type of cargo – it also goes with a goal to diversify our cargo mix as outlined in our larger strategic plan.

“We have always had the necessary infrastructure/ personnel to handle reefer cargo, but most of this cargo (South American fresh fruits) traditionally flowed over ports in the northeast and was moved by truck into other markets. With the programme in place here, Virginia is now a destination and we can compete on a more level playing field.”

8 US Department of Agriculture inspectors have upped their port presence

JUNE 2019 | 69

BULK HANDLING: PESTS

Mr Gallacher enthuses that Australia's ports are “leaders in biosecurity detection and prevention”.

“Biosecurity is a global problem that Australia must deal with to protect our natural assets while also remaining competitive in global trade.”

LABOUR AND LEVIES However, Mr Gallacher laments that government staff cuts are increasingly shifting the “detection work” responsibility to industry in Australia. “A shortage of on-the-ground qualified personnel to undertake screening and investigations of ships is delaying the movement of some ships and their trades. This has a serious impact on our ability to effectively trade and impacts the profitability of the Australian supply chain.”

His members are fervently opposed to a government proposal to implement a biosecurity levy on all imported goods arriving into the nation alongside a charge on all commercial vessels.

“This measure is likely to further impact on trade and the Australian supply chain if not implemented correctly, while adding very little to existing biosecurity measures. It is imperative that the introduction of such a funding measure be transparent and assurances given that all monies raised be directed to biosecurity measures that future proof our nation against emerging biosecurity threats.

“There are brilliant minds at our ports which have the tools to assist in securing our borders from biosecurity threats. I would like to see greater interaction between our ports and regulators on discussing innovative

solutions and utilising current port solutions to solve this problem instead of new programmes that unnecessarily use taxpayers' money or that hit the bank balance of Australians when purchasing goods, such as the biosecurity imports tax.”

EXTRA EYES AND EARS Across the Tasman Sea – where the threat posed by the brown marmorated stink bug is a current priority for New Zealand regulators, with unavoidable impacts on the supply chain – the Port of Tauranga has also set a biosecurity benchmark.

Alongside the Kiwifruit Vine Health organisation and the Ministry for Primary Industries, it has strived to achieve ‘operational biosecurity excellence’ through such measures as upskilling its frontline workforce to be ‘extra eyes and ears’ regarding potential risks.

Recognised by the inaugural Industry Award in the National Biosecurity Awards in 2017, the initiative is understood to not only be providing additional protection to the region’s vital horticultural industry and improving processing speeds, but is also said to have served as a ‘template’ for other ports.

Port of Tauranga chief executive Mark Cairns says: “It’s about everyone doing their bit and working together to protect New Zealand’s environment and primary industries from unwanted biosecurity risks. By having a heightened awareness of what to look for in day-to-day operations, all staff within the port community can play a part in keeping unwanted pests out of port operations.”

8 Ports Australia’s Mike Gallacher claims that Australia’s ports are “leaders in biosecurity detection and prevention”

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BULK HANDLING: PESTS

Detector dogs are being increasingly used to screen inbound cargo and passengers for harmful plant pests and foreign animal disease by the United States Customs and Border Protection (CBP) agency.

The CBP’s public affairs team tells Port Strategy that the ‘Beagle Brigade’ detector dog programme was first launched by the United States Department of Agriculture (USDA) at Los Angeles International Airport in 1984. It’s come a long way since then.

In 2000 the programme evolved to Labrador Retrievers being deployed in both the ‘Border Brigade’ on the Mexican and Canadian borders as well as the ‘Cargo Brigade’ in the CBP’s cargo inspection facilities at airports and seaports.

The USDA’s agricultural inspectorate subsequently transferred to the CBP, which currently hosts about 120 agriculture canine teams providing screening at border crossings, preclearance locations, air passenger terminals, cruise terminals, cargo warehouses and mail facilities that process

international passengers and commodities.

The USDA recently announced it would be working with the CBP to train and deploy 60 additional beagle teams.

