Port Strategy November 2019

NOVEMBER 2019 ❘ VOL. 1019

portstrategy.com

ISSUE 9

INSIGHT FOR PORT EXECUTIVES Plans for Phnom Penh | Reducing risk in port investment | Making the Right Lash Decision | 5G storm clouds

CALLAO HEALTH CHECK CANADA: UPPING THE ANTE TOS INNOVATION

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

VIEWPOINT MIKE MUNDY ❘ Editor

Brexit: changing the logistics landscape

“We have repeatedly warned that a no-deal Brexit would be unacceptable… and reiterate our view that a future relationship should prioritise the flow of trade at our frontiers”

As PS goes to press us citizens of the UK await the end of the latest chapter in the saga of Brexit. Boris Johnson’s revised exit agreement with the European Union will be voted on in the UK Parliament in the next couple of days.

Whatever your preference – Leave or Remain – I doubt anyone will be sorry to see the end of what has been a protracted saga and one which frankly has not cast UK politics and politicians in the best light.

To crash out of the EU would undoubtedly be a stupid move and one with big consequences for the man in the street cost wise. If it materialises this is the route that is taken it will be at a big price in all senses not least in the context of achieving civil unity. The UK is split in various ways about leaving and remaining, it is a close call in terms of overall numbers with the Leave vote just edging it. The North of England wants to Leave and the south to remain. Scotland and Northern Ireland want to remain and Wales wants to Leave. Hardly ‘speaking with one voice.’

If a new referendum vote were to be undertaken would the numbers change? Probably yes. For a start, there would almost certainly be a larger vote – more people would participate. Second, the issues are clearer – to be honest the original referendum was surrounded by a lot of ‘BS’ and in some quarters a distinct lack of enthusiasm to engage with the subject and its implications in a meaningful way. We now know, for example, that there is a large divorce bill to pay as part of leaving the EU - €36+ BILLION – a factor that was never highlighted prior to the original referendum.

Equally, there was absolutely no discussion of the potential for the waste of millions of taxpayer UK pounds in false-start preparations for leaving the EU such as that epitomised by the UK Government chartering ships based on the prospect of a no deal BREXIT. Do we now understand all the implications of leaving the EU – I doubt very much that the average UK voter does? The whole political focus has been on leaving and very little on what comes after.

In terms of port activity and logistics it is very clear that crashing out of the EU on a no-deal basis is an unacceptable path. As Richard Ballantyne, Chief Executive of the British Ports Association pointed out recently: “We have repeatedly warned that a no-deal Brexit would be unacceptable…and reiterate our view that a future relationship should prioritise the flow of trade at our frontiers.”

Whatever the modus operandi of the UK’s departure from the EU, given that it eventually happens, it is manifestly clear that that it will reshape the UK and European logistics landscape. Presently the upside appears to be for mainland Europe organisations, with increased activity there as opposed to in the UK. Indeed, to the best of our knowledge there have been no major advantages spelt out for UK and port and logistics players.

No surprise here, however, it just seems symptomatic of the one thing that Leavers and Remainers can agree on, that the whole process is a just a mess! And one that the UK might take a very long time to clear up!

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NOVEMBER 2019 | 3

CONTENTS

NOVEMBER 2019

12

NEWS

FEATURES

10

15 COLUMNS

16 Cosco says no to Buenos Aires Cosco Shipping has confirmed that it does not intend to bid for the new concession in Argentina, but is continuing to focus on Peru

Weaponising of trade strategically to achieve political supremacy is not a very smart move, with tariffs and sanctions impacting economic growth

Yilport’s influence at Puerto Bolivar is already bringing dividends with increasing container throughput, while copper concentrate is also predicted to double in the next 12 to 18 months

18 Brisbane Fears Truck Tsunami without Rail

10 Promising Times for Northport Improvements to the North Auckland rail line and potential access to develop hundreds of acres of greenfield land could increase vehicle storage and distribution at Northport Online portstrategy.com 5 Latest news 5 Comment & analysis 5 Industry database 5 Events

17 Time to Wear Shades in Peru Good container growth is occurring in Peru in 2019 and Callao Port is a key hub for WCSA. According to local sources there is a bright future for the port, so the role of APM Terminals and DP World is pivotal.

12 21 Area Survey: Canada Not a Smart Policy The Port of Vancouver continues to deliberate

16 Yilport helps Puerto Bolivar Double Box Traffic

Brisbane fears that a lack of rail connection will see 13 million truck movements per year by 2050, causing a truck tsunami and loss of economic and environmental benefits

21

14 Outside the Bubble Shipping and the maritime industry can no longer simply continue to hide within its cocoon and needs to improve its visibility

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15 The Real Culprit in Miami It seems that the Port of Miami’s dredging programme is not responsible for mass coral deaths after all, but the accusations are hiding the real culprit

over Roberts Bank 2 and Halifax is seeing a new President and Ceo, plus arrival of a global terminal operator. Montreal quietly goes about its business successfully developing its new largescale Contrecoeur terminal

29 Extensive Plans Confirmed at Phnom Penh With 32% container growth in the first eight months of 2019, Phnom Penh is already targeting further expansion of its facilities, but the use of international Public-Private-Partnerships will not occur to deliver the investment

31 Increasing Risks in Port Investment Increasing globalisation and increasingly complex supply-chains are two factors port investors must face, says a new report

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NEWS

Cosco Shipping Lines’ president Tiegen Wan has confirmed that the company’s container shipping operator, Cosco Shipping Ports, will not be entering a bid to become the single container terminal operator in the Port of Buenos Aires.

“We are not very interested in the tender,” he said during a visit to the Bactssa container terminal to celebrate the first shipment of frozen pork being shipped from there to China.

He said that the company had been made aware of the concession two years ago and had continued to follow developments, but was not considering a bid.

Significantly, Mr. Wan noted that logistics costs in Argentina are expensive and that Cosco would like to collaborate in reducing those moving forward.

It is quite possible that Cosco may have been deterred from bidding at Buenos Aires by the Yilport Holdings has been in charge at Ecuador’s Port of Bolívar for 30 months and has already boosted total container throughput from 64,000 TEU to 130,000 TEU. The concessionaire, which is part of the Yildirim group, first assumed operational control on March 1, 2017. As part of a 50-year concession, the company will invest $750 million, of which $30 million has already been spent on dredging and a further $92 million on acquiring 26 new cranes, the first of which have already started arriving, with the entire

COSCO SAYS NO TO BUENOS AIRES

increasingly unstable situation in Argentina compared with the position in Peru.

As reported in the October edition of Port Strategy, a change of government has meant that the bidding deadline for the Buenos Aires concession has now been moved back to December, although there are also

8 Cosco has said it will not bid for Buenos Aires

suggestions that any change of administration might lead to either the abandonment of the single concession project overall, or it being amended to two container terminal concessions being offered.

Incumbent operators at Buenos Aires – APM Terminals, DP

World and Hutchison Ports – as well as Manila-headquartered ICTSI, are all expected to bid for the single concession, which is being generated in a bid to improve the competitiveness of Buenos Aires vis-a-vis other regional container ports.

Instead of focussing on Argentina, Cosco is investing heavily in Peru, where it a 60% stake in Chancay Port Terminals in May 2019, at a cost of $225 million.

Chancay, which is just 58km from the capital Lima, has 16m of draft, making it an ideal Pacific coast port for ever-larger container ships being deployed in trade routes to the region. As part of an initial phase, there will be four terminals, with two facilities for multipurpose traffic and two dedicated entirely to containers.

Capacity will be one million TEU per annum.

YILPORT HELPS PUERTO BOLÍVAR DOUBLE BOX TRAFFIC complement to be in place by early 2021.

Development of the port will take place in five distinct phases between now and 2066. Yilport Holdings has scheduled completion of the first phase by 2022. This part of the development will involve a total spend of $240 million, which will see a new quay built, the reinforcement of another two areas and a deepening of the port's draft.

The deeper draft is crucial because it has been key to Bolívar’s ability to capture new traffic. Previously, just 7m – 9m was available, but with water depth

been improved to 14.5m, both MSC and Maersk Line are scheduling more regular calls. CMA CGM will be using the facility in 2020.

A second round of dredging in 2020 will see the draft further deepened to 16.5 metres, meaning that larger ships can call direct from Asia. This will allow local banana and shrimp producers to use Puerto Bolívar rather than Guayaquil, since 75% of banana exports are currently exported via Guayaquil and 100% of shrimp producers want direct services to Asia. To give perspective, around 1.2 million boxes of bananas are dispatched

weekly from Puerto Bolívar.

This port also wants to attract traffic from Cuenca (Azuay), where logistics corridors are being put in place and from the north of Peru, which is rich in mangoes and organic bananas. In this respect, the steaming time from Puerto Bolívar is 10 days faster on services to Europe than it would be via Paita.

Puerto Bolívar is not solely concentrating on box traffic, either.

The Chinese company EcuaCorriente (ECSA) is expecting to handle around 300,000 tonnes a year in copper concentrate, which is projected to double in the forthcoming 12 to 18 months.

Coolstore enhancing exports

Ferry terminal at Kaiwharawhara

Jaxport secures more funding for deepening

Tarragona rail moving agri-foods

NZ Fruits is shortening its export supply chain and reducing its greenhouse gas emissions through lease of a 2700m2 cool store at Eastland Port in Gisborne, plus enabling a greater quantity of kiwifruit through the port instead of via the Port of Tauranga.

NZ Fruits processed 1.5 million trays of kiwifruit in 2018, with 850,000 trays leaving the Gisborne region, on 4 refrigerated ships as volumes rise.

CentrePort Wellington’s Kaiwharawhara landholdings has been identified as the prime location for development of a new, multiuser ferry terminal. The location will unite the two Cook Strait ferry operations and provide greater resilience to the services. CentrePort ferries and bulk general manager Andrew Steele says good progress was being made to develop this major asset for both Wellington and New Zealand by 2028.

Florida Department of Transportation has awarded Jaxport an additional $35.3 million in funding for the Jacksonville Harbor Deepening project, to be used in the second phase of the U.S. Army Corps of Engineers’ contract B, to deepen the project’s next 2.5 miles. State of Florida contributions of $71.5 million, plus support from government and a private tenant means completion is due in 2023.

The Port of Tarragona is targeting more rail to move dry bulk traffic. It is now accommodating agri-food to Zuera, where Alendi Group has a feed mill and distribution facility.

Trains of 17 wagons move consignments of up to 3,000 tonnes of cereals (replacing 35 trucks) three times a week, managed by Go Transport. The port handles 5 million tonnes of agri-foods annually and wants to serve customers in Madrid, Valencia and Zaragoza by rail.

BRIEFS

6 | NOVEMBER 2019

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NEWS

BRIEFS NSW Ports head the green route New South Wales Ports has achieved a 20% reduction in greenhouse gas emissions from the consumption of fuel and electricity, since it released its first sustainability plan in 2015, according to its 2019 Sustainability Plan.

Introduction of energy efficient equipment in offices and vehicle fleets has been key. NSW Ports is the first Australian port to introduce an environmental incentive for vessels that reduce emissions beyond IMO levels, with discounts are on vessel charges at Port Botany and Port Kembla. Further improvements are anticipated from on-dock rail and capacity initiatives.

New tidal model for Australia A tidal model developed by the Pilbara Ports is assisting the development of a national hydroid model for Australia and may prove influential in achieving extra depths in shipping channels. The project helped achieve an extra depth of 71cm in the Port Hedland shipping channel. Pilbara Ports general manager operations John Finch says that every extra 10cm of declared depth is equal to an extra 1200 tonnes of cargo per vessel – meaning extended sailing windows and potentially increasing the number of vessels from six to eight per tide. Adelaide and Melbourne ports may find this model of interest too.

Mobile to dig deep The Alabama State Port Authority (ASDD) has gained federal authorisation to improve Mobile Harbor to accommodate larger vessels.

The US Army Corps of Engineers will deepen the existing Bar, Bay and River Channels Bar by 5ft to a project depth of 50ft.

8 | NOVEMBER 2019

WORKERS’ COMFORT IS GOOD BUSINESS SENSE SAYS JLT MOBILE COMPUTERS “Keeping workers happy in hardpressed port operations isn’t always easy for managers, but there are solutions,” says Peter Lundgren, business development executive at mobile computer specialist JLT. “User comfort feeds directly into performance and therefore workplace productivity,” he elaborates.

JLT, which recently announced the successful implementation of its Navis-validated VERSO™ 12 rugged vehicle-mounted computers at the OPCSA terminal in Las Palmas, says factors such as readability and responsiveness in its devices are vital.

“Whenever we have a rollout project or work with a new port or logistics customer, the users come back and say they really like the screen and the response of the touch,” says Mr Lundgren. “And it is the users that matter.”

When talking about the comfort of the user, it is much more than just the device itself, he emphasises. “It is about how you fix the angle of the device and how it is positioned inside the cabin. It is about displaying sharp letters for clear readability. It is being able to

dim the screen down to avoid flashes during night-time hours, or to adjust it for working in full daylight sun. It is also recognising that a 60-year-old has very different eyesight to a 25-year-old, and being able to adjust accordingly so that the user can always read the screen easily.”

At the same time, we all know the frustration of repeatedly pressing a button but nothing happens. “It is not only how clearly readable the screen is but how good the touch is,” says Mr Lundgren. “Users want to know that the input they have entered

8 Business Development Executive at JLT, Peter Lundgren

on the screen is received. I have spoken to plenty of people working on devices where users need to press so many times on the same spot to get a response that the touch screen eventually develops fatigue. That is immensely irritating and surely is giving people the opposite of comfort.” The user-friendly JLT PowerTouch™ screen provides a crisp contrast display that is highly responsive – ‘comfort criteria’ designed directly into the product.

BRISBANE FEARS TRUCK TSUNAMI WITHOUT RAIL A new study commissioned by the Port of Brisbane into the benefits of a dedicated connection to the Inland Rail project states that up to A$820 million ($562 million) in economic social and environmental benefits per year could be generated.

The relevant section of the Inland Rail project running from Melbourne to Brisbane ends at the intermodal terminal at Acacia Ridge. At the Brisbane end of the train line the route runs to Kagaru then forks to go to Acacia Ridge or to Bromelton (K2ARB section).

There are 13 sections of Inland Rail, and currently the Australian Rail Track Corporation (ARTC) is procuring only the most complex section as a PPP concession for the 130km Gowrie-Kagaru section.

Port of Brisbane’s CEO Roy Cummins said that without a connection, a “truck tsunami” is on the way under the current

configurations, with the growing Queensland population and the region’s reliance on road freight.

