Port Strategy November 2020

NOVEMBER 2020 VOL 1020 ISSUE 9 portstrategy.com

Congestion calls for collaboration | BRI: finance or debt trap? | Santos battle | RFID: building momentum

NEW DAWN FOR BANGLADESH BUILDING BOX TERMINAL REVENUES BREXIT: THE CLOCK TICKS

PORTSTRATEGY INSIGHT FOR PORT EXECUTIVES

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

VIEWPOINT MIKE MUNDY

Bangladesh Port boom to prove instructive

A new dawn is underway in Bangladesh’s port sector – five key projects are now being actively progressed to add major new port capacity. Within these scale initiatives, however, significant challenges remain, not the least of which are undertaking overall development in a structured way and with due regard to meeting sustainability requirements

Bangladesh is the largest least developed country (LDC), according to the United Nations, in terms of population and economic size but even with the restraining influence of COVID-19 it is expected to graduate from this status by the mid-2020s.

“Bangladesh has seen broad-based gains in health, education, infant mortality and life expectancy,” says Daniel Gay, LDC expert in UN DESA’s Development Policy and Analysis Division. “These have in turn driven economic growth, and latterly reduced economic vulnerability, so it’s really a success story.”

As the UN points out: “Since 1996 the per capita national income in Bangladesh has outstripped the LDC average and has risen above the threshold used by the CDP,” (an independent panel of development experts from around the world that meet every three years to review the list of LDCs). “The economy,” the UN elaborates, “has developed largely through textile and garment exports. Remittances, natural gas, shipbuilding and seafood as well as information communications and pharmaceuticals which are all emerging sources of foreign exchange and economic growth.”

Overall, it is manifestly clear that Bangladesh is on an upward path and furthermore, as our lead feature this month explains – page 21, it is fast removing the obstacles that have in the past impeded the installation of modern new port capacity. Five major new port projects are now being progressed and the first new containerport project involving foreign expertise has just been announced. Others will follow.

Nevertheless, Bangladesh still faces immense challenges in putting in place the right port and connecting hinterland infrastructure. Not the least of these is achieving this in a sustainable, eco-friendly, way sympathetic to the human condition as well as trade requirements.

Bangladesh holds 165 million people in an area smaller than Illinois.

Chittagong, the largest of the eight administrative areas of Bangladesh and home to its main port, which presently handles over 90 per cent of the country’s annual trade, contains an estimated 40 million people.

Couple this reality with the fact that most of the country’s land area is no higher above sea level than New York City, and during the rainy season more than one-fifth of the country can be flooded at once, then the scale of Bangladesh’s sustainable port and related infrastructure development challenge becomes readily apparent.

Bangladesh’s transition to a modern port system promises to offer many interesting lessons to other developing nations seeking to pursue a similar path.

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

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NOVEMBER 2020 | 3

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om/enews

CONTENTS portstrategy.com

NOVEMBER 2020 VOL 1020 ISSUE 9

Congestion calls for collaboration | BRI: finance or debt trap? | Santos battle | RFID: building momentum

NOVEMBER 2020 FEATURE ARTICLES

NEWS 16 Virtual War

21 Bangladesh Boom

BACTSSA to sue

Five key projects

16 IPO for MMC

25 Robust Revenues

Offering on horizon?

Creativity in challenging times

17 Lamu awaits‌ ‌green light

28 C ongestion Collaboration

17 Greek Gift

NEW DAWN FOR BANGLADESH

COVID-19 or other factors?

Four interested

BUILDING BOX TERMINAL REVENUES BREXIT: THE CLOCK TICKS

On the cover

19 Selective Spain

Patenga, 14km south of Chittagong, is one of five sites where major new port capacity is to be installed in Bangladesh

19 T urkish Delight

31 B REXIT clock ticking

Investing is on the up

Are UK ports ready?

QTerminals buying

34 Timing is the Key

11 On a Mission

Complexities in Northern Ireland

PV50 port aims

11 Double dipping

37 F inance or Debt Trap?

Questions down under

BRI issues in Africa

11 Plus Two

DPW Santos grows

13 Tyre Reductions

is a proud support of Greenport and GreenPort Congress

13 Cargotec Merger

RFID technology for ports

13 Gavle Efficiencies

Targeting autonomous vehicles

Piraeus2021 &

The Congress is a meeting point that provides senior executives with the solutions they require to meet regulatory and operational environmental challenges.

Stay in touch at greenport.com

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43 B uilding Momentum

Taking on Konecranes

GREENPORT Cruise Congress

Online portstrategy.com 5 Latest news 5 Comment & analysis 5 Industry database 5 Events Online Social Media links Weekly E-News portstrategy.com LinkedIn Sign up for FREE at: 5 Latest news PortStrategy 5www.portstrategy.com/enews Comment & analysis portstrategy 5 Industry database YouTube 5 Events

Bridge vs. tunnel for Santos

Designing benefits

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Join leading port executives www.greenport.com/congress

39 B attle Lines Forming

46 Advancing at Pace Innovative empty container handlers

REGULARS

45 G reat Expectations

15 Economists Fog

Transhipment capacity in Great Nicobar

Carriers do it right

Social Media links LinkedIn PortStrategy 15 Rent Lessons portstrategy Melbourne experience YouTube Social Media 17 Tlinks he R Word LinkedIn Resiliency needed PortStrategy portstrategy YouTube

17 E-Commerce Factors Differentiating service

19 UK Freeports

Sustainable opportunity

52 Postscript

The Congress is a meeting point that provides senior executives with the solutions they require to meet regulatory and operational environmental challenges. Stay in touch at greenport.com

Wrong route to market in Ghana?

The Congress is a meeting point that provides senior executives with the solutions they require to meet regulatory and operational environmental challenges. Stay in touch at greenport.com Join leading port executives in Athens, Greece from 14-16 October 2019 www.greenport.com/congress

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

The is a executives meeting JoinCongress leading port point that provides senior in Athens, Greece from executives with the 14-16 October 2019solutions they require to meet regulatory www.greenport.com/congress and operational environmental challenges. Stay in touch at greenport.com Join leading port executives in Athens, Greece from 14-16 October 2019 www.greenport.com/congress

NOVEMBER 2020 | 5

NEWS REVIEW A virtual war has broken out in Puerto Nuevo, the main Argentine port for containers and general cargo. Buenos Aires Container Terminal Services SA (BACTSSA), which is owned by Hutchison Port Holdings, is suing the port authority, Administracion General de Puertos (AGP), over the discontinuation of a contract to operate containers.

In June 2020, AGP cancelled the planned tender to merge three terminals into one large operation for Puerto Nuevo and instead extended the contracts by two years (up to May 2022) for two box terminal operators – Terminales Rio della Plata (TRP) and Terminal 4 (AP Moller Terminals) – but not BACTSSA, whose concession expires in May 2021.

With volumes through Buenos Aires (which also includes the Exolgan terminal at Docks Sul) plummeting owing to an ailing economy and COVID-19, the feeling inside AGP is that there is not enough volume for three terminals in Puerto Nuevo. Hence moves for the reduction to two facilities.

However, BACTSSA is not going to leave quietly. Its lawyers have issued writs to AGP, claiming commitments made under the previous government of Maurcio Macri are not being honoured.

Alberto Fernandez took over the presidency in January 2020 with the backing of Argentina’s powerful port trade unions, including (Fempinra and SUPA) and his appointee to head up AGP, Jose Beni, wants to keep those unions onside.

BRIEFS PSA takes Dammam

PSA International plans to create a 7.5 million TEU hub in Saudi Arabia. Saudi Global Ports, the company’s local subsidiary is now managing both the First and Second Container Terminals in King Abdulaziz Port Dammam, following the signing of a 30year build, operate and transfer agreement earlier this year. The previous second operator in Dammam, Hutchison Ports, lost its concession and PSA gained a two-terminal concession.

6 | NOVEMBER 2020

BACTSSA WILL NOT GO QUIETLY

BACTSSA currently has only one deepsea service – the ESA East Asia service of Evergreen and Cosco – and now the other terminals are circling, hoping to pick up this service for themselves.

“It was thought by many that BACTSSA would go without much of a fight but they are telling Cosco that they will get an

8 BACTSSA is not going to walk away quietly

extension like the other operators by using the threat of legal action, “said one BA terminal executive, who did not wish to be identified.

“It was also believed that if and when BACTSSA closed its ESA service would go to the ‘overflow’ port of La Plata [where ICTSI’s Tecplata is building its presence],

but then the port labour unions got involved and a new game of chess began” Indeed, a number of “heavy” incidents have been witnessed in Puerto Nuevo in recent months, with unions mounting a two day blockade marred by shootings (one worker was shot in the foot), and vandalism.

And the “new game of chess” involves, according to several reliable sources, behind-thescenes deals involving unions, terminals and AGP. With regional elections on the horizon, a “logical move out to Tecplata cannot happen,” said one BA based consultant.

One veteran Puerto Nuevo insider said that the likely conclusion is that TRP will hand over the Samba service (which it fought so hard to wrest from T-4 a few months ago, with union backing) to T-4, and will take the ESA service to its quays, or operate it out of BACTSSA T-5 using the berth as a semi-public berth.

MMC IPO ON THE AGENDA MMC Corp of Malaysia is reportedly in talks with advisors to revive an initial public offering plan for its port assets which include the major container transhipment hub Pelabuhan Tanjung Pelepas, Johor Port in the southern state, Northport in central Selangor and Penang Port to the north of Kuala Lumpur.

According to Bloomberg, the Kuala Lumpur listed company,

controlled by Malaysian entrepreneur Syed Mokhtar Al-Bukhary, has the objective of raising around US$1 billion with the listing potentially taking place at the end of next year. Such a listing would rank it among the largest undertaken in Malaysia.

MMC was known to be considering an IPO for its ports business in 2017-18 but this never materialised. In the interim

it is also thought to have held talks for a part or whole sale of the ports division with private interests but with the majority of its port businesses now operating at a mature level combined with price expectations this route also did not prove fruitful.

No details have emerged yet as to the potential size of the offering and the timeline is also yet to ‘written in stone.’

Koper Expanding

Oakland Infra’ Plans

ANL Pressing on Size

The Port of Koper is extending the southern part of its Pier I. The first phase of the project involves an expansion of the quay by 98.5m in length (bringing the total to 695m) and 34.4m in width. Construction is scheduled for completion by March 2021. Phase II will see additional container stacking space of 24,830m2 by 2022.

Phase I will take annual capacity to 1.3 million TEU per annum, with Phase II raising this to 1.5 million TEU.

The Port of Oakland, USA has confirmed it currently has 15 transport related infrastructure and software projects underway. Three new container cranes are due to arrive at the Oakland International Container Terminal before the end of 2020. The TraPac terminal also has plans to raise cranes or bring in new, bigger units in 2021. Longer-term the redevelopment of the former Oakland Army Base is planned.

ANL (part of CMA CGM) is telling ports in Australia to prepare for the arrival of larger ships. The company believes Australia needs “blue sky thinking”, as ships are getting bigger but Australia is lagging behind, which puts the country’s competitiveness under threat.

Director of operations Andrew Jena commented: “Big ships are already here, 20,000+ TEU vessels operate on large trunk routes, and Australia has to prepare for the future.

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

NEWS REVIEW

Mid-October - the Hellenic Republic Asset Development Fund (HRADF) reported four consortia had submitted Expressions of Interest relating to the acquisition of a majority stake in the Alexandroupolis Port Authority, one of three Greek ports presently being offered for sale.

The groups comprise: the port operator Euroports, the Copelouzos Group, a Greek construction company together with the international terminal operator Bollore; US investment holding Quintana Infrastructure and Development and Thessaloniki Port Authority, operator of the recently privatised port of Thessaloniki.

Euroports was also recently the subject of a sale process – sold in 2019 by Antin Infrastructure, Arcus Infrastructure and Brookfield to a consortium including the Flanders investment company PMV. With Euroports in the Alexandroupolis bid is US investment company Black Summit Financial Group,

LAMU NEEDED FOR LAPPSET

BRIEFS ADP’s New Logistics Buy

Source: Business Daily

Lamu Port is a key infrastructure project of the Kenya Vision 2030 initiative in Kenya. The objective is for a new transport corridor - Lamu Port-South SudanEthiopia-Transport (LAPPSET) - to link the newly-constructed Port of Lamu with key inland locations and ultimately the borders of southern Sudan and Ethiopia.