“The ability to discriminate and target a specific odour – such as that of an orange or even a live snail – makes dogs an invaluable tool in detecting prohibited agricultural items hidden from view,” says the CBP. “When it comes to finding prohibited fruit, vegetables, plants and meat products from high-risk countries, the nose knows. A trained agriculture dog can scan a piece of luggage for smuggled or forgotten fruits in mere seconds – understandably, it takes an officer much longer to open and visually inspect the same bag.”

In addition to their important detection work, agriculture canine teams make the public aware of the important role that agriculture plays in the CBP’s overall mission and in the US economy. “The special role of the agriculture detector dog programme in protecting American agriculture and its public appeal make it ideal for public outreach

Credit: CBP

The nose knows

8 The US CBP is increasingly using inspector dogs

activities. Agriculture canine teams have given thousands of demonstrations to audiences of all ages. At schools, media interviews, fairs or other events, the agriculture detector dog teams are always ready to steal the show, greeting the public with happy faces and wagging tails.”

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PORT SERVICES: PILOTAGE

SUPPORT VESSELS THAT GO ABOVE AND BEYOND

Credit: Goodchild Marine

Revamped and refitted pilot vessels offer an often-overlooked means of ‘greening’ port operations. Alex Hughes reports on the options available

In many parts of the world, there is an inexorable drive to make ports greener. Not only is shore-side machinery becoming ever-more efficient, quieter and less polluting, but vessels, too, are benefiting from initiatives such as cold ironing to keep emissions down to an absolute minimum.

Now, for the first time in the UK, a battery-powered pilot vessel has begun trials, courtesy of a co-operation between the Port of London Authority (PLA) and vessel designer and builder Goodchild Marine.

The company’s business development manager Tony Birr notes that while many companies have offered hybrid power systems for pilot vessels, many have been little more than theoretical designs. However, in April 2019 Leader, an ORC 136 design, built by Goodchild Marine and featuring a hybrid diesel and electric power system, took to the water to undertake proving trials on behalf of PLA. An official handover is expected to take place in early June.

According to Mr Birr, it will probably operate under electric power for at least 85% of its duty cycle, although it’s expected to operate at 100% electric power for the majority of its work.

Leader is expected to reach speeds of up to 15 knots under hybrid power and will be primarily used by the PLA for the transfer of pilots to and from vessels at Gravesend Reach.

“Only on some of the infrequent, longer journeys will the new hybrid boat have to resort to diesel power,” Mr Birr says, conceding that the hybrid option has meant having to make

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

8 ESL’s ORC 171 could save the company up to £100,000 in reduced fuel costs per vessel per year

compromises in terms of both range and speed, which will mean that it will not suit every port. “This compromise of speed may be too great for these longer duty cycles with current battery technology,” he adds.

The order for the hybrid boat was placed as part of PLA’s commitment to promote the adoption of new, greener technology as part of its recently published Air Quality Strategy for the Tidal Thames, which is the first of its kind for any UK port. The strategy aims to reduce river-based air pollution, while facilitating future growth of waterborne freight and passenger transport.

‘‘

There is no ‘one-size fits all’ solution for a pilot boat Ian Lord, ESL

HORSES FOR COURSES Hybrid vessels are said to be best when there is a short distance between the harbour entrance and the pilot embarkation/disembarkation point, and/or long periods of patrol work at below eight knots, Mr Birr says. Ports with this type of duty cycle tend to be smaller and therefore cannot justify the extra cost of a hybrid, since this would not make financial sense. Larger ports, which have high pilot vessel usage, also tend to have pilot transfers in excess of 20 miles per round trip, also negating the benefits of hybrid.

JUNE 2019 | 73

Credit: Port of London

PORT SERVICES: PILOTAGE

For some ports, therefore, this means that the disadvantages of hybrid power outweigh the advantages, but “only a detailed analysis of the duty cycle of a port’s pilot vessel will clearly identify the potential benefits of hybrid”, says Mr Birr. “Clearly, when the vessel is operating in electric mode, emissions are zero, thus reducing carbon footprint and fuel burn while increasing service intervals on the engines. Naturally, electric motors potentially increase the life span of the engines, too,” he says. However, the faster the boat goes, the more battery capacity it uses.