The report produced by Deloitte Access Economics says, if a dedicated freight rail connection were built by 2035 from Acacia Ridge to the port it could give rail a 30% modal share for the port, resulting in A$820 million in economic, social and environmental benefits per year, 2.4 million trucks off the road, 1,200 new jobs per year to 2045, A$155 million lower road maintenance costs, A$195 million reduction in costs of congestion to the economy, A$215 million savings from reduced greenhouse gas emissions, A$130 per TEU in savings and A$5.5 billion increase to gross regional product over the period to 2045.

“Currently only 2% of containerised freight comes to the Port of Brisbane via rail. The

rest arrives on trucks. In 2018, that equated to 4 million trucks movements. With the current rail constraints in place that number would increase to over 13 million by 2050,” Cummins commented.

Deloitte’s study partly drew on a submission Port of Brisbane made to Infrastructure Australia in 2013 on a Dedicated Freight Rail Corridor, including the proposed 37km Eastern Freight Rail Bypass port connection component.

This featured an A$2.5 billion estimated nominal expenditure in 2014-15 over the construction phase and A$800,000 operation and maintenance expenditure annually.

Port of Brisbane gained a 99-year lease from the Queensland Government in 2010 to operate the port, after paying A$2.3 billion.

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NEWS

BRIEFS Strike threat averted at Sines Strikes have been averted at the Portuguese container transhipment Port of Sines following a breakthrough agreement signed between container terminal operator PSA and both Laborsines and Sindicato XXI. The majority of these members work at the Terminal XXI box facility. The new agreement will see new pay scales and career advancement tables have been drawn up for both dock workers and engineering technicians, covering 90% of Terminal XXI’s employees.

According to a statement, an average wage increase of 7% plus inflation is to be implemented.

Buenaventura losing traffic Buenaventura in Colombia is likely to lose transhipment container traffic. Weekly liner services have been amended to every two weeks and predictions for 2019 reflect a drop of 30%, or 400,000 TEU. The DP World facility at Posorja, with 16m depth, is expecting to benefit.

Buenaventura is losing out because of delays in dredging to allow deep draft vessels, despite local businesses requesting such work for more than a decade.

The deepest draft available is 12m, albeit access at high tide is only every 12 hours.

Abu Dhabi on a roll Impressive container growth in the first half of 2019 continues for Abu Dhabi Ports (ADP). In the January to June 2019 period, ADP recorded a massive 82% increase in containers handled at the operator’s flagship Khalifa Port facility.

A total of almost 1.14 million TEU was handled in the 2019 period, compared with less than 621,000 TEU in the comparable 2018 months.

10 | NOVEMBER 2019

PROMISING TIMES FOR NORTHPORT A Government commitment of NZ$94.8 million to maintain and improve the North Auckland Line between Swanson and Whangarei is a potential boost for the cargo prospects of Northport.

Regional Economic Development Minister Shane Jones says the investment, which will include replacing or upgrading about 54km of the 181km track, will help improve freight services on the rail line.

“The maintenance work will make the line more resilient to weather events and freight services more timely and reliable,” he says.

Northport chief executive Jon Moore has welcomed the development as a “red-letter day for Northland” which he describes as “an important step towards an integrated transport strategy that will enable the region to maximise its full potential”.

“We continue to work with the Upper North Island Supply Chain Strategy Working Group, KiwiRail, the New Zealand Transport Agency, coastal shipping operators, existing and potential customers, and other stakeholders such as local government, to explore the full potential for a spur line to Marsden Point,” he confirms.

Mr Moore adds that the port company was assessing how the

investment might complement its “A Vision for Growth” strategy.

Meanwhile, parent company Marsden Maritime Holdings is urging key stakeholders in the upper North Island vehicle import industry to consider changing their business model to utilising “hundreds of hectares of land” at Marsden Point.

Marsden Maritime Holdings chairperson Murray Jagger says Ports of Auckland (PoAL) already has a stake in 180 hectares of greenfield development land on the boundary of Northport, 65 hectares of which is port-zoned, with a further 115 hectares of

8 Northport Chief Executive Jon Moore

port/light industry-zoned nearby.

“That’s a combined potential area of 180 hectares – more than twice the area of the 77 hectares available at PoAL,” he says.

Potentially utilising an additional 520 hectares of commerciallyzoned land nearby, the business model would entail vehicles being discharged from vessels directly to purpose-built storage, preparation and distribution facilities immediately outside the deepwater port. About 5000 cars could be accommodated on a paved storage area, outlined Mr Jagger.

SAMOA’S APIA PORT SIGNS ADB PROJECT GRANT Apia Port in Samoa was first established in the early 1900s and supports container ships, fuel & gas tankers, cruise vessels, bulk petroleum products, coastal barge ramps and passenger facilities across its 302m quay.

On the opposite side of Apia harbour is a separate fishery port that caters for the local fisheries industry, with a full-time fish market and export packing facility.

The port supports the entire country’s consumer demand for all commodities including petroleum products, foodstuff, beverages, and automobiles and building products.

A successful grant agreement for the Enhancing Safety, Security, and Sustainability of Apia Port Project with the Asian Development Bank (ADB), will see investment to generate a safer,

more secure and greener international gateway developed at this location.

“Building resilience to climate change, strengthening border security, and boosting trade are key components of the Apia Port project,” said Mr. Masayuki Tachiiri, Regional Director of ADB’s Pacific Sub-regional Office. “By 2023, Apia Port will be safer, more efficient, and environmentally sustainable.”

Samoa with its population of about 200,000 lies south of the equator. Given the country’s geographic isolation from major international markets, marine connectivity is critical to the economy, which relies heavily on agricultural exports and the imports of basic goods. Samoa also has historically suffered from disasters triggered by cyclones and earthquakes.

Container traffic totalled 37,091 TEU in 2018, reflecting continued growth on the 2014 total of 28,567 TEU. Total discharged cargo was 506,416 tonnes, of which 74% was containerised goods, with breakbulk cargoes at 14%, transhipment at 12% and the rest empty containers. Total loaded traffic was 129,491 tonnes, of which 41% was transhipment cargoes, 26% being empty containers, 19% of containerised goods and 14% reflecting of break-bulk cargoes.

The upgrade and rehabilitation plan includes the reconstruction of the damaged breakwater and the construction of a new customs examination facility. It will also promote environmentally sustainable practices and encourage greater participation of women employees at the Samoa Port Authority.

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

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THEECONOMIST COLUMNIST BEN HACKETT

NOT A SMART POLICY The weaponising of trade strategically to achieve political supremacy is being honed by the Trump Administration globally, irrespective if the country at the receiving end is friend or foe.

Trump initially picked on his immediate neighbours Mexico and Canada and came up with a new free trade agreement that is not much different to the NAFTA version. After much bluster and threats of immediate tariffs the new agreement lies in limbo in the U.S. Senate.

There is, currently, no China agreement and allies South Korea and Japan have had to bend the knee. The use of sanctions as a backstop to tariffs have been applied to Venezuela, Russia and Iran, to name but a few. The EU is under attack with tariffs applied to a host of products. The sanctions interfere with normal trading relations of third-party states that are not involved in the dispute, because the U.S. dollar is the currency of international trade.

The WTO (World Trade Organisation) ruled that Airbus

8 Weaponising of trade is not a smart policy

was subsidised by EU countries and it awarded the U.S. with the ability to levy $7.5 billion of tariffs on EU goods selected by the US Trade Representative. Amongst the first to be hit are Scotch Whiskey and the automobile industry. As Boeing is unlikely to be innocent in the subsidy game, there will soon be a counter case.

And with Brexit on the close

THESTRATEGIST

horizon, we will possibly see WTO tariffs applied to trade between the UK and the EU. Who pays for this? The consumer of course.

The tariff income is usually squandered on subsidies to industries worst hit, such as agricultural exports in the U.S. and soon to come, requests from the motor manufacturers.

Most signs are pointing to a

looming recession with industrial production around the world in decline, global trade weakening and financial pressures pushing interest rates into negative territory.

Germany is sitting on the brink of recession and with negative borrowing costs, while in the U.S. the ISM index of manufacturing industry slumped deeper into contraction in September to 47.8, its weakest level since 2009.

So, we see tariffs and sanctions damaging trade and economic growth as well as acting as a hidden purchasing tax. Not a very smart policy.

COLUMNIST

MIKE MUNDY

It is interesting to see the European Sea Ports Organisation (ESPO) voicing a pitch for a larger slice of Trans-European (Ten-T) funding and particularly on the basis of assisting ports that have projects with an ROI which is “low and slow.” In practical terms, ESPO seems to suggest that projects of the latter description are deserving of funding on a “societywide” cost benefit basis – their implementation will accrue wider economic and other benefits other than those measured in relation to the core function.

This seems a tenuous route to head down as part of a campaign to secure a larger slice of Ten-T funding, albeit that ESPO in general terms may have a point about TENT funding for ports with this only accounting for four per cent of the total funding available in the 2014 –

12 | NOVEMBER 2019

NO NEED FOR THE INTRODUCTION OF “WeWork” CULTURE 17 budget period. On the other hand, isn’t it up to individual ports to apply for Ten-T funding – so before we can have a degree of sympathy with the four per cent figure it would be useful to know the number of applications submitted?

As ESPO acknowledges there is also funding available to ports and terminals under regional or cohesion frameworks so Ten-T is not the whole story.

The contention, however, that port projects with a “low and slow ROI” should come more into the framework of Ten-T funding is basically difficult to swallow. Taking a macro look Europe is not short of ports and inter and intra port competition. Equally, taking a look around at previous Ten-T port projects a number might fall into or

border on this sort of criteria and to be frank after implementation have only achieved White Elephant status or are in the process of doing so. Realistically, there is also the temptation on the part of some public bodies to use Ten-T funding to bring projects to market in the hope of establishing another source of income rather than meet a genuine need.

Bottom line though, the biggest objection to using Ten-T funding for port projects with an ROI that is “low and slow” is that projects don’t need external support when they are commercially sound. To argue otherwise draws parallels to the current and much publicised case of WeWork, the hip and trendy provider of shared office space, which has been running huge

losses since its start in 2010 and in an effort to deflect from its financial problems, has been extolling the virtues of its wider positive impact in the community, and as part of this thrust highlighting a communitybased EBITDA. Economics and common sense prevail in the end, however, and now, a few months on from planning a big IPO with a target valuation of USD47 billion, We Work is close to bankrupt and in need of a bail-out.

The ports sector is the focus of considerable interest from investors and the range of investments being undertaken is steadily broadening.

To provide a mechanism to invest in soft projects only seems likely to distort what to-date has been a largely successful approach to investment in the port sector.

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

THENEWYORKER

COLUMNIST

BARRY PARKER

OUTSIDE THE BUBBLE One of my big issues is the relationship of the maritime business with the rest of the world, existing “outside the bubble.” In my dealings around the States, the docks and supply chains are usually (though not always) far from the general populations, both physical and mentally.

New York, which historians will tell you was a “hub” for everything in the 1800s, has lost some of its maritime zest as its business has evolved. Organizations like NYMAR (New York Maritime), a group of legal and financial service providers to commercial shipping, endeavour to raise its profile around the world but are still struggling to do so locally. At local shipping events, (often held at a port), that I’ve attended through the years, port management from the locality are invited. When they finish their perfunctory speeches or presentations, they sometimes mix and mingle, other times they are whisked away in their waiting limos. Happily, the maritime commerce side, at least around my home turf, has recently been

re-invigorated so maybe this will be changing.

Shipping’s profile, and ergo its visibility, is changing in all geographies. Shipping can no longer hide inside its cocoon.

Perversely, this is good for port strategists seeking to be more informed. Consider IMO 2020, the coming tightening of restrictions on sulphur content. It is well known inside the maritime realm

THEANALYST

8 Shipping can no longer hide inside its cocoon

that we don’t yet know entirely about its reverberations beyond shipping. Tanker markets are on the move, though another factor, geopolitics, is playing a big role now as U.S. sanctions have now impacted a broader swath of the crude carrier market. In the minds of the public, encompassing all types of “stakeholders” (however

defined), the ports are linked in with all things maritime. Though seemingly far afield, issues such as governmental sanctions are steadily and intrinsically put into the same “basket” (maybe “cargo hold”) with commercial considerations facing port management. On the operational side, various “external” disrupters are already playing a role. For port planners- though perhaps better informed, all this is maddening.

The world has changed.

IMO 2050 (greenhouse gas reductions) is still a work in progress. Increasingly, concerns about CO2 loom large when charterers and, now, financiers, will be looking at a vessel, or fleet’s emissions profile before entering cargo contracts, or providing financial capital. The port financiers are no strangers to dictates of green finance - expect such concerns to increasingly drive movements of capital towards (and away from) projects. At some point, they may begin to drive movements of cargo, if they have not already done so, further complicating the port planners’ jobs.

COLUMNIST

PETER DE LANGEN

One of the best-known cases of port reform aimed to create intra-port competition is that of Buenos Aires, the largest port of Argentina. In the early 1990s, Buenos Aires was an inefficient state-run port. Cargo volumes fell between 1970 and 1990. The port tariffs increased by over 250% in real terms in a decade.

The Argentine government reformed the port industry, creating a deregulated environment for private operators, while securing sufficient competition between terminals.

Five terminal plots in the port were concessioned. The privatisation resulted in the entrance of the global terminal operators in Buenos Aires. The intra-port competition between the

14 | NOVEMBER 2019

INTRA-PORT COMPETITION IN BUENOS AIRES terminals was fierce, as illustrated by the bankruptcy of terminal 6 in 1996. The operator of terminals 1 and 2 (combined from the start) placed a bid to take over terminal 3. After an investigation, the competition agency argued that even after the merger intra-port competition would be sufficient and approved the merger.

Three operators (DP World, majority operator of terminals 1,2 and 3, APMT terminal 4 and Hutchison Ports terminal 5) currently still compete. Port users experienced important benefits of the privatisation: the capacity and productivity increased and the prices decreased. From one of the most expensive ports in South

America, Buenos Aires became one of the cheapest. As a result of these changes, volumes have grown, from roughly 450.000 TEU in 1995 to 570.000 in 2003 and 1 million in 2012.

However, volumes have stalled since 2012 while ship sizes increased and shipping alliances became stronger. As a result, the government decided to grant a 50-year concession to redevelop the whole Puerto Nuevo area of Buenos Aires to one operator, thereby breaking with the ‘intraport competition doctrine’. The core reason is the substantial scale economies in terminal operations. The current facilities operate below the minimum

efficient scale and cannot expand to accommodate the larger vessels and customers cooperating in alliances.

Several of the major players, including the current operators, are expected to bid for the project.