The opening-up of northern Kenya is to help support movement of existing natural resources like oil and coal and attract some cargo that is traditionally using the ports of Sudan, Djibouti and Mombasa.

Indeed, the Kenya Ports Authority (KPA) has hopes that the Lamu traffic could eventually reach 23.9 million tonnes.

By mid-2020, the Phase I development of three new berths were completed, which are targeting container, conventional and bulk cargoes. At this time, it was also confirmed by the LAPPSET authority that the two container yards were also more than 70 per cent completed.

This progress update confirmed the project was five months ahead of schedule, the impact of COVID-19 is still the unknown factor for the next steps.

As of late October 2020, no further progress updates have

been confirmed, with the Director General of the LAPSSET Authority acknowledging that commissioning of the berths “remains uncertain,” because of the global pandemic.

Lamu Port and the LAPSSET corridor has been underway for around a decade, if taking into account the original project assessment. Construction of the newly-completed berths began in December 2016. A further 29 berths, in total, are part of the overall blueprint for this port.

In addition, a 10km dualcarriageway road linking the port to the main highway is complete, meaning it can be used for moving cargo through Garissa – Thika Nairobi or via Malindi. Plus, the 505km Lapsset Highway from

8 Lamu Port awaits commissioning formalities

Isiolo to Moyale was completed over four years ago, so is waiting for the port to be commissioned.

The KPA also reports that the World Bank approved a US$500 million loan for the construction of the section from Lokichor and Nakadok ultimately linking Kenya to Juba South Sudan.

It seems clear that this major project has many of the necessary building blocks in place – modern port infrastructure, efficient inland connectivity, funding and a range of target hinterland markets. Yet until the port is commissioned, this potential cannot be fully assessed.

ALEXANDROUPOLIS INTEREST logistics company EFA Group and Greek developer GEK Terna.

Alexandroupolis is located in north-eastern Greece with Bulgaria to the north and Turkey to the west. It is directly linked to Egnatia Odos – the highway that runs across northern Greece – and the railway line to Thessaloniki, and to the Turkish and Bulgarian borders. It is in close proximity to the Trans Adriatic Pipeline (TAP) and the route of the Interconnector Greece-Bulgaria (IGB), both of which will transport natural gas upon completion. Alexandropoulis is seen as of strong interest in conjunction with plans to import liquefied natural gas (LNG) into the Balkans through the construction of an offshore LNG gasification station by US and Greek business interests.

Part of the interest in the port also stems from political/strategic considerations. A Fact Sheet

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

produced by the US Embassy and Consulate in Greece states: “The port of Alexandroupolis is well positioned to support exercises in the region due to its existing infrastructure and strategic location.”

It is clear that interest in this position has grown as Russia has sought to expand its influence in the region. One visible indicator of this being the increased presence of Russian naval vessels in the area – as evidenced by regular calls of Russian military vessels at the port of Piraeus.

The port of Alexandroupolis has constraints in terms of draught in particular – 6.5m – but this is not seen as problematic by the USA and NATO according to the US Embassy in Greece which further notes it has a long quay, 500m, which has a proven ability to support military operations.

Kavala and Igoumenitsa are the other port privatisation projects.

Abu Dhabi Ports has acquired another logistics service provider as part of its efforts to offer more supply chain logistics solutions. MICCO Logistics will now be integrated into Abu Dhabi Ports Logistics.

MICCO was established in 1978, primarily to serve the oil and gas industries, and has been involved with 80 per cent of Abu Dhabi’s total oil, gas and petrochemicals projects. ADP made the acquisition to compete on the regional and global stage as a provider of holistic logistics solutions.

HHLA Enters Adriatic

Hamburger Hafen und Logistik AG (HHLA) has entered the Adriatic market, buying a majority stake (50.01%) of the 280,000m2 multi-function terminal, Piattaforma Logistica Trieste (PLT) located within the Italian port of Trieste. Subject to necessary approvals, the project is expected to close in January 2021. The facility represents HHLA’s third international project after involvement in the ports of Odessa and Tallinn.

Deeper Halifax

The Port of Halifax in East Canada has confirmed that its South End Container terminal extension is now fully operational and is the longest and deepest berth in the region.

The facility is operated by PSA Halifax and now offers 800m of continuous quay with a water depth of 16m. A new Super Post-Panamax (SPPX) crane has been installed bringing the total number of units of this size classification to five.

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NEWS REVIEW

SPAIN: SELECTIVE TARIFF REDUCTIONS AND ONGOING INVESTMENT Despite declines in traffic during 2020 brought about by the coronavirus pandemic, Spanish ports continue to invest for the future, as the following summary confirms for ports outside the major container facilities of Algeciras, Barcelona and Valencia.

Santander - a major importexport hub for finished vehicles, is investing €16 million in building a new 70,000m² multi-level storage facility to handle new cars. Potentially, a further three facilities of this kind could be added later.

Sagunto - another port that has benefited from new investment that has also allowed it to become a major player in the finished vehicles sector. Up to 2019, owner Valencia Port has invested €360 million in upgrades and now plans to finance a further €136 million of improvements as part of its 2020-2025 Infrastructure Plan.

Almería Port Authority (APA) – releasing a tender for expansion of its Levante Pier and also for necessary infrastructures on the seafront that runs from the quay to the San Miguel breakwater.

Cadiz Bay Port Authority (APBC) - continues to undertake the necessary work to enable concessionaire Concasa to be able to start handling container traffic at its new terminal in 2021. The focus

Gladstone Fenders

Australia’s Gladstone port has confirmed it is undergoing a multi-million fender upgrade which will enable it to service larger bulk carriers. The investment is a “future-proof” measure that will include new marine pylons and securing equipment at berths importing and exporting a range of cargoes including dry bulk, general cargo, grain, containers and bulk liquids.

The work is due to start in March 2021.

8 Francisco Toldo is not expecting across-the-board tariff reductions at ports in Spain but selective initiatives, meanwhile infrastructure investment is continuing

of the work is adapting La Galeona dock to be able to accommodate the super post-Panamax gantry cranes that

the operator currently has at Reina Sofía dock.

Separately, Francisco Toledo, the president of the National

Ports Authority has stressed in a meeting with representatives of the Platform of Investors in Spanish Ports (PIPE) that there is little prospect in the near future of across the board port tariffs reductions being made in line with requests from existing operators.

Instead, Toledo has promised to apply selective reductions as and where these make sense.

However, he has asked for additional investment to be made in state ports by concessionaires. A plan drawn up by the national government envisages €4.7 billion of private sector investment being made in the ports over the next four years as a means of rebooting the national economy.

QTERMINALS TURKISH ACQUISITION SEALED Global Ports Holding (GPH), known for its strong interest in the cruise sector, has signed an agreement to sell the Turkish company Ortadogu Antalya Liman Isletmeleri (Port Akdeniz), which operates the Turkish port of Akdeniz-Antalya port under a concession agreement, to Qatar-based QTerminals for US$140 million.

The price and an EBITDA

multiple of 3.7 reflects the relatively short time left on the concession agreement which is set to expire in 2028.

Formal closing of the transaction is expected by the end of the year.

In 2019 Port Akdeniz handled a container volume of 150.9kTEU and a combined general and dry bulk cargo volume of 589,000 tonnes providing a revenue of

US$47.5 million and EBITDA of 37.4m. GPH’s focus going forward will be on the international cruise market where it is known to have strong growth ambitions. For QTerminals this can be seen as a significant step in enlarging its presence in the international ports market.

Coastal Shipping

Mackay’s cash boost

APMT Finland

The future of coastal shipping in Australia is the subject of a discussion paper released by the country’s Department of Infrastructure. The paper on potential coastal trading reform for cargo vessels encouraged feedback on key points such as general and temporary licences for the carriage of coastal cargo, removal of the five-voyage minimum rule and proposed timeframes for reform. Suggestions from stakeholders are invited.

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

The Queensland port of Mackay is to get a A$17 million injection for infrastructure from the state government.

The capital programme for the next 12 months includes construction of a new tug berth, upgrades to Wharves 1 and 4, seawall repairs and essential maintenance dredging. The projects will support Mackay’s capability to handle diversified trade and position the port to handle new breakbulk volumes..

BRIEFS Larger cranes are being introduced at two terminals in Finland in which APM Terminals is involved. Three additional ship-to-shore units are now operational at two joint-venture terminals, namely the MultiLink Terminals in Kotka and Helsinki. The crane upgrade programme in Helsinki is part of the ‘Door2Lng’ project and co-financed by the European Union from the Connecting Europe Facility, with two cranes relocating to Kotka.

NOVEMBER 2020 | 9

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NEWS REVIEW The recent Connecticut Maritime Association (CMA) virtual conference, produced by the Informaconnect organization, concluded that that lack of infrastructure is a huge impediment to the adaptation of alternative fuels for commercial shipping in the US. With aggressive decarbonisation targets in place for 2030 and beyond, there will be a need to switch away from fossil fuels. One conference presentation of note featured Margaret Doyle, a veteran executive with recent involvement in construction of LNG fuelling capabilities at Jacksonville, on Florida’s Atlantic coast and used by liner vessels in Jones Act trades (and set to be a hub for regional LNG barging).

Doyle explained her outreach efforts to the port community including her recent work with Eagle LNG (a supplier to Crowley Maritime, and others, based in Jacksonville) and Harvey Gulf Marine (an owner of LNG- fuelled offshore supply vessels). She said: “There were so many times when it was pick and choose whether ports were prepared” before adding an interesting observation from her recent work with the International Maritime

PV-50 IS ON A MISSION

Poti Project is on…

Organization on regulations related to LNG fuelling. “From what I saw…there was no presence of US ports in any of those meetings. “ In 2021, she will be unveiling her new non-profit initiative dubbed PortVision 2050, referencing the year when shipping is tasked by the IMO with reducing its greenhouse gas emissions by 50% from 2007 levels.

She said that the mission of “PV-50” is to create a dialogue involving US ports to understand the IMO 2030 and 2050 efforts to reduce greenhouse gas emissions from ships. “It’s basically to get the ports ready… now’s the time do it,” she explained, adding, “North

8 Eagle LNG is constructing a new export facility in Jacksonville (FL), but there is little other involvement from US ports, according to one industry veteran

American ports have to be ready… they need to understand what’s coming out of the IMO.” Noting the long-term nature of infrastructure buildout, she said that the discussions with ports and other stakeholders in the fuelling business (LNG, but also possibly ammonia and methanol) needs to start now. “We are trying to get folks to sit down and have a dialogue about what do we want the U.S. infrastructure for meeting the IMO fuelling mandates to look like.”

OZ ‘DOUBLE DIPPING’ QUESTIONS ASKED Although an agreement between the Maritime Union of Australia (MUA) and Patrick Terminals to start new negotiations has been reached, crippling shipping line fees continue according to Australian freight forwarders and shippers.

As of October a number of international shipping lines are maintaining a ‘Port Botany Congestion Surcharge,’ which ranges from between US$285 and US$350 per TEU, according to the Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA).

Both FTA and APSA are questioning whether the shipping lines are potentially “doubledipping” by gaining penalty revenue from both their supplier (stevedore) and customer (exporter, importer or freight forwarder).

According to ocean carrier representatives, Shipping

BRIEFS

Australia Limited (SAL), talks to resolve the industrial action are commencing, with a deadline for reaching an agreement at the start of December.

Patrick Terminals has said that its focus now is to clear the backlog of containers that has developed due to the longrunning dispute in Sydney and Melbourne and to work towards resuming normal operations.

Yet while SAL acknowledges that the landside position to and from Sydney remains extremely disrupted, it notes that the

ongoing application of charges by shipping lines relating to congestion are leading to significant frustration for Australian shippers and freight forwarders.