Nevertheless, there are other vessel designs that pilot boat operators can trial for other benefits.

For guidance, Mr Birr cites operational data generated by pilot vessels operated by Estuary Services Ltd (ESL), which undertakes some of the busiest pilot services in the UK. Its fleet consists of the 48/50 Halmatic design – whose oldest units entered service in 1992 – and brand new ORC vessels, which were built by Goodchild Marine and began arriving in 2012.

In comparison, the ORC 171 is 27% faster than the Halmatic units, has 38%-42% better fuel economy and is 20% more efficient in terms of pilot duties per run.

For ESL, this means a £100,000 fuel saving per vessel per year when comparing an ORC171 to a similar sized vessel.

Furthermore, thanks to the wave piercing bow of the ORC design, there is a reduced risk of wave impact damage, while other innovations mean that maintenance periods are minimised, allowing vessels to work for longer.

As a result of its lower fuel burn, the standard ORC is also a much greener option.

“Due to the overall design features of the ORC, noise levels are significantly reduced, with our last vessel commissioned measuring 65 decibels. Furthermore, with a legal requirement to mitigate against whole body vibration, the ORC design, with its wave piercing beak bow cutting through the waves, reduces slamming and thus sudden large impact on the vessel and the body,” says Mr Birr.

So impressed has ESL been with the new ORC design that it is to phase out all its Nelson 48/50s within the next two years, replacing them all with ORCs. The Port of Southampton, for its part, took delivery of its first ORC pilot vessel in 2003, while the Humber was the last, putting its ORCs into service in 2011.

However, ORCs have established a proven track record as pilot vessels in the North Sea, the English Channel and the Irish Sea. IMPROVING RESILIENCE Other new innovations for pilot vessels include improved pilot safety through upgraded recovery platforms as well as more resilient, mounted wheelhouses, which are being incorporated

74 | JUNE 2019

to reduce vibration. Reduced emissions Tier 3 engines are also now coming into the marine sector market.

New technology is also seeing the fitting of monitoring systems to enable early identification of faults and also to track vessel usage; this comes in a whole variety of options from online live feed to a simple data download.

“Navigational equipment is also constantly evolving,” adds Mr Birr.

Of course, not all pilot vessel operators can afford to buy new, but this need not keep them from benefiting from upgrades. Pilot boats tend to remain in service for 20-25 years, although one vessel built by the company has been operating out of the Port of Great Yarmouth for 38 years.

“Without exception, I would say all pilot boats go through one or more refits during their time in service. The regularity and the level of refit depends on how many hours the vessel has worked,” says Mr Birr.

8 Alan Goodchild, managing director of Goodchild Marine, and PLA chief executive Robin Mortimer celebrate the order of a hybrid pilot boat

‘‘

Hybrid vessels are said to be best when there is a short distance between the harbour entrance and the pilot embarkation/disembarkation point, and/or long periods of patrol work at below eight knots

Take the case of the Port of London Authority (PLA), which has considerable experience in this sector. Not only does it operate a pilot boat service on the River Thames at Gravesend, it also owns ESL in partnership with the Port of Sheerness, providing a boarding and landing service for pilots joining and leaving ships operating in ports on both the Thames and Medway rivers. Furthermore, fast pilot launches based at Ramsgate and Sheerness also serve ships at the N.E. Spit Buoy, Margate Roads Anchorage, and the Warps/Oaze Deep as well as the Anchorages at Southend and the Great Nore.

Ian Lord, general manager of ESL, agrees that pilot vessels usually remain in service for a minimum of 20 years, although many continue on to their 25th or even 35th year. Given this, vessel refits are common, with ESL carrying these out on each vessel every five years.

“It should be pointed out that ESL’s operating area is a particularly arduous one and the boats consequently require a

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

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PORT SERVICES: PILOTAGE

high level of maintenance. Regular refits are therefore part of that process to ensure continuity of service,” says Mr Lord.