There is still intra-port competition with a PSA-operated container terminal in Dock Sud, an adjacent terminal in Buenos Aires, as well as with smaller newly developed terminals in the vicinity. So, while the case for intra-port competition remains, developments in shipping lead to a larger minimum efficient scale, so that consolidation of competing terminals is in some cases, like in Buenos Aires, called for.

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THEENVIRONMENTALIST COLUMNIST CHARLES HAINE

THE REAL CULPRIT IN MIAMI Attention-grabbing media coverage, which accused the Port of Miami’s dredging project of causing mass coral death, may not be entirely accurate after all.

The ‘Port Miami dredging killed a half-million corals’ headline was reproduced across hundreds of news sites, apparently telling the story of how “tens of thousands of coral colonies and over 250 acres of reef” were harmed by fine grains of sand transported by the works.

Great headlines – but wrong, according to a new study published in the Environmental Monitoring and Assessment journal with the snappy title of ‘Regional coral disease outbreak overwhelms impacts from a local dredge project’.

Bill Precht, director of Dial Cordy & Associates’ Marine & Coastal Programs, was involved in the original monitoring and contributed to the study. He

explained that in 2014, during the programme's monitoring period, record warm summer sea-surface temperatures lead to thermally induced coral bleaching events: a well-documented delayed trigger

8 Climate change to blame for coral deaths

for ‘white plague disease’ (WPD), and added that most healthy corals have an innate ability to shrug off a certain amount of sand.

What seemed to be the ‘smoking gun’, the large-scale coral death during the dredging work, appears instead to be down to the susceptibility of a particular species of tagged colonies to the WPD epidemic that raced around the Florida coastline at the time.

So, did the dredge at least contribute by weakening the coral? According to the study’s analysis, dredge effects were pretty minimal by contrast, the disease being “14-times moredeadly than even the largest marine construction project performed in the USA”.

While the original story had a rather simplistic emotional appeal, it has the unfortunate effect of leaving the real culprit – climate change – unchallenged said Precht.

The paper concluded that “until climate change is addressed, it is likely that local attempts to manage coral resilience will continue to fail”.

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NOVEMBER 2019 | 15

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SPECIAL REPORT: PERU

TIME TO WEAR SHADES IN CALLAO – THE FUTURE LOOKS BRIGHT Rob Ward gives the port of Callao, Peru a health check and discovers that volumes are growing in 2019 and that the future looks bright Despite a fair degree of political uncertainty, the Peruvian port of Callao is having a good year so far and is likely to end up with 7% more boxes handled this year than in 2018, with a forecast 2.5million TEU set to be handled by the end of 2019, according to figures from Empresa Nacional de Puertos (ENP) SA, the local port authority.

“Although Chile seems to have suffered this year from the slowdown in world trade caused by the US and its trade war with China, Peru seems to be buffeting the storm and coming out with positive figures,” said one Chilean maritime consultant based in Valparaiso, who did not wish to be named. “I am not entirely sure why Peru has been so buoyant especially as – politically speaking – it has been quite unstable this year, with President Martin Vizcarra launching several corruption inquiries which led to the temporary dissolution of Congress and continuing fallout since then.

Ricardo Sanchez, the senior economic affairs officer for the Integration of International trade and Integration division of ECLAC (Economic Commission for Latin America and the Caribbean, part of the United Nations), underlined the strategic and economic importance of Peru’s main port of Callao.

“El Callao [as the locals call it] is a very strong port these days and I think El Callao is the great winner among the West Coast of South America ports over the past few years,” he told Port Strategy.

The port of Callao handles 89% of all Peruvian boxed cargoes and the city of Callao has a population of 820,000 and is part of the metropolitan district of Lima, Peru’s capital with just over 8 million inhabitants.

This makes it eligible to become the key hub port for the West Coast of South America (WCSA) if ever that becomes a reality, although political tensions between Chile and Peru might preclude that in the near to medium future, quite apart from the fact that Chile currently handles more than twice the volumes of Peru despite having just over half of the population.

Some 4,661, 461 TEU was handled by Chilean ports in 2018 (up 5.1% on the 4,407,772 TEU of 2017) for a population of 18 million, compared to Peru’s 2,667,974 (up 8% on the 2,540,960 TEU of 2017) with a population of just under 35 million. Even Ecuador, with 12 million inhabitants, handled 2,212,486 TEU in 2018, according to ECLAC. More than half of Peru’s total GDP is generated from the “Lima region”, which includes Callao and, more significantly, the next biggest are, the Arequipa region, generates less than a tenth of the GDP that emanates from Lima, emphasising the importance of Callao as the main gateway to Peru.

One Lima based freight forwarder said that volumes were “healthy and holding up well” despite the political uncertainty caused by the Peruvian Congress.

“On the import side we are seeing around a 10% increase – especially electronic goods and consumer goods, plus chemicals and resins – and an improving economy,” the freight forwarder told Port Strategy, on condition of anonymity. “And with exports we are seeing avocadoes, grapes, blueberries and all kinds of foodstuffs doing well and being shipped especially to China, but also to the US and Europe.”

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He added that, depending on the El Nino and La Nina climatic phenomena, fish exports can often add more reefer boxes to the export totals, but this year had been “an average one”. Overall “exports had been up and down for about a year now,” added the experienced forwarder.

A quick survey of freight rates from Callao to Shanghai (with this freight forwarder and four others) revealed current average freights of $800 per TEU for inbound to Peru, and $500 per TEU for outbound to China, making Peruvian fruit exports very competitive with the likes of Brazilian fruits from the ECSA. The main containerised exports out of Callao are coffee, various fruits and vegetables (especially avocados), fish-meal, fish, apparel and textiles, chemicals and various precious metals. China is the dominant export destination, with 27% of Peruvian exports (totalling $47.2 billion in 2018, up from $44.9bn in 2017) headed there, while the United States comes a distant second with 15%.

Imports primarily comprise electronic goods (especially televisions), telephones and telecoms equipment, chemicals, plastics, machinery, paper, cotton, vaccines and medicines.

Again, China is the leading trade partner for imports, with the US a close second on 20.1% and Brazil in third with 6%.

These stats are reflected in the desire of China to increase its reach into Peru with huge infrastructure investments, including a new port at Chancay, to the north of Callao, and Brazil’s keenness to develop a Trans-Andean multi-modal route (involving rail and trucking).

Callao is the sixth biggest port in all Latin America for containers and ranks third in South America, after Santos (East Coast South America) and Cartagena (North Coast South America), and with regular increases in throughput at the turn of the century, and its growing trade with China, terminal operating companies were drawn in to its orbit and tempted to invest millions of dollars in new facilities.

The fact that Peru still has a somewhat “under- developed” economy from a containerization point of view, especially compared to neighbouring Chile, added even more to the

8 APMTC provides competition to DP World in Callao

NOVEMBER 2019 | 17

SPECIAL REPORT: PERU

attractiveness of Callao, as one of the places to invest in South America.

The first major operator into the area was P&O Ports, but when it was acquired by DP World (in 2006), the Dubai global port player also took up the P&O commitment to bid to run a new container concession in the port of Callao.

Improvement works started on the DP World Callao development at Muelle Sul (Southern docks) in 2009 and the first vessels started docking a year later DPW Callao currently has seven Super post Panamax gantry cranes and 27 RTGs, spread over 960m of linear quay and operating in the second quarter of 2010, using 21 hectares of land, much of it reclaimed from the sea.

Callao handled just 1million TEU in 2009 using ships own cranes but DPW Callao throughput was over 1 million TEU in its new expanded terminal, which was already 71% of Peru’s total, highlighting how “under containerized” Peru was at the time.

AP Moeller Terminal Callao (APMTC) won a concession for a break bulk and general cargo facility including permission to handle containers and it has an 80% share in this concern and local Central Portuaria SAC has the other 20%.

APMTC currently operates with four Super Post Panamax gantry cranes and three Post Panamax cranes, which are deployed on the finger piers with a shallower draft, of just 14 meters compared to 16 meters at its longest pier.

This facility has gone from strength to strength, firstly providing strong competition for DP World – which was one of ENP’s reasons for creating the new concession – and in dealing with Peru’s burgeoning break bulk and ro-ro cargoes.

At the end of 2018 DPW Callao handled 1,305,242 TEU (up 4.6% on 2017) and APMT had 1,035,415 TEU (up 3.2%). Boxes unloaded overall were up 6,8% to 1.03 million TEU and loaded units rose by 6.7% to almost 1.04 million TEU. Transhipment was also up, by 27% to 483,133 TEU. During December of last year APMTC’s percentage of Peru’s breakbulk cargoes hit 60%, compared to just 45% for the December of 2017. Total handling in this category for 2018 was 2.3 million metric tons, for an overall average of 55% for the year.

It is understood that APMT Callao may now be handling around 70% of all Peru’s non-containerised general cargo and earlier this year it spent an extra $2million improving storage facilities.

In May of this year, Cosco agreed, in principal, to invest more than US$3billion, which will, with its 16m draft, be the equal of any port installation along the WCSA, and have the potential for transhipment and become an important new gateway, especially to China. This decision followed its announcement in January 2019 of a new contract to take a 60% share in Terminales Portuarios Chancay, with Peruvian partner Volcan, keeping the rest.

Callao handled 2,340,657 TEU during 2018 (up 5.1% over the 2, 250,224 TEU handled in 2017, according to ECLAC, the United Nations Economic Commission for Latin America and the Caribbean). Of that total, DP World Callao saw 55%-60% and APM Terminals Callao, handled between 40%-45%. That end of year figure for 2018 was some 89% of Peru’s entire container throughput.

This year so far, to the end of June (the latest figures available), confirmed that Callao has handled 1,289,724 TEU,

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SPECIAL REPORT: PERU

with DP World Callao taking about 62% of that (in tonnage terms) and AP Moeller with the rest. This means the Dubaibased operator has increased its percentage share as it has added two new liner calls. Callao posted a 7.5% increase in box handling for the first six months of this year.

A shipping agent who works closely with DP World Callao told Port Strategy that APM Terminals Callao was losing ground to DP World in 2019 because it was approaching its capacity and suffering some congestion problems. Also, DP World had added a couple of new services plus APMT is concentrating more on the break bulk part of its business.

“There has been between 10% and 20% increases during July and August for DP World as the effects of them adding a couple of new services - one Maersk Line service to Europe and an APL service to the Far East – start to filter through into the system,” said the shipping agent. “APMT Callao seems to be happy to focus more on the break bulk and ro-ro cargo, where it is a powerful force in Peru.”

This fact seems true. Today, APMTC handles around 55% to 60% of all Peru’s breakbulk cargoes. During 2018 it handled 2.3million metric tonnes, which was 55% of the country’s total, but the December 2018 figure was 60% (up from 45% in December 2017, and that trend towards concentration that started at the end of last year, has continue into this year with APMT Callao’s share pushing 70% during some months.

In general, most Maersk Line services, and many of MSC’s, call at APM Terminals Callao and the biggest users of DP World are, ONE, Hapag Lloyd, CMA CGM, Cosco and Evergreen plus Wang Hai and APL, plus Maersk Line.

The container handling capacity for these two facilities is today is presently at 2.5 million to 2.7 million TEU per annum, although both terminals officials were reluctant to tell Port Strategy what the exact capacities are. Regardless, those limits are expected to be reached over the next two to three years if new capacity is nor forthcoming, according to a Callao shipping agent.

Taking this factor into account, DP World Callao is hoping to agree an expansion plan, for an extra 400m of quay and more equipment (probably two more gantry cranes), with the government “once the political uncertainty dies down”, according to one source. He added that this would take DPW Callao’s capacity up to 2 million TEU per annum.

“Once the green light is given, then DP World will invest in more gantry cranes and back-up equipment to deal with expected future volumes,” said a port manager who works very closely with DP World Callao.

Hector Cardenas, a general manager for Inchcape Shipping Services in Peru, said that the future looks bright for Callao, despite the pending arrival of competition to the north, in the guise of Chancay.

“Callao is mostly well served today,” he told Port Strategy.

“APMT has general cargo and DP World is doing a good job with containers and now we have this Chancay project, which also looks very good for the future, especially with the Chinese involved, as that is a very strong market for Peru.

“New projects were stopped by political discussions between Congress and the President [Vizcarra] and last year we did not see any progress but we are hopeful that over the next months the new projects will be approved.”

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AREA SURVEY: CANADA

GREAT EXPECTATIONS - THE ROBERTS BANK CHRONICLES Roberts Bank2 remains Vancouver Fraser Port Authority’s preferred option to add capacity.

AJ Keyes assesses the latest position and looks at recent developments at the port The expansion to Roberts Bank in Vancouver (BC) has long been the preferred option of the Vancouver Fraser Port Authority to meet future container capacity demand.

There is certainly a need for more container space at the port, which has successfully grown its throughput in recent years. At the end of 2014, total container traffic was 2.91 million TEU, which had risen to 3.40 million in 2018, reflecting annual growth of 4.0%. The trend has continued into 2019, with yearto-date August data confirming that the 2018 total of almost 2.21 million TEU had risen by over 3.8% to reach 2.29 million TEU. Vancouver also benefits from good volumes of loaded export cargo returning to Asia, volumes other western seaboard ports do not handle. For the year-to-date August 2018 and 2019 position, loaded exports represented 33% of total port handling.

This year’s record mid-year cargo volumes reflect what continues to be two of the Port of Vancouver’s greatest strengths – its broad global reach and ability to accommodate the most diversified range of cargo of any port in North America. While Canada is certainly not exempt from the challenges impacting global trade, the diverse range of trading partners and cargo handled through the Port of Vancouver ensures the entire port remains resilient, despite variations in any one sector or commodity This position reflects that containers are arriving with commodities such as electronics, food, clothing and consumer goods but leaving with agricultural goods, lumber and forest products. It is a fact not lost on President and CEO of the Vancouver Fraser Port Authority, Robin Silvester. “This year’s record mid-year cargo volumes reflect what continues to be two of the Port of Vancouver’s greatest strengths—its broad global reach and ability to accommodate the most diversified range of cargo of any port in North America,” he confirmed, adding, “ While Canada is certainly not exempt from the challenges impacting global trade, the diverse range of trading partners and cargo handled through the Port of Vancouver ensures the entire port remains resilient, despite variations in any one sector or commodity.”

Moving forward, the port authority remains determined to expand the Roberts Bank facility. Yet this is not a new idea, with planning underway for nearly a decade, and it certainly continues to divide opinion. In July 2019, President and CEO of the BC Chamber of Commerce, Val Litwin, stated that “ensuring RBT2 moves forward will guarantee local companies have competitive access to key markets around the world that will help grow their businesses and create jobs for Canadians,”

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

while also adding that “the Port of Vancouver generates nearly $12 billion in national GDP every year through its facilitation of trade with more than 170 world markets. Failure to plan infrastructure accordingly would undermine Canada’s ability to expand trade with Asia and diversify its trading partners.”