As a result, both FTA and APSA have confirmed an intention to lead advocacy for reform to address what are regarded as unfair charging regimes, including the explosion of shipping line surcharges, stevedore-imposed Infrastructure Surcharges and empty container park transport booking fees.

PLUS TWO FOR SANTOS DP World Santos has just added two new CMA CGM services to its roster. In October 2020, the French carrier’s Brazex Loop 2 (to the Caribbean) and the Nexco cabotage service of Mercosul Line (a fully-owned CMA CGM Brazilian flag subsidiary), began

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

calling at Santos’s newest container terminal.

Already in 2020 DP World Santos has been averaging around 74,000TEU throughput per month, reflecting an increase of more than 30 per cent over last year.

APM Terminals Poti and Poti New Terminals Corporation (POTC) of Georgia have confirmed an agreement has been signed for the joint development of a new bulk cargo facility on the north side of the existing Poti Sea Port.

APM Terminals has said it will invest in the construction of a new breakwater, 400m of quay and dredging to generate a maximum vessel draft of 13.5m. PNTC will invest in building a new dry and bulk cargo facility including a large storage yard and rail connection.

….and ADC complains

While Poti proceeds, however, the Anaklia Development Consortium (ADC), the company originally selected by the government of Georgia to develop the new Anaklia Port project, has released a statement which claims the government ran a campaign ‘to undermine the project by dissuading potential project investors, lenders, contractors and suppliers from joining the project in order to kill it’. Essentially, the ADC Supervisory Board alleges that the Georgian government strangled ADC’s ability to develop through manufacturing all sorts of excuses for not wanting to see various investors, lenders and partners involved in the project. It says: “… the government really only had one purpose: to choke the project to death by scaring away everybody who might have an interest in supporting it.” ADC’s view is, however, not entirely supported by wider industry. The project has had its critics in terms of its ability to generate sufficient cargo volumes and revenues.

NOVEMBER 2020 | 11

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NEWS REVIEW

TYRES FOR REDUCED EMISSIONS AND COST Continental’s new truck tyre range has been designed to reduce CO2 emissions and to reduce operating costs.

Continental reports the Conti EcoRegional HS3 and HD3 tyres have been designed with a new manufacturing process and tread designs.

The HS3 includes an optimised tread surface pattern for the ground contact area, modified tread groove geometry, reduced sipe width (the sipes in the tread ribs offer extra grip edges essential to traction) and W-tread groove technology designed to withstand even abrasion. The net result, according to Continental, is reduced fuel consumption and extended mileage.

The HD3 uses Conti Interlock Technology in the form of a new tread compound which

offers low rolling resistance but without affecting mileage performance.

8 Continental’s new EcoRegional range of HS3 and HD3 tyres are available in five sizes for steering and drive axles

CARGOTEC AND KONECRANES MERGING Cargotec and Konecranes are merging to better focus on development of automation, robotics, electrification and digitalisation and sustainable material flow.

In 2019, the two companies had combined sales of approximately €7 billion and operating profits of around €565 million. However, in March 2020, Konecranes stated that it was going to have to commence with temporary staff reductions due to the impact of the COVID-19 pandemic.

This development may have had some impact on the decision to merge, which will see

Konecranes be merged into Cargotec. Mika Vehviläinen, CEO, Cargotec, provided further clarification on the decision being taken. He said: “The future company will have enhanced opportunities to improve the efficiency in customers’ operations and shape the whole industry forward to a more sustainable and intelligent one. Together we are stronger, and our combined R&D resources will enable us to accelerate innovation in automation, robotics, electrification and digitalisation.”

The view was endorsed from the side of Konecranes too,

as Rob Smith, CEO, outlined: “The timing is right, and the logic and fit of this combination are compelling.

Konecranes looks forward to starting this journey together with Cargotec.”

The future company is aiming to generate more than 10 per cent annual operating profits, supported by synergies of approximately €100 million per annum, expected to be achieved, in full, within three years from the completion of the merger.

Currently, there has been no new named released for the merged company entity.

AUTONOMOUS VEHICLES IN GÄVLE A new feasibility is being undertaken in the Swedish Port of Gävle to investigate how transport flows can be made more efficient.

The port, which is part of Yilport’s growing international portfolio of 22 facilities, has commissioned Gothenburgheadquartered Semcon to assess the potential role of autonomous automated vehicles to reduce costs, while improving operational safety and quality.

David Darwall, Global Business Manager Applied Autonomy at Semcon, explained further.

“We have been commissioned to map and analyse the benefits and values autonomous solutions could provide to Yilport for a specific logistics process. The feasibility study will focus on a single process, but the vision is to build a fully autonomous logistics production solution for Yilport, which is very exciting.

Autonomous solutions not only optimise operational costs

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– they also contribute to improved safety, quality and traceability Håkan Bergström, Sales Director Yilport Nordic explained the rationale for the commission.

“Automation in ports is common, but no one has really come up with a solution to get it to work in conjunction with other traffic,” he said.

Semcon will map all parts of the process, costs, needs and challenges in order to understand the potential in depth.

COVID-19 detection

by Nutech The Nuctech thermographic camera is designed to detect the presence of fever, and allied to this Covid-19, in truck drivers entering ports.

The scanning equipment assesses the body temperature of truck drivers through its Fever Block infra-red face temperature detection system.

Temperature can be measured in real time without making any physical contact.

A recent application is with Belarusian Customs who are employing the Nuctech system at its border truck clearance facility as part of efforts intended to control the spread of Covid-19.

Ben Nghe boxhunter RTGs Vietnam’s Ben Nghe Port has placed an order for two new Boxhunter RTG cranes.

With two Konecranes Boxhunter RTGs already in service since 2017, Ben Nghe is due to receive two more units in April 2021.

The fully electric 16-wheel machines will have the ability to stack containers one-over-five with an operating span of six container rows plus truck lane.

Key design features include: an eco-lifting system, GPS-based auto-steering and TRUCONNECT remote technical support.

PPAP opts for Smartpower RTGs Cambodia’s Phnom Penh Autonomous Port (PPAP) is to receive four new Kalmar SmartPower RTGs. Delivery of the new equipment is scheduled for the third quarter of 2021 with all units intended for use at the LM17 Container Terminal.

With its smaller diesel engine and intelligent power management system, Kalmar states the SmartPower RTG consumes up to 10 litres less fuel per hour compared to other diesel-powered RTGs.

NOVEMBER 2020 | 13

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THEECONOMIST BEN HACKETT

THE ECONOMIST’S FOG The life of an economist is currently about as satisfying as a that of a scientist trying to understand COVID-19. When we think that we have it nailed down and that our projections are based on fundamentally solid numbers, things happen, and we realise that we are enveloped by a fog of unclarity and apprehension.

The good old days were bad enough, but the current situation beggar’s belief and lack of certainty. It seems that the only sector of the industry that is getting it right, a first in decades, is the shipping sector. It has managed to control its capacity despite its instinct for market share as the answer to its financial problems. In the midst of the global COVID-19 pandemic resulting in the virtual shutdown of production and supposedly consumption for three months, freight rates have risen to the point of smug satisfaction with strong profitability.

8 Economists are struggling with the COVID-19 fog, but the shipping industry is getting it right

In the US, the “third” estimate of GDP released was based on more complete source data than were available for the “second” estimate issued in August. In the second estimate, the decrease in real GDP was 31.7 percent. The upward revision with the third estimate primarily reflected an upward revision to personal

consumption expenditures (PCE) that was partly offset by downward revisions to exports and to non-residential fixed investment.

Seasonally adjusted GDP decreased by 12.1 per cent in the Euro area and by 11.9 per cent in the EU, compared with the previous quarter, according to a

preliminary flash estimate published by Eurostat, the statistical office of the European Union. These were by far the sharpest declines observed since time series started in 1995. Note that these figures are not on an annualised basis.

We understand that the collapse of the economy was self-imposed worldwide, except in Sweden. What is remarkable is that the consumer continued to go shopping whilst locked away at home. More food was consumed, and high value imported goods were in demand.

This caused inventory to drop as firms de-stocked going into the summer. With the second wave of COVID-19 we can expect inventories to rise sharply again.

Good for carriers and ports, but by the Autumn this will come to an end.

THESTRATEGIST MIKE MUNDY

MELBOURNE PORT RENTS: LESSONS TO LEARN The topic of port rents is an interesting one – a subject that does not always get a public airing due to the confidential nature of concession and other lease/rental agreements.

Australia’s Essential Services Commission has, however, just released an interesting report into rents in the Port of Melbourne which addresses the period 1 November 2016 to 31 October 2019.

The Port of Melbourne is an interesting focus for such an exercise as the previous port administration – prior to the port’s privatisation – came under fire for first leading a charge to push up some port rents, notably in conjunction with DP World’s Swanson Dock container terminal by as much as 750 per

cent and then backing down and giving DPW a deal which was viewed by many as a sweetheart deal amounting to a modest increase – said to be a rental of A$20 per square metre, up from around A$16-18 per square metre – as well as a much extended concession term to 2065. The u-turn was interesting in itself but also the eventual result was seen as one that did little to achieve a good competitive balance with competing terminals.

It has to be said that all this occurred just prior to the review period but it nevertheless provides an interesting backdrop to the review and without doubt it was a catalyst to it being undertaken.

The final report produced presents some interesting findings, the highlights of which

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are featured below and provide interesting food for thought: 5 “The Port of Melbourne has power in setting and reviewing rents. While its power is not unconstrained, reflecting a mix of market characteristics and legislative and contractual arrangements, we consider the Port of Melbourne retains a significant degree of control in relation to setting and reviewing rents.

5 “The requirements in the Port Concession Deed for rents to reflect a ‘reasonable market rent’ are not sufficient to constrain the Port of Melbourne from charging rents above an efficient level and its approach has contributed to significant rental inflation.

5 “The Port of Melbourne’s exercise of its power has caused material detriment.

Tenants are incurring inefficient rental costs and higher transaction costs, evidenced by examples of deferred investment, and uncertainty impacting tenants’ ability to lock in new customer contracts.

These impacts have flowed through to consumers,” and “Remedial action is required to mitigate the Port of Melbourne’s ability to exercise its power and impacts. This includes an enhanced, independently oversighted negotiate-mediate-arbitrate framework.”

The message is clear – a fairer balance has to be struck to achieve a more competitive port platform that delivers a win: win between port management and tenant and thereby meets the needs of importers and exporters in the most efficient manner.

NOVEMBER 2020 | 15

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THENEWYORKER BARRY PARKER

THE R-WORD, RESILIENCY Around New York, we’ve seen huge sea changes since the beginning of 2020, along with the rest of the maritime world.

By the early days of October, one hallmark of my world shipping conferences (gatherings, that type of conference) had all gone virtual. So it is with New York Maritime Week, which included a group of sessions by port executives at the annual Capital Link conference. The watchword for the overall industry, including the port sector, is the “R-word”- resilience.

New York, where seaborne cargo volumes have now been resurgent to pre-COVID-19 levels, is no stranger to “R”, having handled the 9-11 attacks, Superstorm Sandy and a host of minor calamities in between. Rick Cotton, the Port Authority’s Executive Director, showed statistics demonstrating the big recovery in seaborne trade (with August 2020 levels actually exceeding those of a year earlier).

But crisis is the flipside of opportunity. Another panel participant, Andrew Genn, from

New York City’s Economic Development Corporation (who has led planning efforts all over the region’s waterfront) highlighted an acceleration of efforts to move cargo around the harbor.

I would add that a necessary ingredient of resilience is the ability to pivot quickly in the face of adversity. The efforts around New York include what Cotton described as “a strong cooperative effort between the port itself, terminal operators, and labor…” but also a resurgent effort to develop “Marine Highways”. One byproduct of COVID-19 has been increased

8 Virtual New York Maritime Week reported that New York City over-relies on trucks…with the answer very much in maritime

online shopping which has led to strains on landside local infrastructures, including the truck-laden Brooklyn Queens Expressway ( “BQE” yes, the one that could possibly sink into Upper Bay) and the perpetually gridlocked George Washington Bridge (GWB).

The bottom line, according to Genn, is that “New York City over-relies on trucks…same day/ next day delivery doesn’t work”.

