Port Strategy March 2020

MARCH 2020 VOL 1020 ISSUE 2 portstrategy.com

Coronavirus assessed | Sri Lanka ambitions | Indonesia initiative | Clean handling

SOUTH ASIA SURVEY SAUDI VISION

PORTSTRATEGY INSIGHT FOR PORT EXECUTIVES

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

MIKE MUNDY

Brake on the world economy?

. . . this new virus is set to do more damage than its predecessor, SARS . . . compounded by China’s increased economic vulnerability

The number of cases of coronavirus outside China is growing.

Italy, South Korea, Iran are all hot spots while a few cases have also been identified in Switzerland, Austria, Germany and the USA. And as the virus spreads the world’s stock markets have been reacting. At the time of writing the Dow Jones Industrial average had fallen more than 1900 points in just two days – the worst two-day percentage loss in two years. Similarly, after the same two horrendous days the FTSE 100 index closed at its lowest level for a year at 7018.

Markets across Europe suffered a similar fate. Asian stocks registered more modest drops but with those markets ‘ahead of the game’ in factoring in the economic impact of the coronavirus.

This represents a transformation from concern about the virus’s ability to slow the Chinese economy on a localised basis – and the impact on supply chains – to a wider concern that the virus will wreak havoc with the nations that serve as key customers for virtually everything that the global economy produces. This, in turn, raises the spectre of global economic slowdown.

It is clear that this new virus is set to do more damage than its predecessor, SARS. It’s not just the higher death rate but an impact that economists say is likely to be compounded by unfavourable circumstances with a key factor being China’s increased economic vulnerability. It is a matter of record that economic growth in China has slowed over the last decade and now with the COVID-19 outbreak there is every reason to expect a sharp slowdown this year with growth well below last year’s 6.1% – its lowest level since 1990. This, it is argued, could put the brake on global growth because the world economy is today so much more dependent on China. In 2003, China constituted only four per cent of global GDP, today it has risen to around 17%!

Too alarmist? Hopefully this will prove to be the case but there is evidence to suggest signs of vulnerability. One example – China is the world’s biggest importer of crude oil, estimated to be in the order of 11 million bpd, accounting for one third of global consumption. With the Coronavirus in play a 20+% reduction in this demand is forecast putting global oil demand and pricing into a highly unsatisfactory place, and potentially for an extended period.

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

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MARCH 2020 | 3

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CONTENTS

MARCH 2020

15 NEWS

11

26 New Service for ICTSI Argentina

TecPlata is consolidating its role as an alternative port to Buenos Aires with the signing of a new, direct service to/from Asia

29 Expansion at Ports in Spain – Except in Barcelona

The Port of Barcelona has ruled out the construction of a third, dedicated container terminal, as MSC targets further Valencia expansion

11 U S West Coast Ports see Stuttering 2019

All major US West Coast container ports recorded a decline in 2019 throughput volumes due to concerns over US-China trade issues

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16 REGULARS 15 Impact of Coronavirus on Global Trade

The coronavirus has the potential to wreak further harm to global trade, with economists concerned about supply chain disruption

16 The Ownership of Port Operations

FEATURES

24

24 Matching Port Investment with Digital Efficiency

India is seeking to improve the performance of its ports and the infrastructure offered – but what plans exist to make it happen?

34 P ushing Port Development in Indonesia A World Bank project in Indonesia wants to see supply-chain reliability reduced but ports may be the chokepoint in the system

38 Targeting Zero Carbon Footprints

Modern day port design and use of technology should be playing a part in efforts to see emissions levels reduced to zero

Is it correct that DP World will return to ‘private ownership,’ when in fact it will essentially return to state ownership?

16 It’s Important to be Part of the Mix

Those bodies and individuals running the waterfront in the US, such as the Coastguard, must be more involved in conference agendas and participation

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

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NEWS REVIEW

BRIEFS Coastal shipping breaches alleged Regulatory authorities in New Zealand are being asked to investigate allegations that foreign vessels are carrying coastal cargo in breachof the Maritime Transport Act. The New Zealand Shipping Federation believes a number of foreign operators are “skirting” around the rules – handling small amounts of international cargo at local ports as an excuse to pick up substantial domestic cargos for delivery around the coast, against the Act.

Port monitoring emissions

Port Otago chief executive Kevin Winders has confirmed his port is to measure the air quality within its environs, in part as a consequence of noting visible changes to vessel exhaust emissions following the enactment of MARPOL Annex VI. “Both our team and neighbours have commented that the emissions appearing are more visible, albeit whiter,” he says, adding, “While we are told emissions have reduced significantly, we just don’t know for sure.”

Electric drive from CentrePort CentrePort Wellington is replacing six straddle lifts and seven truck and trailer transfer vehicles with new electric models as it aims to reduce its carbon footprint and improve productivity. It is expected the new deployments will reduce the port’s carbon outputs by about 250 tonnes per year while speeding transfers by about 20%. The port is also installing LED lighting and solar panels as a further sustainability measure.

6 | MARCH 2020

NEW SERVICE FOR ICTSI ARGENTINA TecPlata, the Buenos Airesbased operation in Argentina for International Container Terminal Services, Inc. (ICTSI), has secured a new Far East direct link to further increase Asian import cargo potential and local export opportunities.

Tecplata is located 60 km from Argentina’s capital Buenos Aires and has a total area of 41 ha, of which 25 ha has been allotted for containers. In October 2008, TecPlata S.A. was granted a 30-year concession to build and operate an all-purpose port terminal in the greater Buenos Aires area in Argentina by the Consorcio de Gestion del Puerto La Plata.

The operator has signed a new contract with Evergreen Marine Corp Taiwan Ltd. for a new service. With this agreement with the Taiwanese shipping line, TecPlata has confirmed that it believes it is taking a “further step” in consolidating its role as an alternative port in Buenos Aires for Argentine companies seeking competitive options for their exports and imports while able to take advantage of TecPlata’s efficient service and modern facilities.

TecPlata, which began operations with the Brazilian shipping line LogIn last April 2019, a Brazilian shipping line specialising in door-to-door logistics. will enhance with Evergreen the offer of services for Argentine foreign trade operators, who will now have the possibility to quote directly a shipment to Asia and the Far East from and to La Plata.

Evergreen will carry out this new service in collaboration with LogIn, connecting with the largest ports in China, Taiwan, Japan, South Korea, India and others in Southeast Asia.

Built with an investment of US$450 million, TecPlata is

8 TecPlata – an increasingly important option to the confusion in Buenos Aires?

Argentina’s most modern container terminal with an initial capacity of 450,000 twenty-foot equivalent units (TEU) capacity, and capable of being extended of up to 1 million TEU in the second phase The ongoing development at TecPlata comes at a time of uncertainty in Argentina’s port sector, with three container terminal concessions soon to expire in the Puerto Nuevo complex at the Port of Buenos Aires and continued confusion over the new concession process.

AAPA DEBATES SHIFTING TRADE Shifting Trade was the focus of the recent American Association of Port Authorities (AAPA) conference in Tampa, Florida.

Keynote speaker, Dr. Ricaurte Vásquez, Administrator of the Panama Canal Authority, said that the future for the Canal will be very different, highlighting with caution that Inter-regional trade (especially Europe Asia, which bypasses the Panama Canal and moves through the Suez instead) will grow in importance.

He also specified that a big growth area in the midst of changing trading realities will be U.S. exports of fossil fuels and the role of Liquified Natural Gas (LNG), with the future relationship between the U.S. and China the major determinant.

Yet the Administrator also highlighted the continued issue for the Canal being the levels of

available fresh water for operating the locks, which he said is climate related. Low water levels in recent years have required restrictions on the drafts of transiting vessels when the Canal’s locks are replenished, after each transit, with fresh water (now reduced) from Gatun Lake.

Vásquez confirmed that implementation of a “fresh-water charge” on vessels that commenced in mid-February was “revenue neutral” and included a fixed portion and a variable charge (with the charges increased if Gatun water levels are low but reduced if more rain brings about increased levels of fresh water).

Port Tampa Bay’s CEO/ President, Paul Anderson, confirmed that the port is now directly linked to Asia with three global carrier services calling at the port, with Cosco, CMA CGM and

now MSC/ Zim/Maersk consortium offering direct sailings.

Mr. Anderson, previously a Commissioner at the Federal Maritime Commission, told the AAPA audience, “We’ve never been a container port before,” adding that Tampa would likely double its container capacity each year over the first half of the decade.

Also, at the two-day event, Joe Greco, Ports America’s Vice President of Containers, moderated over the value of gaining real time insights at terminals, with advances in connectivity enabling all parties concerned to see the configuration of containers which, in turn, enables efficiencies for surface modes (trucks) picking up containers. However, as industry platforms become fulcrums of business, questions remain regarding data ownership, and monetization of data.

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

NEWS REVIEW

BRIEFS Northport upgrades A Konecranes Gottwald Model 6 Mobile Harbour Crane (MHC), CM Labs’ crane simulator and two Kalmar terminal tractors have been purchased by Northport. Northport chief executive Jon Moore says the new equipment was needed “here and now” to meet current container traffic requirements and was not dependent on any future port expansion.

“This investment in container-handling capability is a tangible demonstration of the growth of our business and a visual reminder,” he says.

Cape Verde concession

Cape Verde is to issue a new tender by June 2020 covering the concession of all the country’s ports. The government is currently deciding the exact model that it wants to use for the revised process. In 2017, offers to sub-concessions at the main ports were withdrawn, since it did not meet requirements for the agreed strategic vision for ports. French multinational Bolloré had been awarded the original contract.

International interest for Luanda The Angolan Port of Luanda says that it has received proposals from a large range of potential bidders for the multipurpose terminal concession. These have come from a combination of the largest companies working in Angola’s port sector, but also from China, Dubai, Nigeria, France, Switzerland and the Philippines.

The terminal handles both general cargo and containers.

8 | MARCH 2020

NEW SANCTIONS SCREENING SERVICE LAUNCHED FOR INDUSTRY Trade sanctions between countries remains an ongoing and regular issue today.

Companies involved in shipping have to be aware of what this means to them and how they operate. There is a need to know that insuring, financing or booking cargo with a ship is a process that is safe from potential threats.

A new reporting service has been launched that provides critical analysis that can highlight possible evasion of sanctions on a global basis by cargo ships.

London-based Windward is a leader in maritime analytics and is now able to support a wide-range of industry participants reduce possible sanctions risk and meet regulatory expectations.

Ami Daniel, CEO of Windward, explained further. “Everyone we speak to, whether it is insurers, bankers, trades, bunkerers or even shippers, tell us of their concerns about the difficulty of saying on top of sanctions.

Regulators expect all organisation to be fully aware of any activity relating to suspected sanctions evasion occurring. It is almost impossible to do this manually

with significantly increasing compliance resources and costs.

It’s incredibly challenging.”

To assist, Windward is now able to provide a continuing screening and analysis of ships moving and whether there are high-risk sailings being undertaken – or have been completed in the recent past.

This allows any interested company to feel comfortable that their involvement will not now run the risk of being caught in sanctions, even though it may have occurred in the past.

To outline the value of the process, Windward is offer a complimentary sanctions review.

This will deliver confirmation of the following:

8 Companies involved in shipping have to be aware of what sanctions mean

5A udit of ships’ activities for sanctions risks 5O verview of suspicious vessel behaviour in or near any currently sanctioned countries 5A list of named ships with recent suspicious activities 5O utline of behavioural risk drivers for shipping Windward marries big data, AI and maritime expertise to make the seas safer, and help the maritime ecosystem thrive. Its technology helps companies comply with sanctions, assists governments in curtailing smuggling and enables marine insurers to improve profitability.

VOLUMES UP FOR SOUTH ATLANTIC PORTS Savannah and Charleston have both recorded good container throughput activity for 2019 and each is investing in infrastructure to further support demand growth moving forward.

In Savannah, the Georgia Ports Authority confirmed that an increase of nearly 250,000 TEU – or 5.6% - pushed up the port’s calendar year total for 2019 to 4.6 million TEU, while South Carolina Ports Authority (S.C. Ports) outlined that Charleston had its best-ever calendar year in seeing over 2.4 million TEU across its quays – an increase of 5% year-on-year.

Savannah cited new cargo in 2019 via the Appalachian Region and two new resin-handling facilities near the port – collectively these examples resulted in around 126,000 TEU of additional traffic.

For Charleston, it specifically

noted how it recorded “recordbreaking” activity of 190,539 combined rail moves through its two inland port facilities, Inland Port Greer and Inland Port Dillon, reflective of a year-on-year increase of 41%.

Another year of container growth at both these South Atlantic ports in 2019 endorses longer-term development since 2000.

Collectively the two ports have generated average growth of 5.5% per annum over the assessment period, with Savannah contributing 8.7% per annum and Charleston adding 2.3% per annum.

Investment is also continuing at both ports. At its recent Georgia Foreign Trade Conference in January 2020, the Georgia Ports Authority confirmed it has confirmed plans to expand port capacity to 9 million TEU by 2030

and double rail capacity available to 2 million TEU per annum.

Construction at the Garden City Terminal is now complete, and it can service three 14,000 TEU ships and up to 8 vessels simultaneously. Clearly this will be insufficient moving forward and the new Savannah Container Terminal, a 200-acre facility located on Hutchinson Island, will offer a capacity of 2.5 million TEU per annum when fully developed.

Phase I is slated to commence operations in 2025.

Similarly in Charleston there are vital infrastructure projects coming to fruition with extra container space targeted. In 2021, S.C. Ports is expected to open the first phase of its new High K. Leatherman Sr. Terminal, supported by a 52ft water depth in Charleston Harbour.

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

NEWS REVIEW The Port of Barcelona has ruled out the construction of a third, dedicated container terminal.

Port authority president Mercé Conesa says that current demand would not justify the investment.

The decision is significant, given that major rival in Spain, Valencia, is pressing ahead with the construction of its fourth box terminal, which will have a 5 million TEU capacity. This is despite opposition from Spain’s Environment Ministry and also from the city’s mayor.

MSC, which presented the only bid for the Valencia project, has also recently been outlining its support to the process. MSC Spain president, Francisco Lorente, met with the city’s mayor, no doubt to express he importance of the project to the shipping line. It should be remembered that the majority of the traffic at MSC’s terminal is transhipment, which could, in theory, move to a number of other hubs in the region. In 2019, transhipment traffic totalled over 2.9 million TEU in Valencia, which was almost exclusively generated by MSC. Aurelio Martínez, president of Valencia Port Authority has also stressed his concern that MSC will simply take its planned €1.011 billion investment package to a rival port if its new Valencia terminal is not built.

“When such an opportunity is lost, it is lost forever,” he said, adding that the loss of such investment could put the future of the port at stake.

Elsewhere, the Port of Bilbao is adding to its infrastructure, with construction of its Outer Harbour

ONGOING TERMINAL EXPANSION ACROSS SPAIN’S PORTS – BUT NOT AT BARCELONA

The Chilean Port of Valparaíso handled just under 9.4 million tonnes in 2019, down 9% over the previous year, as the whole country was negatively impacted by social unrest as of mid-October.

T1, which is operated by TPS, recorded traffic of 8.0 million tonnes, a fall of 10% compared to 2018, while TCVAL-operated T2 was down by 5% to just under 1.4 million tonnes.

For total container activity, traffic was down 0.5% to 898,715 TEU compared to 903,296 TEU in 2018. Of this figure, T1 handled 893,198 TEU (+0.2%) while T2 added just 5,517 TEU (-53%), a

reflection of the decision by the concessionaire to abandon operations following concerns over the time being taken to give it clearance to expand operations.

Despite the downturn, the end-of-year figure was actually better than anticipated, given a very slow start to 2019. The port’s managing director, Franco Gandolfo, said that the “encouraging end to the year” is expected to enable the port to enter 2020 feeling more positive than originally anticipated.

At the same time, legal attempts by local residents to block the environmental permit

granted by the Environmental Assessment Commission (CEA) for the go ahead of the expanded T2 have been rejected.

These attempts were part of the reason why TCVAL told port authority EPV in March 2018 of its decision to quit the port, since delays in gaining clearance meant that it no longer believed the expanded terminal could be operated profitably.

The decision by the CEA is significant, since the owners of TCVAL have until October 2020 to pull out.

Buenaventura rail link re-0pens

Haifa Port privatisation starts

Callao masterplan revamp

Sines sees better 2020 after tough 2019

In Colombia, the Yumbo Buenaventura Port railway renovation is close to completion.