However, he stresses that refits are not carried out to improve things like energy efficiency – they are primarily to ensure reliability and service continuity and to make sure vessels have a long working life. However, if efficiency and/or environmental improvements can be made during a refit they are always considered.

As to whether it is cheaper to refit an existing boat rather than buy new, Mr Birr says that is the question that every operator and finance director asks themselves every time they consider a refit.

“Much of their decision making will depend on available capital budgets compared to operating budgets, and not whether it is cheaper to buy new or refit,” he says, adding that the final calculation will take many factors into consideration, include historic use and future projections.

“Advances in design and technology mean that our modern vessels are more efficient; however, whether they warrant the expenditure has to be looked at on a case by case basis,” he says.

INNOVATION BY DESIGN Other than hybrid power systems – which the PLA thinks could well become a regular feature on future orders – other innovations in the pipeline are looking at new hull forms and low friction below the water line coatings. Significantly, because pilot vessels are usually bespoke and expected to remain in service for a long time, operators are usually cautious in their hull choices.

76 | JUNE 2019

‘‘

Innovations for pilot vessels include improved pilot safety through upgraded recovery platforms as well as more resilient, mounted wheelhouses, which are being incorporated to reduce vibration. Reduced emissions Tier 3 engines are also now coming into the marine sector market “Seminal pilot vessel hull designs are rare, and criteria are governed by operational requirements,” Mr Lord says.

“Consequently, design improvements tend to be more in the equipment field, rather than hulls,” he says.

He adds that each port around the UK will have differing requirements. For example, pilotage runs may be longer or shorter, and prevailing weather and sea conditions will differ from port to port.

“So, there is no ‘one-size fits all’ solution for a pilot boat. What works for PLA or ESL, may not work elsewhere and so on,” he says.

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

PORT SERVICES: PILOTAGE

Mid-life refresher 8 ABP’s refit of the Beaufort could extend its service life by 10 years

Credit: ABP

ABP's Beaufort is a good example of a midlife refit of a pilot vessel. It was initially built for the Swansea Pilotage District by Halmatic, in 2001, and had an expected service life of 25 years. However, according to Dan Brown, marine maintenance manager for ABP South Wales, the company is aiming to extend this for a further ten years, meaning it will remain in active service in South Wales for approximately a further 15 years.

“She may then go into standby boat duty or even to one of our other smaller ports where she may have a further useful operational life,” he says.

Mid-life rebuilds are fairly common at ABP. Most pilot vessels at the larger ports are routinely refitted half way through their life. For example, ABP South Wales refitted its Providence in 2015 and ABP Southampton, which leases its pilot vessel, has also used a mid-life refit to extend the working life of its boat.

“We have now completed major refits for

our South Wales fleet and, as a result, have pushed the need to acquire a new build out beyond the present five-year capital expenditure plan,” says Mr Brown.

He explains that the refit cost for the Beaufort was just 20%-25% that of a new build like-for-like replacement vessel. Furthermore, he adds that the Beaufort is well proven and has a good history of safe operation in South Wales, which is another good reason to hang onto it for as long as possible.

“As part of the refit, we were able to install more fuel-efficient power units, which should result in a 5%-10% reduction in fuel costs going forward,” he adds, which helps drives the overall return on investment.

During the refit, a new hybrid power system was installed which powers the 240V systems at sea. In total, the vessel has been fitted with two generators, one of which needs to run permanently when the boat is on active duties.

The current hybrid system is powered by 2.5kw alternators, which run the main engines.

These charge a battery bank, which powers a pair of 5kw inverters to provide power to the critical systems whilst the vessel is at sea.

“In addition to the power upgrade, we also opted to update the man-overboard recovery system during the refit. This involved fitting a Goodchild marine system, which is both proven and is also the leading solution within the industry,” says Mr Brown.