He explained that “…the answer very much lies in maritime,” and went on to describe the DOCK-NYC project, which will see a Request for Expressions of Interest shortly.

The idea is to create docking areas around New York, including in densely populated Manhattan, that would handle intra-harbor barging of containers from the big terminals in New Jersey. He stressed that considerable cooperation will be needed among the cargo side, terminals, and barge operators and alluded to the necessity of a very sophisticated cargo tracking interface to support e-commerce and last mile deliveries.

A year ago, the “Marine Highway” (presented at the same conference, albeit non-virtual) was an interesting concept, without a great deal of local applications. But, to me, resiliency is about far more than rebuilding after an attack or flood. With unsafe BQE and the 24-7 congestion on the GWB, a shift to waterborne transport is most welcome.

THEANALYST PETER DE LANGEN

E-commerce had been growing impressively before COVID-19, with growth rates as much as 10 times higher than the growth of sales of physical stores. COVID-19 has obviously accelerated that growth. Currently, around 20 per cent of all retail sales are online, with huge differences between commodities.

For books the online share is over 50 per cent, for groceries the share is, in most countries, still below five per cent. It seems fairly obvious that the rapid growth will continue once the pandemic is over, one noticeable reason is that many stores are closing and as a consequence it is harder to purchase offline, especially for specific products (ever tried to find

E-COMMERCE, SERVICE DIFFERENTIATION AND PORT OPERATIONS a specific light bulb or board game in a physical store?….).

The e-commerce model deeply changes physical goods flows, as consumers can easily purchase foreign products online.

The recent announcement of a strategic cooperation agreement between ZIM and Alibaba demonstrates the traction of global e-commerce flows. The Chinese e-commerce platform’s customers can directly purchase sea freight from ZIM. These e-commerce flows are, apparently, more time sensitive than most container flows. ZIM specifically targeted e-commerce customers for a faster direct service connecting South China

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ports and Los Angeles, while CMA CGM has also developed a direct service on the Pacific trades aimed partially at e-commerce flows.

Thus, e-commerce is probably a main driver of new initiatives to introduce the time-based service differentiation of shipping lines.

Shipping lines, such as CMA CGM and APL offer priority offloading and a ‘terminal fast track’ service.

Cargoes using this service will be stowed in ‘priority discharge’ slots.

If these attempts to offer a differentiated, faster service succeed - and caution is due as previous efforts, such as ‘Daily Maersk’ failed - ports and terminals may need to be able to embrace such priority services

and extend them into priority intermodal products.

So far, shipping lines offer priority discharge services only in the Port of Los Angeles, a port with huge call sizes and serious congestion issues. It seems unlikely such a premium product will eventually be offered at all ports. In some ports with moderate call sizes, the demand may not be there. Competition may emerge between ports for implementing such a premium product. Having such a service may turn out to have an impact, as it may attract more time sensitive (e-commerce) flows and over time strengthen the position of the winning port in service networks.

NOVEMBER 2020 | 17

THEENVIRONMENTALIST CHARLES HAINE

The UK Government consultation on freeports’ was launched in February 2020 with an opening salvo to establish up to ten of them in the UK. Following an analysis of the 364 formal returns, Westminster has outlined its response on how policy will be modified and how they might work.

After the wave of uncertainty delivered by BREXIT, the build-back-better mantra now demands even more creative solutions to rejuvenate an economy battered by COVID=19.

It’s widely acknowledged all this has to be progressed with an anchor in sustainable solutions so what does the freeports movement have to say about the environment and social value?

Freeports have always intended to boost business activity helping investment in machinery, infrastructure and workers while often masquerading as innovation hubs.

In the UK right now, there is a need to catalyse employment in economically deprived coastal communities and balance-up opportunities across the regions.

This has to be instigated while simultaneously boosting global trade, promoting British industry, and tub-thumping for more efficient technologies. Certainly, the British Ports Association (BPA), National Maritime and British Marine want to encourage this, and not least from small and medium size enterprises, of which there are around 5000.

Respondents have welcomed the emphasis on local markets and regeneration, a flexible customs model, and the continual roll out of that term ‘innovation’.

Others are worried about the elimination of bureaucratic burdens and admin’ because important issues such as port security, safety and environmental protection are often wrapped-up in the red tape argument. Saying that, the Government rhetoric is that it is committed to high standards in the areas of concern.

Driving green economic growth and regional investment are mentioned in the Government’s summary. When aligned with

UK FREEPORTS: A SUSTAINABLE OPPORTUNITY

Nusrat Ghani’s Clean Maritime Plan (Maritime 2050) and recent announcements about offshore renewable energy, the low carbon future and alternative energy market has immense potential to create new jobs and support port-city, harbour and hinterland regeneration. This is evidenced by the diversification activities on the Humber, Tyne and in Great Yarmouth now.

While post-EU protection of the natural environment will depend on the delivery of a rigorous Environment Bill, new Office of Environmental Protection and the next generation of marine regulation (always the last to be addressed), the new sustainability performance craved by many may lie in the ability of coalitions to be formed. We’ve seen Tilbury and London Gateway join forces on the freeport concept, but we’re talking about collaboration between a) UK and international businesses, port authorities and terminals (39% of respondents), and b) local councils and cities, academia, NGOs and public representative (61% of respondents, including individuals).

Local authorities and ports

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themselves foresee little to no environmental impact from the freeports concept, not least because existing regulations will stay in play. Having visited many freeports around the world, I’m not entirely convinced.

New development does attract the latest engineering techniques, plant and equipment, and infrastructure, however, most authorities have now declared a climate and biodiversity emergency.

The bottom line is that we need fundamental changes to behaviours, living and making money in transport, energy and food.

If freeports indeed include investment drives for widespread clean technology (e.g. hydrogen) and evoke ‘decarbonisation multipliers’ (i.e. coalition initiatives that proliferate better practices up and down the supply chain) then the concept can be a major success. The argument of sea freight having a lower carbon footprint than air is only valid if the supply chain also improves air quality and the human health benefits associated with that.

We’ve around five years to make critical and fundamental reductions in all emissions if we

8 Port of Tilbury has joined forces with London Gateway to pursue Freeport status

want any chance of achieving 2030 stepping-stone and 2050 net zero targets.

There was a consensus amongst respondents that criteria and objectives are appropriate in the pursuit of freeports, So if the UK Government wants to put its money where its mouth is, and align with the clamour of global businesses and people for a brighter, cleaner and greener future, then a higher priority weighting on sustainability will be imperative. Ideas such as the BPA’s Green Maritime Fund (to drive development in a net zero context) and faster-track planning policy and decisionmaking (for low carbon initiatives and efficiency improvements) would be quick wins. Catapult funding and incentives for and by port authorities to allow maritime/marine entrepreneurs to start-up in port business parks à la Amsterdam, Oslo and Porto, really need to happen if the UK wants to claim that its freeports will wear the badge of innovation.

NOVEMBER 2020 | 19

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SPECIAL REPORT: BANGLADESH

BANGLADESH PORT BOOM BEGINS Bangladesh is cranking up its efforts to deliver major new port capacity – five key projects are now being actively progressed. Mike Mundy assesses progress to-date and what next Bangladesh is on the path to boosting its port capacity despite the setbacks to its economy presented by COVID-19.

Presently, five major port projects are in the pipeline: 5 Bay Terminal in Chittagong; 5 Patenga Container Terminal, 5 Matarbari Port, Cox’s Bazaar, 5 Payra Port, and 5   Mongola Port.

The selection of the Port of Singapore Authority (PSA), under a Public Private Partnership (PPP) scheme, to take the Bay Terminal project forward together with Chittagong Port represents a significant step forward – significant in terms of achieving a definite timeline for the introduction of major new container capacity and significant as regards the introduction of foreign expertise into Bangladesh’s port sector.

The idea of the latter – injecting foreign expertise - has been around for a long time, over a decade, but up until the ‘signing up’ of PSA there hadn’t really been tangible progress in this respect. This step follows recognition by the Government of Bangladesh of the importance of building new port infrastructure to support both export and import activity as well as the surmounting of the wishes of domestic parties to implement port projects. With the Bay Terminal project, for instance, it is known that the Chittagong Port Authority had submitted its own proposal to the Ministry of Shipping to implement the project on a solo basis.

The development and operation of the Patenga Container Terminal is also expected to involve foreign participation with DP World and Red Sea Gateway Terminal of Saudi Arabia identified as the frontrunners in this respect.

There is also every reason to believe that other port projects will harness foreign expertise for terminal development and operation as Bangladesh makes serious efforts to crank up its port capacity to fuel its economic objectives. So far it has done so via the approaches of individual companies but hopefully the future will see a more broad-based call for tenders implemented by the Bangladesh Public Private Partnership Agency which has demonstrated its ability to do this in conjunction with dry bulk terminal projects. Global experience underlines the promise of potentially greater benefits to the host country via the application of this type of tried and tested process.

MATCHING CAPACITY TO DEMAND In 2019 the port of Chittagong handled 3,088,187TEU, up 6.3 per cent over the 2018 volume of 2,903,966TEU. In 2017 the port experienced an even higher level of growth, 2,556,597TEU an increase of more than nine per cent over 2016.

While Covid-19 is inevitably expected to slow growth in the current year and possibly beyond there is no question that growth will be maintained and that as COVID-19 dissipates that there will be a return to higher end growth rates.

The Hamburg Port Consulting forecast for future container traffic for Chittagong Port, contained in its September 2015 People’s Republic of Bangladesh: Strategic Master Plan for Chittagong Port, foresees 5.4 million TEU by 2040 but it is notable that the port has already sailed past the 2020 forecast of 2.7 million TEU for 2020 exceeding this by a wide margin in 2019.

The pattern of container distribution is 30 per cent in the Chittagong region and 70 per cent Dhaka with to-date Chittagong port handling in excess of 90 per cent of Bangladesh’s maritime trade.

Inevitably there has been growing pressure on Chittagong Port as volumes have risen driven in large part by Bangladesh’s ever rising garment exports.

Vessel delays have proved a regular occurrence although some respite has been achieved through comprehensive new cargo handling equipment purchases. The latter, however, is not a finite solution and new port capacity, especially container capacity is a must. Equally, as part of this Bangladesh wishes to bring down its logistic cost to build both export and import competitiveness. On the waterside, practically speaking this means achieving deeper draught port capacity and inland improved connectivity – the latter is underlined in Figure 1 which highlights projected container traffic in conjunction with Dhaka. Accordingly, extensive plans have been laid for road, rail and inland waterway system improvements in conjunction with the major port projects.

8 With Chittagong Port under pressure and new port capacity essential to support Bangladesh’s economic objectives new port projects are coming thick and fast

CLEARING THE PATH Decision making delays, lack of planning, politics, corruption and other factors have traditionally acted as a brake on logistic projects implementation in Bangladesh. Step-bystep, however, it now seems that these impediments are being dissipated as the importance of putting in place the right infrastructure, port and connecting infrastructure, rises up the development agenda in line with economic objectives.

The five major port projects discussed overleaf, now all being actively progressed, are a testament to this, and without doubt there is more to come.

8 Figure 1: The HPC forecast for 2020 has already been exceeded by a wide margin – irrespective of COVID-19 strong growth is on the cards

Source: HPC

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NOVEMBER 2020 | 21

SPECIAL REPORT: BANGLADESH

BANGLADESH: PORT EXPANSION PR 8N EAR CHITTAGONG CLUSTER PROJECTS THE BAY TERMINAL Project: Major new port area.

Location: On the coast of the Patenga Halishahhar area, six kilometres from Chittagong Port.

Foreign Participation: Port of Singapore Authority (PSA) nominated to be involved in development and operation.

Timeline: Imminent development. PSA’s participation was formally announced in September 2020. It is understood that the Chittagong Port Authority and Public Private Partnership (PPP) Authority will originate the project timeline and then consult on this with PSA prior to finalisation.

Scope of Project: The development site spans some 871 acres of existing land and will also utilise another 1600 acres reclaimed from the sea – a site multiple times larger than the current Chittagong Port. Reportedly vessels with a draught up to 12m and length of up to 190m will be able to be accommodated – a step up from the current Chittagong port facilities which can only accept vessels with a draught up to 9m.