This route reduces local transport costs and consolidates all operations. Work commenced in August 2019 by operator, Ferrocarriles del Pacífico (FDP). The country’s National Development Plan is targeting approximately 20,000 monthly tonnes on the Buenaventura – Yumbo – Palmira line.

8 MSC transhipment could leave Valencia without further terminal expansion

completed during 2020. This process involves extending the AZ1 pier and construction of the second phase of the Central Breakwater. There will be an

additional 50,000m2 of new operating area at AZ1 and around 250 metres of extra berth.

In contrast, port union Coordinadora has indicated it has

major concerns regarding Yilport’s investment strategy for the Port of Huelva.

Rising traffic throughput, suggests the union, means that there is a need for an urgent capital injection in the container terminal in 2020. Work to expand the stacking yard is under way, but this has started too late, says the organisation.

It also believes that the two 1984-built container cranes lack sufficient capacity, given the arrival of a new Maersk service at the port in February 2020 and that a third crane should be acquired rapidly. Yard equipment is also viewed as obsolete.

VALPARAÍSO REPORTS DOWNTURN IN 2019

In Israel, the government has commenced the process to privatise operations at Haifa Port Company by selling its existing equity stake in the operation.

Bidders will have to undertake investment of $290 million as part of a tender. Here, $116 million will be spent on developing infrastructure and the acquisition of port equipment, with the rest on worker lay-offs and early retirement programmes.

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

Callao Port Community (Comport) and Peru’s National Port Authority (APN) have outlined updates to the Callao Port Master Plan. It was officially presented to the public on February 15, 2020 and outlines key infrastructure aims, including DP World increasing berth length to 400 metres to accommodate much larger vessels. APM Terminals is to make major Berth changes as part of a four-stage upgrade.

BRIEFS Despite a 12% decrease in traffic for 2019, the Portuguese Port of Sines expects to achieve double-digit growth in container throughput for 2020, says port president José Luís Cacho. He says that last year’s downturn as largely due to the renegotiation of the PSA concession contract for Terminal XXI, wage negotiations with workers and operational problems. These are now all resolved.

MARCH 2020 | 9

NEWS REVIEW

US WEST COAST PORTS SEE VOLUMES HIT A summary of the results being reported by ports in the US for 2019 is showing there was a divide by coast, with the West Coast seeing a decline compared to 2018 due to concerns over the US-China trade war, while the East and Gulf Coast facilities generated improvements due to lower exposure to trade with China.

In more detail, the San Pedro complex saw a decrease for 2019 for both Los Angeles (-1.3%) and Long Beach (-5.7%).

Looking at the specific numbers, for 2019 Los Angeles recorded a total of 9.34 million TEU, which compared to 9.46 million TEU for 2018 and stopped the port surpassing the 10 million TEU barrier for the first time.

The other port in California, Oakland, provided a similar story, with a fall of -1.8% in handling 2.5 million TEU in 2019 and 2.55 million TEU one year earlier in 2018.

In comparison, Long Beach feel back below of the 8 million TEU level in 2019, with the 7.63 million TEU recorded down on the 2018 figure of 8.09 million TEU. A similar position occurred in the US Pacific Northwest, with the Seattle-Tacoma ports handling 3.78 million TEU for 2019, down on the 3.8 million TEU for 2018 and reflecting a decline

Box traffic up in Panama

of 0.6%, so smaller than generated further south on the western seaboard.

For the major container ports not on the West Coast the position in 2019 was more positive, with gains recorded.

New York/New Jersey remains the largest container volume ports on the US East Coast and its 2019 total of 7.47 million TEU was a 4.1% rise on the 7.18 million TEU handled in 2018.

Likewise, Savannah increased its throughput to 4.6% in 2019 compared to 4.35 million TEU in 2018 (+5.7%), while Norfolk saw a

8 US West Coast ports were impacted by trade war concerns in 2019

rise from 2.86 million TEU to 2.94 million TEU (+2.9%) and Charleston enjoyed growth of 5.2%, from 2.31 million TEU to 2.44 million TEU in this same two-year period.

Growth was even more impressive for Houston on the Gulf Coast, which saw its 2018 total of 2.7 million TEU improve to 2.99 million TEU for 2019, up by 10.6%, and the port will expect to surpass the 3 million TEU level for the first time in 2020.

TCP POSTS RECORD 2019 AFTER SUCCESSFUL DRIVE Terminal de Contêineres de Paranaguá (TCP) has posted record throughput figures for 2019, of 915,242 TEU, following a commercial drive to attract more shippers from the neighbouring states of Sao Paulo and Santa Catarina.

The increase of 12.5% over the 2018 figure of 800,000 TEU owes much also to the closure of Libra Terminais in Santos – Brazil’s biggest and busiest port for containers, located some 151 nautical miles away – as this greatly assisted TCP in picking up more transhipment cargoes.

Juarez Moraes e Silva, the Institutional Director of TCP, said that a strong commercial push into neighbouring states has harvested rich dividends. “Some parts of Santa Catarina and Sao

BRIEFS

Paulo are closer to Paranaguá than they are to the ports of those states but we are also winning shippers from greater distances, especially in Sao Paulo, because of the congestion and delays at Santos,” said Silva.

“Also, as well as strong commercial work, TCP offers the option of the railroad, which directly accesses the primary area of the Port of Paranaguá, reducing logistical steps and, consequently, making the operation more competitive through Paranaguá.” This argument is sound, given that around 15%-20% of containerised cargo through TCP is carried by rail, much higher than the 2%-4% through Santos.

Moraes e Silva stated that the release of the new docking berth,

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

which took place last November, also influenced the result of 2019.

“Our terminal increased its handling capacity by 60% and is now able to simultaneously operate three of the largest and most modern ships of containers,” he explains. Silva added that the sectors with the most growth were reefer (+14% over 2018), pulp and paper (+31%), and automotive (+6%).

Paranagua is currently the “Chicken Export Capital of the World” and last year exported more than 110,000 TEU of chicken.

For 2020, the forecast is for growth to be above 10%, mainly due to the movement of commodities such as wood, cotton, paper and cellulose, refrigerated cargo and consumer goods and electronics.

The Panama Maritime Authority confirms its domestic ports handled a combined 7.31 million TEU in 2019, against around 7 million TEU in 2018.

Noriel Araúz, Minister for Maritime Affairs said, “Our expectations for 2020 are positive, because since the beginning of this administration, we have strengthened ties with important countries that have experience in ports to establish collaboration for the development and implementation of initiatives aimed at boosting the maritime sector.”

Maersk MedMontreal change

Maersk Line is adding a call at the new APM Terminals’ Vado Ligure terminal to its Med Montreal Express (MMX) service.

This facility has recently been inaugurated by APM Terminals and now fellow AP Moller company Maersk Line has added a call after Marseille-Fos and Algeciras. Deployment will be five vessels in the 2,200TEU-2,500 TEU range, with the service change in place during early March.

Traction for “Enfidha?”

A new deep-water part at Enfidha in Tunisia may, finally, be seeing some traction. A company has been established in the North African country, with the possibility of initial works starting in 2020, with the aim of phase I operations starting in 2023 or 2024. Longer-term, container capacity of up to 1.6 million TEU by 2026 is being mooted. The publicprivate partnership is expected to consider 60% finding from the state and 40% from private interests.

MARCH 2020 | 11

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NEWS REVIEW

NY/NJ LEADS THE WAY AS US NORTH ATLANTIC UP New York/New Jersey remains the largest volume port by some considerable margin in the US North Atlantic region and in 2019 its container terminals handled over 7.49 million TEU, up by 4.3% from the 7.18 million TEU for 2018. By comparison, Virginia saw its 2018 total rise from just under 2.86 million TEU to 2.94 million TEU for 2019, an increase of 2.9%, with Baltimore generating a small increase, from 1.02 million TEU to 1.07 million TEU for 2018 into 2019.

The other two regional facilities also enjoyed growth. Based on Philadelphia Port Authority estimates, a 2019 total of around 616,000 TEU represented an improvement of 5.5% on the 584,000 confirmed for 2018, while Boston maintained its current level of around 300,000 TEU with a minor rise from 298,000 TEU in 2018 to 301,000 TEU for 2019.

Based on the growth figures for 2019 over 2018, its clear that the US North Atlantic port region did not suffer any fall-out from Asia-US trade-related issues in the same way that the US West Coast ports did.

Over the longer-period since 2000 New York/New Jersey is generating annual growth of 4.8%, despite already being a highervolume port in the market.

Likewise, Virginia has increased its volumes by an average of 4.2% per annum between 2000 and 2019, while the highest growth (although not the largest volumes) is occurring at Philadelphia – endorsing the port authority’s ability to

Backing for Melbourne rail

The Victorian Government’s backing of the $125 million Port Rail Transformation Project developed by the Port of Melbourne has been welcomed by the Australian Logistics Council (ALC) as recognition of industry’s efforts to improve the efficiency of supply chains. The ALC says development of a new on-dock rail terminal at Swanson Dock East will help road congestion.

8 NY/NJ saw growth of 4.3% in 2019, as US North Atlantic ports all saw increasing container volumes

continue to specialise in North-South and reefer cargo trades and supporting the foodstuffs industries.

Baltimore’s growth over the same period was 4.2% per annum and the port will hope to see this figure improve once it finally

gets double-stack access through the Howard St. Tunnel in place (following recent confirmation that is has the necessary funding secured).

So far, the impact of the US-China trade issues does not appear to have impacted container traffic in 2019, although the full extent of the impact of the current coronavirus issue is yet to be understood and could potentially generate some decline in cargo moving out of China.

IS FUTURE OF SANTOS OFFSHORE? The future of Brazil’s biggest container port, Santos, could be offshore, according to a new study from the Santos Cecilia University (Unisanta) although it could be sometime after 2050.

Professor Adilson Gonçalves, head of the Advanced Nucleus of the Association for Collaboration between Ports and Cities (Rete) of the university and the Nucleus for Port, Maritime and Territorial Studies (Nepomt) co-ordinated the studies of four Santos students who concluded that the best solution to the inevitable congestion that will engulf Santos as the port grows, will be an “offshore terminal” 2 km from the coast.

The plan allows for five berths with 20 meters draft with a fleet of trucks shuttling unloaded boxes back to the land storage

areas, a port operation similar to that of Porto Itapoa, in Santa Catarina state.

Engineers and technical managers at Codesp – the port authority for Santos – have been looking at an area near Peruibe, some 30 km west of the Santos port area, for some years with a view to building an extension to the official port area.

This news comes as a new study from ANTAQ, the Brazilian National Agency for Waterborne transport, has highlighted the wide diversity in Terminal Handling Charges (THCs) made by terminals in Brazil’s key ports. At Santos the THCs ranged between $164 and $212 per TEU, depending on the terminal and the carrier, while most expensive was Suape, where Tecon Suape and charges between $283 and $315 per TEU.

Cheapest terminals were in the Porto Itapoa (majority owned by Hamburg Sud/Maersk) and Sao Francisco do Sul port complex where prices ranged from $135 to $180 per TEU. ANTAQ also registered that Pecem, a growing port for boxes on the north Brazilian coast, was charging between $155 and $195 per containers and Tecon Rio Grande, (owned and operated by Wilsons, Sons group) was the second most expensive, charging a THC of between $199 and $236 per TEU. ANTAQ stipulated that the figures were only provisional so far but the final figures, covering 85% of all Brazil’s containerised cargo movement, would be released before mid-2020.

Pass on costs advice

MSC Back at Valparaíso

Service back at Itaqui

Transport operators have been advised to pass on higher costs to freight movers, as a result of stevedores increasing infrastructure charges. The Container Transport Alliance Australia has recently stated that “transport operators face a significant and rising burden to carry thecost of paying stevedore fees (or have their terminal access denied) ahead of collecting the amounts from import and export customers.

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

MSC’s North Europe to South West Coast South America service (via US East Coast and Panama Canal) has returned to Terminal Pacifico Sur (TPS) in Valparaíso. Since February the service is calling twice a week.

It began in mid-2016, as a merger of two MSC services but stopped calling at Valparaíso in mid-2018. In November last year, MSC reinstated the northbound service.

BRIEFS Aliança Navegação e Logística, the Brazilian cabotage and coastal shipping outfit, has re-instated a regular service calling at Itaqui, in the north Brazilian state of Maranhão. The Maersk/ Hamburg Sud owned shipping line is providing a weekly service to/from nearby traditional town/port of Sao Luis - to Manaus (in the Amazonas jungle region) to the north and west and to Santos and Sao Paulo in the southeast of Brazil.

MARCH 2020 | 13

THEECONOMIST BEN HACKETT

In the shadow of the tariff wars the coronavirus has the potential to wreak further harm to global trade.

We are seeing the impact on exports from China as carriers begin to cancel sailings and potentially light loading in Chinese ports due to lack of stevedores and certain key products. US, Korean, Japanese and European motor manufacturers are reporting the beginning of parts shortages since they have run down inventories. Fortunately – unless you are in the automobile industry – the shortages come as demand for new vehicles has also dropped.

The fear of the unknown is infecting human behavior. As it spreads, the virus will also impact the manufacturing industry, putting further downward pressure on global trade. It may be that fear will be the root cause of a global decline in trade growth.

In theory Chinese factories were due to open on February 10th, 2020. In practice the

THE IMPACT OF THE CORONAVIRUS ON GLOBAL TRADE

Government has told workers they can work from home to do so and those in the manufacturing sector appear to be voting with their feet and staying at home. It is unlikely that industrial production ramps up before the beginning of March and that is probably an optimistic view.

Hardest hit is the motor industry and some hi-tech

8 Coronavirus has potential to wreak further harm to global trade

companies such as Apple. The biggest problem is the damage being done to the logistics supply chain. With Hubei province on lock down and quarantined, supplies for production ae not coming in nor are the factories functioning.

It goes beyond this as other manufacturing areas are on self-imposed lockdown and workers unwilling to come out into public environments. The loss of exports and the difficulty in importing commodities and raw materials needed by industry is damaging the Chinese economy as well as those in Southeast Asia that are so dependent on trade with China.

GDP (gross domestic production) projections are spiraling down. Hong Kong, Singapore and Korea and economists are concerned that the disruption in the supply chain will impact most of Europe as well.

The slight up-tick that we have seen in the Purchasing Manager’s Index globally is under threat.

Given the depressed state of the main European economies, it would not take much to generate a short, sharp recession resulting from the decline in trade.

THESTRATEGIST MIKE MUNDY

CORONAVIRUS: MAKING IT GO AWAY! If ever there is a strategy needed, it is a well thought out one to minimise the impact of the coronavirus. The big question is, of course, when will it be brought under control, or even better stamped out? There is clearly a lot of effort going into this but as of the time of writing this question the answer remains very much open to speculation.

Work progresses on developing effective drugs to use against the virus. Two HIV drugs are being tested as a potential treatment – they target a protein that helps coronaviruses replicate.

Scientists have also identified other existing medications that target this function plus there are a number of international research groups that are working on a vaccine. Three examples are: Inovio, USA which is employing a relatively new DNA technology to

arrive at a vaccine; the University of Queensland is assessing a “molecular clamp” vaccine and Moderna Inc. of Massachusetts is working with the US National Institute of Allergy and Infectious Diseases to accelerate its efforts in identifying a vaccine.

In comparison to the last time the world saw the outbreak of a similar virus in 2003 – severe acute respiratory syndrome (SARS) - China has been much quicker to tell the world what is occurring. When SARS appeared, by the time work on a vaccine gathered momentum the outbreak was nearly over. This time round work on a vaccine has got off to a timely start and at least offers hope if not certainty.

The simple fact remains, however, that for the time being at least the emphasis presently remains on containment. And it clear that as

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

of mid-February global supply chains are being progressively disrupted with increasingly worrying consequences.

One of the most influential factors here is China’s prominent status as ‘manufacturer to the world’ – much more so than it was in 2003 which, in turn, has spawned global and more complex supply chains. One indicator – Apple Inc. works with suppliers in 43 countries, all of them recipients of components from Apple’s manufacturers in China. Samsung, the world’s biggest smartphone maker while producing the larger proportion of its phones in Vietnam is highly dependent on China as a source of components. The border between China and Vietnam has been subject to closures due to fears over the coronavirus and so the truck transport of components is largely off the agenda,

leaving the more expensive option of air transport as the alternative. But not everyone will be able to access air cargo capacity – leading to forecasts of increasing supply problems.

SHIPPING AND PORT IMPACT The problems for shipping and ports are well documented – freight rates dipping despite an increasing number of blank (void) sailings and reduced cargo volumes at China’s export ports in turn lowering the prospects at major US, European and other import gateways.