This view is endorsed by Anita Huberman, CEO of the Surrey Board of Trade who said that without the expansion, by the mid2020s, “Shippers would be faced to slow and divert cargo to other ports along the US coast, driving up costs for importers, exporters and, ultimately, Canadian consumers.”

However, there is opposition, especially from within the Port of Vancouver directly. GCT Deltaport, which operates the existing facility at Roberts Bank, put forward its solution involving development of “Deltaport 4.”

The project would increase terminal capacity by 2 million TEU per annum to 4.4 million TEU annually and expand the footprint to 141ha from the current 85ha. If construction commenced in mid-2024, operations could then start in early 2029 – and all at a cost of C$1.0-C41.6 billion.

However, the Vancouver Fraser Port Authority has rejected this proposition, instead preferring to pursue Deltaport 2, much to the likely frustration of GCT President and CEO, Doron Grosman, who was quoted at the time as saying, “You don’t need both projects at the same time.

If ours goes forward, then the next logical thing would be for theirs (port authority) to follow in 20 to 25 years, roughly.”

GCT is currently pushing for the federal review panel to halt the Roberts Bank 2 project, while the Port Authority maintains its commitment. The threat here is clear, whatever the outcome.

Vancouver needs to resolve its expansion issues and get building. The longer it waits, the longer its utilisation rises and the threat of congestion appears.

8 Roberts Bank needs to be expanded, but port authority and operator remain at loggerheads

8 Vancouver Fraser Port Authority President & CEO Robin Silvester

NOVEMBER 2019 | 21

AREA SURVEY: CANADA

THE TIMES THEY ARE A CHANGING IN HALIFAX A new President and CEO, global terminal operator involvement and growing competition shows that 2019 is proving to be an eventful year for the Port of Halifax, as AJ Keyes discovers It’s all change at the Port of Halifax (NS). There is a new President and CEO incoming before the end of 2019, arrival of a new global container terminal operator, PSA International, at the Halterm facility and the proposed Laurentia project in Quebec progressing its plans.

The new President and CEO is Captain Allan Gray. He is moving from Fremantle, Australia to this East Coast Canadian port and is expected to be in his new position in late November or early December 2019. Halifax Port Authority Board Chair, Hector Jacques, outlined the rationale of the appointment, stating that “Captain Gray’s extensive experience in leading a large port with similar priorities and economic impact as our own, from container and bulk shipping to cruise and infrastructure projects, will serve the growing Port of Halifax’s needs well.”

One of Captain Gray’s first tasks will be to meet the new terminal operator at one of the port’s two container facilities.

PSA International handled 81 million TEU in 2018, including activities in Singapore, but only secured its first marine operations in North America with the acquisition of Halterm and the Penn Terminals facility on the Delaware River from Macquarie Infrastructure Partners in May 2019.

Captain Gray’s extensive experience in leading a large port with similar priorities and economic impact as our own, from container and bulk shipping to cruise and infrastructure projects, will serve the growing Port of Halifax’s needs well So, what is the new President and CEO inheriting? Well, generally, container traffic has been increasing since 2014. The 2018 total of 547,000 TEU across both the Halterm facility and the Fairview Cover terminal operated by Cerescorp Company, collectively generating an improvement on the 399,000 TEU handled in 2014. Plus, cruise continues to be a key activity too, with around 1.3 million visitors annually and a 2019 season of 190 vessels and 320,000 cruise passengers scheduled.

At the same time, the port’s economic impact benefits are also continuing to rise, with the 2018 total of C$1.97 billion being a 15% improvement over the position just two years earlier, according to the port authority.

There are also known infrastructure improvement plans, which both the new President and CEO, plus PSA International, will see as positive developments. There is investment planned at Halterm, as CEO Kim Holtermand confirms. “A new Super Post-Panamax ship-to-shore crane, due June 2020, will offer enhanced outreach (24-wide) and height, capable of spanning the largest vessels being deployed on North America’s east coast and will be added to Halterm’s main berth alongside four existing Super Post-Panamax units and one Panamax unit.”

The ongoing investment is part of other recent developments, including adding more Rubber-Tyred-Gantries

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(RTGs), which Holterman says is part of “re-focusing the terminal to ensure that we not only meet existing customer requirements, but have a credible plan to realise future growth.”

The investment is required at Halterm, based on the increase in the number and capacity of services to/from the Asian markets. Dean Davison, Technical Director of WSP’s Maritime & Ports team explained further. “In 2020, we expect likely service upsizes at Halterm, with the Asian services of THE Alliance’s ECS strong shifting to 9,000TEU vessels and the Ocean Alliance ‘Columbus’ service introducing vessels in the size range to 14,000TEU. Both services will use vessels too large to access Fairview Cove. This development is reflected in Halterm adding a fifth super post-Panamax crane in 2020 to enable simultaneously handling of two ultra-large container vessels.

These are highly positive developments for Halifax and will help boost cargo volume potential.”

If the proposed Laurentia project in Quebec is developed, then Halifax could see increasing competition for the handling of larger container ships. One of Halterm’s competitive strengths is it being the only (current) east coast Canadian port capable of handling ships up to 16,000 TEU, with onward intermodal rail connectivity to central Canada and the US Midwest.

This will change, if the Laurentian development comes to fruition, with the level of regional port competition increasing. However, an existing cargo base, comparable services to both ports from CN Railway, ongoing infrastructure investment and its own global terminal operator in place leaves Halifax in a strong competitive position.

8 PSA International has taken charge at Halterm

8 New Halifax Port Authority President & CEO, Captain Allan Gray

NOVEMBER 2019 | 23

AREA SURVEY: CANADA

QUEBEC GOES DEEP TO TARGET US MIDWEST TRAFFIC Quebec Port Authority (QPA) plans to enter the container port business. It has Hutchison Ports and Canadian Railway on board already, but is it viable, asks AJ Keyes The QPA has announced that the “St. Lawrence supply chain lacks a deep-water container terminal to compete effectively with ports on the US East Coast and to take advantages of the improved transportation economies of using larger container vessels that require deep water.”

In addition, QPA also stated that the Laurentia expansion is necessary because the existing port is operating at fully capacity. At its Annual Meeting in June 2019, for its most recent fiscal year period the port authority announced that 27.6 million tonnes of cargo was handled, with “significant increases in the agrifood and liquid bulk sectors.”

However, this is not currently a port handling container traffic and the Laurentia project represents a move towards having a fully containerised terminal. The C$775 million project will see a 450m expansion of the port’s existing wharf, an additional two berths and a17ha handling and storage area. The four-year construction plan will deliver capacity of 500,000 TEU per annum.

In May 2018, QPA reached an agreement with global container terminal operator, Hutchison Ports and Canadian National Railway to develop the new facility, with the project to be financed by the three partners. QPA is to pay for the wharf infrastructure (and remains in discussion with federal and provincial governments to complete the financing at the time of writing in Mid-October 2019) and Hutchison Ports to meet terminal and equipment costs.

The Laurentia project represents the first involvement in North America for Hutchison Ports, despite a long-standing interest in the region. Eric Ip, Group Managing Director of Hutchison Ports confirmed the target market and thinking behind the project, as he announced at the time of project confirmation. “With its fully intermodal deep-water port, its strategic location to reach the Midwest market, and the strong support shown by the local authorities, the Quebec project has all the attributes to be successful in this highly important market.”

With its fully intermodal deep-water port, its strategic location to reach the Midwest market, and the strong support shown by the local authorities, the Quebec project has all the attributes to be successful in this highly important market Serving the US Midwest markets requires a competitive port option, as highly-experienced consultant, Andrew Penfold, Director, Maritime & Ports at WSP, confirmed.

“For the Laurentia project to be a viable option in the North American port market, it will need to offer highly-competitive cost and time schedules because there are already a number of East Coast and West Coast ports on the continent also competing.”

Mr. Penfold also added, “However, that is not to say it cannot be an effective option, if the right infrastructure and logistics transportation partners are

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involved and the through transport costs offered to shippers are appealing.”

As a statement of intent, QPA has also hired Don Krusel as Managing Director of the Laurentia project and the rationale for the decision is easy to understand. For 25 years Mr. Krusel was CEO of Prince Rupert and under his tenure the port was transformed from a small regional facility to a fast-growing container option, specialising in Asian imports moving directly to intermodal train for onward distribution to major US and Canadian markets. When he left Prince Rupert in 2017, the port was under the operating control of DP World, handling more than 900,000 TEU (and has since surpassed 1 million TEU) and has known plans for further port expansion.

So, the obvious question is, will Laurentia work and what does it need to do next? Well, according to Andrew Penfold, the initial requirements are being addressed. “A recognised and creditable terminal operator is in place and with CN Railway then competitive intermodal rail is also taken care of. The QPA approach of “go deep” to be handle larger container ships is also relevant” However, he added a note of caution. “The port market and transport networks are highly competitive, although the Prince Rupert blueprint shows it is possible to serve more distant markets under certain conditions.

Ultimately, it will come down to transport costs and reliability of service, plus which container shipping lines are prepared to switch to a new untried port over more established networks through New York/New Jersey and Virginia.”

8 New Laurentia project Managing Director, Don Krusel

8 Andrew Penfold, Director – Maritime & Ports, WSP

NOVEMBER 2019 | 25

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AREA SURVEY: CANADA

MONTREAL SUCCESSFULLY MOVES ON TO THE NEXT STEP Continued growth is being accommodated with new capacity at Montreal.

AJ Keyes discovers how the port is well-placed for future success By the end of September 2019, the Port of Montreal had handled almost 1.31 million TEU, an increase of 4.6% over the comparable period of 2018. Over the past five years, total port traffic, which includes dry and liquid bulks, containers and general cargo, has increased by an average of 6.7% per annum, proving demand for using this port remains strong – and especially for containers.

At the start of Q2 2019, the VIAU terminal expansion was confirmed with an additional 250,000 TEU of annual capacity to be added during 2019-2020. This will bring the facility’s total throughput capability to 600,000 TEU per annum. It was a decision positively acknowledged by one of the port’s major container shipping line customers, Mediterranean Shipping Company (MSC). “The increase in terminal capacity is coming at the right time for us, it ensures the future growth of our services in Montreal,” said Sokat Shaikh, President and CEO of MSC Canada, before adding, “MSC has grown by more than 10% a year for the past five years. The additional capacity at VIAU Terminal will support such growth over the next two years. Then we will have to move on to the next step.”

The next step referred to by Mr. Shaikh is, of course, the new largescale Contrecoeur development. The aim of the new Contrecoeur terminal is to meet the long-term needs of importer and exporter shippers and cargo owners who want to use Montreal and take advantage of its excellent location close to major local markets in Quebec, while also serving the competitive US Midwest markets. The project is planned to deliver capacity of 1.5 million TEU per annum when fully built.

Current scheduling indicates construction will commence in 2020, conditional on all necessary permits in place (as expected), with the facility commissioned in 2023-2024.

This commitment by the Canada Infrastructure Bank is a key milestone in the progress of our project towards its completion. This collaboration with this new partner confirms the national importance of our project, whose purpose is to support the growth of international trade for Canada A recent and highly crucial step in the process was confirmed with the news that the Canada Infrastructure Bank (CIB) is to work in partnership with the Montreal Port Authority (MPA) to help develop the new terminal at Contrecoeur.

A Memorandum of Understanding has been signed in which CIB and MPA will develop the financial structuring of the new facility, with key areas of planning and procurement for the design, construction, financing, operation and maintenance of the new terminal addressed. MPA also stated that this joint process could lead to a potential investment in the project for CIB (subject to all due diligence and decision-making processes being approved).

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

Sylvie Vachon, President and CEO of MPA confirmed the relevance, and importance, of this latest development. “This commitment by the Canada Infrastructure Bank is a key milestone in the progress of our project towards its completion.

This collaboration with this new partner confirms the national importance of our project, whose purpose is to support the growth of international trade for Canada.”

From the perspective of CIB, the Contrecoeur development is an attractive option because it helps the organisation serve its mandate. President and CEO, Pierre Lavallée, confirmed that the project “represented the type of initiatives” that will help diversify and expand Canada’s trade.

CIB retains a primary focus on transformational projects that are revenue-generating and in the public interest. In addition, it has a range of priority investment sectors, including public transit, trade and transportation and green infrastructure.

A Crown corporation in Canada, CIB has a mandate to utilise C$35 billion of Federal funding to attract private sector and institutional investment across a range of provinces, territories, municipalities and Indigenous and private partners, with the aim of delivering infrastructure projects throughout Canada.

Montreal’s status as the key port of call serving the localised Quebec market, while also competing as an effective option for the US Midwest markets, will continue. The expansion of the VIAU terminal offers shorter-term expansion, with the Contrecoeur project taking another important step to fruition. The port remains well-placed to serve its customers well into the 21st Century.

8 VIAU terminal to see further expansion

8 MPA President & CEO Sylvie Vachon

NOVEMBER 2019 | 27

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BALANCING ENVIRONMENTAL CHALLENGES WITH ECONOMIC DEMANDS

PORT PROFILE: PHNOM PENH

EXTENSIVE PLANS CONFIRMED AT PHNOM PENH Phnom Penh Autonomous Port (PPAP) is to bring forward its development plans, as Michael Mackay discovered at the recent 17th ASEAN Ports and Shipping Conference

8 PPAP is already planning Phase 4 of its development

PPAP is located 30km outside the Cambodian capital and is expecting to grow by 10% this year. With container growth of 32% in the first eight months of 2019 already, plans to improve facilities and connectivity are being sped up.

PPAP’s strategy has two strands - improve its existing water courses and build new facilities, an official from PPAP confirmed.

Among the new infrastructure is moving forward the schedule of the port’s third phase of development, which will add another 200,000 TEU of annual capacity. The port spokesperson said that knowledge that the current 300,000 TEU capacity would be filled two years ahead of schedule (it was originally planned for 2022) prompted the rethink.

The Phase Three plans will add a jetty and 5.5ha to LM17 Container Terminal over a three-year period and on an incremental basis. Phase four is now being planned and it will bring container capacity to 900,000 TEU per annum. Phase four will also have a focus on value-adding services, such as rice processing.

Other noted plans include developing UM2 multipurpose terminal at Tonle Bet, (some of PPAP facilities are spread out along Cambodia’s rivers) as a consolidation/deconsolidation centre and three sub-feeder ports along the rivers in Northern Cambodia at Prek Kdam, Preak Tamaek and Kratie.

These three feeder ports are expected to support agricultural exports, especially fruits such as mango, durian and pineapples, and will be aided by development of a cold/dry warehouse at the current LM17 facility.

