6 New Service for ICTSI Argentina

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

MIKE MUNDY

Brake on the world economy?

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 Cor onavirus 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.

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THE FUTURE IS VERTICAL

THE REVOLUTION OF CONTAINER STORING OF PORTS!

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NEWS

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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 US 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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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 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

FEATURES

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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 Pushing 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

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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.

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.

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.

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

5 Audit of ships’ activities for sanctions risks 5 Overview of suspicious vessel behaviour in or near any currently sanctioned countries 5 A list of named ships with recent suspicious activities 5 Outline 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.

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

Buenaventura rail link re-0pens 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.

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

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 50,000m 2 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.

BRIEFS VALPARAÍSO REPORTS DOWNTURN IN 2019 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 t o pull out.

Haifa Port privatisation starts 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.

Callao masterplan revamp 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.

Sines sees better 2020 after tough 2019 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.