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JUNE 2019 | 77

PRODUCTS & SERVICES: DIRECTORY

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

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 Fax: +39 049 8848006 Email: info@dellnerdampers.se Web: dellnerdampers.se

Gantrex

E LECTRIFICATION SOLUTIONS

T: +49 (0)40 74008-0 info@hpc-hamburg.de www.hpc-hamburg.de

500 Seventh Avenue New York, NY, 10018, USA Tel: +1 646 908 6550 Patrick.King@jacobs.com www.jacobs.com/capabilities/ transportation

D REDGING EQUIPMENT

HPC is an internationally renowned consulting firm with profound experience in the global port, transport and logistics sector and a clear operations/ownerâ&#x20AC;&#x2122;s perspective.

Container Terminal Altenwerder, Am Ballinkai 1 21129 Hamburg, Germany

DREDGING

HPC Hamburg Port Consulting GmbH

C RANE RAIL SOLUTIONS

C ONSULTANTS

Gemini House Cambridgeshire Business Park, 1 Bartholomewâ&#x20AC;&#x2122;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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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

DEME NV DEME has almost 175 years of experience in dredging and land reclamation activities, hydraulic engineering and executed major works of marine engineering infrastructure.

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FĂĽrtoftvej 22 7700 Thisted, Denmark Tel: 0045 72 42 24 00 holding@cimbria.com www.cimbria.com

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.

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

C RANE COMPONENTS

C OMPONENTS

A/S Cimbria

LASE Industrielle Lasertechnik GmbH

Jacobs has served the global port industry for 150 years. As one of the worldâ&#x20AC;&#x2122;s largest port consultancies, our unequaled talent delivers innovation and technical excellence to solve your greatest challenges.

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Email: info@buttimer.ie Tel: +353 52 744 1377 Website: www.buttimer.com

Cimbria design, develop, manufacture and install custom-built solutions, from processing lines to large turnkey projects. We possess in-depth specialist knowledge in every field of crops and products with project engineering and process control as particularly demanding fields of competence.

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Buttimer Engineering are a diversified mechanical engineering company with 40 yearsâ&#x20AC;&#x2122; experience, specialising in bulk materials handling systems and high-quality steel fabrication.

In 2014 Buttimer launched their DOCKSOLID brand, a range of market leading Standard and Environmental ship unloading hoppers.

â&#x20AC;˘ Portable pneumatic conveyors or grain pumps; â&#x20AC;˘ Pneumatic continuous barge and ship unloaders; â&#x20AC;˘ Mechanical continuous ship unloaders; â&#x20AC;˘ Mechanical loaders; Complete turnkey projects for port terminals

VIGAN Engineering s.a.

Rue de lâ&#x20AC;&#x2122;Industrie, 16 1400 Nivelles (Belgium) TĂŠl.: +32 67 89 50 41 www.vigan.com info@vigan.com

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Buttimer Engineering

B ULK HANDLING

B ULK HANDLING

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

Via Praimbole 38, 35010 Limena (PD) â&#x20AC;&#x201C; Italy Tel: : +39 049 7663100 Fax: +39 049 8848006 Email: sales@bedeschi.com Web: www.bedeschi.com

VIGAN manufactures dry agribulk materials handling systems:

Stäubli Electrical Connectors AG 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/

VAHLE PORT TECHNOLOGY

Founded in 1971, Gantrex is the global market leader in production, distribution, installation and maintenance of high quality crane rail solutions. Gantrex offers its products and services across the world and operates four production sites in Belgium, Spain, Canada and China. Gantrex products are used in many different applications including ports, shipyards and heavy industries.

YOUR VISION â&#x20AC;&#x201C; OUR SOLUTION As a specialist for energy and data transmission VAHLE is active in the fields of ports, intralogistics, automotive, people mover and cranes. VAHLE offers innovative customized solutions based on wide experience.

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Email: info(at)vahle.de Web: www.vahle.com

JUNE 2019 | 79

PRODUCTS & SERVICES: DIRECTORY

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

info@alimak.com www.alimak.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

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.

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

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

CERTUS provides Automatic Container Recognition systems in ports and terminals all across the globe. Our systems have consistently demonstrated high reliability and overall high OCR accuracy, streamlining customer operations.