Underpinning all this activity is the plan for a logistics center adjacent to the existing LM17 terminal. It will be 3.5km south of the planned phase four development, with a sizable area already set aside.

PPAP is though keen to stress that it will remain the “number

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

two facility,” with Sihanoukville on the coast representing Cambodia’s first maritime gateway with Phnom Penh, despite its growing facilities remaining more a feeder port for the countries interior. “We know our role,” the PPAP official stated.

The other part of PPAP’s strategy is to maximise its location and existing resources, although it does involve a great deal of dredging. Currently, the barges using PPAP are largely bringing in construction materials from China and taking out garments, but maximum draft restrictions of 5.5m applies. This limits each barge to 200-250 TEU, the PPAP spokesperson confirmed.

PPAP currently handles 22 barges per week but larger units of up to 400 TEUs would stop bottlenecks emerging. The problem is the scale of the task, as the port’s spokesperson acknowledged.

“Our future plan is to have 7.5m all the way to the Vietnam border,” he stated, outlining that this means 130km with the current draft varying between 4.5m and 5.5m, plus a need for Vietnam to dredge to a similar depth to the coast.

This process will involve a lot of work needing to be completed and coordination with another country. PPAP acknowledged the domestic works are extensive as there is the need for “some capital dredging on the Cambodian side from LM17 to Vietnam – Cambodia border.”

Money is the other major issue. The Cambodian economy is currently strong, but as a country it remains poor and the Cambodia government, so far, has taken a cautious view on public-private-partnerships (PPPs). This is because PPPs with foreign companies are not undertaken in the country and there are seemingly no plans to start working with local companies.

Private companies can bid for the construction work but that is all. “It will be done by ourselves,” concluded PPAP’s official when replying to who would organise and pay for the new faciltites.

NOVEMBER 2019 | 29

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CONTAINER TERMINAL PROFITABILITY

INCREASING RISKS IN PORT INVESTMENT AJ Keyes reviews a new report that looks to identify and manage risks relating to container terminal investment The container revolution has both facilitated and driven globalisation. The transfer of production to low-cost regions and increasingly complex supply chains have been the major factors generating trade growth. The model is now changing. These changes – combined with technical shifts in container sector – are multiplying risks and increasing pressure on trading margins. The levels of risk are now as high as those that followed the Financial Crisis. The many shifts impacting on the container market are considered in a far-reaching new study, “Container Terminals: Paths to Profitability” from respected market analysts.

The container market since the Financial Crisis has seen steady volume growth and resulting high demand for port and terminal investment. But there are underlying problems and understanding of the prevailing risks should be the central preoccupation of investors and operators in each part of the container transport chain. It is far from clear that this is the case.

So, what are these risks? The report outlines those that are external to the container business over which investors have very little control and those within the business.

Other key factors considered are: 5 Globalisation and protectionism: Containerisation has ridden the wave of globalisation and protectionism is now – once again – a major factor in risk analysis.

5 Financial instability: Recovery since the Financial Crisis has been built on massive increases in debt. Essentially, consumer demand has been paid for by borrowing – the scope to extend this is limited.

5 Structural demand change: A steady decline in the GDP:trade multipliers consumption is maximised, moving from an OECD-driven demand profile to an intra-Developing World pattern – a significant risk increase.

5 Near-sourcing: Increasing pressures to repatriate production to the major OECD economies is a manifestation of increasing protectionism and technological change.

5 Technological change: Two clear issues exist, blockchain (digitisation) and 3D printing, with profound implications for the container sector.

5 Environmental pressures: International shipping and terminal development has largely escaped from environmental pressures – until now.

The port/terminal developer has no direct control over any of these risks. Yet if these uncertainties were not enough, the terminal investor faces a whole set of container-specific issues:

Container Terminals: Risk Summary External Factors - zero control Globalisation and protectionism Financial instability Structural demand change Near-sourcing Technological change Environmental pressures

Pace of demand growth Short term volatility in demand Maturation of the market will moderate container growth Reduced overall significance for deepsea operations Increased supply chain integration - higher investment Higher capital and operating costs

Intrinsic Factors - limited direct influence Shipping over-capacity Alliance instability Shipping line terminal investment Larger vessels & cascading Unrealistic expectations and over-capacity Automation New company involvement Concession renewal/extension Tightening regulatory framework

Pricing pressures on stevedoring Short term shifting in demand Increased competition for third party operators Large scale investment to handle larger tonnage Danger of excess capacity driven by Port Authorities Increased costs and uncertain benefits New players in the market An area of increasing concern and difficulty Government policies and increased access investments

8 Investors must understand the risks to terminal investment

5 Shipping over-capacity and instability: Container shipping is a very difficult market.

The search for scale economies by much larger vessels results in demand concentration terminal modification – a classic ‘prisoner’s dilemma’ for developers.

5 Alliance instability: Investing in a new terminal is a long-term project, but long term partnering almost impossible. Counter party risk is key.

5 Shipping line terminal investment: Uncertain development driving up capacity and obscuring returns.

5 Larger vessels and cascading: Forced larger vessels into trades ahead of demand – again, driving the need for investment.

5 Unrealistic expectations and overcapacity: Extrapolation of unrealistic demand trends is prevalent in this sector.

5 New company involvement: As new traders and logistics companies such as Amazon and Alibaba increase their presence, vertical investment in the transport chain will increase, meaning new competition with investment capability.

5 Tightening regulatory framework: Increased regulatory pressures and attempts to link approval to ‘supporting’ hinterland investments are intensifying.

Identifying and manging risks and focusing on trading margins is essential to successfully deal with all these issues. The report defines the nature of risk and develops a comprehensive blueprint for long term profitability in the face of these issues. The days when increasing demand would rescue a marginal project are gone.

Source: Mundy Penfold Ltd.

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

NOVEMBER 2019 | 31

USA: PORT PLANNING

“TEXAS CHICKEN” CONCERNS IN THE HOUSTON SHIP CHANNEL The Port of Houston Authority's commissioners voted to limit arrivals of container ships and shut down two-way traffic in the Houston Ship Channel. Gordon Feller investigates the impact

8 Vessel access concerns in Houston

The Port of Houston has recently come up against the challenges posed by a significant step up in container vessel size, as the vote undertaken by its commissioners shows.

Following this decision, a coalition of companies voiced concern that such interruptions could chill investment and export growth, but Houston Port Commission’s chairman, Ric Campo, said in a prepared statement that, "The Houston Ship Channel is open for business for all and will continue to be."

Recently, the first container ship to exceed 1100 feet in length traversed the 23-mile stretch between the entrance to the ship channel and one of the port's two container terminals, facing no oncoming traffic. This happened while outbound tankers were forced to wait until it docked.

That was the first of 10 such ships with length and/or width which were too large to safely allow two-way traffic, with more expected in coming months. Companies that work with tankers asked port officials to limit the transit of such ships to one per month, but they declined to avoid turning a ship away if more than one happened to arrive in the same week.

Port officials previously rejected a moratorium on bigger container ships to allow all ship channel operators to study the issue, given concerns about two-way traffic interruptions.

However, a coalition of 13 companies that load and unload crude, refined products, liquefied petroleum gas and chemicals from tankers, as well as several oil and gas producers, formed a coalition to push for limits on the number of arrivals of the larger ships.

32 | NOVEMBER 2019

They contend such interruptions that can happen at any time could prompt companies to invest in liquids export infrastructure elsewhere and threaten the Houston port's market share, just as Texas oil and gas production as well as chemical output is expected to grow sharply in the coming years.

The port also faces competition from other ports keen on gaining resin export business. The US Government’s data shows that there’s an expectation to increase export-bound polyethylene production by more than 13 million metric tonnes between 2017 and 2027.

Two key executives, Jim Teague, the CEO of Enterprise Products Partners, and Steve Kean, the CEO of Kinder Morgan, testified at a State of Texas committee in that state’s Senate.

They were seeking legislative intervention from new laws that would limit or block larger container ships from docking at the Houston port. They expressed concern that as the owner of the container terminals, the Houston port receives profits from the container business while regulating all other business on the 52-mile ship channel. Multiple bills are now pending in the Texas Legislature which address those issues.

At the same hearing, Campo said Houston port officials feared any restrictions on larger container ships would prompt ocean carriers to bypass Houston altogether and take container business to other ports.

However, the Houston Port Commission voted to limit arrivals of larger container ships that interrupt two-way traffic to one per week, "an interim solution intended to ensure unencumbered

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

USA: PORT PLANNING

access to upper channel reaches," the Houston Port Commission said in a prepared statement.

Both sides agree the ultimate solution is to widen the 530foot-wide channel to 750-800 feet wide. However, such a project is years or decades away, and liquids operators turned to the state Legislature because until the Houston Port Commission’s vote, the port had rejected any such limits.

The US Federal Government’s Army Corps of Engineers is in the fourth year of a four-year, $10 million study examining the feasibility of deepening and widening the channel.

All ships normally flow freely toward each other in the ship channel, which is home to the world’s second-largest petrochemical port.

In a carefully orchestrated manoeuvre - which some have dubbed “the Texas Chicken" - ships veer around each other to maintain consistent two-way traffic. This is all happening in a waterway too narrow to allow such traffic, as is seen on a twolane highway. However, ships that are 1100 or more feet long and 150 feet wide were deemed too large to safely accommodate the Texas Chicken - because they essentially become 54% wider when at an angle.

All other oncoming traffic waiting to exit the channel or waiting to get in must stand down, often for up to 10 hours or more, until the container ship docks or exits the waterway.

In 2018, 71% of 18,790 ships that traversed the channel involved energy - 55% were tankers, 10.5% involved natural gas and 5.6% were barges. Of the rest, only 11.1% were container ships, according to data from Houston Pilots.

The importance of the Port of Houston is undeniable. It is the largest port on the Gulf Coast and the biggest port in Texas and comprises a 25-mile-long complex of nearly 200 private and public industrial terminals along the 52-mile-long Houston Ship Channel. The eight public terminals are owned, operated, managed or leased by the Port of Houston Authority and include the general cargo terminals at the Turning Basin, Care, Jacintoport, Woodhouse, and the Barbours Cut and Bayport container terminals.

Each year, more than 247 million tons of cargo move through the greater Port of Houston, carried by more than 8,200 vessels and 215,000 barges. The port is consistently ranked 1st in the United States in foreign waterborne tonnage; 1st in U.S. imports; 1st in U.S. export tonnage and 2nd in the U.S. in total tonnage. It is also the nation’s leading breakbulk port, handling 52 percent of project cargo at Gulf Coast ports.

The port has been instrumental in the city of Houston’s development as a center of international trade. It is home to a multi-billion petrochemical complex, the largest in the nation and second largest in the world. Carrier services on all major trade lanes link Houston to international markets around the globe. The ship channel also intersects a very busy barge traffic lane, the Gulf Intracoastal Waterway.

Centrally located on the Gulf Coast, Houston is a strategic gateway for cargo originating in or destined for the U.S. West and Midwest. Houston lies within close reach of one of the nation’s largest concentrations of 152 million consumers within 1,000 miles. Ample truck, rail and air connections allow shippers to economically transport their goods between Port Houston and inland points.

The port is vital to the local, state and national economy and the maintenance and improvements of the public facilities ensures its continued economic impacts. Keeping the port secure so that business can flow freely is also an essential responsibility. As the local sponsor of the Houston Ship Channel, the Port Authority plays an important role in the management and environmental stewardship of this important waterway.

Continued growth of both imports and exports and associated far reaching economic impacts can only be supported by infrastructure investment. Access to intermodal hubs, major traffic arteries and improvements to the Houston Ship Channel are critical for Port users.

The Port is working with adjacent communities, local, state and federal agencies, and industry partners to ensure that road and waterway improvements keep pace with the constant increase in cargo.

8 Access issues on the busy Houston shipping channel

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

NOVEMBER 2019 | 33

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

CARGO HANDLING: 5G

ARE THE 5G STORM CLOUDS CIRCLING THE PORT INDUSTRY?

Image: Stevie Knight/Jürgen Diermaier

There’s a storm brewing over 5G’s promise to link up anything and everything, writes Stevie Knight

The new 5G technology is an Internet of Things (IoT) dream: people, assets, machines – in fact millions of devices can be simultaneously connected and return real-time data. The supplychain possibilities are almost endless and run from advanced cargo tracking to remote operation of near-shore vessels.

Certainly, the port industry is staring at real advantages.

Ericsson and mobile service provider China Unicom created a 5G ‘smart harbour’ at Qingdao, which they say demonstrated labour cost savings of up to 70% over a standard, fully automated facility. Equipment providers like iSAM and Kalmar are already trialling 5G applications in the belief it will be the industrial standard of the future.

But is it all safe?

Yes, says the US’ National Cancer Institute. They say that while the higher-frequency electromagnetic waves – gamma and xrays - are known to damage DNA and cells, this is different to the non-ionizing part of the spectrum which includes magnetic fields from electric power lines and appliances, microwaves, WiFi, plus, of course, mobile phones and masts.

Others are more equivocal, even about the current range of telecom frequencies which inhabit the 800MHz to 2.6GHz part of the spectrum. A study carried out by the US National Toxicology Programme (NTP) showed there were indeed “statistically significant increases” in tumours found in rats exposed to the 900MHz wavelengths. However, John Bucher, NTP’s senior scientist says: "The levels and duration of exposure

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

8 The new 5G technology is an IoT dream: could it turn into a nightmare?

to radiofrequency radiation (RFR) were much greater than ...people experience with even the highest level of cell phone use, and exposed the rodents' whole bodies. So, these findings should not be directly extrapolated to human cell phone usage."

Despite this, one of the senior toxicologists overseeing the NTP study, Ron Melnick, has other views. Melnick, now retired, explains the study showed that as many as one in twelve of the brains or hearts of the exposed rats were affected by tumours or precancerous lesions. A truly staggering figure “that’s just been dismissed without scientific justification”.

Moreover, he says the chief criticism of the study is misleading: “Yes, the total amount your body receives is divided by your weight... but if you’re holding the phone to your head, then what you’re really concerned about is the radiation to that specific location, near the brain.”

So, what about the impact on people? “The mantra repeated by most of the telecom industry is that damage only occurs by heating effects. If there is no measurable heating, then there cannot be damage,” says Professor Beatrice Golomb of University of California, San Diego, adding, “therefore the permissible limits have been derived from levels that increase temperature.

However, both Melnick and Golomb’s research contradict this: “The prevailing assumption at the start of the NTP study was that there isn’t enough energy at cell-phone frequencies to break chemical bonds or cause DNA damage,” says Melnick,

NOVEMBER 2019 | 35

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adding: “That assumption is clearly wrong, with results showing increased tumour incidences, increased DNA strand breaks in the brains of exposed rats and mice, reduced birth weights and cardiomyopathy.”