Respected industry analyst Alphaliner forecasts container traffic at Chinese ports, including Hong Kong, is likely to reduce by over six million TEU in the first quarter of 2020 and forecasts global container throughput would fall by at least 0.7% in 2020.

MARCH 2020 | 15

THENEWYORKER BARRY PARKER

IT’S IMPORTANT TO BE PART OF THE MIX Every February, the local and Norwegian and Greek Chambers of Commerce host an excellent conference along the East River waterfront (across from the long-gone industrial terminals in Long Island City and Greenpoint).

Most of the attendees represent shipowners, and lawyers and banker types who work closely with equipment owners and operators.

Themes vary from year to year, with IMO2020 having come and gone, and the U.S. elections looming closer, one of the big topics this year was economic sanctions. Another topic was decarbonisation, with greenhouse gasses now on the agendas of international maritime regulators more than ever before.

On the sanctions part, one observation that struck me was that “shipping” is now in the crosshairs of the U.S. Department of State. An observation from the regulatory session (which also applied to the discussion of decarbonisation) is that

“shipping” really refers to entire supply chains. Cargo origins, and links to entities involved in their movement, are central to the State’s mission of punishing bad actors.

While we can save the politics for another article (or a chat with readers, many of whom know how to find me), suffice it to say that ports are now on a new regulatory radar screen, at least peripherally at this point.

The conference discussions on decarbonisation, a longer-term target for the maritime business

8 Those running the waterfront must be involved in conference agendas

(with the IMO looking 30 years out) also pointed to supply chains much broader than vessels only. Ports have already taken great initiatives towards greener operations. I daresay the port efforts have been more effective and impactful than those from many on the vessel side. The message that was imparted during the sessions, which should be passed along to the port community, is the level of interconnection

and intertwining in the cargo supply chains.

At the early Feb event, and at many others, we hear about silos, where one group in an organisation does not talk to another. Taken over a broader context, the message is clear that as data connectivity enables better networking, the ports will need to be part of the mix.

Topics such as measuring emissions from individual vessels, at various points in their voyages, and then reporting them to commercial interests, and to regulators, were the among the items discussed.

This is all coming, and the ports will need to be an integral part of such architecture. The US Coast Guard, with whom responsibility rests for Port State control of maritime matters, was certainly in attendance at the event- but attendees did not include folks running the working waterfront. Next year, if these subjects are again on the agenda, maybe they should attend.

THEANALYST PETER DE LANGEN

THE OWNERSHIP OF PORT OPERATORS The move of DP World’s parent company (Port and Free Zone World) to purchase shares traded on Nasdaq Dubai and delist the company is highly interesting. If, as expected, the offer is accepted, DP World will be 100% owned by Port and Free Zone World, a subsidiary of the state entity Dubai World. In an announcement DP World stated, ‘Returning to private ownership will free DP World from the demands of the public market for short term returns which are incompatible with this industry’.

If this argument applies for DP World, does it also apply to other port operators? Is it correct that a listing on a stock market goes hand-in-hand with a focus on short term returns?

Is it correct that DP World will

16 | MARCH 2020

return to ‘private ownership’, when in fact it will essentially return to state ownership?

These are interesting and complicated questions. The numerous tales of companies that were purchased by venture capitalists (i.e. private ownership instead of a listing on the stock market) and restructured for short term gain cast doubt over the benefits of private ownership per se. In my view the more relevant distinction is between state-ownership and private ownership. With a single, state-owned parent, pursuing a long-term strategy indeed easier than with shareholders aiming for financial return.

It is noteworthy that various of DP World’s competitors are also partly or fully state-owned (these

include PSA, CS Ports and the other Chinese port operators, as well as the Hamburg based operator HHLA). Both for PSA and DP World, the case for state ownership historically makes sense - the economies of Singapore and Dubai are based on their status as hubs. Thus, the need for a world class port operator committed to providing world class terminal operations in Singapore and Dubai may justify state-ownership.

It is tempting to read this announcement as a signal that due to vertical integration (driven by digitalisation) the ‘public interest’ argument for Dubai is no longer about being world class in Dubai (that goal has been achieved) but about shaping and developing a global network, as

phrased in the DP World announcement: ‘a globespanning network of ports, economic zones, industrial parks, feeders, and inland transportation’, in which Dubai plays a central role.

In the case of DP World, one could argue that the track record so far justifies a ‘naïve’ view in ‘host countries’ (such as The Netherlands, Romania and India) that DP World acts the same as fully private international port operators (such as HPW, APMT).

However, this perspective also suggests some host countries (India and Azerbaijan come to mind) may need to think carefully about securing their position in global logistics networks that are shaped to a significant extent by foreign state-owned enterprises.

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

THEENVIRONMENTALIST CHARLES HAINE

AMMONIA IS NOT SHIPPING’S PANACEA My first encounter with ammonia was in the lab at school in Stroud. Mr Heymans tested our patience explaining that this simple compound of hydrogen and nitrogen was colourless.

Of course, the odour was its giveaway, but ammonia was of zero interest to these greasy teenagers as it didn’t burst into flames or make a marshmallow cloud. Yet, we learned of its essential role as a feedstock and fertiliser on farms.

My next ammonia date was equally as unglamorous – an audit of a urea production facility in Bahrain. At least that enhanced my understanding of its synthesis into pharmaceutical products and as a base for textiles, refrigerants and even explosives.

Its widespread use means it’s shipped in bulk and passes through – and is stored/chilled in – the global network of ports but you, literally, never see it. So, some of the infrastructure is there already.

These days, you won’t turn the pages of a maritime magazine without seeing the clamour for ammonia as an alternative fuel for ships. The chemical can be burned in engines to power vessels. That process does not generate CO2 emissions, which is a distinct advantage over traditional marine fuel.

Soon, the IMO is going to need to rethink its target year for net zero emissions. Countries such as the UK have recently announced that 2050 is the deadline for net zero in other sectors, now including airports and aviation. The pressure is on the IMO to improve the vision of a 50% cut in GHG emissions (against 2008 base year) for the total fleet (existing, and expected increase in shipping) by midcentury. The targeted reduction in total CO2 emissions for the total existing fleet is 40% by 2030 and 70% by 2050.

Engine designers are up for the challenge. Two-stroke ammoniapowered engines will be ready within four years. Like LNG, the first ships using ammonia as a fuel will be those tankers already transporting the product across

. . . ammonia might not be the panacea for shipping’s contribution to global warming . . . oceans. That will require extra space that will reduce the capacity for tradeable cargo.

There are a lot of other hoops to navigate through. As is the case with some forms of hydrogen, the ‘manufacture’ of ammonia gives rise to carbon emissions. Even now, its creation represents 2% of all global GHG emissions – that’s huge and right up there with cement and steel.

The key to clean fuel is enabling carbon capture and storage (CCS), safely, and at an acceptable price. That’s a nut that hasn’t been cracked yet, not least with public acceptance. The use of green energy in production would make ‘zero carbon’ ammonia but that’s another hurdle to scale-up renewable energy to meet industrial needs.

There are a few reasons other

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

reasons why ammonia might not be the panacea for shipping’s contribution to global warming. In the US, ammonia is classified as an extremely hazardous substance thanks to its causticity in concentrated form.

Without subsidy, it’s cost would prove a deterrent while its efficiency – alongside stablemates vying for future market share, such as LPG and methanol – lags behind diesel’s performance and reliability.

Burning ammonia also creates nitrogen oxides – a GHG emission – so we’re back to scrubbing to contend with that menace.

The University of Cambridge’s ‘Absolute Zero’ Report is reticent about the take-up speed of ammonia in ocean-going vessels while decarbonising simultaneously. The Royal Society is more upbeat, stating that ammonia is the only zero-carbon fuel that will propel a vessel across deep-sea shipping legs. Furthermore, it points out that ammonia is the only zero carbon fuel made from renewables that can be stored for months or even years.

8 IMO will need to rethink its target year for net zero emissions

Some are supporting the push into NH3 and creating port-hubs as they do it. H2U is developing a $118M facility integrating 30MW in water electrolysis and distributed ammonia production, near Port Lincoln in South Australia. The plant will use 100% wind and solar generation to produce up to 18,000tpa of green ammonia for agriculture and industrial use. This is a globally significant demonstrator project being one of the first commercial plants to produce carbon-free green ammonia (and hydrogen) from intermittent renewables resources. The potential for ammonia for large-scale power stations make it an attractive export opportunity, hence the development of a multi-user, multi-commodity deep-water port at the 1,100ha site.

We will certainly see more of these opportunities for ports to diversity and grow. I really should have paid a lot more attention in chemistry class.

MARCH 2020 | 17

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REGIONAL SURVEY: SOUTH ASIA

PILE THEM HIGH, SELL THEM CHEAP Container volumes can move from transhipment port to transhipment port in big volume amounts.

Steve Wray of WSP considers how Sri Lanka’s hub port aims could be realised going forward

8 Shipping company involvement in Sri Lanka can help increase cargo “stickiness”

Pile high and sell cheap applies to a container transhipment hub. Volumes can be large, and shifted to the terminal quickly, but the handling rates often achieved are lower than charged for origin and destination gateway cargo.

The requirements for a transhipment hub port are straightforward. Ports fall into different categories as far as their natural market is concerned. The location and cargohandling facilities of each port dictate which type of traffic it can compete for, and therefore defines its role in the market.

For transhipment ports, geographic location and proximity to sailing routes is crucial. To be close to shipping lanes means that large and expensive ships do not incur extra costs for having to deviate to the port.

Other factors include the ability to call to modern terminals with easy physical access, offering deep water with immediate berthing available - and then be serviced by large cranes, with good productivity from a flexible and committed workforce.

Other important factors are availability of future capacity and avoidance of congestion, plus good support services (such as tugs and pilots). The ability to also bring some local import-export cargo is a bonus, too. Finally, a competitive tariff, with good discounts offered and linked to volume guarantees.

There are many examples of successful container transhipment hub ports around the world, but there are also ports and terminals that have struggled to attract cargo and also other facilities that have seen large chunks of their throughput disappear quickly – and often to another hub in the same region.

Whereas gateway demand is directly related to economic development in a port’s hinterland, transhipment demand is related to a broader, regional market, and hence to economic development in the transhipment region. In addition,

shipping cost calculations for direct versus feedered delivery are also determinants of demand.

Increases in both container port demand and vessel sizes have acted as catalysts to the development of transhipment.

It allows carriers to benefit from the scale economies available from the introduction of increasingly large vessels on long-haul, high-volume trades, whilst also serving local ports, with smaller trade volumes and more restricted vessel access, by means of smaller feeder vessels.

Transhipment is significant in the Indian Sub-Continent port market, serving East Africa, the Bay of Bengal and Indian Ocean. Typical transhipment hubs for this region include Port Klang, Singapore, Tanjung Pelepas, Chennai and Colombo, as well as future potential at Hambantota It should be noted that the level of transhipment will depend on the decisions of carriers about how they organise their service networks, to combine scale economies with maximised loadings and geographic coverage, not only underlying economic and container trade growth.

So, what is the current situation for transhipment in Colombo, as a well-established and utilised transhipment hub?

Sri Lanka forecasts were downgraded due to a terrorist attack in early 2019 and this had an adverse impact on a short-term consumption and investment.

Although a weaker 2019 occurred, the IMF is expecting GDP growth in 20202021 to return to previous levels of around 4%.

Of course, GDP growth is more relevant for internal consumption and likely import-export demand, although social unrest in any country will impact cargo activity, even transhipment.

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

8 Steve Wray, Associate Director, WSP

MARCH 2020 | 19

The 2019 transhipment and container volumes need to be put into context and the longer-term position should be considered as a better reflection on the port’s development.

As Figure 1 identifies, there has been continued and ongoing growth since 2010, with the estimated total for 2019 of over 7.65 million TEU in total and 6.51 million TEU of transhipment.

These estimated totals reflect growth of 7.1% per annum between 2010 and 2019e, with the transhipment portion slightly higher at 8.2% per annum and follows strong growth of 15.8% in 2018.

Colombo continues to thrive on Indian Sub-Continent transhipment and East-West Relay containers, which collectively are behind recent demand improvements.

This success and a need for more capacity gave the Sri Lanka Government the necessary drive to further develop this port sector with the introduction of Hambantota, which had already been converted into a deepwater port in 2008. In 2017, Sri Lanka Port Authority signed an agreement with China Merchants Ports Group to convert Hambantota International Port into a public, private partnership.

The Hambantota International Port is managed by Hambantota International Port Group (HIPG) and Hambantota International Port Services (HIPS), two new companies set up under a PPP between China Merchant Port Holdings (CMPort) and the Sri Lanka Ports Authority (SLPA). The concession runs for a period of 99 years.

The recently announced deal in which CMPort and French Container Shipping Company, CMA CGM, entered into the Master Agreement which means that the jointly owned business, Terminal Link, acquired an interest in 10 terminals owned by CMA CGM for $955 million, was announced by HIPG. As such, it can be assumed that the Hambantota port facility is also part of the new arrangement.

Looking at the other container-handling facilities, there are several options, but the infrastructure is becoming more limiting: 5 Jaya Container Terminal has 1,292m of quay and 1 x 350m feeder berth, but water depth is 12.0-15.0m.

5 Unity Terminal has more limited water depths of 9,0-11.0m and a 590m of quay, though this option is not geared for larger container vessels moving transhipment units.

5 South Asia gateway Terminal (SAGT) has 940m of quay and 9 x Super Post Panamax cranes, but water depth is 15m, so more limited for the sizes of ships being introduced into East-West trades, although both APM Terminals and an Evergreen Marine subsidiary have a stake in the management company.

5 Colombo International Container Terminal can offer 18m of water depth, largescale terminal infrastructure and the ability to serve 18,000 TEU ships – however, fully laden ships that are now over 22,000 TEU will be more of an issue.

This very short summary of the port’s terminals underlines that as container ships on the major East-West trades continue to increase in size, so the pressure on ports grows too. A port that is unable to successfully receive the largest ships will find its competitiveness impacted.

The Port Authority is studying the Colombo North Port option as part of a 30-year plan to raise annual capacity from 12 million TEU to 35 million TEU. A challenge for any hub port is to look to entice the cargo and make it more “sticky” to the port directly. Where there is a large local market to serve will also help the ship to call because this is demand that needs to be served. Jebel Ali in Dubai is a good example here. Despite its deviation from the main shipping routes, major liner Alliances will make the sailing for the local demand and load transhipment cargo too for discharge.

20 | MARCH 2020

Source: WSP

REGIONAL SURVEY: ASIA

Colombo does not benefit from a large local population, due to it being an island facility. This means that other “pull” factors must be generated to help attract and retain the cargo. This is a longstanding and frequent challenge that all transhipment ports face, even the most successful ones.

For example, Tanger Med has seen rapid growth since it opened in 2007, reaching 2.0 million TEU by 2010 and seeing subsequent increases of 8.9% per annum between 2010 and 2019. Yet the port authority remains keen to reduce exposure to transhipment which still accounts for around 90% of all port volumes.

As the market for Sri Lanka’s transshipment activities moves back towards equilibrium, after the next wave of newbuilds have been introduced, it can be anticipated that port concentration will be reasserted. Faster deep-sea services will be reintroduced and pressure to increase feedering and transshipment will intensify. Establishment of correct network solutions in advance of these developments will be in the interests of the major lines and will influence the size of vessels deployed on main and secondary trade lanes.

One policy that hub ports can adopt is to secure terminal ownership and equity arrangements with container shipping lines, mainly because the ocean carrier will want to bring its own cargo to its own facility.

The arrangement between CMPort and CMA CGM may be a good policy for transhipment in Sri Lanka to supplement the involvement of APM terminals and Peony Investments (a subsidiary of Evergreen Marine Corporation) at SAGT.

8 Figure 1: Transhipment and Total Container Volumes at Colombo in ‘000 TEU, 2010-2019

8 Colombo: Infrastructure at some terminals is becoming limited

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

REGIONAL SURVEY: INDIA

CAN INDIA’S EAST COAST CORRIDOR PROJECT SUCCEED? Gordon Feller asks whether the much talked about, but not yet fully developed, desire to introduce coastal corridors along India’s substantial coastline might hold water

8 Obstacles in India must be cleared if coastal corridors have any hope in succeeding

The East Coast Economic Corridor (ECEC) is India’s first coastal corridor and an example of what economists sometimes call “an integrated economic development initiative”. The key idea behind this corridor is to have port-based industrial development along the eastern coastal belt of India.

For a long time, the national government in Delhi has been keen to exploit India’s 7,500 km-long coastline, along with the 14,500 km of potentially navigable waterways.