The Bay Terminal will be located 800m from the shore with vessel access planned via a dredged channel and protection provided against the omnipresent problems of sea rise and changes in the frequency and intensity of extreme weather events.

When complete the Bay Terminal will comprise multiple port facilities with reports suggesting this will include two container terminals, a multi-purpose terminal and numerous other facilities. It will also offer improved landside access with road traffic benefitting from being able to move directly to the Dhaka-Chittagong highway avoiding traditional congestion points. Additionally, there are plans to increase road capacity particularly to cater for projected substantial increases in container traffic.

Access: Marine: Draught will be provided for vessels of up to 12m and compared to the existing Chittagong Port LOA restrictions due to the navigability of the river will no longer apply. Thus, the Bay Container Terminal will be

8 Bay Terminal located on the coast of Patenga

22 | NOVEMBER 2020

8S OUTH OF CHITTAGONG

8 Patenga Container Terminal is located near to the mouth of the Karnaphuli River south of the existing port

able to handle larger vessels of the Panamax and post-Panamax type.

Road: The Bay Terminal is located next to the Port Link Road, connecting the N1 Highway to Dhaka with the existing port.

Rail: The railway line Chittagong – Dhaka is within close vicinity.

PATENGA CONTAINER TERMINAL Project: New Container Terminal Location: Between Chittagong Dry Dock and the Boat Club in Patenga – approximately 14km south of Chittagong.

Foreign Participation: DP World and Red Sea Gateway Terminal have been selected by the Shipping Ministry as the preferred candidates to operate the new Patenga Container Terminal – July 2020. Some reports suggest that both companies could attain operator status but it is thought more likely that one of the two will be selected.

Timeline: The Chittagong Port Authority (CPA) is presently constructing the Patenga Container Terminal on a self-funding basis.

Construction is understood to be at an advanced stage and expected to be completed in the immediate future.

Scope of Project: Container terminal located on 26 acres of land with a 600m quay line. The incoming operator will be responsible for equipment provision.

Access: Marine: Near to the mouth of the Karnaphuli River.

Road: New road inks are being provided as part of the overall terminal development.

Rail: Rail linkage is to be provided.

MATARBARI PORT – COX’S BAZAAR Project: The construction of a deep-water port facility. The project was officially sanctioned by Bangladesh’s highest economic policy body, the Executive Committee of the National Economic Council (ECNEC) in March this year.

Location: Matarbari, Cox’s Bazaar is located 150 kilometres (93 miles) south of Chittagong.

Foreign Participation: In September of this year an agreement was signed with Nippon Koei Joint Venture of Japan to provide engineering services related to the port development. At the same time, an agreement was also signed with another Japanese firm, a joint venture of Oriental Consultants Global Co Ltd, DDC Ltd and BCL Ltd, as the consulting entity to provide engineering services for the related roads and highway component of the project.

The Japan International Cooperation Agency (JICA) is providing finance for the new port project together with the Government of Bangladesh.

8 The Matarbari Port Development Project

Timeline: Phase one development is scheduled to be completed by 2026. The coal power plant is expected to be in operation in mid-2023.

Scope of Project: This new port project flowed out of the project underway to establish a coal-fired power plant in Matarbari. This project is based on a deal signed by the state-owned Coal Power Generation Company (CPGCBL) with the Japanese consortium of Sumitomo Corporation, Toshiba Corporation and IHI Corporation. The potential was identified to further develop Matarbari as an economic hub incorporating a deep-water port. The Phase One development of the new port will reportedly include: an 18-hectare container terminal with a 460m quay and a multi-purpose terminal with a 300m quay.

Annual container terminal capacity is put at 600,000TEU+ and multi-purpose terminal capacity at 2.25 million tonnes.

Under the Phase Two development plans provide for the container terminal to expanded to 70ha with a 1850m quay.

Access: Marine: will be provided via a 15km long channel, 350m wide with a draught of 16m.

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

SPECIAL REPORT: BANGLADESH

ROJECTS, PROGRESS AND PLANS Road: the new Matarbari Access Road will connect with National Highway No 1.

Rail: connection also planned with the idea being to accommodate double-stack rail cars as part of overall plans to beef up rail freight capacity.

PAYRA PORT Project: A new port, partially operational, intended to cater for the handling of diverse cargoes. The Payra Sea Port Act 2013 established the Payra Port Authority. A strong role for the port is seen in conjunction with the Bangladesh-China-India-Myanmar Economic Corridor.

Location: West Bank of the Rabnabad Channel, Payra Port, Kalapara in the sub-district of Patuakhali.

Foreign Participation: Port development initially proposed as part of China’s Belt and Road Initiative but with financing eventually provided by India and from other sources.

Timeline: The port began basic operations in August 2016 and further development is now being rolled out.

Scope of Project: The proposed location of Payra Seaport is naturally shallow in depth and requires large scale dredging for vessels to achieve efficient access. The international dredging contractor Jan De Nul secured the contract for capital and maintenance dredging for the port over a 10-year period on a concession basis. Jan De Nul’s project works centre on the dredging of a 75-kilometre path through the Rabnabad Channel to the Bay of Bengal. Initial dredging cost is put at US$963 million. The work entails the removal of over 100 million cubic metric tons of sediment with natural tidal currents forecast to constantly bring sediment back into the channel. This will require nonstop dredging to ensure that the channel maintains an adequate depth – an aspect that has raised serious questions among leading hydraulics experts. Specifically, the point is made that even a single cyclone, an occurrence that regularly ravages Bangladesh’s coastline, could completely fill the channel resulting in trapped vessels.

The development of port facilities is being undertaken on a three-phase basis – the first phase comprising the dredging works, scheduled to run from April this year through to 2021 and to take the channel depth down from four metres to 10.50m.

The full port construction project as per original plan has 19 components, 13 to be implemented under foreign direct investment and the remaining six implemented via government to government deals.

China Harbour Engineering Company and China State Engineering and Construction Company have been awarded contracts to the

8 Payra Port presents marine access challenges

value of US$600 million to develop two of the 19 components.

Terminal development will include multi-purpose, bulk and container terminals with the first new terminal expected to be completed by 2022.

Access: Marine: HR Wallingford, a UK-based consultant to Payra port, has developed a 35 nautical mile-long channel dredging plan from the Rabnabad channel tothe outer anchorage.

Intensive capital dredging followed by maintenance dredging is essential to implement the designed channel navigable for 16 metre draught vessels. Also, see above.

Road: Presently there is a two-lane national highway connection with the capital city Dhaka with the distance between Payara Port and Dhaka totalling approximately 235km. The Government has laid plans to expand the existing highway into four lanes and to construct a 5.6km connecting road from Payra Port to the Patuakhali highway.

Rail: A new rail connection forms part of the development plan.

Inland Waterways: Existing river routes are suitable for vessels with a draught of up to 5m for the carriage of goods inland. The distance via waterways to Dhaka is 267km, almost the same as from Chittagong port.

8W ESTERN REGION MONGOLA PORT Project: Mongola Port is the second largest port in Bangladesh and the main port for the country’s western region. It is the focus of a major upgrade project intended to consolidate and expand its prominent position including fulfilling the role of boosting trade with India, Bhutan and Nepal.

8 Mongola Port – transit trade will be developed

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

Location: The port is located in Bagerhat District in the southwestern part of the country; and lies 62 km (39 miles) north of the Bay of Bengal coastline.

Foreign Participation: India has extended lines of credit in excess of US$500 million as part of the financing for the port upgrades.

Timeline: Dredging projects have been initiated and new terminal development plans are expected to yield results by 2024-2025.

Scope of Project: The upgrade project comprises 12 key components including construction of two container terminals.

Access: Marine: The port is situated at the confluence of the Possur River and Mongla Nulla approximately 71 nautical miles upstream of the Bay of Bengal. Once the dredging of the inner and outer bars is finished, container vessels with draughts of up to 10m will be able to access the port.

Dredging works are planned for the inner bar which extends from Mongola Port Jetty to Joymonirghol with implementation expected around mid-2022. This will facilitate access for vessels with draughts of 9.5 to 10m. The Outer Bar extends from the Mongola Port Channel to the Bay of Bengal and has already been the scene of significant dredging activity – including by the Hong Kong River Engineering Company and China Civil Engineering Construction Company – to provide access for vessels with a draught of up to 10m.

Road: In 2018 the government-initiated road and rail system development in conjunction with the port – roads for all-round regional connectivity and rail lines connecting Mongola to Kolkata via Nepal and Bhutan.

Rail: Connection is provided to the rail terminal at Khulna.

8 The weather in Bangladesh is largely governed by the monsoon. The prevailing wind directions are from south to south east during the month of April through September.

After taking an easterly direction for a while, the wind turns to the northerly and north easterly directions, The latter prevail from November to January. During the month of February and March, winds turn via westerly direction back to the transition periods between monsoons, October and November, extremes of inclement weather like cyclones often occur with wind velocity in excess of 30 knots. The waves are generally low showing a distinct relation with the wind. The waves period vary between 3-4 seconds generating waves of about 0.5 meters and about 6 seconds for waves of 2 meters. During the months May to October, freshets are expected.

Freshets are caused by the normal velocity of flow of EBB tide augmented by flow of additional volume of water that drains into the river Karnafully from the catchment areas.

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CONTAINER TERMINAL OPERATIONS

BUILDING ROBUST REVENUES

Source: Unifeeder

In the first of a two-part series of articles, renowned industry analyst, Andrew Penfold, considers the creative approaches open to container terminal operators to consolidate and expand terminal revenues in a challenging marketplace

The uncertainties associated with volumes and revenues for container terminal operators has been at the front of industry attention this year. There are many techniques that can be applied in this situation. This is the first of a two-part series of articles that examines various strategies to preserve and enhance revenues in these difficult market conditions.

During economic contractions, some ports and terminals have been confronted with above-average volume declines, while others have done significantly better. Specific factors determine market position, but a port or terminal must work with the advantages and disadvantages associated with its location and other key factors. How do you build revenue robustness? The answer is always case-specific, but the following approaches can be taken: 5 Low cost strategy 5 Pricing 5H  igh service strategy 5 Service delivery 5 Competitive network strategy 5 Intensive selling 5 Collaborative initiatives 5 Contractual means 5 Marketing techniques LOW COST STRATEGY In a given terminal, with various local competitors, a low-cost strategy and therefore a low tariff strategy may attract a certain segment of customers. However, there are dangers with buying market share as investment may slip and impact quickly on service levels. A low-cost strategy should always be appraised in the light of the Total Cost of Ownership in the overall transport chain) for a customer (line or alliance). It is the total of vessel, port, terminal and hinterland costs that

8 DP World is one company that is pursuing the vertical investment option – its 2018 acquisition of Unifeeder signposts this

determines cost competitiveness. Having the lowest costs for one of these items will have little effect, if the total picture still results in a disadvantage. In general, there is a limited elasticity between stevedoring pricing and volumes – although lines will always seek to chisel savings here.

COMPETING ON SERVICE The regular announcements made by terminal operators of new records on vessel handling productivity suggest that competing on speed is a valuable strategy. Higher berth productivities reduce the in-port time of vessels and increase earning times for the vessel allowing improved network options. However, a Total Cost of Ownership analysis should be used to confirm such a strategy. This also requires continuous innovation – including direct copying of best practices.

Competition on speed will be especially worthwhile in carrier haulage markets and transshipment markets, where the shipping line is the sole decision maker. Where trucking is shipper-controlled, reliability and predictability are key, in order to enable parties to secure the reliable supply of distribution centres or factories.

Understanding the customer’s real needs is key in driving this approach.

COMPETITIVE NETWORK STRATEGY The creation of an extensive network of hinterland and feeder connections will be very rewarding in the long term.

Once in place, it is not easy to copy and it may continuously reinforce itself through scale economies. The density,

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

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How do you build revenue robustness? The answer is always case-specific, but there are a growing number of creative approaches emerging frequency, reliability and cost-effectiveness of the available networks will be a key determinant of terminal choice for a line. This strategy will also boost customer loyalty. This strategy has seen vertical investment in complementary services – e.g. feeders or barge services – from some of the major players.