Check out our Mobile OCR! www.certus port automation.com +31 78 6815196 The Netherlands

Sany Europe 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.

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.

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

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

80 | JUNE 2019

1-Stop is a globally recognised leader in innovating and delivering integrated solutions to increase productivity for the Port Community. We are committed to working collaboratively with all members of the community to deliver efficiency gains for everyone.

PO Box 204, Rockdale, NSW, 2216 Australia Tel : +61 2 9588 8900 (Intl) Email: info@1-stop.biz Web: www.1-stop.biz

To advertise in the The TT Club is the international transport and logistics industry’s leading provider of insurance and related risk management services.

TT Club specialises in the insurance of liabilities and equipment for multi-modal operators.

90 Fenchurch St London • EC3M 4ST Tel: +44 207 204 2635 london@ttclub.com www.ttclub.com

Port Strategy Directory contact Tim Hills on

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S IDELIFTER/SIDE LOADERS

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.

I NSURANCE

Verstegen Grijpers BV

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

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

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

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

P OWER TRANSMISSION

Orts GMBH Maschinenfabrik

VISY Oy VISY takes pride in solving operational problems, specialising in gate automation and access control solutions in ports and terminals. Their solutions streamline processes resulting in saving money and increasing productivity.

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

M ARINE FENDERS

G RABS

Liebherr-MCCtec Rostock GmbH

MRS Greifer GmbH

I T PORT AUTOMATION

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

I T PORT AUTOMATION

Alimak, the leading manufacturer of rack and pinion elevators, have been successfully servicing ports since the early 1970s with close to 3,000 elevators installed, providing easy access for crane drivers, which enhances productivity and profit. Today, the company’s crane elevators are installed in almost 100 countries around the world.

H ANDLING EQUIPMENT

E LEVATORS

Alimak Group Sweden AB

Conductix-Wampfler The world specialist in Power and Data Transfer Systems, Mobile Electrification, and Crane Electrification Solutions.

We Keep Your Vital Business Moving!

Rheinstrasse 27 + 33 Weil am Rhein 79576 Germany Tel: +49 (0) 7621 662 0 Fax: +49 (0) 7621 662 144 info.de@conductix.com www.conductix.com

Hammar Maskin AB Hammar Maskin AB is developing, manufacturing and marketing Sideloaders, also known as Sidelifters, Swinglifters or Self loading trailers, under the brand name HAMMAR™.

Buagärde 36, Olsfors 517 95 Sweden Tel: +46-33 29 00 00 Fax: +46-33 29 00 01 info@hammar.eu www.hammar.eu

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

PRODUCTS & SERVICES: DIRECTORY

Bromma is the industry’s most experienced spreader manufacturer, known worldwide for crane spreaders of exceptional reliability.

Today you find Bromma spreaders operating in 97 out of the top 100 ports worldwide.

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Coda Octopus is a global leader and specialist in underwater technologies.

Our patented flagship product, the Echoscope®, is the world’s only real-time 3D volumetric imaging sonar, giving operators the ability to visualize and map the subsea scene in real-time 3D.

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

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Master Terminal TOS from Jade Logistics solves the complex problem of managing a variety of mixed cargo within one system, providing the agility you need to manage your port. Designed to cater for all cargo types, it is the TOS of choice for mixed cargo terminals.

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Solvo Europe B.V. Solvo’s software solutions such as TOS or WMS help container and general cargo terminals take full care of their cargo handling processes and make sure the clients expectations are exceeded.

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

Providing complete solutions for your container cranes Refurbishments & Upgrades – Maintenance – Training – Inspections & Audits – Safety Lashing Cages – Spares & Service Support www.wcs-grp.com/ info@wcs-grp.com T: +971-4-8838980

T RACTORS

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T ERMINAL OPERATING SYSTEMS

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 18,000 spreaders have been attached to lift trucks, reach stackers, straddle carriers and cranes.

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

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T ERMINAL OPERATING SUPPORT

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T ERMINAL OPERATING SYSTEMS

S UBSEA

S PREADERS

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MAFI Transport-Systeme GmbH Specialised in the development and production of heavy-duty equipment for transporting containers, semi-trailers, cargo/roll trailers and special container chassis in ports and industry.