The ECEC’s development program starts with the launch of the Vizag–Chennai Industrial Corridor. The VCIC is ambitious, covering approximately 800 km and including several port clusters, as well as major industrial zones.

India’s national government is attaching great importance to both the ECEC and VCIC and the overall objective is simple – to improve shipping and air connectivity in ECEC and VCIC. However, this will require something that is hard to do inside India, namely develop an enabling environment for efficient logistics support businesses. In short, it means establishing businesses that play a critical role in the management of global supply chains.

CLEARING OBSTACLES A number of obstacles inside the national and state-level governments and private sector enterprises, currently inhibit the growth of connectivity and investment in logistics services, rather than only physical infrastructure for individual ports and airports.

Specific proposals have been made to clear away obstacles, including items such as policy reforms to support development of a major hub port on the eastern coast of India and a major air cargo hub at Chennai, the streamlining of customs procedures and removal of protective measures in road freight markets and the establishment of Free Trade and Warehousing Zones.

ECEC has certain distinct advantages for the development of ports, including India’s eastern coast offering relatively deeper drafts that can support the new breed of larger container ships and supertankers. It also offers an existing rail and road spine that is relatively better developed than its western counterpart.

However, India’s historical focus on trade with partners to its west—and the trajectory of industrialization that has put most of the traded goods that require containerization (as opposed to bulk) in the natural hinterland of its western coast ports—means that ports on the eastern coast handle very little container cargo.

INDUSTRIAL ORIENTATION The ECEC’s industrial orientation, which includes VCIC, is focused on sectors that require breakbulk and other forms of non-containerized shipping solutions.

The presence of minerals-producing areas in this region has led to significant investment in metallurgical and nonmetallic minerals-based industries over the past five decades, which is a trend that is continuing. Existing data for 2008–2013 shows that three of the top six most important industrial sectors in terms of investment and industrial growth were resource-based activities that require breakbulk solutions both for inputs and outbound final products.

These industries are chemicals and petrochemicals, metallurgy, and nonmetallic mineral industries. The other three include information technology, which has limited shipping and logistical requirements, textiles and automobiles and automotive parts.

While textiles and automobiles and automotive parts require containerised solutions, these industries are clustered around Chennai, which is the only port in ECEC that handles any significant volume of containers.

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

MARCH 2020 | 21

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REGIONAL SURVEY: INDIA The logical outcome of such an industrial orientation is that, with the exception of Chennai and Kattupalli, the main focus of ECEC ports is break-bulk and raw materials, such as petroleum, oil and lubricants, coal, iron ore, fertilizer and agricultural raw materials.

For VCIC ports, coal and iron ore collectively account for about 57% of total throughput, with liquids and petroleum, oil, and lubricants comprising 12, general cargo a share of 26% and container traffic a mere 5%.

The newly developed ports of Gangavaram and Krishnapatnam are heavily dependent on coal, which accounts for 80% of all traffic. The four VCIC ports located in Andhra Pradesh, Vishakhapatnam, Gangavaram, Kakinada, and Krishnapatnam, account for just 3%–4% of India’s total container cargo volume.

GOVERNMENT PREDICTIONS OF 3.0-7.5X EXPANSION The government’s own VCIC analysis predicts an expansion in industrial output of approximately 3.0–7.5x over the next 25 years under different scenarios. Such growth will create significant additional demand for containerised cargo solutions in the corridor’s ports.

While a “business-as- usual” scenario would increase the share of VCIC ports in India’s total container traffic handling to about 6% by 2020, new investments in sectors that require container-based evacuation solutions could see this share increase more significantly.

However, relatively low container-based cargo volumes currently translate into a lack of business interest for developing regular liner connections originating from India’s eastern ports, especially VCIC ports.

Except for Chennai, none of the eastern coast’s ports have direct liner services to major economic nodes in Southeast Asia or East Asia. The focus of eastern coast ports on bulk is

also reflected in the fact that most ECEC and VCIC ports are much better connected by bulk and petroleum, oil and lubricant routes with Southeast Asia and East Asia than with container liner shipping and feeder routes.

8 The Sagarmala Programme wants to extend Indian value-chains to Asia

NEED FOR SHIPPING LINKAGES Integrating with global production networks cannot be achieved without establishing low-cost containerised shipping linkages with major global and (especially) regional industrial nodes in Southeast Asia and East Asia.

Regular, cost-effective connectivity with Southeast Asia and East Asia are an essential condition for the development of VCIC and the larger ECEC. This can be viewed as an example of the “chicken-and-the-egg” problem; that is, liner connections require that high trade volumes be present, yet (in some ways) having liner connections creates the enabling environment needed to establish such volumes.

Sagarmala Programme Goals The ECEC aims to be in alignment with the goals of the Sagarmala Programme, which is focused on the integration of India’s industrial clusters with value chains extending to Southeast Asia and East Asia.

Sagarmala is an initiative of the national government of India which aims to enhance the performance of the country’s logistics sector through unlocking the potential of waterways and the coastline to minimise the infrastructure investments required to meet these targets.

In 2018 the government said that Sagarmala will require an investment of 8.5 trillion rupees. This spend will be used to set up new mega-ports, to modernize India’s existing ports, development of 14 “Coastal Economic Zones” and “Coastal Employment Units” while enhancing port connectivity via road, rail, multi-modal logistics parks, pipelines and waterways and, finally, promoting coastal community development.

This is a significant amount to invest and if undertaken the government estimates that it would boost merchandise exports by US$110 billion and generate approximately 10,000,000 new direct jobs, and indirect jobs.

Sagarmala is the flagship initiative of India’s national Ministry of Shipping and designed to promote port-led development.

It is focused on modernising India’s ports so that port-led development can be augmented, and coastlines can be developed in ways that contribute to India’s economic growth.

Sagarmala aims to accomplish two goals, namely transform existing ports into what can be defined as “modern world-class ports” while integrating future development of ports, industrial clusters and hinterlands through road, rail, inland and coastal waterways – with the ultimate outcome seeing ports becoming “the drivers of economic activity” in India’s coastal areas.

The successful development of ECEC is also critical to India’s Act East Policy, which focuses on connectivity agreements in South Asia and Southeast Asia such as the Bangladesh–Bhutan–India–Nepal Motor Vehicles Agreement, and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation.

ECEC will be integrated with existing infrastructure development and upgrading initiatives at its starting and end points of

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Kolkata and Tuticorin, respectively, which are already part of the Golden Quadrilateral highway development program.

In the regional context of South Asia and the intra-regional role of South Asia– Southeast Asia (covering the Bay of Bengal-adjacent regions of southern and eastern India, Bangladesh, Nepal, Myanmar, and Thailand), relatively poor physical connectivity and the resulting high transaction costs have ensured that production network linkages remain weak.

The relatively low volumes of intra-South Asian trade, in turn, reduce the incentive for logistics firms to provide effective and low-cost connectivity and value-added services.

This has the effect of further increasing the transaction costs associated with developing effective production networks. The relatively well-connected nodes of Chennai, peninsular Malaysia, and Singapore have helped develop robust linkages between India and the Association of Southeast Asian Nations within wider Asian and global production networks, particularly for automobiles and automotive parts, chemicals, and textiles.

MARCH 2020 | 23

INDIA REVIEW: CAPACITY EXPANSION

MATCHING PORT INVESTMENT WITH DIGITAL EFFICIENCY A National Port Grid and National Logistics Policy are two components in a push to improve port performance and infrastructure in India, reports Felicity Landon

8 Aerial view of container yard and cranes at Nhava Sheva terminal

India is looking to break into the ‘top ten’ league with the development of a mega container port at Vadhavan, in Maharashtra. With a price tag of US$9.2bn, the port was approved by the government in early February 2020.

Assuming the project goes ahead – it still has to navigate past environmental objections – Vadhavan will provide India with one of the world’s top ten container ports, offering a natural draft of about 20 metres and the ability to handle vessels of up to 25,000 TEU in size.

Meanwhile, Jawaharlal Nehru Port Trust (JNPT), currently at number 28 on the world’s top container ports list, is expected to move up to 17 when its fourth container terminal is completed in 2023. The port handled a record 5.1 million TEU last year – with the expansion, its capacity will be up to 10 million TEU per annum.

These are just two examples of significant physical expansion. India’s shipping ministry is currently busy drawing up a ‘National Port Grid’ which will look to make the most of the synergy between major and minor ports, the idea being that all 204 minor ports in the country could become important centres of maritime trade, if revived. This project has involved identifying specific cargoes and downstream industries linked to each port and also focusing on coastal shipping and inland waterways.

NEW NATIONAL LOGISTICS POLICY In parallel, the government’s new National Logistics Policy, due to be released soon, will be a digital drive for efficiency and cost-savings, with the focus on data analytics,

24 | MARCH 2020

e-commerce logistics, Port Community Systems and Single Window solutions.

“The Indian government is accelerating its port development efforts as global transport giants continue to see the country as a promising freight spot,” says Rajni Patwardhan, head of marketing at Mumbai-based Kale Logistics Solutions. “That India’s ranking on the World Bank’s ease of doing business index improved from 100 in 2017 to 77 in 2018 has made news. What is not well known is that a vital role in this jump was played by the IT-enabled integration of India’s maritime infrastructure.”

As more than 90% of India’s trade by volume is carried via the maritime route, there is a continuous need to develop India’s ports and trade-related infrastructure to accelerate growth in the manufacturing industry and to assist the ‘Made in India’ initiative, Ms Patwardhan points out. “There is immense potential for modernisation and growth of Indian ports. The Ministry of Shipping, the nodal agency for ports, encompasses the shipping and port sectors, including shipbuilding and ship repair, major ports and inland water transport. As per government policy, 100% FDI is allowed in port development projects.”

The ministry’s Sagarmala programme, which is looking to reduce logistics costs for exports, imports and domestic trade, encompasses aspects such as optimising modal mix, lowering the logistics cost of bulk commodities by locating future industrial capacities near the coast, and improving export competitiveness by developing manufacturing clusters next to ports.

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

INDIA REVIEW: CAPACITY EXPANSION “Setting up new ports, modernising existing ports, developing coastal zones and boosting local employment generation, establishing connectivity between ports and road, rail, multimodal logistics parks, pipelines and waterways, as well as promoting coastal community development – through its ambitious Sagarmala project, the Indian government wants to transform the country’s ports and reduce logistics costs for domestic as well as import/export cargo by optimising infrastructure investment,” says Ms Patwardhan.

The government is also investing in and pushing for more use of coastal shipping and inland waterways, she adds. The National Waterways Act focuses on connectivity through 15,000 km of inland waterways across 24 states: “This is believed to be a game changer in the Indian logistics space, as waterway transportation can decongest roads to a large extent.”

The Indian Port Rail and Ropeway Corporation has been formed to enhance throughput and capacity by rail, and in a US$11bn project, the Dedicated Freight Corridor Corporation is overlooking the building of ‘corridors’ covering thousands of kilometres, for fast-track movement of freight from origin to port. The East Coast Corridor concept is assessed on page 24.

JNPT has five container terminals, including APMT Terminals Mumbai, which handled 2 million TEU last year, DP World NSIGT (990,000 TEU) and DP World NSICT (520,000 TEU), PSA Mumbai (820,000 TEU) and JNPCT (770,000 TEU) – according to figures supplied directly by JNPT. In August 2019, JNPT brought together all the terminals in aWSP newJan-Feb inter-terminal rail handling operation agreement, 2020_WSP 27/01/2020 14:53 Page 1 designed to maximise train placement, track productivity,

efficiency and cost-effective handling. The dwell time of import containers moved by rail fell from than 116 hours in 2018 to just over 66 hours by March 2019, while the rail share increased. At the same time, the dwell time for containers moving by road fell from more than 41 hours in 2018 to 28 hours by December 2019.

8 Containers being transported at Mundra port DPW

LOGISTICS NEEDS COLLABORATION Growth in both exports and domestic trade is critical to realise India’s vision of a US$5 trillion economy, says DP World.

“For higher exports growth, logistics costs need to come down to 11% of GDP from the current 13-14%,” says a spokesperson. “To reduce the overall cost of logistics, there is a

Cargo / Passenger and Recreation / Military Facilities Core Services Advisory Services Port Planning and Analysis Environmental Services Engineering Services Coastal Engineering Program Management Construction Services Asset Management

wsp.com/maritime Simon Harries Tel: +44 777 322 8338 simon.harries@wsp.com

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

MARCH 2020 | 25

INDIA REVIEW: CAPACITY EXPANSION strong need to integrate the fragmented supply chain, promote the multimodal transport of freight, reducing the share of road and increasing the share of rail, and leverage the long coastline for coastal shipping as well as leveraging technology to aggregate supply chains on to an integrated platform.”

Transforming India’s logistics industry will require collaboration between the government and the private sector, says DP World. “This collaboration can drive exports growth by helping to reduce the cost of logistics and make Indian manufacturers globally competitive. The most important ways to do this is through technology adoption, reducing turnaround time at ports, improving the modal mix of transport, increasing the share of rail freight, utilising inland waterways and coastal shipping, and building integrated supply chain platforms to offer end-to-end solutions for customers.”

WHAT ARE THE TERMINAL OPERATORS DOING? DP World has been operating in India since 1997 and was instrumental in building the first PPP project for the government of India.

“Our network in India comprises a complete suite of supply chain capabilities across port terminals, rail, warehousing, inland rail terminals, cold chain, 3PL, express service and feeder services,” says the DP World spokesperson. “All these capabilities allow us to handle and move all types of cargo through any mode of transport and offer all kinds of storage services preferred by our customers.”

DP World is striving for more efficiency in the supply chain by integrating the fragmented logistics sector, the spokesperson adds. “We have been making significant

investments in India into new assets, as well as modernising terminal operations across all the ports that we are present in. Over the last year, we have built a strong portfolio of integrated logistics assets, including rail freight, warehouses, container freight station, private freight station, free trade zones, cold chain logistics and supply chain services. Global customers will be able to leverage our services across a broader portfolio for their supply chains.”

PSA, which operates four terminals in India, is also expanding. Its operations at Mumbai, Chennai, Kolkata and Sical handle more than 2.5 million TEU per annum between them. PSA’s Bharat Mumbai Container Terminals (BMCT) which opened for operations at JNPT in January 2018, is set

8 DP World and all operators are striving for more port efficiencies

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INDIA REVIEW: CAPACITY EXPANSION to double its capacity to 4.8 million TEU per annum by the end of 2022; PSA says that when it is fully completed, it will have a berth length of 2,000 metres and the deepest berths at the complex to handle super post-panamax vessels. “PSA Mumbai serves the important industrial and manufacturing centres and cities in Northwest India, as well as India’s largest hinterland with a population in excess of 400 million. The development of BMCT will cater to the ever-increasing demand for container handling capacity, boost export/ import trade and increase economic activities between India and other countries.”

The JM Baxi Group’s International Cargo Terminal (ICT) business includes the operation of container terminals at Visakhapatnam, Kandla and Haldia, container freight stations/ICDs at Mumbai and Delhi, and cargo terminals at Rozi and Paradip.

Among major developments last year, Visakha Container Terminal saw the start of its first direct service to/from Europe – the IEX service of Hapag Lloyd, Cosco, OOCL, ONE and YML; VCTPL also emerged as a preferred gateway to Nepal in 2019. Kandla saw volumes rise from 207,600 TEU to nearly 411,000 TEU. Paradip, JM Baxi’s newest terminal, saw cargo rise from 743,287 tonnes of bulk/breakbulk and 6,448 TEU in 2018 to 2.47m tonnes and 11,182 TEU, respectively.

PCS OPERATORS WORK ON HARMONISATION ND STANDARDISATION At the end of 2018, the Port Community System PCS 1x was launched at 13 ports simultaneously when Indian Ports Association (IPA) chairman Shri Sanjay Bhatia declared ‘Go live’. PCS 1x was designed, developed and implemented by Portall Infosystems, part of the JM Baxi Group, under the aegis of the IPA and India’s ministry of shipping – in just six months. It is built on a cloud-based open platform to enable the ‘intelligent, easy, efficient and secure’ exchange of information between public and private stakeholders.

Since launch, the number of stakeholders using the system has since increased from seven to 29, says Portall, and registered users have increased from 6,000 to more than 16,000.

During 2019, Portall added functionality to the system, facilitating government-to-business, business-to-government and business-to-business transactions; added payment gateways; organised customer engagement through workshops and road shows; focused on change management for constant improvement and transparency amongst the stakeholder communities; and put in place governance mechanisms and committee based reviews for maximum stakeholder participation, according to a senior source at Portall.