It’s a controversial subject. While some studies conclude no correlation, there is now a tilt toward ‘be cautious about cellphone use’ advice and some researchers are adamant that evidence supports a health impact, including Golomb. She explains that the list of common symptoms includes sleeplessness and dizziness, irritability, depression and cognitive impairment – and though it won’t hit everyone equally, “as with all toxins, there will be a number who are more severely affected”.

Those arguing against electromagnetic radiation (EMR) say it does not even take having a mobile strapped to your head.

Reports include sensitivity close to masts, smart meters or other connected technologies. This includes US attorney, Dafna Tachover, the force behind the We Are the Evidence advocacy group which, she says, “intends to expose the suppressed epidemic”. Her own story is like many others who have, according to Tachover, been diagnosed with EMR injury.

Further, she says the effects are cumulative: “We are now exposed to levels of radiation from wireless devices -manmade modulated frequencies at levels which are a million and more times higher than those our body evolved to tolerate and prolonged exposure to this radiation has clear effects”.

The huge variety of complaints cannot just be put down to people’s imagination. Golomb’s own studies have shown that EMR-induced oxidative stress, which results in the prevalence of highly-reactive free radicals in the body, can damage membranes, disrupt the blood-brain barrier, compromise blood flow, injure mitochondria, damage the myelin sheath and trigger a cascade of autoimmune issues.

According to Golomb, the link is “cemented” by evidence in the genes of people experiencing symptoms: “People cannot manipulate their genes in response to suggestibility,” she points out. Additionally, urine samples show consistently depressed levels of melatonin – an antioxidant the body uses to fight EMR damage.

Moreover, if there are issues they stand to be magnified by the 5G roll out. Professor Om Gandhi of the University of Utah points out that the physics of higher frequencies demand a vastly increased number of base stations to create the necessary connectivity, and Tachover adds that in the US “the aim is to connect 20bn more devices as part of the Internet of Things – IoT – so anything and everything will have an antenna”.

There are implications for ports and terminals with their sheds, container stacks and quay cranes as both Melnick and Gandhi point out, because EMR signals bounce around metal surfaces. According to Gandhi, multiple reflections can result in exposure from more than one direction: “Rat studies showed that a subject could be exposed to twice the level of radiation than directly coming from the emitter.”

More, even apparently low levels of radiation need not be that safe “as modulation in the signal means that you may have a jackhammer effect, with the peaks rather than the average determining the level of damage,” adds Golomb.

Most of the research so far has centred on the effects of 3G and 4G, so could 5G be less of a problem? Possibly. According to Gandhi’s research the higher, millimetre wavelengths like those to be utilised by 5G networks “tail off faster than the lower frequencies”. His work with very short wavelengths of the kind proposed by some 5G providers shows that much of it “is likely to be absorbed by clothing... and penetration into the body appears to be limited to the skin”.

However, others point to studies which suggests that the skin can transmit the damage and Gandhi cautions against drawing

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

Image: Stevie Knight/Mimzy@Pixabay

CARGO HANDLING: 5G

any conclusions one way or the other – yet.

Unfortunately, even if these new frequencies do prove less hazardous, that is not the end of the problem. According to Tachover, 5G isn’t a single technology, “it’s an infrastructure, concept... and that covers a lot more than just those so-called 5G millimetre wavelengths”.

She underlines that much of the 5G infrastructure is not quite what it seems. US providers are installing 4G ‘small cell’ antennae under the 5G banner. Further, Peter Linder of Ericsson has stated that “carrier aggregation” will likely be the best solution as “you can take a part of high-band spectrum and combine it with midor low-band spectrum, combining the capacity power”.

As Golomb says, “We’re not getting rid of 4G, we’re just adding to it. Evidence indicates that when multiple frequencies are present, toxicity may be synergistic.” She continues: “Every time we roll-out new frequencies, we see yet another subgroup of affected people.”

So, why aren’t we taking the effects of 5G, and possibly all EMR technologies, seriously?

Many EMR critics say the industry is selecting what it wants to hear, drawing parallels with the tobacco giants. According to Tachover, the ‘no-harm’ findings came from studies funded by vested industries or had other conflicts of interest. Golomb added how bias has been documented, with study results depending on who is paying the bill. Others are more cynical, saying that the big players want to discredit research that counters their ambitions. Interesting, there’s a groundswell against them. In 2017, over 200 scientists signed an appeal submitted to the EU calling for a moratorium on 5G. Melnick and Golomb say that industry needs to hold back.

So far that has not happened, says Melnick, adding: “If it’s safe, show us the evidence.”

8 There are doubts, even about the current range of telecom frequencies which inhabit the 800MHz to 2.6GHz part of the spectrum

NOVEMBER 2019 | 37

TERMINAL DATA ANALYTICS

OPTIMISING TERMINAL OPERATIONS WITH DATA ANALYTICS Terminals face different pressures today to optimise their operations, as Matthias Jablonowski, Global Practice Lead – Ports, Nokia, confirms Larger vessels, demands by global supply chains for faster turnarounds, competition from new ports and growing shipping volumes are pressures terminals face. Indeed, from late vessels to damaged goods, there are multiple and daily risks to be managed.

Data analytics based on artificial intelligence and machine learning can optimise specific terminal business processes and provide terminal managers with insights on how to optimise their operations end-to-end, predict high-risk areas for attention and prioritise the actions needed to manage disruption when it inevitably occurs.

The first step in building analytics capabilities is to access data hidden in multiple systems and spreadsheets, and overcoming “tribal” knowledge within the workforce. One of the problems is that where data exists, it is isolated in individual data lakes. One of the first challenges then is finding how to link the rich historical data buried in the TOS, the ERP, asset management, and other stakeholder systems and sub-systems in the operational chain.

The next challenge is to integrate and analyse streaming information coming from IoT sensors, RFID readers and video cameras. These sensors and devices can be mounted on a fixed infrastructure around the yard or on moving containers, container-handling equipment, as well as workers, vessels, trucks and trains. This will require a robust wireless technology such as LTE today, and 5G in the future. These technologies overcome the performance, security and mobility challenges of Wi-Fi and have better support for IoT devices.

Gathering all the data — both historical data embedded in terminal systems and live streaming data — enables the analytics software to model work flows within the terminal. It ingests partner data on vessels, containers, payloads, available workers, yard layout and destinations, and gives the terminal operator an optimised sequence for loading, unloading and storage. We’ve found that logistics solutions of this kind can provide a 7% –10% improvement in efficiency. When applied at scale, these solutions can generate significant cost savings.

These sensors and devices can be mounted on a fixed infrastructure around the yard or on moving containers, container-handling equipment, as well as workers, vessels, trucks and trains With such a heavy reliance on terminal assets, predictive asset maintenance is a key application for analytics. Advanced data analytics can create maintenance models or “digital twins” for most equipment through historical maintenance records and real-time IoT monitoring. These analytic models use machine learning to create what normal operations look like and spot anomalies that might indicate the risk of failure. They make it possible to optimise the maintenance and replacement schedules for assets using “predictive maintenance” and

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

identify where the greatest risks exist. These models can be created for almost any asset or process within the terminal and help with capital planning.

In addition to asset monitoring, it is also possible to apply video analytics to truck movements inside the terminal and to video from drone inspections and perimeter surveillance.

Containers need to be monitored during handling and their condition identified in case of damage claims. Video cameras can play an important role in meeting many of these needs, although human monitoring of video feeds can be error-prone.

Software-based video analytics can reduce the human review costs of monitoring video streams using machinelearning algorithms. The software learns over time to identify anomalies based on data models it constructs for what is normal. The analytics program alerts personnel when an anomaly occurs, such as the mishandling of a container that might lead to damage.

Video analytics can also be used to identify container BIC codes and the condition of the container, plus a truck license plate or movements in the terminal.

As terminal operators pursue digital transformation to meet increased pressures and better integrate their operations with digitalised global supply chains, analytics powered by machine learning and artificial intelligence hold tremendous potential to enable new capabilities and optimise terminal operations end to end.

8 Hidden data at ports must be accessed

8 Matthias Jablonowski

NOVEMBER 2019 | 39

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TERMINAL OPERATING SYSTEMS

INNOVATION REMAINS THE TARGET FOR TERMINAL OPERATING SYSTEMS

Credit CyberLogitec

John Bensalhia looks at how the latest technological breakthroughs are boosting Terminal Operating Systems for ports

Innovation remains the word of choice for today's Terminal Operating Systems. Wai Mung Low, head of business consulting, CyberLogitec Global, outlines the four main ones.

“Dashboards and business intelligence modules capitalising on big data; 3D visualisation; the capability to handle multiple types of cargo, and not just containers; and finally, the automation of terminal operations.”

Cloud technology and automation have had a massive impact upon the container terminal industry. “This has led to an increase in demand for TOS vendors to include these technologies into their TOS,” says Harry Nguyen, CEO of RBS. “Automation has allowed terminals to improve their operational efficiencies and ability to manage larger vessels.

This allows terminals to keep up with the rest of the world with minimum dependency on human resources. This has made such a big breakthrough in our industry because terminals can now enable CHEs such as ASC, ARMG, ARTG, AVG, and STS, to automatically adapt to dynamic situations which optimise performance and output.”

RBS has implemented a Cloud TOS to keep up with the changing demands of today's terminals. “There is no surprise that the Cloud has weaved into the container handling industry and yielded quite a presence,” says Lilian Huynh, Marketing Assistant, RBS Marketing Team. “This is because the Cloud's pervasive nature grows proportionately with the masses of the world continually shifting to the digital landscape due to consumerism and globalisation. As this innovation foresees a promising future the reinforcement and integration of the Cloud into a TOS is inescapable.”

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

8 AI is a well-known phrase, it is still an unfamiliar concept

Ms Huynh says that creating a TOS entirely in the Cloud allows terminals of any size the opportunity to leverage autonomous and real-time functionalities which achieve maximum return on investment.

RBS' TOPX Expert has been developed in a unique architecture that can support any automated CHE without additional third-party interface software - a TOS that offers automation modules entirely in the Cloud.

While AI is a well-known word, it is still an unfamiliar concept for most.

“In this bullet-proof industry, many fear the unknown and avoid change,” says Lilian Huynh. “However, the relentless rise in consumer demand resulting from globalisation incites the development of larger vessels with greater capacity.

Therefore, it will soon become almost impossible for the human mind to manually plan and solve for all factors without omitting one or the other. Currently, the concept is still in the early stages. However, machine learning in tandem with realtime processing, automation, and the Cloud has rendered machine learning functionalities in TOPX Expert which assists in berth planning to achieve optimum decision-making and resource optimization. AI will gain more remarkable traction in the future when it expands and advances its capabilities, and therefore, should not be overlooked.”

Dan Pershin, Head of Marketing, SOLVO, specifies several significant approaches towards TOS development and innovation that could change the market of IT solutions for ports and terminals and general trends in supply chain execution segment.

NOVEMBER 2019 | 41

TERMINAL OPERATING SYSTEMS

“First, we are talking about the future development of SOA, or good old service-oriented architecture. The approach provides resource and cost optimisation benefits through a 'collection of loosely coupled services' integrated with lightweight protocols.”

Mr Pershin explains that this technique is becoming popular among global TOS vendors, thanks to the growth of DevOps and Cloud-native applications. “Classic monolithic systems are getting more difficult to support for vendors and clients, especially when it comes to introducing new modules and supporting new types of cargo.”

The second growing trend is for standardisation of processes at multi-purpose terminals. As a result, a modern TOS can be introduced to those terminals handling break-bulk and bulk cargoes. “Certainly, software systems for general cargo handling had been there for quite a while already,” says Mr Pershin.

“However, now the functional requirements for the type of systems have changed. For example, in the past ports could easily rely on TOS systems being more of a general SORs (systems of record) with only a few basic functions dedicated to technological process management automation, but now general cargo terminals demand fully-fledged functionality repeating that of more advanced container TOS.” These functions include automated and semi-automated stowage planning and forecasting, real-time management of yard operations with automated yard planning and put-away of cargoes.

Increasing demand is growing for access to more supply chain data, and making it available across the wider port community. Tony Davis of Jade Logistics explains that this can be achieved by using Cloud-based platforms to capture data from multiple sources and making that data available to all supply chain participants.

“Technologies such as Blockchain will also play a part, more so, ensuring the integrity of the data being captured and providing trust that the information is true and accurate. Jade Logistics’ TOS, Master Terminal, is already integrated with the CargoChain information sharing platform to achieve this.”

A wider array of TOS functions is now available on mobile devices like smartphones, tablets, handhelds and vehiclemounted terminals. “By deploying these apps on mobile devices, real-time tracking and dynamic work instructions dissemination becomes more convenient and quicker to deploy,” says Wai Mung Low. Mr Low adds that TOS solutions are moving to the SaaS model, reducing cost and time when implementing terminal systems.

Port operators have the flexibility to deploy the software of their choosing on pay-per use basis. It is then left to the software vendor to manage and host the software, rather than the port.

“The SaaS model helps the port to save money. Moving to usage-based charging means that terminals have more flexible Opex options for financing their investment on systems as against hefty Capex investments.”

8 Modern TOS can be introduced to break-bulk and bulk terminals

42 | NOVEMBER 2019

SaaS modelled terminal operating systems offer more flexible add-on modules to the “core” product, thus enabling operators to gradually grow the system in accordance to their business needs and complexity.

TOS pricing is becoming more competitive, ultimately affecting price points. Although as Tony Davis says, more flexibility around pricing models is equally prevalent. While the traditional licensing model is still relevant, the ability to offer OPEX models through subscription based pricing is becoming more common.

“Given the breadth of TOS functionality, and differing levels of complexity across terminals, most TOS can be purchased on a modular basis, ensuring operators only pay for what they need now, with the ability to upgrade to new functionality in the future as they scale and grow.”

“Cost-wise, TOS prices are not reducing or increasing, but rather pricing structures are changing, depending on the type of TOS (Enterprise or Cloud) that terminals prefer,” says Lilian Huynh.

“However, what we are seeing, especially in the European market, is that the cost and price pressure in the overall industry are also coming towards TOS suppliers,” adds Norbert Klettner, Director, RBS EMEA. “As such, that puts pressure on the market, but at the same time, this makes a good, efficient TOS necessary for terminals.”

Greater optimisation of terminal operations is a core driver for ports as they look to provide efficient service. “This means faster turnaround of ships, faster turnaround at the gate and increased visibility of the operation as a whole,” says Tony Davis, adding, “Once the core TOS solution is in place, terminals are able to identify areas where additional investment in technology can provide even more returns.”