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

Terberg Special Vehicles develops and manufactures customised tractors. Our terminal, RoRo, industrial and road/rail tractors operate in ports, distribution centres, shunting yards, industry and construction sites worldwide.

We believe efficient operations depend on high quality, easy maintenance and operator comfort.

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JUNE 2019 | 81

POSTSCRIPT

POSORJA – ALLEGATIONS OF IRREGULARITIES BUILD

Allegations continue to build about the improper manner in which DP World was awarded the concession for the Posorja Deep Water Port Project.

The latest of these relates to incorrect testimony as to DP World’s company status at the time of the signing of the concession agreement and related to this false testimony, a criminal offence

82 | JUNE 2019

The furore around the award of the 50-year concession to DP World for the development and operation of the Posorja Deep Water Port Project in Ecuador is escalating.

Local media sources report that a complaint filed by Dr Luis Fernandez, Carlos Figueroa and Ramiro Garcia – a combination of legal and other professional interested parties – before the State Attorney General of Ecuador, submits that there were irregularities in the delivery of the concession and identifies the crimes of embezzlement, private enrichment, bribery, influence pedalling, tax fraud, money laundering, forgery of signatures and so on.

The complainants, it is reported, have requested a special investigation be made by the General Comptroller of the State into the contract for the development of the new port and that the officials responsible for granting the concession to the international terminal operator DP World, including former President Rafael Correa, be investigated for issuing the Decree 1060 which authorised the construction of the port. Former President Rafael Correa is, of course, now effectively living in exile in Belgium with charges relating to the 2012 kidnapping of a political opponent pending against him in his homeland.

Central among the allegations made regarding the Posorja port project is that DP World did not meet the criteria necessary for it to be awarded it on a sole basis, i.e. without an international tender on the grounds that this can be done by direct negotiation between one sovereign state and another. Also important is that the returns to Ecuador under the terms of the Posorja concession are significantly less in real terms than those generated from existing marine terminal concession arrangements. And that in the drafting of the concession terms DP World, with external assistance, sought to introduce certain measures that would provide it with key competitive advantages over its competitors including Yilport, the Turkish headquartered international terminal operator, which is developing modern terminal facilities at Puerto Bolivar located in the municipality of Machala, El Oro Province, and which offers relatively short transit times from the

8 Turkish operator Yilport, now engaged in upgrading Puerto Bolivar, is one of the operators said to be unhappy with the concession terms granted to DP World for the Posorja Port Project

main sea lanes to the port facilities. Posorja Port is situated 85 kilometres south west of Guayaquil which houses established multipurpose and container terminal facilities such as those operated by Contecon Guayaquil SA (CGSA), the ICTSI Group company.

The port of Guayaquil is accessed by a 95 kilometre access channel which is now undergoing a major upgrade in terms of deepening and maintenance following the award of a 25 year concession to the Luxembourg-based Jan de Nul Group, the specialist international dredging contractor. It is suggested that this latter upgrade is one of the key elements that DP World sought to constrain when negotiating the terms of its concession. Had this happened then it would have contravened the tried and tested practice of leaving market forces to ‘regulate’ the competitive environment in a multi-port/terminal environment.

TWO INFRACTIONS In the latest submissions regarding the concession award for the Posorja Deep Water Port two major allegations are made: 5 That on the occasion of DP World signing the 50year concession agreement for Posorja that the company knowingly made an incorrect statement of fact, i.e. that DP World Investments BV (the majority shareholder of DP World Posorja SA) is a stateowned company of Dubai, UAE, whereas the deed of incorporation of DP World Investments BV states that it is a private company with a limited liability. Equally, it is well known that the parent company DP World has private investors and as such is not a whollyowned state company.

5 The second infringement identified follows on from the first, namely false testimony – a criminal offence resulting from appearing before a Notary Public and “signing something that is a lie.”

The case is in the preliminary investigation stage and continues.

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

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