COLLABORATIVE INITIATIVES Joint ventures between terminal operators and shipping lines and dedicated concepts offered by a terminal operator to a shipping line (or alliance) are, of course, alternative ways to develop revenue robustness. Under such deals the line will receive dedicated terminal capacity, more control over operations and lower rates or higher benefits from utilisation profits (‘gain-sharing’). Typically, lines would hold a financial interest in the terminal, either as shareholder or by way of fixed cost components for the stevedoring services. Even with volume contractions the line will have an interest in favouring these terminals.

In downturns these JV arrangements may support volumes and eliminate over-reliance on particular lines or consortia for a port. However, the role of dedicated line-owned terminals is not straightforward. Terminals as cost centres are usually intrinsically less efficient than independent operators where marketing is usually much more comprehensive.

MARKETING TECHNIQUES - PRICING Various marketing tools can promote revenue robustness and minimise the risk of switching volumes in times of crisis.

The pricing techniques are: 5  General volume incentives 5  String incentives 5  Feeder incentives 5  Hinterland incentives 5  Gain sharing and cost cutting 5  Opportunity cost driven pricing To attract additional volumes and increase customer share, or to discourage volume switching to competitors, both general and specific volume incentives can be offered to customers. This can be either on a fixed per container basis or on a sliding scale based on volumes. Typically, a volume guarantee would form part of this deal. This could be linked to previous years volumes and agreed escalators.

In highly competitive markets a ‘string incentive’ can be applied, when a line or alliance introduces a new string or considers moving a string from one port or terminal to another.

In these cases, the terminal operator would discount on the specific string and would not impact on existing rate structures.

When stimulating feeder traffic, and where the deepsea line carries the feeder handling-costs, similar incentives can be applied. There is scope here to tie the pricing offers to feeder volume bands or to feeder markets targeted as growth regions.

Similar approaches can be applied to specific hinterland connections. For example, start-up incentives can be applied for a limited period of time for a new rail, feeder or barge connection. Once again, a Total Cost of Ownership analysis should be developed to estimate the required discount.

‘Gain-sharing’ refers to joint measures that increase the benefits or lower the costs of either the shipping line or the terminal operator. The gains obtained from this approach are shared between the terminal operator and the line. These arrangements are likely to be further intensified in the future.

A gain-sharing programme consists of a documented and agreed project plan to reduce costs for the terminal and/or of the shipping line with the help or assistance of both parties.

There are numerous case-specific possibilities here.

Pricing strategies are often based on cost-plus models. In these situations, an approach based on opportunity costs may be worthwhile. Here, some tariffs are based on the lost margin or the foregone profits if a customer occupies a part of the terminal capacity from which income can be generated and this is not utilised. This would be based, for example, on an agreed berth share or proportion of terminal storage. In practice, opportunity costs are complex to calculate and cost-based tariffs are not readily accepted by shipping lines.

However, consideration of lost opportunities in cases of reserved, but unused, capacity is a worthwhile approach and common in other industry sectors Part 2 of this review – next month - will focus on improving service and productivity levels in order to promote market share and maintain customer loyalty. In addition, active intensive selling and contractual innovations will be considered. What is clear is that creative approaches are essential. These established approaches will become increasingly critical in the next few years and beyond as simple reliance on increased volumes looks more uncertain.

It is always the case that a definition of the customer, and their needs, is central to successful position of a terminal.

This means a full analysis of the overall costs involved in the transport chain of a specific terminal versus the competition.

This defines the real room for price negotiation (in both directions). In the current market, with volumes lower and lines under pressure there will be increased demand for lower pricing. These pressures can only be resisted with a comprehensive understanding of the costs involved – with stevedoring being just one component.

8 The Port Authority of Singapore (PSA) has embraced collaboration and cooperation as a route to safeguarding and building terminal revenues – it now has six joint venture terminal arrangements

8 Part 2 of this review – next month - will focus on improving service and productivity levels in order to promote market share and maintain customer loyalty

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

NOVEMBER 2020 | 27

TERMINAL CONGESTION

CONGESTION COLLABORATION After months of falling throughput volumes, a number of ports across the world are now seeing congestion. AJ Keyes asks if this is due to the rebound from COVID-19 or if other factors are in play?

There is no doubt that 2020 will be a year that most container ports will want to forget. The COVID-19 pandemic continues to impact volumes on a global basis with the fall-out from weak trade demand, spikes in demand and country lockdowns causing ongoing uncertainty.

Yet while the impact of COVID-19 is causing weaker port handling throughput, there are also now a growing number of ports experiencing congestion. So, what is causing the congestion, is it uniform across the world and what other factors are in play?

UNIFORM CONGESTION OR OTHER FACTORS? At the time of writing, in mid-October 2020, various ports in Australia, Canada, the US and UK are all currently reporting or suffering terminal congestion. This is geographically widespread but is across different container trade lanes, taking in both the major deep-sea routes like Asia-Europe and the Transpacific, but also secondary options such as to/ from Australia.

Table 1 offers a summary of various factors known to have caused or contributed to port congestion recently – and not all due solely to the COVID-19 pandemic.

WATERFRONT DISPUTE HITS AUSTRALIA Industrial action has been rumbling on for some time in Australia. The Fair Work Commission recently held a ballot in which the unionised-work force agreed to implement protected industrial action across the container terminals in the key ports of Brisbane, Freemantle, Sydney and Melbourne, affecting the majority of operators, DP World, Patrick Terminals and Hutchison Ports.

The work stoppages progressively impacted operations at the terminals, resulting in vessel delays and terminal congestion. Maersk Line stopped accepting new bookings for Sydney, “to remove uncertainty for customers,” in the latter part of September and declared that the “heavy congestion at Sydney terminals and container depots” was resulting in “vessel delays as a result of waiting times up to 19 days.”

The shipping line also switched terminals in Sydney during the second half of September, moving from Patrick Terminals to DPW Australia to try to maintain schedule integrity and introduced a Port Congestion Surcharge of US$350 per TEU for all containers arriving/departing Sydney. Hapag-Lloyd also omitted calls at Sydney to avoid congestion, instead discharging in Melbourne.

What seemed to be a positive step forward came in the second half of September when DP World confirmed that the

MUA had withdrawn all industrial action at DP World Sydney, effective immediately. In addition, the union also agreed it would cease any industrial action at the operator’s Port Botany terminal before November 1st, 2020.

However, this was not a full resolution, with Patrick Terminals still trying to terminate maritime union strikes after the MUA notified stevedores of a planned 24-hour work stoppage in Brisbane and Port Botany. The response from the operator was an application to the Fair Work Commission to terminate its industrial action.

The issue is firmly in the political spotlight. Australian Prime Minister, Scott Morrison, accused maritime workers of “extortionate” pay claims and said that the industrial action must stop or face the threat of “federal intervention.”

The claims over pay are vehemently denied by the MUA, accusing Patrick Terminals and the government of a “hysterical” response, stating that the original six per cent pay increase for three years has been adjusted to below 2.5 per cent.

Nevertheless, Morrison ramped-up pressure on the MUA by refusing to rule out sending in the military, if required, to settle the dispute at Patrick Terminals.

Australia is fully in its Peak Season for container demand, so terminal congestion needs to be resolved – and quickly.

8 A surge in imports and struggles with a vehicle booking system are the major contributors to congestion at Felixstowe

MONTREAL STRIKE, HALIFAX CONGESTION In Montreal, a dispute between terminal operators and the Local 375 of the Canadian Union of Public Employees (CUPE) erupted in July 2020.

Initial stoppages for four days occurred in late July, which impacted import and export container handling. These were

Port

Country

Cause of Congestion

Port Botany/Sydney

Australia

Waterfront dispute by terminal operators

Felixstowe

UK

IT implementation – High volumes of inbound Asian cargo

Halifax (NS)

Canada

Cargo diversion from Montreal

Los Angeles/Long Beach

USA

Extra loaders – return to pre-COVID-19 levels – Inland infrastructure issues

Montreal

Canada

Stevedore strikes

Vancouver (BC)

Canada

Inland rail derailment

8 Table 1: Summary of Key Factors Influencing Congestion at Selected Ports

Source: Port Strategy, collated from ports, shipping lines, NVOCCs, beneficial cargo owners

28 | NOVEMBER 2020

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

followed by further action between August 3rd and August 7th that closed the Termont Terminal. The situation worsened with an indefinite strike commencing from August 10th stopping all container cargo handling and mooring services being provided by longshoremen.

There has been no contract in force since the end of December 2018, when the previous collective bargaining agreement expired, and a deal could not be reached.

However, by the end of August, the striking workers agreed a seven-month truce with employers while a new collective bargaining agreement is negotiated, hopefully by March 2021. While negotiations are ongoing, there will be no lockouts or strikes.

Montreal Port Authority estimates indicate that at the time of workers agreeing to return to work, 15 container ships had been re-routed, meaning around 90,000TEU was either diverted or idling, including 18,000TEU still on the ground.

An extensive backlog built-up during the strike, with estimates of up four weeks predicted before operations could be back to normal. Hapag-Lloyd noted: “It will take some weeks to clear the backlog of vessels and cargo in the terminals which were impacted because of this interruption.

Both Railroads will need to re-adjust their networks to reinstate normal operations in Montreal while at the same time clear the backlogs in both Saint John and Halifax.”

OOCL confirmed a similar position in late September 2020, citing that inbound cargo moving via rail was seeing “excessive delays” from Montreal, but there were also issues in Halifax too.

This shipping line confirmed that congestion had been caused by a “large influx of cargo arriving via a non-standard gateway,” which had an impact. In a statement released, it added: “Due to the volume of diverted vessels, excessive dwell times continue to be experienced. While efforts are ongoing to prioritise dwelling cargo, current estimated delays of departure of cargo that is currently sitting in Halifax are projected to extend into October 2020.”

EXTRA LOADERS AND FAILING INFRASTRUCTURE IN USA While the Montreal and Halifax congestion was caused by industrial action, other ports in North America are experiencing similar issues, although caused by different reasons.

The San Pedro Bay complex – Los Angeles and Long Beach - is being impacted by a shortage of equipment, warehouse workers and truck capacity as the Peak Season kicks in and logistics networks seek to ramp-up capacity.

This had earlier been reduced due to the COVID-19 pandemic and softening import demand requirements.

Maersk Line is offering the following recommendation for congestion in the USA, clearly showing that this operator does not expect an improvement in the current position in the immediate days ahead: “The Peak Season is being defined by a number of volume-related challenges and we encourage customers to add more buffer to supply chain schedules to allow for potential disruptions and delays.”

This 2M Alliance member also confirmed that the issues of congestion are not limited to San Pedro, with strong import activity seen at the Pacific Gateway ports of Prince Rupert and Vancouver (BC) impacting container yards, who are now “often exceeding infrastructure limits,” and slowing down access through the ports.

The Peak Season in North America was already going to be challenging, but congestion is likely to continue, as confirmed by Maersk Line.

IMPORT SURGE SEES FELIXSTOWE STRUGGLE A surge in imported containers from Asia during the latter part of Q3 2020 has caused numerous issues of congestion

Courtesy of the Port of Los Angeles

TERMINAL CONGESTION

and operational challenges for the UK’s largest volume container port, Felixstowe.

The British International Freight Association (BIFA) said in late September 2020 that there was “ongoing and severe congestion” at the port but added that while there was a surge in imports from China, there were longstanding problems with the port’s Vehicle Booking System (VBS), which have been ongoing since 2018.

According to the Port of Felixstowe, the congestion is being caused by a surge of imports, with increases of up to 30 per cent higher than the normal average, but a combination of storms and the unusually high levels of empty containers at the port are also influential factors.

This is partly repudiated by some of the port’s liner customers, who have openly stated that there have been additional issues too, caused by staff shortages (with workers on furlough) and reduced productivity as working patterns in the COVID-19 environment require new hygiene regimes.

In particular, trucking companies are especially upset due to the lack of positive dialogue with the port over the lack of availability in its appointment system, something the hauliers say is better-handled at DP World’s London Gateway and Southampton facilities.