Wai Mung Low explains that core functions like yard planning and real-time operations are key interests of ports when it comes to implementing TOS. “Supporting functions are very important. Our real-time module is very dynamic, and is able to support the main aims of the port.”

Dan Pershin says that the most wanted areas of application are ship stowage planning, yard planning/optimisation and real-time equipment control. “All these areas require high-end technologies to be featured including genetic algorithms for sequencing cranes for example, BI, machine vision (MV), and Artificial neural networks (ANN).”

While real-time processing is becoming more common in the TOS field, it is still vital to analyse a system’s architecture to determine if its functions can truly support this. “To say a TOS without real-time capabilities can engender catastrophe is

8 There is a growing demand for access to more data across the port community

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

TERMINAL OPERATING SYSTEMS

quite the understatement,” says Lilian Huynh. “Without realtime capabilities, operations and equipment behave unpredictably. There is a common misconception between the exchange of real-time and transactional processing, so the true meaning behind real-time becomes misleading and convoluted. Transactional processing is not to be synonymous with real-time processing as it adopts a static and sequential operation when feeding and filtering data, which are pulled from multiple different servers and incur substantial wait times.”

As a result, CHEs on the field receiving work instructions to move a container from one location to its destination, execute tasks on redundant data and spawn bottlenecks as well as congestion.

RBS' TOPX Expert challenges these impediments which inhibit container terminals, achieving efficiency and optimisation with its unique, centralised, single server infrastructure. “A system architecture like TOPX Expert is constructed on a genuine real-time environment, ensuring data always remains in its most updated state,” says Ms Huynh.

“Optimal decision-making for vessel planning, yard planning, and CHE work instructions are, therefore, always created based on data that automatically update even if it is changed in any stage of planning. Any alterations in data are automatically adjusted accordingly, so every step of the planning process gains independence and remains unaffected.”

All CyberLogitec system functions are conducted in real time. Wai Mung Low says that CyberLogitec’s Terminal Operating Systems are built with dynamic decision-making in mind: “Port operators are working out the most efficient ways of handling cargo: efficiency-based decisions such as optimal yard stacking and storage of containers that minimises shifting can boost productivity and reduce operating costs.”

“Therefore, when the TOS solution record all transactions and activities in real time, terminals can maximise the dynamic method of allocating containers and assign operational jobs to terminal equipment and resources.”

Substantially increased speed of processes, elimination of human errors, overall transparency, more efficient planning and increased quality and range of services that ports can offer to their clients, such as shipping lines and cargo owners Tony Davis explains that the use of web-based mobile applications by workers on the ground complements this by allowing real-time data to be sent directly to the core system, reducing time and human error. “While access to real time data is important at an operational level, historical data for analysis and business decision making is also a key output from the TOS.” What are the main benefits of TOS? Dan Pershin lists some of the most important ones: “Substantially increased speed of processes, elimination of human errors, overall transparency, more efficient planning and increased quality and range of services that ports can offer to their clients, such as shipping lines and cargo owners.”

Wai Mung Low explains that the TOS is the central repository of all data and information. “It's a source of Big Data and business intelligence, adding a great deal of value for port owners,” before adding, “A TOS that can effectively process inputs from various sources (shipping lines, shippers, port authorities, customs authorities) and transform these inputs to system-driven cargo handling jobs will help a terminal manage operations in an optimised and effective manner.”

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

A TOS with sufficient data validation points ensures accuracy of information that in port operations will be used to generate reports to the relevant parties. Following on from this, data from the TOS is the basis for generating invoices after vessel departure. “For example, in the vessel operations process, each aspect is accurately matched with tariff values, which can then be invoiced to the customer. All movements are recorded, highlighting the need for TOS data to be accurate and secure.”

“A TOS provides a port or terminal with increased visibility of their operations, access to decision making information, and the ability to capture and record opportunities to generate revenue,” concludes Tony Davis. “The TOS can be the differentiator when it comes to optimising the use of port resources and providing high levels of customer service to port customers such as shipping lines and carriers. A TOS allows a port to take control of their operations.”

8 Without real-time capabilities equipment can behave unpredictably

8 Terminals must manage in an optimised and effective manner

NOVEMBER 2019 | 43

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INSIGHT FOR MARINE TECHNOLOGY PROFESSIONALS

LASHING SYSTEMS

MAKING THE RIGHT LASH DECISION IS MORE IMPORTANT THAN EVER John Bensalhia investigates the decision-making and trends behind lashing systems for port cargo and considers the role for automation Getting cargo from A to B in one piece is a top priority for port operators. Whether it is breakbulk, project or loose items, the mission remains the same - securing and protecting the cargo to the highest standard.

The lashing system adopted is one important method of keeping cargo tightly in place. It is regarded as one of the most popular ways of securing cargo and there are a good number of different lashing options available.

However, many factors come into play. The type of cargo being stored will require a different kind of lashing, the design of vessel will affect the choice of lashing system and, essentially, there is the added requirement of ensuring that the selected lashing system meets the correct safety standards.

The most notable recent trend with respect to lashing systems is the increase in the size of ships. Arto Toivonen, Naval Architect, MacGregor, and Tommi Keskilohko, Director, Customer Solutions, MacGregor, explain that because ships have become bigger, this has resulted in different criteria for how to arrange the lashing system.

“Larger ships can have up to 11 layers of containers on deck, which can cause challenges. For example, more careful stowage planning is required – where do you put all the containers in the run-up to the cargo loading? Where is the best place to store the containers? One aspect of this area is that when ships become bigger, the systems tend to be more complicated.”

The main aim for ship operators is to maximise the amount of cargo and the number of containers onboard. “The operator will be looking for the right lashing system that is best for their cargo mix and operations,” Mr. Toivonen and Mr. Keskilohko both confirm, collectively adding, “However, the more complex the lashing system, the more work that needs to be done at the port – which can then have the knock-on effect of impacting operational efficiency and safety levels at the port. However, our systems are designed to be easy to operate and to use and accessible for the port operator.”

Larger ships can have up to 11 layers of containers on deck, which can cause challenges. For example, more careful stowage planning is required – where do you put all the containers in the run-up to the cargo loading? Where is the best place to store the containers?

One aspect of this area is that when ships become bigger, the systems tend to be more complicated The Macgregor executives elaborate further. “What's important is to ensure that the cargo chain flows as smoothly as possible and to expedite the cargo loading process for the port operator. In Cargotec we can cover the different parts of the cargo flow, including MacGregor's on-board cargo systems, Bromma spreaders, Kalmar’s ship to shore cranes and terminal

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

equipment and Navis terminal operating systems. By combining these elements, ports are in a unique position to improve the overall logistics chain and efficiency.”

The choice of lashing system clearly requires careful consideration. There are plenty of services and companies available to help ports meet all the necessary criteria, such as products, calculation systems and lashing services to ensure ports meet their target of delivering cargo as securely as possible.

Pasec Port (part of the Gosselin Group) is one such cargo securing company. Based in the Port of Antwerp, Pasec assists with all kinds of cargo securing. An experienced team of inspectors and foremen ensure that every kind of cargo is fully secured, including heavy lift, breakbulk and pipes for every kind of vessel, whether it's general cargo ships, breakbulk or ro-ro.

To ensure that the lashing products match up with the right safety levels of cargo handling, the materials are thoroughly tested for their strength at Pasec's purpose-built factory or workshop.

An ideal solution for a port seeking the right lashing product is to hire the services of a company that can provide a complete

8 Larger ships are the major trend for lashing industry

NOVEMBER 2019 | 45

LASHING SYSTEMS

design services package. MEC is a case in point, providing designs for lashing bridges, plus additional components and systems including adjustable-length container cell guides, access platforms, container stanchions. Clients are taken through every stage of the process from the initial engineering through to the final construction designs.

MEC's lashing bridge solutions are carefully mounted on container vessels with the aid of specially engineered modular deck frames. Movable cell guide stanchions, meanwhile, can be installed either on a loose or rotatable basis in the cell guides. This method provides better flexibility for ports, as the containers can be loaded above general cargo items. Also available are lashing items – fixed or loose – for Ro-Ro and PCTC (Pure Car Truck Carriers) vessels.

As with many other aspects of port operations, the principle of lashing systems isn't a case of “one size fits all.” Recognising this fact, MEC provides lashing solutions that are designed with the precise requirements that each client has in mind. Every project is planned and designed in meticulous detail. For example, to make sure that it complies with the latest safety regulations, all stack weights are calculated on this basis. For an extra degree of security, cargo security manuals are also provided with each system.

MacGregor's cargo systems offer many benefits when it comes to lashing and securing cargo. A good system will take on board a combination of factors. These include the relevant safety rules and regulations, maximising cargo intake and keeping the process as simple as possible.

One of these examples is the external lashing system that secures the lifting side of the container, as opposed to the compressed – thus, reducing both forces. The external lashing system provides a superior weight distribution for container stacks. For lashing the various container heights, the system allows for tailor-made distances between the lashing bar knobs,

thus optimising handling and minimising turnbuckle length.

As well as efficiency, the external lashing system boosts safety levels by preventing potential loosening of components.

A further advantage is that all MacGregor external lashing systems are specifically tailored to each vessel design.

Another notable MacGregor product is the lashing bridge, which allows lashings to be applied on higher stack tiers. Not only does this result in a larger level of cargo, but it also provides higher levels of stability for the container stacks.

Lashing bridges can suit a wide spread of tier level requirements, available in options of one to four tiers in height.

The lashing bridges can be designed and delivered separately or as part of the MacGregor PlusPartner cargo system.

8 MacGregor system allows lashings to be applied on higher stack tiers

8 A "one-size-fits-all" approach does not apply to lashing systems

46 | NOVEMBER 2019

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

LASHING SYSTEMS

MacGregor's PlusPartner initiative encompasses all aspects of the complete cargo system, which can be used for new and existing ships – in the case of the latter (the service of which is known as a Cargo Boost), this ensures that the system can be used to maximum capacity for specific routes.

In terms of the new lashing rules for route-specific lashing, MacGregor can now assist operators with the accurate calculation of a ship's route-specific cargo arrangements, thus making the most of each vessel's cargo carrying capabilities for each route.

Forankra Pritchard provides an abundance of lashing products such as claw hook ratchet lashings, loop end ratchet lashings, D ring delta end tie down lashings and rave chassis hook ratchet lashings. These offer strong load capacities of up to 10,000 kg.

The Forankra Pritchard lashing products use webbing as the basis, which is made with top quality polyester, to ensure the highest standards of use (the products are also compliant with European standards BS EN 12195-2: 2001).

Fortris offers two kinds of lashing solution, namely, Woven and Container. As well as being simple to use, Fortis' woven lashing straps are a cheaper method of securing loads on flat racks and in containers, as opposed to using the more expensive alternative of multi-way straps.

Ease of use is also a big advantage with the ready-made container lashing systems. As the systems are already assembled, this means that ports can use them instantly. The choice of polyester fibre material offers a two-way benefit.

Providing high levels of strength, the rigid polyester prevents the problem of causing surface damage. Depending on the type of container being used, the Fortris systems comprise either two lots of 2400mm long ribbons (used for standard height containers) or 2600mm long ribbons (used for higher cube containers).

One of the major issues with respect to the choice of lashing is working out the calculations involved. For example, how many lashings are needed? What are the configurations? In today's technologically-driven world, port operators are fortunate because there are various software programs that can carry out this task.

Semi-autonomous terminals can effectively work if smaller-scale.

However, for very big scale terminals, this is a longer journey, although there are already some good references where, for example, Kalmar has been part of the process The recently introduced Navis MACS3 API service can calculate safe cargo handling. As well as checking for stability, dangerous goods and loading conditions, Navis MACS3 API services check lashing calculations, including up-to-date regulations from all key classification organisations.

Navis MACS3 loading computers for new tonnage have been ordered for Yang Ming and ship owner and ship managers China Navigation and Eastern Pacific shipping. Singaporelocated Eastern Pacific is due to install the MACS3 computers on two 15,100 TEU container vessels, which will also include the lashing module, SEALASH, which has been approved by Lloyd's Register in accordance with up-to-date BoxMax class notation.

Veristar's lashing software is another source of calculation for ports. The software can check detailed lashing configurations for containers and stacks, applying to external, internal and mixed lashing systems. For containers, the

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

software considers several elements including acceleration values, roll reduction factors and both horizontal and vertical twist-lock gaps. In the case of given stack and lashing configurations, the software assesses the twist-lock tensile and shear load, container fitting loads, stack reactions and racking and vertical forces in the way of both container sides.

Calculation tools and software are available for free download, meaning that the likes of Imbema's lashing calculator can be used on mobiles, laptops, and tablets. Port operators have access to a fast, easy-to-use tool that can be used on the go for ideal convenience.

The Imbema calculator tool works out how many lashings are required for each project. The calculation is decided after working out specified data in accordance with two common lashing methods - tying down and diagonal securing.

Three aspects are used to determine lashing numbers for the former method, which requires at least two lashing points, which are connected to the floor of the vessel, from one to the other.

The right lashings data considers the vertical angle (which must be at least 25 degrees, with a recommended angle of 90 for the most effective result), coefficient of friction (which depends on the materials used and the conditions) and finally, tensile force (which applies to the tension that the ratchet can apply to the lashing).

Coefficient of friction and vertical angle are also used in the case of diagonal securing, a method that uses four lashings to hold the cargo.

The lashings go backwards, forwards and sideways, using fixed points on both load and floor. With respect to the angles, both vertical and horizontal should be ascertained (the vertical angle is recommended to be between 20 and 65 degrees, while horizontal between 6 and 55 degrees).

Looking ahead, Arto Toivonen and Tommi Keskilohko observe that the trend of autonomy is growing. “Semiautonomous terminals can effectively work if smaller-scale.

However, for very big scale terminals, this is a longer journey, although there are already some good references where, for example, Kalmar has been part of the process.”

These executives offer a key conclusion. “While it's unlikely that all ship owners would follow the same lashing system, the solution is more likely to provide systems and tools that improve the transparency throughout the logistics chain.”

8 Software can now better check lashing configurations for containers

NOVEMBER 2019 | 47

USA: LOGISTICS I.T.

SECURING PORTS: TECHNOLOGY MAKES A BIG DIFFERENCE A new and ambitious project is focused on developing and deploying electronic cargo tracking solutions, as Gordon Feller discovers

8 IoT connects smart devices and systems

A new project sponsored by the US Federal Government’s National Institute of Standards and Technology (NIST) could make a big difference across sea ports, dry ports and manufacturing Free Trade Zones, plus across different geographies, traversing from landlocked locations to ports, in East Africa and in Asia. The aim is simply to expedite customs clearance and enhance trade facilitation.

Sounds simple in theory, but in reality, these things never are.