Amongst other important developments, the concept of Latch On was introduced, so that technology service providers can now interact with the stakeholders via PCS 1x, dashboards and mobile applications were improved, and efforts continued to bring in harmonisation and standardisation amongst trade; in line with global standards such as UN/CEFACT and WCO. Port Community Systems are not a new concept for Indian ports, says Portall – they have been available for at least 12 years, but were based on individual port servers and encompassed smaller functionality, so were not well utilised by maritime operators.

“There are different, disparate IT systems invested in by the ports and terminals in India, with limitations wherein stakeholders would be depending on multiple systems to have access their day-to-day business operations. The community at large had no single point of information, data consolidation and retrieval.

“The implementation of PCS 1x is a digital initiative driven by the IPA and Government of India towards implementing a cashless, paperless, digital regime in the shipping and maritime space. It minimises transaction time and cost to Indian export-import trade. The use of PCS 1x aims to improve India’s ranking in the Logistics Performance Index in ease of doing business.”

PCS 1x is now being used by India’s 13 major ports and seven private terminals. As to the benefits, Portall says that the direct connectivity to Customs via PCS 1x has enabled JNPT, for example, to receive data faster in a more systematic and sanitised way, with the ability to segregate data to match each stakeholder’s requirements.

It is understood that the approval of vessel profile submissions has been reduced from an average of 30 hours to 30 minutes.

Portall Infosystems and Kale Logistics are both members of the International Port Community Systems Association (IPCSA).

The past three years have been very exciting for Kale, says Rajni Patwardhan. “We have moved our major focus on to trade facilitation platforms like port community systems, air cargo community systems, national regulatory single windows and logistics e-marketplace.

“CODEX, our port community system, has enabled speedy tax refunds to the India exporter, falling from 120 days to seven days. CODEX (Container Digital Exchange), which is live at Tuticorin Port in southern India, has also reduced container dwell time by 75% and, due to quick container movement based on a single barcoded gate pass, the carbon emissions have also reduced by 75%.”

Kale wanted to build a single window platform where information from all relevant parties would be captured digitally and made available to any entity that required it, she explains. Kale deployed the first version of CODEX at Tuticorin within three months of starting the project. It provides a digital gate pass for containers, a single digital document mapped to individual containers via a barcode, accessible to every stakeholder to view and fill.

“As a container moves from one checkpoint to the other, a combination of desktop systems, mobile apps and scanners ensures that the information from the digital gate pass is directly read,” says Ms Patwardhan. “This information is then available to a port gate officer or a Customs officer who does not have to do a physical verification of the documents. The availability of information in advance allows seamless movement of the container from the CFS hub to the port.

Impressed by the seamlessness of the platform and the resultant time savings during customs clearance, customs officials put up a public notice to use CODEX for all container movements at the port.”

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

8 Port Community Systems are not new in Indian ports but were based on individual port servers, so not well utilised

MARCH 2020 | 27

SPECIAL REPORT: SAUDI ARABIA

MEETING THE VISION IN SAUDI ARABIA The Vision 2030 project is the major initiative in KSA. AJ Keyes assesses recent developments at the Kingdom’s largest container port to see if aims are being met

8 DP World has a 30-year concession at JIP to help support Vision 2030

In 2016, Reuters reported that the Kingdom of Saudi Arabia (KSA) oil reserves were estimated to “last for another 70 years at the average production rate of 10.2 million barrels per day reported for 2015.”

The exact number of years is unknown, but while it is clear that while oil will remain a significant component of the country’s future trading activities, the concern about an overdependence on a single commodity remains, especially as this industry does not create sufficient employment opportunities for the population.

The diversification of the economy away from oil and petrochemicals means the expansion of services and other commodities, many of which can be containerised. The competition of container ports in the country, and region, has grown more fierce to attract the already, and envisioned, increasing demand for container volumes Crown Prince and Chairman of the Council of Economic and Development Affairs, Mohammad bin Salman bin stated that “Vision 2030 is a bold yet achievable blueprint for an ambitious nation” because it “Expresses our long-term goals and expectations and it is built upon our country’s unique strengths and capabilities.” Moreover, the initiative “Guides aspiration towards a new phase of development – to create a

28 | MARCH 2020

vibrant society in which all citizens can fulfil their dreams, hopes and ambitions to succeed in a thriving economy.”

The port industry in KSA has a key part to play to helping strategic objectives being met. Measurable objectives in infrastructure are where the role of ports becomes particularly important, because 15 – 20 million TEU of additional capacity is slated as need in the future, along with 6 million TEU rail additional capacity and the building of the third Jeddah Mecca highway, amongst other aims.

DEVELOPMENTS IN JEDDAH So, how are KSA’s West Coast container ports stacking-up in pursuit of the Vision 2030 initiatives, especially at the Kingdom’s largest facility, Jeddah Islamic Port (JIP)?

Well, an immediate impact can be seen in JIP, where the current three container terminals located at the port will be reduced to two facilities in 2020.

Red Sea Gateway Terminal (RSGT), located in the northern part of the port, is to be expanded as it will be merged with the existing Jeddah North Container Terminal (NCT) when the existing NCT contract belonging to Gulf Stevedoring Contracting Company (GSCCO) expires in 2020. GSCCO is a 51% subsidy of UAE-based terminal operating company, Gulftainer.

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

SPECIAL REPORT: SAUDI ARABIA RSGT is a joint venture of the Saudi Industrial Services Company (SISCO), which has a 60.6% stake and MMC Corporation of Malaysia, which retains a 20% interest. The remaining shares are held by a range of smaller stakeholders.

RSGT has signed a new 30-year concession with the Saudi Arabia Ports Authority (Mawani), which will see the Phase I newly consolidated operation have 2,600m of berthing supporting a terminal of 150 hectares.

The second terminal at Jeddah, in the southern part of the port, is being retained by DP World. The Jeddah South Container Terminal (JSCT) is going to see its current container capacity of 2.4 million TEU per annum increased to 3.6 million TEU per annum, as part of DP World’s new 30-year concession in Jeddah.

The Supervisory Committee for Privatisation of Transport Sector in KSA approved the concession with DP World and RSGT in support of Vision 2030 and said that the project “will activate the Memorandum of Understandings (MOUs) that Mawani had signed in the presence of HRH Crown Prince Mohammed bin Salman bin Abdulaziz last February during the inauguration of The National Industrial Development and Logistics Program, one of Saudi Vision 2030’s major initiatives.”

In addition, the project will help “consolidate Mawani’s pivotal role as a key contributor towards transforming Saudi Arabia into a global logistics hub connecting the three continents.”

Sultan Ahmed Bin Sulayem, DP World Group Chairman and CEO, confirmed that the concession supported the 2030 Vision to “Transform the country into a global logistics hub” and said that there is a commitment to “Investing significantly to modernise the Jeddah South Container terminal, which will not only result in greater direct and indirect job creation but also deliver best-in-class efficiency and productivity to the Port’s operations.”

DP World confirmed that the planned infrastructure investment of US$500 million will ensure the port is a more efficient option to serve the largest container ships in service to/from Asia. Bin Sulayem added, “Beyond the terminal, our ambition is to develop inland connectivity across the Arabian Peninsula between Jeddah and Jebel Ali Port in Dubai, as well as to Saudi Arabia’s cities through smart technology-led logistics, which should support further growth in this strategic hub that connects East-to-West.”

EMERGENCE OF KING ABDULLAH PORT The reduction of three operators to two company specialists at JIP comes at a time when recent volume throughput has been challenged, due to the emergence of King Abdullah Port (KAP).

Container volumes at JIP reached a recent high of 4.74 million TEU in 2012 but have since fallen back to around 4.1 million – 4.2 million for 2019. In comparison, the privately owned and operated King Abdullah Port, a Greenfield development located approximately 100km to the north of JIP, has seen strong increases since opening in 2013. From handling just over 500,000 TEU in 2014, the port had seen throughput rise to more than 1.4 million in 2016 and by the end of 2018 total volumes had surpassed 2.3 million TEU. There are substantial expansion plans for KSA West Coast facilities, with a high amount of new capacity to be added overall, a 91% rise to 14.1 million TEU per annum from the current 7.4 million TEU per annum, which includes: 5 JSCT - dredging to 18m depth, expansion potential for additional 500m of quay, introduced of automated equipment.

5  RSGT - has expanded quay to 1,300m, could add up to 1,000m when gaining NCT.

5  K AP - phase II plans, with 8 new quay cranes in 2020 due for delivery.

Mediterranean Shipping Co (MSC) is an advocate of King Abdullah port and the shipping line’s strong continued support means that estimated 2019 activity at the port will have seen further increases.

There are long-term development plans that will eventually see the current Phase I capacity of 3.0 million TEU per annum continue to rise, with Phase 2 adding a further 1 million TEU per annum, before Phase 3 brings the total to 6.0 million TEU annually. Subsequently phases will see 10.6 million TEU per annum developed by the end of Phase 6, although timescales are currently unknown and likely to be driven by demand.

8 Crown Prince and Chairman of the Council of Economic and Development Affairs, Mohammad bin Salman bin Abdulaziz

CONTAINER SHIPPING IN THE RED SEA The size profile of vessels deployed into the Red Sea suggests great potential for direct mainline large vessel calls at one or more deep water container ports in the region, with shorter feeder legs effectively replacing existing more distant transhipment operations. The ability to handle the ultra large vessels at the ports is therefore extremely important.

Container trades in the Red Sea, rely on the fact that the location of the terminals on the major Asia-Europe arterial trade route, allows the largest vessels being deployed by shipping lines to bypass Jeddah without significant deviation (8 nm) on their way to Europe via the Suez Canal.

The increase of vessel sizes deployed increasingly means that lines want to call at a limited number of ports This contrasts favourably with the Arabian Gulf alternative of serving the region, where there are far fewer direct calls available to the Upper Gulf. Although volumes are increasing, it is apparent that feedering of containers from Dubai and more remote hub ports such as Salalah is on the increase, together with the size of feeder vessels.

From a shipping line perspective, a call at JIP or KAP is preferable than feedering via Gulf ports. The very largest vessels are passing the port on a frequent basis, the lines are seeking to increase load factors by integrating regional ‘wayport’ calls and there is no requirement for feedering to a Saudi port. This form of “double dipping” gives lines an

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

MARCH 2020 | 29

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SPECIAL REPORT: SAUDI ARABIA

8 KAP has seen strong increases in throughput since it opened, supported

by MSC, with eight new quay cranes due in 2020

opportunity of loading cargo from Asia to Europe and Asia to Saudi Arabia, as well as from Saudi Arabia to Europe.

The increase of vessel sizes deployed increasingly means that lines want to call at a limited number of ports in order to turn vessels around quicker. This means calls are often used both for local cargo where there is a high demand as well as for transhipment volumes to a wider region.

Services calling into KSA continue to be concentrated on JIP, with 42 services being offered compared with around 20 confirmed regular services seen at KAP. In terms of alliance activity, the Ocean Alliance concentrates its services on terminals at North Jeddah with GCT and RSGT being used until the former is phased out in 2020. THE Alliance use the DPW Jeddah facility in South Jeddah and Maersk Line undertakes its services at RSGT to protect its local market interests, in addition to 2M services calling at KAP. The involvement of MSC (through Terminal Investment Ltd.) at KAP is seeing 2M Alliance services calling, mainly for transhipment opportunities, although Maersk Line also offer

owned services to JIP facilities to handle local Saudi Arabian cargo. Clearly, container port capacity in the Red Sea is going to increase, with both JIP and KAP already planning to raise capacity and efficiencies for the future to meet local demand and the largest container ships by-passing to/from the Suez Canal.

Mawani is also working in conjunction with the Kingdom’s own internal agencies to create new operating concessions at these two major container ports, with the focus of developments at JIP clearly stated as being in support of Vision 2030.

On a practical basis, serving Riyadh will remain a key objective of ports in KSA, although for JIP it is also an effective gateway for its own local Jeddah market and also for the City of Mecca.

Yet overall, location and shipping line strategies will be key influencing factors moving forward in terms of port choice, but the ability of the Kingdom to generate the economic demand for the Vision 2030 initiative that ports can serve will remain the overall challenge.

Serving the Jewel in the Crown – East vs. West Coast?

From a port perspective, population density and location remain an important consideration because the facility in a good geographic location supported by adequate access networks (of road and rail) will remain the preferred option for the movement of cargo.

Total population in KSA is estimated to be 34.8 million inhabitants and it has continued to increase slowly from the 31.7 million recorded in 2015. Annual increases are slowing from the 3.0% seen for 2015 down to 1.5% for 2020.

The Jewel in the Crown in terms of population and consumption demand has traditionally been the capital city of KSA, Riyadh. It has an estimated population of around 8.5 million people, so ports on both the West and East coasts will always target this location.

So, what about East Coast ports, notably Dammam, and the ability to reach Riyadh?

The historic position in terms of share of container traffic in KSA has shown that ports on the West Coast account for the majority of container traffic. In 2010, total volume shares were split to West Coast 70% and East Coast 30%, although for 2019 the figure is close to 65% (West Coast) and 35% (East Coast), with the increase in the East Coast share due to the growth in larger vessels arriving on direct services to/ from Asia and Arabian Gulf.

For example, according to information supplied by PR News Service, the size of ships on the Asia-Mid East trades has been rising, as follows: 5  2 010: Typical deep sea ship was 9,000 TEU, largest was 14,500 TEU 020: Typical deep sea ships now 18,000 52 TEU, largest at 20,000 TEU

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This means a higher volume of cargo moving direct to the Gulf as opposed to a feeder service from one of the regional hubs, such as Jebel Ali or Khalifa Port.

In terms of competitiveness to serve Riyadh, distance is a factor because Jeddah to Riyadh is around 950km, while Dammam to Riyadh is 449km (direct) and Dammam to Riyadh is 556km (via Haradh).

However, the higher inland costs will be offset by significantly cheaper shipping costs.

The advantage JIP can offer is that it is no sailing deviation to call for a ship en-route through the Red Sea than having to make a specific call to Dammam in the Gulf Introduction of an intermodal rail service from Jeddah to Riyadh, as part of the US$7 billion Saudi Landbridge project, can also help to better serve the Riyadh contestable hinterland too for JIP.

MARCH 2020 | 31

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MARITIMEJOURNAL INSIGHT FOR THE EUROPEAN COMMERCIAL MARINE BUSINESS

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EXPLOITING THE OPPORTUNITIES IN SHORT SEA SHIPPING The Port of Antwerp is adding another string to its bow – it’s increasing its short sea offering to attract new cargo streams, creating an end-to-end multimodal solution for customers As the second largest port in Europe, Antwerp has been working hard to preserve its competitiveness and maintain its edge in the market. But at present it only offers weekly fixed shortsea and feeder services, no dedicated daily fixed short sea routes.

“A couple of years ago short sea shipping was not a focus point,” said Dries Van Gheluwe, Short sea Shipping, Port of Antwerp.

“But this aspect has been missing from our commercial strategy until now, despite the fact that the building blocks were already there for us to take advantage of the market.”

TARGETED FOCUS Mr Van Gheluwe told Port Strategy that the port now has three specific key target areas for short sea – Spain and Portugal (Iberia), the UK and Ireland and Norway.

So, it is working to attract new business from the lines that service these locations.

In doing this it will be expanding its multimodal offering as a hub by using short sea as part of its integrated port plan alongside barge and rail.

“We see short sea as part of the overall mobility connection, creating a full multimodal transport solution for our customers,” he said.

MITIGATION In the current economic climate, there are two other positive motives for getting into short sea.

To counteract any possible negative impact to business resulting from the UK’s exit from Europe and to offer customers an alternative to trucking their goods to the above locations.

It’s a solution that helps protect the port from issues that the truck industry is currently facing – namely costly delays due to congestion and the well documented shortage of truck drivers.

Creating these strong short sea shipping routes also helps mitigate losing business to other ports.

The port having its own routes means keeping a cargo contract for its whole lifetime and preventing needless movements.

DEVELOPMENT To develop the new short sea routes, the port authority has been working with three terminal operators, two on the right bank and one on the left of the Schelde.

The port itself has been playing a guiding role with these three operators, helping build case studies for them and starting up business connections with carriers.

“The most important thing for stakeholders is reliability on an operational but also on a commercial point of view,” says Mr Van Gheluwe.

Antwerp has already lowered its port dues for short sea to make it a more attractive prospect for these carriers.

It has also been helping with performing macro-economic

analysis and facilitating the necessary infrastructure needed at the terminals.