The Port of Felixstowe has apologised for the issues and is working to improve the situation through improvements to its VBS but at the time of writing – mid October - the congestion remains a daily concern. With the UK now seeing a combination of a return to pre-COVID-19 traffic levels and the ramp-up of volumes serving the Christmas holiday period, the threat of continued congestion remains at Felixstowe. Trucking companies will be hopeful that the tightening of VBS processes delivers positive benefits.

8 Los Angeles is just one North American port seeing terminal congestion caused by extra loaders and pressure on supporting transportation networks – it will be a tough Peak Season in 2020

LOSERS AND LOSERS There are no winners from port congestion and transport logistics networks are being impacted by it. The biggest losers, while these issues continue, will be importers and exporters, beneficial cargo owners and, ultimately, end-users.

These companies and individuals are all powerless to resolve waterfront strike issues, the impact of the COVID-19 pandemic and other congestion creating issues. Short-term, these challenges look set to continue, so it is imperative that any other factors, such as poor IT, unavailable equipment or strained relations, are minimised. Collaborative and not combative attitudes are needed now, more so than ever before.

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

NOVEMBER 2020 | 29

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BREXIT

THE BREXIT CLOCK IS TICKING While the UK Government and EU continue eleventh hour talks on a trade deal, AJ Keyes asks if the UK port industry will be ready for BREXIT?

8 Operation Stack cannot be a long-term solution for border issues in UK ports

While the UK and rest of the world’s port are dealing with the COVID-19 pandemic, BREXIT looms large in the UK. Although the UK has technically already left the EU, the transition period will soon end, so what better time to take stock of the current position for ports?

The exact outcome of the BREXIT process from the politicians is unknown (at the time of writing in early October 2020), but there has been some positive news for the port industry over the past few months.

BREXIT BORDER FUND In July 2020 the UK Government announced a £705 (US$888) million fund to support infrastructure, systems and staffing related to BREXIT border issues.

The announcement was received positively, as Richard Ballantyne, CEO, British Ports Association confirms: “We are particularly grateful that the Government has listened and agreed to our requests to pay for new infrastructure both at ports and at inland sites,” Yet the provision of funding is only part of the process, clearly, as the UK port industry looks to navigate the unknown but potentially stormy waters from the start of 2021. It is a fact fully appreciated by Ballantyne, among others, who rightly

state that new border infrastructure will inevitably impact on freight and cargo flows.

The key factor here is the concern to keep freight moving.

Or to put it more practically, that any enforcement of border processes will not result in trucking and cargo being held-up while seeking to transit the port of entry/exit. “There is a huge amount to prepare for and operators across the freight and logistics sectors will need to understand what will be required and what this will mean for their businesses,” Ballantyne underlined at the time of the UK Government announcement.

AVAILABILITY OF FUNDS Confirmation of availability of funds for the investment is clearly a positive sign to begin with. At the start of October 2020, the UK Government unveiled a package of £200 (US$259) million in one-off grants to support development of new order processing facilities for ports from the start of 2021.

These funds form part of the July 2020 investment package.

The UK Government Cabinet Office has stated that this Port Infrastructure Fund will be “targeted at ports that have the space to build new border infrastructure on current sites, so they are ready to handle new customs requirements under the new Border Operating Model.”

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

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BREXIT

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Time is short, and it is vital that UK businesses prepare for new border arrangements

M20 highway, with one lane used for traffic heading to the Eurotunnel terminal and one lane kept aside for (Dover) port traffic. The middle lanes are not used and have to be kept clear for emergency vehicle access. All non-freight traffic is diverted off of this major road artery and onto secondary routes.

It has been used regularly in the past, but this use is the exception, not the rule – and certainly not a regular option.

PRACTICALITIES – “OPERATION STACK” There are already compelling signs of what could occur come January 1, 2021.

BPA warns: “How new controls are placed on the 10,000 lorry and trailer movements a day between the UK and Europe is critical to avoid traffic disruption.”

This is a crucial point, as signposted by the impact of a 24hour closure in Calais, France due to industrial action.

There are strong similarities between a work stoppage in a key connecting port to the UK and delays in ensuring that trucks and cargo are efficiently processed to/from the UK. Both situations have the ability to slow the movement of freight, even bring it to a complete standstill, and thereby generate congestion.

The implementation of “Operation Stack” is already wellknown in the southern-eastern part of the UK involving access to the Port of Dover but could again be activated come January 2021.

When Operation Stack is in place, trucks with freight are separated into two queues on either side of the connecting

BIGGEST CHALLENGE The biggest challenge now facing the UK ports industry regarding BREXIT is not efficiency of operations or, currently, funding from central UK Government coffers. It is time!

There are (at the time of writing) less than three months until the BREXIT transition year is finished and while the UK Government is providing funding, it has also stated that the deadline for applications for the Port Infrastructure Fund is 12-noon on October 30, 2020.

Successful bids are to be announced “shortly after” this deadline. It is, therefore, imperative that the release of funds occurs promptly after the deadline.

However, for ports and terminals in the UK, there is a need for site selection, preparation and gearing-up to commence handing goods, all before the end of the year. The challenge and risks still exist though because the funds for these processes will only be forthcoming once the port facility knows it has been approved.

The clock is ticking….and clearly there are some doubts about what can achieved in such a short time window.

Photoe: DPW Londongateway.com

The remaining £270 million is being allocated to inland customs facilities in order to support ports who lack sufficient space. “The funding can be used for a range of vital port infrastructure, from warehouses and control posts to traffic management systems,” the Cabinet Office announcement confirmed.

The news from the UK Government has been, generally well-received, based on responses from relevant parties. Tim Morris, Chief Executive of the UK Major Ports Group acknowledges it as a “welcome step” in the significant amount of UK port capacity being maximised.

Ballantyne is also positive. “We welcome this scheme which, importantly, will be open to all port operators across Great Britain,” he said.

Yet both of these highly-respected individuals make additional incisive observations. Ballantyne underlines that: “Without support, there would not be the capacity to deal with the new customs and border requirements,” in relation to the UK’s main ro-ro gateways.

In a similar vein, Morris also states: “Time is short, and it is vital that UK businesses prepare for new border arrangements,” he said.

8 The biggest challenge facing the UK ports industry regarding BREXIT is not funding but the time available to implement seamless border controls – the time window is very short

Three-Steps to Heaven?

The UK government has confirmed that it expects new border controls to be implemented in three different phases with these taking effect in phases from January 2021.

5  S TEP ONE will see companies importing standard goods, (noted as being “everything from clothes to electronics”), having to prepare for basic customs requirements, such as keeping sufficient records of imported goods. Then, a period of up to six months will be allowed to complete customs declarations.”

5  S TEP TWO commences from April 2021, with from this point all animal and plant products requiring pre-notification and all relevant health documentation completed.

5  S TEP THREE is scheduled to go live from July 2021 with importers required at this point to make declarations at the point of import and pay all relevant tariffs.

The number of inland border control posts (BCPs) to handle overflow of cargo is under consideration. Facilities at Thames Gateway, Birmingham, Holyhead, Fishguard/ Pembroke and Dover will increase the

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

number of BCPs to 10 and are planned to be operational in July 2021.

These new locations will complement proposed and nominated sites that are set to go live in January 2021. These include: Ebbsfleet; North Weald Airfield, two sites in Ashford and another in Warrington still awaiting planning permission.

However, with such a short period of time remaining, until January 2021, ensuring these initial locations are ready for operations to commence could be very challenging.

NOVEMBER 2020 | 33

BREXIT: NORTHERN IRELAND

TIMING KEY IN NORTHERN IRELAND Aaron Nelson, Senior Associate at UK-based law firm BDB Pitmans, puts the spotlight on the complex situation regarding the Northern Ireland Border as the end of the BREXIT transition period fast approaches

8 Uncertainty and delay means that through no fault of their own, Northern Ireland’s ports and freight interests are in serious danger of not being ready for the post-BREXIT world

With less than three months to the end of the transition period, time is running short for Northern Ireland’s ports and traders to prepare for the impact of Brexit.

The Northern Ireland Protocol in the Withdrawal Agreement provides that, after transition, Northern Ireland will remain subject to certain EU rules, particularly on customs, animals and food products. This will avoid creating a hard border between Northern Ireland and the Republic of Ireland, contrary to the Good Friday Agreement.

So, when the Brexit transition period comes to an end on 31 December 2020, sanitary and phytosanitary checks will be required on animals and food products crossing the Irish Sea from Great Britain to Northern Ireland, to ensure they comply with EU standards. The Northern Ireland Executive has legal responsibility to get Northern Ireland’s ports ready for this change, and work on the necessary infrastructure began in the early summer.

But the controversial Internal Markets Bill, introduced into the UK Parliament at the beginning of September, cast doubt – in some quarters – on whether these preparations were strictly necessary. While the main aim of the Bill is to maintain the harmony of the UK’s internal market post-Brexit, it also contains clauses which, if enacted, would allow UK Government Ministers to disapply or modify certain procedures agreed in the Withdrawal Agreement, including in respect of trade between Great Britain and Northern Ireland.

CONTROVERSIAL POWERS These powers are controversial because – as the UK Government has admitted in Parliament – exercising them

34 | NOVEMBER 2020

would breach the terms of the Withdrawal Agreement, and so international law. The UK Government says they are “limited and reasonable steps to create a safety net” in order to prevent EU rules “interfering” with the UK internal market, and would only be used only if a UK/EU Free Trade Agreement were not concluded. And, in any event, international law operates in a separate sphere to domestic law, and that national governments are entitled to breach international obligations in the national interest. But opponents – including a number of experienced backbench Tories and eminent lawyers – argue that, even if strictly “legal”, any such breach would deliver irreparable damage to the UK’s reputation for upholding the rule of law.

These controversial provisions prompted Northern Ireland Agriculture Minister Edwin Poots – whose Democratic Unionist Party opposes the new checks as a “border in the Irish Sea” – to propose halting work on the new checking facilities (although he stopped short of ordering his department to stop work). This caused a rift with his

‘‘

These powers are controversial because – as the UK Government has admitted in Parliament – exercising them would breach the terms of the Withdrawal Agreement, and so international law For the latest news and analysis go to www.portstrategy.com/news101

BREXIT: NORTHERN IRELAND

‘‘

With less than 100 days to Brexit, consensus and clarity are in short supply permanent secretary, Denis McMahon, who refused to comply, saying his department was legally obliged to proceed with the work. He acknowledged the need to work with his Minister and noted — “I am also absolutely required to comply with the law… [My department] has been put in an impossible situation as a result of the wider politics around this, we find ourselves having to navigate our way through this process.”

Ultimately, UK DEFRA Minister George Eustice intervened, indicating to both parties the UK Government’s expectation that the work should resume.

Poots maintains his opposition to the new infrastructure, but now acknowledges the legal requirement, both in domestic and international law, to set it up.

UNCERTAINTY AND DELAY Uncertainty and delay thus means that practically speaking the new infrastructure will not be ready for 1 January.

Denis McMahon has advised the Northern Ireland Assembly that procurement, planning and IT issues have delayed work, and there is a lack of clarity on the checks required and the size of facilities needed, as this has not been agreed by the EU/UK Joint Committee on the operation of the Northern Ireland Protocol.

To help Northern Ireland business through the uncertainty, the UK Government recently launched a Trader Support Service, providing education and guidance for traders moving goods under the Protocol, including between Great Britain and Northern Ireland. Tens of thousands of traders will receive emails and letters about this free-to-use digital service, which will help businesses and traders of all sizes to navigate the changes to the way goods move once the Northern Ireland Protocol comes into effect on 1 January 2021.

The UK and the EU continue to meet to try to resolve the outstanding issues. With less than 100 days to Brexit, consensus and clarity are in short supply.

Aaron Nelson is a Senior Associate at law firm BDB Pitmans. BDB Pitmans act for many of the UK’s port authorities, advising on port developments, management and operations. Aaron advises on obtaining or objecting to development consents, including compulsory purchase, highways, rights of way, open space and interfaces with utilities, and on wider legal powers, duties and regulatory requirements. He also writes BDB Pitmans’ Brexit blog.