The objective is part of an initiative focused on the “Internet of Things” (IoT). These types of emerging technologies involve connecting smart devices and systems – in diverse sectors such as transportation, energy, manufacturing, and healthcare – in fundamentally new ways.

IOT technologies are enabling ports, cities and shippers to improve services, promote economic growth, and enhance the quality of life. As many of today’s IOT initiatives and deployments are isolated and customised projects, NIST launched the Global City Teams Challenge (GCTC) to encourage collaboration and the development of standards.

GCTC’s long-term goal is “to establish and demonstrate replicable, scalable, and sustainable models for incubation and deployment of interoperable, standard-based solutions using advanced technologies such as IOT and demonstrate their measurable benefits in communities and cities.” NIST is working closely with many companies and governments, including with U.S. Federal Government’s Department of Homeland Security, and their Science and Technology Directorate.

The new solution which is being developed in this GCTC project is integrated – working across technology stacks, including end-devices, platforms and analytics. The initiative involves a wide variety of participants - port security officials,

48 | NOVEMBER 2019

field enforcement officials working at ports and borders, customs officials, software application developers, telecom service providers, shippers and consignees.

The project aims to take on one big challenge, namely the system of manual checks and clearances of cargoes at multiple check-points. These methods are time-consuming and laborious. They are error-prone due to multiple hand-offs and result in uncertainty in goods delivery schedules. They also cause congestion, impeding overall traffic flow and helping pollution to increase.

The key focus is on a primary solution of an electronic cargo tacking system. In that new system, the stakeholders have visibility of the status and location of cargo. Furthermore, they can be notified of exceptions for immediate action by field enforcement. With a Customs-accredited tracking device, the cargo can flexibly move to its declared destination via an optimal route, and in a secure manner.

In order for the implementation of this solution to succeed, there are some major requirements. Firstly, there must be a customs mandate on electronic cargo tracking and accreditation of tracking devices and solutions, including integration with customs systems. Customs enforcement must be able to undergo a “process re-engineering”, which is another way of saying an “organization restructuring”. This entails buyin from such key stakeholders as transport firms and logistics companies, shippers, etc. Accredited vendors must be ready and willing to set up device depots and monitoring control centres.

The project’s Key Performance Indicators (KPIs) and measurement methods include a reduction in the number of days for cargo customs clearance, of between 50% to 80%. This would represent a major improvement in the efficiency of cargo

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

USA: LOGISTICS I.T.

customs clearance measuring somewhere between two-fold and five-fold. Reductions are also measured in transhipment time between bonded areas, from the original days and hours, to less than half an hour.

Efficiency improvements and cycle-time reductions are computed based on data from two sources: 5 Current baseline statistics as per customs, shippers or their proxies - such as logistics providers.

5 Post-implementation lead times from electronic cargo tracking system.

The project’s racking device complies with international standards for ruggedness – and in particular with ISO17712 for high security seal, IP65.

The solution (covering middleware, user interface and enddevice) was originally deployed in Kenya and has since been replicated in Indonesia, Thailand and Tanzania. It is being scaled further in the Philippines, Vietnam, Panama and Brazil. This electronic cargo tracking system has been in use since 2012 in Asia and East Africa. Some of these deployments have been in use for more than five years, which many consider to be a testament to their sustainability.

The project’s security module is embedded in the device’s firmware. The device’s middleware verifies the authenticity of devices reporting to it. Proprietary and open encryption standards/algorithms (such as AES256) are applied in the module and the middleware. At the application layer, devices which have not been associated to legitimate trips are ignored.

The trade facilitation impacts of this solution are numerous.

Consignees can receive goods on a timely basis. This means

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

fewer idling production lines, higher velocity of sales, greater predictability, which in turn leads to higher productivity and better use of resources. In brief, ports and cities can run more efficiently.

By effectively preventing tax leakage, customs officials can maximise tax revenue without increasing staff. The solution offers visibility and assurance to private sector shippers and consignees, which means they can achieve the outcomes they desire for time critical sensitive and perishable goods.

8 NIST is targeting a reduction in number of days for cargo customs clearance of 50% to 80%.

NOVEMBER 2019 | 49

THE CARGO SHIPPER VIEW: MELBOURNE EXPORTS

TASMANIAN SHIPPERS HAVING TO SUCK UP COSTS Tasmanian shippers are positive despite increasing infrastructure charges being applied by terminal operators, as Iain MacIntyre discovers In the current financial year, the three container terminal operators at the Port of Melbourne – Patrick Terminals, DP World Australia and Victoria International Container Terminal (VICT) – have raised levies in the range of A$47.50-A$49.20 to A$82.50-A$85.30 (excluding GST) per container.

Tasmanian Transport Association executive director Michelle Harwood notes these surcharges were first implemented at the Port of Brisbane by Patrick Terminals in 2010, “as a means to recover investment associated with their container handling equipment automation.”

The executive added, “The stevedores who operate within the Port of Melbourne ... have progressively introduced and amended the charge dating back to 2015.”

Tasmanian Logistics Committee chairperson, Brett Charlton, observes that the introduction in early 2017 of the third terminal operator in Melbourne, VICT, has increased competitiveness from the carriers’ perspective but with the consequence of higher costs flowing to shippers.

“In order for the terminal operators to secure the vessel operations, they have had to reduce their costs due to market forces through to the shipping lines,” he stated, before adding, “But at the same time, they still have demands with regards to infrastructure development. Traditionally, they would increase their charges to the shipping lines, but the shipping lines are demanding a more competitive pricing structure. So, the terminal operators have to put an infrastructure surcharge in to shippers via their transport companies.”

Mr. Charlton further elaborated why cargo shippers are unhappy. “There are a lot of shippers that aren’t best pleased about it, because it is unregulated – at any given time, one or all of the terminal operators can say our infrastructure surcharge is now ‘this amount’,” he added.

We’re blessed with an A-class service – we have to pay for it of course – but you can have something at shipside at 3pm and have it delivered in Melbourne the next day by 11am or at Sydney that night or the night after On a positive note, Ms Harwood observes how the Port of Melbourne’s wharfage tariffs for full export containers comparatively decreased by 2.5% in 2019-2020, the fourthconsecutive annual reduction, while all other port company tariffs rose by 1.3%. in line with the CPI. However, another pending cost to Tasmanian shippers, albeit one which would also be felt nationwide if it was introduced, is the Australian Government’s proposed new biosecurity levy of A$10.02 per incoming container and A$1 per tonne for noncontainerised cargo.

Ms Harwood notes that Tasmanian shippers have other options for their shipments and are not beholden to transit through the Port of Melbourne. Of the non-bulk (containerised and roll-on/roll-off cargo) vessel services from Tasmania, she

50 | NOVEMBER 2019

notes that two services call at Melbourne with others using Station Pier (Victorian Ports Corporation), Sydney (Port Botany) and Geelong Port.

“On a TEU basis, the Port of Melbourne is cost-competitive and linked into the major freight flows around Australia. Comparative analysis with other ports shows that the Port of Melbourne overall is one of the lower cost ports in Australia,” she confirms.

While stating that “there are a lot of people who are not keen about any charges going up”, Mr. Charlton does not sense any drive among Tasmanian shippers to reroute their cargo through another mainland Australian port.

“If you look at Toll or SeaRoad, they’ve got their wharf operations in Melbourne and Tasmania set up for an overnight sailing. So, the markets are established around Melbourne for distribution through to Sydney and the trucking route is setup accordingly. TT-Lines once tried Sydney and we did have Swire calling down here, going from Hobart to Sydney, but that didn’t take off.”

He further adds, “We’re blessed with an A-class service – we have to pay for it of course – but you can have something at shipside at 3pm and have it delivered in Melbourne the next day by 11am or at Sydney that night or the night after.”

Also noting significant recent infrastructure investment to accommodate Tasmanian’s growing volume and value of cargo, Mr. Charlton expresses positivity for the state’s future trade. “Our volume growth used to be tracking at 2% per annum and over the past two years has been tracking at 4% per annum.

The business confidence here in Tasmania is as strong at is has ever been and documented as the strongest in Australia.”

8 Tasmanian Logistics Committee chairperson Brett Charlton

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

PRODUCTS & SERVICES: DIRECTORY

3690 N Church Avenue Louisville, MS 39339 USA +1 662 773 3421 contactus@taylorbigred.com www.taylorbigred.com

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

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/news

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/

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

Scheldedijk 30 / Haven 1025 2070 Zwijndrecht – Belgium T: +32 (0)3 250 52 11 Info.deme@deme-group.com 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.

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!

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

D REDGING EQUIPMENT

LASE Industrielle Lasertechnik GmbH

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.

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

Email: info@gantrex.com Tel: +32 67 88 80 30 www.gantrex.com

DREDGING

www.mcceexpo.com

YOU CAN DEPEND ON BIG RED!

C RANE COMPONENTS

TO

C OMPONENTS

9 JUNE Southampton 112020 United Kingdom

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.

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

C RANE RAIL SOLUTIONS

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 ARGO HANDLING SYSTEMS

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

Taylor Machine Works, Inc.

HPC Hamburg Port Consulting GmbH

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

C ONSULTING ENGINEERS

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

• 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

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

NOVEMBER 2019 | 51

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.

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

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

Email: info(at)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

52 | NOVEMBER 2019

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

S IDELIFTER/SIDE LOADERS

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

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

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

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.

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

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

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

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

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

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

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

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

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

PRODUCTS & SERVICES: DIRECTORY

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

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

To advertise in the

Port Strategy Directory contact Tim Hills on

+44 1329 825335 www.portstrategy.com

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

5 Sir Gil Simpson Drive Christchurch 8053 New Zealand PO Box 20152 E: info@jadelogistics.com W: www.jadelogistics.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

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

9 JUNE Southampton 112020 United Kingdom TO

www.mcceexpo.com

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

T RACTORS

ELME Spreader AB ELME Spreader, world’s leading independent spreader manufacturer supports companies worldwide with container handling solutions that makes work easier and more profitable. Over 18,000 spreaders have been attached to lift trucks, reach stackers, straddle carriers and cranes.

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

T ERMINAL OPERATING SUPPORT

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 OPERATING SYSTEMS

T ERMINAL OPERATING SYSTEMS

S PREADERS

Bromma Conquip 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

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

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

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

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

Benschop – The Netherlands Tel. +31 348 45 92 11 terbergspecialvehicles.com

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NOVEMBER 2019 | 53

POSTSCRIPT

GREECE: WHEN WILL PPP RESISTANCE END?

Greece has implemented major port PPP schemes but there has been a lot of resistance along the way. Now the New Democracy Party is in power with a majority government will the brakes be taken off?

Some progress has been made in Piraeus but overall there remains a lot of work to be done to engender a real investor-friendly climate

54 | NOVEMBER 2019

What does an investor expect from a public private partnership (PPP) in the port sector? To make money of course albeit within the ‘rules’ set under the terms of the governing concession agreement and within the framework of any port masterplan. But it seems this is more of a challenge in Greece with PPP’s suffering from what can be interpreted as an unusual degree of tinkering as highlighted recently in the port of Piraeus.

Greece’s Committee of Planning and Development of Ports approved a range of expansion plans for the port of Piraeus, valued at USD673 million, but, for the time being at least, turned down the plans of COSCO Shipping, the port’s majority owner (51%), to realise a major expansion of container terminal capacity.

In business terms, given that COSCO is satisfied with its business plan for the new container terminal expansion, there seems to be no real commercial justification for the Committee not to sanction the plan.

The motivation to do so appears to originate more from what can be termed wider considerations.

It is a matter of record that Greece under the previous left wing Syriza Government was effectively dragged to the table by the EU to privatise key infrastructure including its main ports – Piraeus and Thessaloniki – as a primary condition of its massive economic bail-out. Prior to this there was resistance all the way down the line to the idea of implementing PPPs and then when this became inevitable so began a process of bureaucratising PPPs from which port sector privatisations continue to suffer today.

Indicative of this when the left wing Syriza party came to power in 2015, Alexis Tsipras, the new prime minister, appointed Thodoris Dritsas as Shipping Minister who promptly announced, “The port sell-off stops here!”

This didn’t last long, however, with the Syriza Government compelled to implement the major port sell offs as part of the new EU July 2015 bailout agreement. The response to this on the part of government, however, in the case of Piraeus was to tinker with the terms of the original deal which included removing a large non-operational section of the site from the opportunity.

Then came the setting up of a port authority whose function, COSCO complained at the time, overlapped with that of several existing bodies and created

8 Piraeus has just had a large slice of its expansion plans approved but its container terminal expansion plans still face a bureaucratic red light

unnecessary bureaucracy. And all the time, prior to COSCO signing the deal, in April 2016, Mr Drisitas and others fought the deal inside government. There was then a hiatus whereby Mr Drisitas took until 29 June to submit the contract to Parliament for approval.

When it was submitted the text of the deal contained changes that COSCO had not seen before – a major one being that the government would no longer have to abide by 90-day deadlines for granting licences to COSCO’s activities thus creating the opportunity for various ministries to delay projects. This led to Angelos Karakostas, acting on behalf of COSCO, writing a pointed letter to lawmakers suggesting that someone in government was “completely reversing” the deal “unilaterally.”

The terms of the original contract were hurriedly restored and the deal was eventually ratified on June 30, 2016. Under the terms of the whole port privatisation COSCO purchased 51 per cent of Piraeus for USD280.5 million and contingent on completing investments worth USD350 million over the next decade it has the right to purchase a further 16 per cent for USD88 million after a five-year period.

COSCO formally signed the agreement that made it the 51 per cent owner of Piraeus on 10 August 2016 with the signing ceremony taking place at the Athens Stock Exchange.

There has, of course, recently been a change of government in Greece – the centre right New Democracy party assuming power with promises of progressive economic reform. So far, however, this does not seem to have translated into PPP’s “without strings attached.” Piraeus has taken a step forward with part of its expansion plans approved but the justification for holding up its container terminal expansion does not appear to have been formulated on pure business grounds.

Generally, the jury is still out on exactly what New Democracy will do to oil the wheels of progress in Greece’s port sector and facilitate the primary goal of investors, to generate reasonable returns on the substantial investments made.

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

CONTAINER TERMINALS: Paths to Profitability

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Container Terminals: Paths to Profitability

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Trends and Risks in Container Port Demand The Container Shipping Market Terminal Investment Trends Forecast Demand Growth Winning Competitive Strategies Customer Behaviour in the Container Terminal Industry Servicing Customers

5 Effective Pricing for Stevedoring Services 5 Competitive Assessment of Port-Wide Service and Cost Levels 5 How to Make a Comparative Port Cost Analysis 5 Assessing the Real Risk of Losing Customers 5 Competing for Transshipment Volumes 5 Building Revenue Robustness

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