MARKET RESEARCH One case study the port is conducting is looking at the creation of a short sea route between Antwerp and Hull/ Immingham in the north of the UK. Involving 80 different companies around the Port of Antwerp (including both destination ports and the carriers), the study revealed that the creation of this direct route could potentially transfer 50,000 teu of cargo per year from the road to short sea. If you were to factor in all of Antwerp’s prospected new short sea destinations (Norway, Portugal, Spain, the UK and Ireland), this could equate to a road/sea transfer of 250,000 teu per year.

“By consolidating this information, you can draw a business case for short sea together with the carriers and the terminals,” says Mr Van Gheluwe.

8 At present, Antwerp only offers weekly fixed short sea and feeder services, no dedicated daily fixed short sea routes

NEXT STEPS There are still some obstacles to overcome in terms of driving down costs and making short sea an even more attractive prospect.

At present Antwerp is not the cheapest maritime connection by way of the port’s inward location. So, one of Antwerp’s main obstacles going forward is convincing shippers and forwarders to look at the entire cost of the supply chain, not only compare the cost of maritime transport.

To this end, Mr Van Gheluwe says that the next steps are to “Find and create the right partnerships” for the new routes.

“There are so many opportunities for us in this sector and for strengthening multimodal transport in Europe on a wider scale.

We’d be foolish if we didn’t take full advantage of this market.”

COASTLINK The Port of Antwerp is hosting the annual Coastlink conference which will run from 13 to 14 May 2020 where Dries Van Gheluwe will share his expertise on this issue. More information from www.coastlink.co.uk.

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

MARCH 2020 | 33

SPECIAL REPORT: INDONESIA

PUSHING PORT DEVELOPMENT IN INDONESIA A World Bank project in Indonesia is seeking to reduce costs and improve supply-chain reliability – but are ports the chokepoint in the system, asks Gordon Feller

8 World Bank wants to reduce costs and improve supply-chain reliability in Indonesia

A largescale World Bank project in Indonesia wants to reduce the costs and improve reliability of the country’s logistics chain. Underlying the project is one key assumption - enhancing the movement of goods within and across this large country’s borders is the key to furthering the mediumterm economic development and poverty reduction goals.

SO, WILL IT WORK? This new US$400 million project is the first in a planned series of two such projects, both of which are designed to support critical reforms that address bottlenecks at various points in the supply chain.

SPENDING THE MONEY The World Bank and Indonesia’s national government is using the funds to focus on strengthening port governance and operations, enabling a competitive business environment for logistics service providers and trade processing being more efficient and transparent.

This ambitious project is structured around three sets of objectives, each one being aimed at a specific area of reform: 1) Enhancing port performance: Strengthening port governance and operations by better clarifying the role of Port authorities vis-à-vis port operators.

It means that the emphasis is on facilitating the entry of port services operators and enhancing the coordination of documentary and container examination in ports. These

34 | MARCH 2020

actions are expected to increase in the share of Pelindos’ ports with internationally certified management systems, raise the number of applications for the Build-Operate-Transfer scheme for port development and reduce the average turnaround time in Tanjung Priok and Makassar ports.

2) Dramatically improving logistics services: Enable a competitive business environment for logistics service providers by increasing competition in freight forwarding services, storage and distribution services. Also, increase competition in auxiliary shipping services and reduce inventory costs of imported materials for producers.

This project is expected to help increase the number of new foreign licenses for freight forwarders, warehousing and cold storage services, support new shipping agents’ (SUKK) and foreign maritime cargo handling licenses and raise the amount of logistics bonded centres.

3) Strengthening trade processing: To make the processing of trade flows more efficient requires many chang¬es, including a greater degree of transparency that comes from reducing licensing requirements for imports. The main aims are to reduce licensing requirements for imports, facilitate traders’ compliance with trade regulatory requirements, expedite the submission of trade documentation and improving risk management by border agencies. These actions are expected to help reduce preclearance time in Tanjung Priok port, increase in the share of

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

SPECIAL REPORT: INDONESIA

relevant regulations included in the Indonesia National Trade Repository, reduce dwell time in the two main ports at Tanjung Priok and Tanjung Perak and lower pre-clearance time for food and drugs imports in Tanjung Priok.

EXPOSING STRUCTURAL WEAKNESSES Over the last decade, Indonesia has seen strong growth and job creation, and this has resulted in poverty reduction. But the end of the commodity boom has exposed the economy’s deep structural weaknesses, with other sectors not able to take up the slack of commodity exports. As a result, growth slowed.

The need for efficient logistics is now seen as a vital element of Indonesia’s overall effort to boost competitiveness in all of the country’s trading sectors. In the opinion of both the government and World Bank, smarter and cleaner logistics can help to reverse the slowing of poverty reduction, especially in the country’s more remote regions.

THE NEED TO REBALANCE Indonesia needs to rebalance the economy away from commodity production, since those prices are declining. The shift must be towards manufacturing and modern services.

Efficient logistics is one vital tool to make that happen, since smoother logistics move cheaper products from the source to those who should use them, whether it be the producers or the final consumers.

Large inefficiencies plague the logistics sector in Indonesia, which acts as both a drag on growth and a contributor to inequality. Logistics costs (transport, warehousing and inventory) are higher in Indonesia (25% of manufacturing sales) than in neighboring countries, including Thailand (15%) and Malaysia (13%). A large share of these costs is connected to carrying high inventory levels, due to a lack of predictability and due to the logistics chain’s chronic unreliability. On average, 19 out of 100 orders will either be late or (with some units) missing, which is a higher share than countries enjoying a similar level of income.

Almost two thirds of Indonesian manufacturers have inhouse, as opposed to outsourced, logistics activities - a clear signal of the lack of trust in the capability of local logistics service providers. Traders who wish to have their freight sent

from Java or Sumatra to other islands are likely to be confronted with long supply chains, uncertainties in delivery time and high costs needed to compensate for at least 70% empty volume on the return voyage (backhaul).

Indeed, it is cheaper to ship a container of Chinese mandarin oranges from Shanghai to Jakarta than to send similar freight from Jakarta to Padang in West Sumatra, despite the distance between the former cities being six times further than the latter.

In a relatively remote archipelago such as Indonesia the logistics supply chain is typically long and fragmented. This project is trying to address the main chokepoints along the chain. At the port of entry the aim is to facilitate more efficient investments and port services, while at the border the focus is on improved clearance procedures and before/beyond the border the emphasis is on the final destination of goods through better logistics services.

Consider, for example, imported inputs used by a manufacturer in South Sulawesi. Inputs produced in a third country are first shipped to an Indonesian international port, often Jakarta, with the shipment typically managed by a logistics service provider (e.g. a freight forwarder) responsible for contracting the shipping service via a shipping agent.

The shipment has to be offloaded at the port and go through trade processing, which verifies its compliance with Indonesian regulations. This may involve as many as 12 ministries/agencies and multiple inspections for one product. Once the goods are “cleared” they may be loaded on another vessel for carriage to the Port of Makassar.

The container is then offloaded and loaded on to a truck inside the port, which may deliver it to a warehouse from which the consignment to the final destination would be arranged. Again, the delivery process may be organised by a third-party logistics service provider, which arranges the services of various other providers.

Bottlenecks in this chain, whether in terms of inefficient port operations, restrictions on core logistics services or delays in trade facilitation, have a particularly negative impact on manufacturing productivity both internationally and within Indonesia.

Inefficient port operations Inefficient port operations, uncompetitive logistics services and lengthy trade procedures are at the core of the country’s inefficient logistics activities. Ports are often a bottleneck in the Indonesian logistics chain, hampered chiefly by inadequate infrastructure, although both burdensome regulations (in trade processing and investments) and low labour productivity do play a role.

The quality of port infrastructure, across the entire country, is a weak factor in the overall country’s competitiveness. Detailed work on 18 ports throughout Indonesia by the World Bank confirmed numerous infrastructure gaps. A key reason behind under-investment in the country’s port infrastructure is the lack of clarity on the respective roles of the port landlord and the port operator.

Cumbersome regulatory requirements and inefficient procedures make trade processing a further weak link in the logistics chain. Indonesia ranks 105 out of 189 national economies in the “Trading across borders” indicators which are assessed within the World Bank’s “Doing Business” project, a successful global effort to benchmark countries against each other’s performance vis-à-vis ease-of-business.

The national government’s Medium-term Development Plan for 2015-2019 (aka “RPJMN 2015-2019”) includes “efficient logistics” as one of the priorities of its economic development strategy. The effort is guided by two high-level strategies, i.e. the national logistics blueprint (aka “SISLOGNAS”), and the implementation of the Indonesian National Single Window (INSW), which aims to facilitate trade flowing into and out of the country.

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

Improving logistics performance, especially maritime, can have important poverty reducing effects in an archipelago like Indonesia. More efficient logistics would also allow greater domestic market integration. As poverty is relatively higher in remote regions, especially in Eastern Indonesia, lowering prices there would have a particularly important poverty reduction effect. Unemployed and poor workers can have access to greater income earning opportunities and small and medium enterprises are able serve a larger number of clients and have greater access to inputs.

Two national priorities are under intense scrutiny - reducing container handling time in selected international and domestic terminals and lowering travel time for selected links to the ports. Both are clearly needed.

MARCH 2020 | 35

CONTAINER HANDLING: SPREADERS

SPREADING THE LOAD FASTER AND BREAKDOWN LESS John Bensalhia looks at notable recent trends and developments for container-handling spreaders and talks to equipment suppliers about their activities

8 Spreaders have to lift more, faster and breakdown less

“Put simply, the trend for spreader use in container terminals, now and forever, has been to lift more boxes faster and have less breakdowns.”

So says Cameron Hay, Head of Sales & Marketing, RAM Spreaders, in outlining the major crane spreader industry trend and one which holds true for all container terminals around the world. Yet he adds that greater capabilities are being introduced to meet modern requirements of container handling, resulting in a number of additional recent trends can be seen – all of which help boost reliability, easy maintenance and lifting of heavier weights.

One notable trend is the progression of single to twin and now to tandem spreader. The tandem spreader allows for a number of benefits in container handling, especially greater speeds in loading and unloading multiple containers simultaneously from large scale vessels. “All major ports will operate tandem in five years,” says Cameron Hay. “The technology is mature, and the flexibility of the RAM design means we have now 150 units delivered or in production.”

Bromma’s Tandem telescopic 40’/45′ spreader is also capable of handling different kinds of container sizes. It can twin lift 20´, 40´ or 45´ containers side by side in tandem mode, without having to change.

POTENTIAL SAVINGS BLOK Container Systems’ spreader works on the same principle, with the ability to lift and transport four empty shipping containers as a single block. As Selwyn Rowley, BLOK’s director of sales and marketing explained, this spreader hastens the container handling process while reducing congestion and emissions – and saving money.

“Ports around the world handle 679 million containers

36 | MARCH 2020

annually of which around 24% are handled empty. Container terminals charge at least £100 and often much more per lift, so the potential savings created by being able to move four at a time rather than one unit can run into the billions.”

Bromma introduced its new Spreader Monitoring System, SMS at TOC Europe in June 2019. “Bromma SMS is a Cloudbased application that helps the terminal operators to understand the health of each spreader in their fleet,” explains Lars Meurling, Vice-President, Marketing, Bromma. “Monitoring fleet data, analysing performance and providing real-time dashboards with detailed information to operations and maintenance functions in the container terminal. The first commercial agreement is signed and a terminal in Europe is now starting to see the power and the benefits with the system.”

Elsewhere, Swedish Spreader manufacturer ELME Spreader launched 817 INNOVATION, its New Generation Spreader for laden container handling. The new design implies a lighter spreader with enhanced durability, increased life expectancy for structural parts, optimized hydraulic system and numerous other improvements. With the unique combination of 16% reduced weight and increased structural strength the spreader is estimated to have an increased life expectancy of 30 %.

Niklas Lefévre, Head of Sales and Marketing at ELME explained, “In general 817 INNOVATION is a stronger spreader when it comes to torsional stiffness. When we say we have a 30 % increased life expectancy, we relate that to fatigue resistance in standard load case conditions.”

Lefévre outlines further. “The reduced weight also enables opportunities for the reach stacker. One possibility is to increase the lifting capacity in second and third row and another to keep the same capacity but reduce the counter-

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

CONTAINER HANDLING: SPREADERS weight and enable reduced axle load, tyre wear, fuel consumption and lower strain on the chassis.”

The spreader also brings forth another innovative item since 817 INNOVATION is equipped with lubrication free twist locks – a solution that will reduce the need for, and time spent on, maintenance.

NEED TO BE READY FOR THE ROUGH Increases in container weight, crane hoist speed and acceleration can all affect spreader usage. Pieter Verdonschot, Product Manager, Spreaders, VDL Container Systems, comments: “The spreader is one of the most vulnerable parts of the crane and is also the most heavily abused parts. This is not a good combination. However, our customers are aware of this and act accordingly. The robustness of the spreader is a heavily rated spreader topic.”

“The environment for port lifting equipment is getting rougher,” says Lars Meurling, adding, “Over the past 10 years, the average weight of a container has increased at the same time as crane hoisting speed and acceleration. This results in extra forces and strain on the equipment and especially on the spreader. Bromma continuously monitors and checks lifting classifications, given any new circumstance.

RAM has come up with a solution to combat the heavy impact that the spreader is subjected to with its RAM ShockAbsorb product. This is an Impact Suppression System that prevents spreader damage, increases the longevity of the spreader, and reduces impact noise.

HIGHER LEVELS OF WEIGHT Modern spreaders are designed to accommodate higher levels of weight. Modulift’s adjustable lifting/spreader beam has the ability to lift up to 27 tonnes. This includes a new clamp system which allows for lifting from different points, as well as a redesigned safety mechanism that makes it simpler for one person to perform the job and to slide and safely lock into place.

The right choice of spreader can make all the difference to crane operations. Selecting a cheaper spreader may save money in the short-term, but in the long run, it ends up costing far more. A sub-par spreader could potentially result in damage to the crane – causing a far heftier bill for either repairs or investment in a new model. As well as this, it is important to spend the money on maintaining the spreader.

Cutting corners with spreader investment and maintenance results in far more problems. Bromma clearly understands the financial implications.

Lars Meurling says that the cost of a spreader is less than 2% of a quay crane, but the impact of a sub-standard spreader can be dramatic. “A common figure used is that 30-50% of quay crane downtime is related to the spreader. An investment in a high-quality spreader may be one of the most important decisions to take when investing in crane equipment.”

Cameron Hay concurs, explaining that the cost of a spreader is a tiny fraction of the cost of a crane breakdown and lost revenue and productivity. “Yet many terminal operators will opt for low cost spreader specifications or choose to not maintain them to the required standards.”

Hay says that this is counter-productive, and the breakdown of a crane will be detrimental to a port’s productivity, leading to a loss of revenue. “Though it is essential that ports maintain their cranes, they do overshadow a key ally to the container handling operation. A reliable and robust spreader is important for any port operation. If anything goes wrong with the machinery, this will inevitably cause a chain reaction that slows down operations.”

INTEREST IN HYBRID PIGGYBACK SPREADERS Spreader demand continues to grow for global container handling. Last year, VDL Container Systems supplied a hybrid piggyback spreader, which “combines the advantages of a fully electric spreader with the possibility of handling trailers.”

“Only when the spreader is in piggyback mode (handling trailers), then the powerpack is active,” explains Pieter Verdonschot. “When in Twist lock mode, the spreaders are operating fully electric, resulting in less energy consumption as well as less maintenance costs on the spreader.”

Bromma reports a sales and order intake increase from 2018 to 2019. Lars Meurling says that orders for crane spreaders grew by 32% and sales growth was even higher at 41%. “The magnitude of the growth is higher than market growth in general, which means that market share has increased.”

During the second half of 2019, Bromma won five large orders for green-field or capacity expansion projects.

Meurling explains that each of these orders has been for between 10 and 30 all-electric YSX40E or YSX45E single-lift yard crane spreaders.

In addition, two major orders for respectively 10 and 12 STS45 quay crane spreaders were received for new capacity projects. In December 2019, Bromma received a major replacement spreader order of a total of 46 spreaders from a terminal in North America.

BLOK has continued to see demand for its products this year, with more trials for its spreader at a London container terminal. The BLOK spreader will be used to double the speed of loading and unloading the terminal’s empty containers.

8 The right choice of spreader can make all the difference to crane operations

FUTURE IS REMOTE DIAGNOSIS With regards to the future, Pieter Verdonschot says that remote diagnosis will become more and more important in order to monitor the status of the spreader continuously.

“This will enable doing predictive maintenance in time and will reduce downtime.”

“Developments in the spreader market over the years has seen the progression from the standard single lift spreader, to the twin lift spreaders of today,” concludes Cameron Hay. “With the introduction of the tandem headblock, it represents one of the biggest developments in container handling since the introduction of the twin lift spreader.”

He concludes, “The natural progression is that within 10 years, all cranes in big terminals will be tandem as standard.

We have seen the benefits of introducing tandem as part of our product portfolio, with a large number of units in operation and on the order books.”

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

MARCH 2020 | 37

CONTAINER HANDLING: CLEAN HANDLING TECHNOLOGY

TARGETING ZERO CARBON FOOTPRINTS How are ports helping to reduce emission levels to zero in the operation of container handling? John Bensalhia reports on modern day design and technology use

8 Ports around the world are targeting clean, emission-free operations – but what are they doing to achieve it?

As a result of environmentally friendly initiatives and investments, ports around the world are targeting clean, emission-free operations. A notable example is APM Terminals Gothenburg, which has cut the rate of emissions by 90%. The company’s Green Gothenburg Gateway concept creates renewable energy, enabling all customers to receive fossil-free transport through the terminal at no extra cost.

APM Terminals Gothenburg has also announced that it will be making its container handling operations fossil-free. “All container handling equipment runs on HVO 100, all cranes and gates run on renewable electricity and biogas is used for heating,” says Cajsa Levén, Marketing Communication Coordinator. “These actions reduce APM Terminals’ climate footprint in Gothenburg by approximately 90%. All customers are also offered fully climate-neutral cargo handling through APM Terminals’ Low Carbon Logistics program. The program is a way to reduce carbon dioxide emissions by investing in our own supply chain. This strengthens our contribution to the Swedish business sector’s competitiveness and climate work.”

Another initiative introduced by APM Terminals Gothenburg is an increase in the container terminal’s capacity. “A high container capacity is key to reducing climate impact,” explains Levén. ”Vessels that can maintain normal speed minimise climate impact. The fast handling times at our terminal help vessels keep their timetables, without needing to run at extra high speeds and consume more fuel.”

A vessel that needs to travel 10% faster to recoup lost time increases its fuel consumption (hence its emissions) by 20%.

38 | MARCH 2020

“APM Terminals in Gothenburg therefore ensures that vessels that arrive late still depart on time,” says Levén. “The most recent survey showed that 22% of vessels arrive later than scheduled; nevertheless, 97% leave the terminal within (or earlier than) the stipulated time. This is possible thanks to the capacity-enhancing investments and changes made by APM Terminals.”

Another important climate measure is to move freight transport from truck to train. APM Terminals Gothenburg is doubling rail volumes by 2022. Transporting goods by train not only offers economic advantages, but also reduces emissions by up to 98% compared to road transport.

From a zero-emission equipment angle, the Port of Valencia’s H2Ports project concentrates on testing heavy-duty, hydrogen fuel cell-powered port equipment. Two cargo terminals at the Port (MSC Terminal Valencia and Valencia Terminal Europe) will trial prototype equipment of a container handling reach stacker and a terminal tug master for ro-ro operations.

EQUIPMENT MANUFACTURERS HELPING PORTS? Manufacturers of container handling equipment are helping ports achieve their goal. Arto Keskinen, SVP Kalmar Automation Solutions, says that Kalmar’s credentials in developing electrically powered equipment go back into the 1970s, and since then, the company has extended its offering with dieselelectric, hybrid and electrically-powered machines to help customers improve their productivity and reduce air emissions, noise and fuel consumption of their operations.

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

AUTOMATION FOR TERMINAL OPERATIONS Visy provides software and system solutions that enable terminals to automatically identify and record everything going in or out of the terminal by road, rail or quay, or being moved in the yard.

By interfacing with 3rd party systems, Visy systems allow terminals to reach new levels of productivity and efficiency.

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CONTAINER HANDLING: CLEAN HANDLING TECHNOLOGY Less quantity of fuel will be used and therefore, purchase quantities will be reduced, turning into a main cost decrease per running hour.

With our Ecolifting solutions, you can both save money and make better choices for the environment by using less fossil fuels without compromising on performance “Kalmar’s rail-mounted STS and yard crane offering has been electrically powered for decades, and we introduced the world’s first mains-powered RTG in 2002. Today, over 50% of Kalmar cargo handling equipment is already available with electric power sources,” Keskinen outlines.

In December 2015, Kalmar introduced a fast-charging solution for electric-powered shuttle and straddle carriers that was extended to hybrid machines in June 2016. The Kalmar FastCharge solution is based on the same technology used in electric buses. “The charging station with a pantograph direct current charging system is located flexibly on the working route of the machines in the terminal,” explains Keskinen. “The machine has modern Lithium-ion (Liion) batteries which enable fast charging to be used.

Charging happens during the idle time in the machine working cycle when it has stopped to wait for the container.

Typical charging time in operation is 30 to 180 seconds, and with the maximum charging power of 600 kW, full charge can be achieved in a few minutes.”

Electrification is one of the main trends in clean container handling. In May 2018, Kalmar announced its commitment to reduce emissions in cargo and material handling operations by fostering eco-efficient technologies. According to the commitment, Kalmar’s full offering will be available as electrically powered versions by 2021.

“In line with our eco-efficiency target, we introduced the Kalmar Ottawa Electric Terminal Tractor to the Americas market in May 2018,” says Lasse Eriksson, VP Technology, Kalmar. “The electric terminal tractor with a fully electric powertrain that produces zero emissions at source is designed for trailer-handling operations in dispersed warehouses, container terminals and other applications where short-distance highway travel is required.”

Kalmar continued on its electrification journey by introducing a fully electric version of the Kalmar Empty Container Handler. “The machine is designed to help customers reduce overall fuel costs and comply with

increasingly strict airborne and noise emissions standards without compromising on performance,” explains Eriksson.

As well as being environmentally sound, electrification and automation offer other significant advantages, such as for terminals operating Rubber-Tyred Gantry (RTG) cranes.

“Hybrid, cable reel and busbar-based systems each have their own unique strengths,” says Arto Keskinen. “The choice of the crane electrification solution needs to be considered carefully while taking into account the automation level and development roadmap of the entire terminal.”

8 Electrification is a key step forward in clean container handling

HOW AUTOMATION CAN HELP Automation can benefit ports in a number of ways, with respect to costs, reduced operational time (saving the problem of operators moving to and from the cranes) and improved productivity of crane operators (the result of one operator controlling multiple RTGs remotely).

In 2018, Konecranes Lift Trucks introduced the Powered by Ecolifting concept to the market. This includes all the technical features developed on Konecranes’ lift trucks, granting a reduction in fuel consumption and noise level, which consequently contributes to issue less emissions in the air (carbon and noise emissions).

“With our Ecolifting solutions you can both save money and make better choices for the environment by using less fossil fuels without compromising on performance,” says Patrik Lundbäck, Director and Head of Sales & Distribution, BU Lift Trucks, Konecranes.

“The solutions that have been implemented are mainly three: Power Drive; Flow Drive; and Hybrid Drive, but there are others in the pipeline,” he confirms.

Taking the first of these solutions, Lundbäck says that the Power Drive offers an affordable and convenient method of reducing emissions and costs. “With Power Drive at first, it is possible to take important steps in emission reduction, without major changes to the infrastructure or training of the staff. It is 8 Kalmar’s electric equipment reduces airborne and noise emissions

40 | MARCH 2020

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THE VISION

PERFECTION IN SPREADER ENGINEERING

The Vision of Gösta Karlsson – the founder and president of ELME Spreader – is a continuing success story, told from the deep forests of Småland since 1974.

Gösta once stated ”the better spreaders we manufacture, the more value we bring to our customers”. His vision, to produce world leading spreaders, is the North Star for people at ELME. In line with that – no efforts are spared developing our New Generation Spreaders.

We call that ’perfection in spreader engineering’.

CONTAINER HANDLING: CLEAN HANDLING TECHNOLOGY the most cost-efficient way to start reducing emissions and fuel expenses, thanks to a very short payback time. It saves on fuel and costs, reducing consumption by up to 15%.”

With a relatively small extra investment, Flow Drive has a drive line that offers up to 25% in reduction, combined with an improved working environment for the drivers.

“With a minimal financial investment, this solution brings concrete benefits to everyday operations,” Lundbäck explains.

“A precise, smooth ride, reduced noise and less cabin vibration and a significant increase in overall productivity.”

The third solution, Hybrid Drive, as Lundbäck comments, is the one with a bigger impact in customer operations. “The difference with the diesel engine driven trucks is higher due to the fully electric propulsion and lifting. Leading the next generation of sustainable lift trucks, Hybrid Drive cuts down the fuel consumption up to 40%, providing benefits to business, users, processes and the environment. The evolution of the world’s first Hybrid Reach stacker grants benefits in terms of reduced emissions and cost efficiency, which are much more significant than the first two options, being also the bigger investment.”

COST REDUCTION BENEFITS Considering that environmentally friendly container handling products reduce fuel and noise consumption, one of the additional benefits is cost reduction.

“Less quantity of fuel will be used and therefore, purchase quantities will be reduced, turning into a main cost decrease per running hour,” says Lundbäck, adding, “With our Ecolifting solutions, you can both save money and make better choices for the environment by using less fossil fuels without compromising on performance.”

The combination of factors such as technological inroads, emission-free equipment/machinery and a greater awareness /understanding of keeping the environment clean is pushing clean container handling further towards zero.

“Equipment with completely zero emissions will be a certainty in the future, for sure,” says Patrik Lundbäck. “We will see a trend in which the terminals will turn into fully electric hubs.”

Robert Bernardo agrees that more ports are moving towards all-electric container terminals. “This is being studied in tandem with moving towards partial or full automation of cargo terminals – since the capital investment needed for both can be accomplished at the same time.

More federal and state funding will be needed to help

provide incentives so that container ports move toward electric equipment. Also, long-shore labour may be opposed to automation because it will reduce jobs for dock workers.”

Lasse Eriksson adds a further comment here relating to costs. “It is important to note that electrification is not only about improving your green credentials, it can also mean a decrease in operational costs. Eco-efficiency is the future of cargo and material handling, with new and more advanced technologies helping us to do more with less.”

The executive offers a concluding summary too. “At Kalmar, eco-efficiency means systems efficiency, enabling continuous improvements with automation technologies and smart data gathering and analysis. It also means emissions efficiency cutting atmospheric emissions with electrification, the latest driveline technologies, and better operator training. Finally, it also means resource efficiency, taking a proactive approach to maintenance to keep equipment operating optimally, delivering smart upgrades that help customers move more with less, and focusing on optimising our own operations as well as those of our suppliers.”

8 Is more State funding needed to help ports move towards electric equipment?

No Dreaming in California Reducing emission levels of cargo handling equipment has been part of strategies introduced by the Ports of Long Beach and Los Angeles.

The Clean Air Action Plan not only lowers the pollution from equipment, but also vessels, trains and trucks. The outcome is a drop of more than 85% for particulate matter, a 50% reduction for nitrogen oxides and 95% less sulfur oxides.

The end game of the plan is that the two ports’ fleets will be completely zero-emission by 2030.

The plan has seen the replacement and upgrades of older, diesel-powered

equipment, with trials of modern zero-emission yard tractors and cranes. The Port of Los Angeles introduced a rule in 2008 that banned access for trucks built before 1989. A follow-up ban outlawed any trucks that did not meet the requirements of the 2007 emission standards. The process was taken a step further in 2018 with the rule that only trucks constructed in 2014 or after will qualify for sign-up in the Port Drayage Truck Registry.

The Northern Californian Port of Oakland has its own initiatives, such as using hybrid rubber-tyre gantry cranes at its Oakland International Container Terminal.

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

“These hybrids use diesel engines and electric motors to reduce emissions,” explains Robert Bernardo, Communications Manager, Port of Oakland. “Also, several port tenants are beginning to test all-electric trucks for use in moving cargo containers within the yard.”

He explains further. “The main benefits of using these include lower carbon dioxide emissions, lower particulate matter pollution, less noise, less money spent on petroleum-based fuels, and less life-cycle costs for equipment (because of much lower maintenance and fuel costs for electric equipment).”

MARCH 2020 | 43

TUGS: TUG DATA DIGITALISATION

TUG DESIGN GOES HI-TECH IN SEARCH OF OPTIMISATION Digitalisation is a driving force as tug manufacturers capture data from the tug’s operating performance to enhance design improvements and modifications, as Dave MacIntyre discovers

8 The RSD 2513 Multratug monitor

Performance optimisation is a key goal at a time when ships are getting ever larger but port constraints such as berths, turning circles and approaches remain fixed. So, manufacturers are using remote monitoring and other means to retrieve all digital data available on the vessel’s operation.

They make use of existing sources onboard, like the alarm and monitoring system, navigation and communication equipment and any additional systems onboard that generate data. Additional sensors can be placed for specific functionality.

Data is then used to optimise the design and improve the operational uptime for the client, such as a port.

The importance digitalisation has assumed is underlined

by Arnout Damen, Chief Executive Officer at Damen Shipyards Group NV, who says it is an ongoing development that is becoming more important to clients and to sustainability.

“We will build our ships cradle-to-cradle – all materials used will be usefully applied to another product after the ship is scrapped – and ensure it sails emission-free. Being able to digitalise is critical,” he confirms, before adding, “You need that constant flow of information about the performance of a ship to determine, for example, the optimally-economic and most-sustainable sailing speed and to plan predictive maintenance.”

Yet Damen adds a word of caution too. “But digitalisation is also an economic law. Onshore operators can monitor multiple ships and solve problems remotely using virtual reality and artificial intelligence.”

For this reason, the group has established a focused digital platform called Damen Triton.

Damen says its goal is to put data to work in the areas of safety, sustainability and efficiency.

44 | MARCH 2020

Sjoerd de Bruin, Sales Manager Asia Pacific explains further. “Initial focus is on fuel consumption, but also on the data that assists us to provide better after-sales support to our clients in case of a technical issue.…furthermore, design parameters to improve our designs and be able to come with better solutions in the future are important.”

An example of data capture leading to design enhancements relates to the fuel consumption of the generators. For a specific harbour operation, the use of electrical shore power instead of the generator when the vessel is alongside the quay will save a significant amount of fuel, emissions and maintenance.

PREDICTIVE MAINTENANCE De Bruin says predictive maintenance leads to more reliable assets. “This is a development that is ongoing in many different sectors and requires close cooperation with equipment manufacturers, since these are best aware of the characteristics and maintenance profiles of their products.”

In terms of next steps, he is also clear. “Context data is available through Damen Triton. We will slowly move towards new models like predictive maintenance and should carefully coordinate the steps that are needed to get there as feedback and historic data are needed.”

Addressing whether digitalisation can work in with automation, de Bruin says it is important to ask, “Do we need to take care of this remotely, should it be available on board and/or can we automate this?”

In reply to the question, his response is clear about the issues. “It is most effective if you can automate certain aspects, but also most difficult. Directly feeding intelligence

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

TUGS: TUG DATA DIGITALISATION We will build our ships cradle-tocradle – all materials used will be usefully applied to another product after the ship is scrapped – and ensure it sails emission-free.

Being able to digitalise is critical to the skilled crew onboard has different requirements and complexity than feeding it to people onshore. This is something that will evolve, where choices will be more and more based on desirability and technical feasibility will be less of an issue. An example is sending alerts to onshore personnel when the vessel is lying unmanned at the quayside, in case of a fire – the existing alarm and monitoring system is then combined with the functionality to send a text.

He adds that fully automated tugs working in major ports is still a long way off, with initial development probably being in remote-controlled tugs.

Voith is also focused on collecting data, detecting anomalies and seeking digital solutions, and has its own hardware on board, a CPU which collects a huge number of sensor data. These are then transferred to the Cloud.

Robin Wankerl, the group’s Global Market Communication Manager, Trade Media & Market Communication, says Voith has installed numerous CMS systems on tugs (content management software applications).

“This digital data is used to further improve the Voith Schneider Propeller (VSP). The load collectives obtained with the CMS are directly incorporated into the design process of new propellers. As a result, service intervals are extended and costs for the tugboat owner are reduced. The data is also used to further reduce fuel consumption and emissions of

tugs with Voith Schneider Propellers. With the aid of the digital CMS data, the VSP operation is further optimised, i.e. the optimum RPM and pitch is recommended to the captain.”

Motion data such as ship speed, rolling and pitching, and line forces are recorded with the CMS. This data is then directly entered into the design process for new tugs. For predictive maintenance, sensors often reveal coming issues far earlier than they can be physically observed.

“If you look on the overall efficiency of tug use, you may not simply focus on one system but on the combination and interaction of all systems leading to certain results (e.g. line forces, turn rates etc.),” says Mr Wankerl.

Looking forward, he says fully automated tugs might be seen working in major ports at some point but adds, “the big question is when.”

8 An artist’s 3D impression of Damen’s Next Generation series which will capture design enhancements

World to Win if Digital Data Used Correctly Julian Oggel, Managing Director of Novatug, says “there is a world to win” if digital data is captured and used correctly, but he believes a lot more could be done.

“Tug design is still a very traditional corner with very little imagination about what could be possible. The tug is basically an extrapolation of the original idea of a tool that could help shift a dead ship once it has stopped in port,” he confirms, but is also clear about the issue.

“The current problem is, however, a lot more dynamic and this calls for a different solution. Not a tool aimed at static pull, but one that can assist at speed and do so in an energy-efficient manner, so it is also clean. ICT (Information and communications technology) can help understand the problem parameters and show possibilities for solving those in an integrated way and this should then filter through to design changes.”

Novatug captures data such as line forces and vectors, fuel flow, propeller thrust, speed through the water, time and vessel heading. These are analysed relative to each other and give a clear indication of tug effectiveness and efficiency.

“We measure a typical ratio of Kw of engine power added per ton of Kline force generated as a proxy for the tug’s (energy) efficiency. We learned that per ton of line force generated during an assistance (which is the ultimate aim of a tug) the CRT [Novatug’s Carrousel Rave Tug] can save up to 80% of energy needed to pull compared to traditional tugs,” Oggel confirms.

Digitalisation capture has helped Novatug’s measurement and simulation of different settings, particularly the position of the VSP units relative to hull length and position of the Carrousel ring, and the hull shape which is optimised for resistance.

Oggel explains further. “Since the CRT works on hydrodynamic properties of the hull rather than on engine power to generate its forces, and surprisingly little is known about hydrodynamics, the data collected by the system is also used to train masters and (in the future) give real-time advice to crews about optimal operations.”

He also says that the use of sensors measuring parameters like vibration, acceleration, fuel consumption, load and emissions, all analysed relative to each other,

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

in time helps plan maintenance. While Novatug does not believe fully autonomous tugs will be possible for the foreseeable future, it firmly believes in “computer-assisted-towing”, with the tug crews getting more and better real-time information and advice about tug performance.

LOW-HANGING FRUIT Oggel is clear about the process from today.

“The first step, which is really low-hanging fruit, of tug digitalisation is to provide much more situational awareness to tug crews, pilots and assisted vessels’ crews alike about the actual effect of tugs in port and what resources are being applied to reach that.

This is hard as in the chain of maritime logistics everybody (tug operators, pilots, port authorities) traditionally works in a silo.

Getting benefits from IT starts with having a full and complete picture.”

He is also certain what needs to occur first. “The ‘C’ for communication in “ICT” is often neglected and we feel that we first need to make sure we have access to the right information before we can complete the system to be optimal.”

MARCH 2020 | 45

TERMINAL OPERATIONS: BRAZIL

TIMELY TERMINAL BOOST FOR WILSON, SONS Major Brazilian shipping group, Wilson, Sons has received a boost as shipping lines are bringing additional cargo to the company’s two terminals, as Rob Ward confirms In the January-February edition of Port Strategy, it was reported that Wilson, Sons had removed its two terminal operations from the market due to lack of a suitable offer.

Now, the diversified Brazilian shipping group, has received a major boost for these same two facilities with news that CMA CGM and other carriers are now preferring to offload their River Plate transhipment cargo at Tecon Rio Grande (in the far South of Brazil) and Tecon Salvador (in the Brazilian northeast region).

For many years, shipping lines have been running “simulations” and researching “options” to avoid the extra two to three days sailing down to the River Plate [from Rio Grande], especially with the restricted draft making it almost impossible for the larger vessels calling East Coast of South America to berth at Buenos Aires these days.

Now, with improved and expanding cabotage (Brazil) and Gran Cabotage services (Big Cabotage basically means sailing up and down the East Coast of South America, calling in Uruguay and Argentina as well) the options for carriers have never been greater.

As a result, Mercosul Line (CMA CGM), Alianca Navegacao (Hamburg Sud/Maersk Line) and Brazilian owned LogIn Logistica Ltda, are all providing numerous services from Manaus – in the Amazonas jungle region – all the way to the south of Brazil, and then Montevideo (Uruguay) and turning at Buenos Aires and/or Zarate and La Plata (Argentina).

With the Sirius/Bossa Nova service, in which CMA CGM operates two vessels and Maersk Line five ships, Tecon Salvador is to become the hub for CMA CGM’s Argentina/ Uruguay import cargo from the Mediterranean and TRG will load Argentine/Uruguay export cargoes from now until further notice.

Demir Lourenco, the executive director for Tecon Salvador, said that the re-configuration will add around 500 TEU per month and 6,000 TEU per year to the already rising volumes handled by the Wilson, Sons terminal. There will be an even bigger boost for TRG in the south.

“This arrangement is great news for us and it is good timing as from March or April of this year we will also see our new berth come on-stream,” he told Port Strategy. “This will double our berthing length allowing us to handle two large ships and one smaller vessel simultaneously. It will increase our annual capacity from 430,000 TEU up to 530,000 TEU.” Lourenco added that Tecon Salvador can currently handle vessels of up to 307m in length but when the new berth configuration is operational over the next few months it will be able to handle vessels up to 366m in length, which are yet to call in the ECSA trades.

Leandro Carelli Barreto, a consultant and director for the Solve Shipping consultancy based in Sao Paulo, also endorsed the simulation process previously undertaken.

“When I worked at Hamburg Sud a few years ago we spent more than 10 years simulating the movement of cargo to the River Plate and the transhipment possibilities but back then the Transhipment costs were higher than the savings made

46 | MARCH 2020

on cutting one vessel from the schedule,” explained Barreto, adding, “Also the volumes of Argentine import cargo were very high. However, now that these costs have been reduced, owing to more competition at key Brazilian ports, and the Argentine financial crises, imports are way down, this system is now cost effective.”

Barreto further explained that congestion at Santos is causing carriers to find alternative ports for transhipment and so this agreement between the French carrier and Wilson, Sons seems ideal.

Tecon Salvador has already seen an upturn in cabotage and import cargo over the past three years and recently released throughput figures showing that a record 211,540 TEU were handled during 2019, up 4% on 2018. Of those boxes, some 44,149 TEU were import containers, representing an impressive 12% over the 39,439 TEU moved in the previous year. Cabotage hit 50,101 TEU in 2019, up 5%.

As well as TRG and Tecon Salvador Wilson, Sons also operates dry ports, two Offshore Support Bases (for supply vessels), a shipping agency, a shipyard and a tug operation.

However, it will be encouraged by the latest developments, especially coming so soon after deciding that the terminals were no longer for sale.

8 CMA CGM is one of several carriers to offload transhipment cargo at Tecon Rio Grande

8 Wilson, Sons gains a timely terminal boost at both its port facilities

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

PRODUCTS & SERVICES DIRECTORY

Taylor Machine Works designs, engineers, and manufactures more than 100 models of industrial lift equipment with lift capacities from 6,000-lbs. to 125,000-lbs.

YOU CAN DEPEND ON BIG RED!

3690 N Church Avenue Fårtoftvej 22 Louisville, MS 39339 USA 7700 Thisted, Denmark +1 662 773 3421 Tel: 0045 72 42 24 00 Neuroholding@cimbria.com Directory Jan-Feb 2020_Neuero contactus@taylorbigred.com 29/ www.cimbria.com www.taylorbigred.com

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

LASE Industrielle Lasertechnik GmbH

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

When experience really does matter!

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

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

Tel: +65 9186 6846 jon.arnup@trent-global.com www.trent-global.com/

igus® GmbH Spicher Str. 1a D-51147 Köln, Germany Tel. +49-2203-9649-0 info@igus.eu igus.eu/P4.1

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

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

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

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

Scheldedijk 30, Haven 1025 2070 Zwijndrecht, Belgium +32 3 250 52 11 info.deme@deme-group.com Staubli directory 40x58_Stäubli 29/01/20 www.deme-group.com

E LECTRIFICATION SOLUTIONS

P4.1 e-chain® Energy chain with optional intelligent wear monitoring for double the service life, travels of up to 1.000 m, speeds of up to 10 m/s and fill weights of up to 50 kg/m.

Jacobs has served the global port industry for 150 years. As one of the world’s largest port consultancies, our unequaled talent delivers innovation and technical excellence to solve your greatest challenges.

DEME Directory Jan 2020_DEME Directo

C RANE COMPONENTS

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

C OMPONENTS

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.

HPC is an internationally renowned consulting firm with profound experience in the global port, transport and logistics sector and a clear operations/owner’s perspective.

Container Terminal Altenwerder, Am Ballinkai 1 21129 Hamburg, Germany

D REDGING EQUIPMENT

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

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

C ARGO HANDLING SYSTEMS

NEUERO Industrietechnik GmbH

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 WASA Dredring Directory_Wasa Director www.rohde-nielsen.dk

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

C ONSULTING ENGINEERS

Taylor Machine Works, Inc.

HPC Hamburg Port Consulting GmbH

D REDGING

• Portable pneumatic conveyors or grain pumps; • Pneumatic continuous barge and ship unloaders; • Mechanical continuous ship unloaders; • Mechanical loaders; Complete turnkey projects for port terminals

VIGAN Engineering s.a.

Rue de l’Industrie, 16 1400 Nivelles (Belgium) Tél.: +32 67 89 50 41 www.vigan.com info@vigan.com

C ARGO HANDLING EQUIPMENT

A/S Cimbria 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.

VIGAN manufactures dry agribulk materials handling systems:

C ONSULTANTS

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) – Italy Tel: : +39 049 7663100 Fax: +39 049 8848006 Email: sales@bedeschi.com Web: www.bedeschi.com

B ULK HANDLING

B ULK HANDLING

Bedeschi S.p.A

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/

MARCH 2020 | 47

PRODUCTS & SERVICES DIRECTORY

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.

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

Westicker Str. 52, 59174 Kamen, Germany

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

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

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.

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

48 | MARCH 2020

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

CAMCO Technologies NV

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

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

Liebherr-MCCtec Rostock GmbH Liebherr provides advanced maritime cargo handling solutions with a focus on quality, innovation and performance. With more than 50 years’ experience in vessel handling and container stacking, Liebherr supplies premium port equipment for highly efficient port operations across the globe.

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

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

Check out our Mobile OCR!

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

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

G RABS MRS Greifer GmbH

Orts GMBH Maschinenfabrik

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

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

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

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

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

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

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

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

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

M ARINE FENDERS

info@alimak.com www.alimak.com

BLOK Container Systems Ltd

SANY offers reliable quality container handling trucks.

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

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

I NSURANCE

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

H ANDLING EQUIPMENT

E LEVATORS

Alimak Group Sweden AB

Sany Europe GmbH

I T PORT AUTOMATION

Verstegen Grijpers BV

VAHLE is the leading specialist for mobile power and data transmission VAHLE provides the solutions to reduce the carbon footprint while increasing the productivity.

RTGC electrification including positioning and data transmission making RTGC ready for Automation.

H ANDLING EQUIPMENT

G RABS

E LECTRIFICATION SOLUTIONS

VAHLE PORT TECHNOLOGY

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

We Keep Your Vital Business Moving!

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

9 JUNE Southampton 112020 United Kingdom TO

www.certus port automation.com +31 78 6815196 The Netherlands

www.mcceexpo.com

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

PRODUCTS & SERVICES DIRECTORY

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

9 JUNE Southampton 112020 United Kingdom

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

9 JUNE Southampton 112020 United Kingdom TO

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

TO

www.mcceexpo.com

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

Providing complete solutions for your container cranes

www.mcceexpo.com

T RACTORS

ELME Spreader AB ELME Spreader, world’s leading independent spreader manufacturer supports companies worldwide with container handling solutions that makes work easier and more profitable. Over 21,000 spreaders have been attached to lift trucks, reach stackers, straddle carriers and cranes.

Stalgatan 6 , PO Box 174 SE 343 22, Almhult, Sweden Tel: +46 47655800 Fax: +46 476 55899 sales@elme.com www.elme.com

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

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

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

T ERMINAL OPERATIONS SUPPORT

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

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

Malaxgatan 7 , P.O. Box 1133 SE-164 22 Kista, Sweden Tel: +46 8 620 09 00 Fax: +46 8 739 37 86 sales@bromma.com spareparts@bromma.com

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

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

T ERMINAL OPERATIONS SYSTEMS

S PREADERS

Bromma Conquip

T ERMINAL OPERATIONS SYSTEMS

S PARE PARTS

TVH PARTS NV TVH supplies every part you need for heavy forklifts, reach stackers, container handlers, spreaders and terminal tractors. As a one-stop shop, the company offers a full service in spare parts and accessories for container handling equipment, with a guaranteed fast delivery at a competitive price.

Brabantstraat 15 BE-8790 Waregem Tel: +32 56 43 42 11 Fax: +32 56 43 44 88 info@tvh.com www.tvh.com

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

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

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DECEMBER 2019| |53 | 49 53 DECEMBER 2019 MARCH 2020

POSTSCRIPT

NIGERIA: EXPANDING DESPITE TRAFFIC SETBACKS

Nigeria’s port sector is on the comeback trail with traffic volume. While, however, previous highs have not yet been attained new port development is proceeding and a flurry of new investment in conjunction with existing terminals

50 | MARCH 2020

Nigeria, Africa’s most populous country with over 200 million inhabitants, is often cited as a land of great potential but as seen time and time again it has been slow to realise it and ,accordingly, port development has proceeded at a measured pace. This remains the case today with port investment largely following forecast economic prospects, although after nearly a decade financing has at last been secured for the new port of Lekki in Lagos State.

In October 2019 agreements were signed with the China Development Bank including a USD$629 million financing facility that government officials said would accelerate the completion of the Lekki deep-sea port project. Completion was put at 30 months, which appears to be highly ambitious and will likely lengthen. This may also be appropriate given the reality that Nigeria’s overall non-oil related cargo volumes are still in recovery from previous highs with the container sector included in this.

Further, while there is, generally, significant economic potential the actual economic forecasts are not yet that bright - Real GDP growth is projected to rise to 2.9% in 2020 and 3.3% in 2021. But this depends on implementing the Economic Recovery and Growth Plan (2017–20), which emphasises economic diversification.

The latter has, of course, traditionally proved problematic, one significant factor being foreign investors deterred by security problems. Also, as the African Development Bank poignantly notes, “The poverty rate in over half Nigeria’s 36 states is above the national average of 69%. High poverty reflects rising unemployment, estimated at 23.1% in 2018, up from 14.2% in 2016. Low skills limit opportunities for employment in the formal economy.”

In cargo throughput terms the challenge is also clear. For 2013, a total container volume in Nigeria was of over 1,700,000 TEU and the latest statistics available from the Nigerian Ports Authority (NPA) give a volume of 1,210,000 TEU for 2018. The

8 The West Africa Container Terminal is due to commence a comprehensive Phase 2 upgrade in the next 18 months

situation with total cargo throughput excluding crude oil is even more dramatic, from a high of over 80 million tonnes in 2011 the volume had fallen to just under 36 million tonnes in 2018.

This overall situation clearly presents a challenge for new port developers. While the Lekki concession is for 45 years a good kick-start to a new development is most beneficial.

BUILDING EXISTING BASES Meanwhile two existing container terminal operators have just announced investment plans.

The SIFAX Group company Ports and Cargo Handling Services Limited, located on Tin Can Island, has introduced three new, high capacity, Liebherr mobile cranes for across the quay operations as well as two more second-hand units. These units are particularly intended to match the latest vessel types calling at the terminal. Also acquired as part of a comprehensive terminal upgrade package are nine reach stackers and 10 terminal tractors.

The company has just one year left to run on its concession period, it has submitted a bid for an extension and with the investment undertaken is clearly confident of getting it.

Similarly, the West Africa Container Terminal at Onne, offering a gateway to Eastern Nigeria and an alternative to the Lagos terminals, has announced what it describes as a Phase 2 upgrade scheduled to commence over the near term. Terminal operator APM Terminals states: “The Phase 2 upgrade includes the acquisition of three additional mobile cranes bringing the total in operation to five; 20 rubber-tyred gantry cranes (RTGs), three reach stackers, 13 terminal trucks and trailers and an empty container handler.”

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