BDB Pitmans was established in 2018 following a merger between legacy firms Bircham Dyson Bell (BDB) and Pitmans Law. This brings together over 300 years of legal expertise across four locations – Cambridge, London, Reading and Southampton, serving clients across the UK and internationally.

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PORT INVESTMENT: AFRICA

BRI: FINANCE OR DEBT TRAP?

Source: Financial Times

A new report into the implications of China’s Belt and Road Initiative (BRI) in Africa paints an unsettling picture – but there is more than one side to the story. Felicity Landon reports

A new ‘Issue Brief’ from the Observer Research Foundation (ORF) takes a discerning look at the nature of the Belt and Road Initiative (BRI) in the African continent, and its advantages and disadvantages for the host countries. As report author Dr Venkateswaran Lokanathan points out, China has established a significant economic presence in most African countries over the past two decades.

“Its lucrative economic investment package, flexible political approach and focused big-ticket development projects under the BRI provide an ostensibly massive opportunity to African countries,” he writes in his report.

“However, the unilateral nature of the initiative, the lack of transparency and accountability to African countries, and the absence of projects that directly benefit locals, have raised suspicions and fuelled local resentment.”

GROWING CONCERNS Dr Venkateswaran says there are growing concerns among African countries over a ‘rising debt trap’. According to his report, Djibouti is said to owe the equivalent of 75 per cent of GDP to China, while China owns 72 per cent of Kenya’s external debt, which stands at US$50 billion.

Over the next three years, Kenya is expected to pay US$60 billion to the China Exim Bank alone. The story around Mombasa port and the standard gauge railway (SGR) connecting to Nairobi has attracted much attention – as reported by Port Strategy last year, the Kenyan government borrowed Sh227 billion from the bank to fund the rail project and is under huge pressure to keep up the repayments. The ORF report says Kenya’s auditor general has warned that the country risks losing control of Mombasa port if it defaults on the SGR loans from the China Exim Bank.

However, maritime economics and logistics professor Dr

8 Some see Chinese investment in Africa as beneficial but concerns over a growing debt-trap are emerging

Hercules Haralambides, who lectures at Dalian Maritime University and Sorbonne University, takes a different view.

DEBT-TRAP DIPLOMACY “A part of Western concerns on BRI consists of what has come to be known as ‘debt-trap diplomacy’,” he says. “The Sri Lankan port of Hambantota has often been used as a case in point.

The practice is not unknown to certain western ‘financiers’, however, and in short it consists of extending loans to borrowers, usually under onerous terms, when one knows that the latter will be unable to repay. The solution is often a swap of debt with equity, i.e., in this case, the lender takes over control of the port. Whether this is the case or not, in the case of BRI investments, remains to be seen. But loans to Sri Lanka (Hambantota) were rather concessionary (two per cent), while the country’s largest debt is to Japan and not to China.”

Decisions made in the BRI framework, whether project selection or investment and financing cooperation, are all based on full consultation among the parties, says Dr Haralambides, and on the basis of carrying out due risk assessment and investment feasibility study.

“China and another 27 countries have jointly adopted the Guiding Principles on Financing the Development of the BRI, which highlight the need to ensure debt sustainability in project financing. China claims that in cases where its BRI partners face difficulties in servicing debts, China will properly address the issue through friendly consultation, and will never press partners for debt payment.”

REVOKING CHINESE LICENCES In the ORF report, Dr Venkateswaran says there have been increasing instances of African countries cancelling or postponing BRI projects over rising debt concerns – listing

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

NOVEMBER 2020 | 37

PORT INVESTMENT: AFRICA examples such as the Zambian government revoking a Chinese company’s licence to operate coal mines due to poor safety and environmental compliance, the Ugandan government postponing the construction of the KampalaEntebbe Expressway, and the Sierra Leone government cancelling the US$318 million Mamamah International Airport project under the BRI. Similarly, the Tanzanian Government has pushed back on proposed lending from China for its new Bagamoyo port project.

Ports, and supporting road and rail infrastructure, are a big part of the BRI picture. Setting out the significant trends emerging from China’s BRI projects in Africa, the ORF report says: “China is investing in ports and port areas along the coastline from the Gulf of Aden through the Suez Canal towards the Mediterranean Sea. Of the 49 countries that China claims have signed Memorandums of Understanding (MOUs) of officially expressed support for the BRI, 34 (nearly 70 per cent) are located along the coast of Africa – 16 in the West, eight each in the North and East, and two in the South.”

These include, it says, Djibouti Port, three Egyptian ports – Port Sudan, Port Said-Port Tewfik, Port Ain Sokhna – Zarzis Port in Tunisia and El Hamdania Port in Algeria. Also, “The People’s Liberation Army Navy has built its first overseas military base in Djibouti, which has been in use since 2017. To serve its strategic interests, China could use its influence over these ports for economic (transport of raw materials, finished goods and labour) and military (surveillance and blockade of overseas and deepsea maritime traffic) purposes in the future.”

Dr Haralambides points out that many other nations, including the US, UK, France, Germany and Italy, also have naval bases there, while the Gulf of Aden is the global hub for the illegal trade in weapons.

The implications of the ‘one-stop-shop’ approach are also up for debate. The ORF reports says China is using its connectivity projects, which represent 20 per cent of its overall projects in Africa, to link its industrial and energy projects in the hinterland to its infrastructure projects along the coastline, says the report.

For example, an oil refinery in the north of Sudan is located close to the railway line connecting Port Sudan and Dakar Port. Gabes, a hub for petrochemical and phosphate industries in Tunisia, has been connected by rail to the port of Zarzis. An industrial park in Ethiopia is located near the Addis Ababa-Adama highway, which connects with the AddisDjibouti rail line connected to Djibouti port. “This enables China to use the maritime route to transport raw materials such as phosphate, copper, cobalt, gold, iron ore, cocoa, bauxite, coal, lithium, steel, granite and marble back to the mainland, and finished goods and Chinese labour to Africa.”

WHO BENEFITS – LOCAL COUNTRIES OR CHINA? The report asks: “Does the BRI genuinely benefit participating local countries or only serve to enhance China’s economic benefits?” It says the local population only occasionally benefits from Chinese investments, and often it loses out – being relocated, witnessing damage to the local environment

‘‘

There are increasing instances of African countries cancelling or postponing BRI projects over rising debt concerns and revoking Chinese company’s licences 38 | NOVEMBER 2020

8 There are divided opinions on the value of the BRI to African countries

or losing homes and facilities that are ‘in the way’ of developments, from mines and power plants to railway lines and ports. Its conclusion is that so far, “BRI remains a largely unilateral Chinese exercise, with only a few instances of collaboration with third-party countries in Africa.”

However, Dr Haralambides pushes back against the idea that there is no local benefit from China’s investment strategy in Africa, stressing: “For reasons of credibility, reports like this one from ORF should be submitted to independent peer review while also providing full referencing of their claims and sources”.

“China is not investing only in African infrastructure, but also transfers manufacturing activity there,” he says. “By the end of 2015 - 128 industrial projects in Nigeria, 80 in Ethiopia, 77 in South Africa, 48 in Tanzania and 44 in Ghana. It seems developing Africa is much easier than developing China’s own north-western territories, and this trend is bound to continue in line with rising labour costs in China,” he says.

Dr Venkateswaran also draws attention to financing conditions. “Financing from western countries or institutions is usually accompanied by strict conditionalities; an inconvenience for poorer African countries. Comparatively, China’s financing strategy – through a combination of grants, aid and loans (free or at low interest rates) with a generous schedule of return, particularly on infrastructure projects – is an attractive option for African countries.”

China has adopted a practical approach, not a value-based one, when dealing with political regimes across the continent, he adds: “Unlike western countries, which prefer dealing with transparent and accountable democracies, China has an ‘allinclusive’ approach and deals with regimes without any preset conditions.”

Dr Haralambides points to a screening mechanism proposed by the European Commission in 2017 and approved by the European Parliament in February 2019. The mechanism, which mirrors similar procedures in the US Senate, aims to ensure that ‘strategic infrastructure’, such as ports, is not predatorily targeted by foreign investors.

“The ‘mechanism’ is seen as a coordinating tool at EU level, which does not intend to replace national mechanisms, or challenge member states’ prerogative to decide on investments,” he says. “The screening mechanism has led to a 40 per cent drop of Chinese investments in the European Union in 2018, compared with 2017, to about €17.3 billion. In 2016, Chinese investments had reached a record peak of €37 billion. This ‘success story’ has been over-advertised in Brussels, but, to my view, the decline in Chinese investments is due to the cooling of the Chinese economy since 2016, rather than to a (fairly lukewarm) screening mechanism.”

Moreover, he asks, when it comes to sensitive financial matters, aid or FDI, “are other countries like the US, UK, France, Germany less opaque?”

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

PORT ACCESS: BRAZIL

SANTOS: BATTLE LINES FORMING

Source: Rob Ward

A battle is brewing in Santos. Should there be a tunnel or a bridge to link the two disparate sides of the port area? Or neither? Rob Ward investigates

Today, if a container is unloaded from a feeder service in the Tecon Santos terminal in Guaruja (operated from the left bank by Santos Brasil) and needs to be trucked to Brasil Terminal Portuaria (at Alemoa on the right bank) for onward shipment, it faces a 40km trip and a possible 90 minute journey (depending on traffic) to find its next shipboard slot.

Delay costs are incurred, around Reais600 (US$107.06) per one-way trip at present, but with the construction of a crossing, savings could be more than US$130 million per year for shippers.

For years, even decades, Santos port users and residents have been talking about a crossing of the Santos channel to connect the two cities and two banks of South America’s largest port - but nothing has come to fruition.

FORCES BEING MOBILISED Now, momentum has picked up and two strong teams – one supporting the tunnel plan and another the bridge - are being assembled. Both are mobilising their forces to impress a government in Brasilia that is very open to at least one of these expensive schemes, as it forges ahead with its privatisation and public-private development schemes.

“It does seem that after all these years of on and off projects, one of the two will go ahead,” said a veteran Santos port terminal executive, who did not wish to be identified. “It is like a very complicated game of chess with BTP [Brasil Terminal Portuaria, a joint-venture between Maersk Line and MSC’s stevedoring arms, AP Moller Terminals and Terminal Investment Limited, strongly favouring a tunnel and having the support of the Santos Port Authority, several dredging

8 Powerful interest groups are planning to build either a bridge or tunnel to connect the right bank (left of photo, at the old T-37 Libra terminal) with the left bank (in the city of Guaruja, on the right side of photo, showing Santos Brasil)

companies [including Boskalis and Van Oord] plus some political factions in Brasilia.”

“And, on the other hand, there is Ecovias, and its EcoRodovias subsidiary [which operates the main Sao Paulo to Santos highways], that are backed by Joao Doria, Governor of Sao Paulo, pushing the bridge project which will also suit Santos Brasil, which aims to bid for the area next to BTP, in the Alemoa district, to scupper its expansion plans.”

SPA and CAP are drawing-up plans for a tender to cover the area in Alemoa, bordering BTP, where the former Deicmar car terminal, Rodrimar container terminal and Termares inland bonded terminal used to operate, for a new terminal that will be a mix of containers, ro-ro and general cargo. BTP is often running at full capacity and desperately wants to take over the adjacent area.

Ecovias initially presented its bridge project to the Santos Port Authority Council (CAP) in February of 2019. It involves constructing a crossing between the cities of Santos and Guarujá that would cost around Reais3billion and “would improve handling cargo in the port of Santos and urban mobility in these two cities”.

The project will cover 7.5km, take three years to deliver, and would, according to Ecovias, be funded by merely extending the concession for the Santos-Sao Paulo highways for a long period; the company would recoup its outlay via tolls on both transport networks. It would also be contiguous to the BTP terminal.

“On top of this, plans are moving ahead to turn the military airport in Guaruja [left bank of port of Santos] into a regional, civil airport so the bridge especially, but also the tunnel albeit

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

NOVEMBER 2020 | 39

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PORT ACCESS: BRAZIL

SHOCKED SANTOS PORT COMMUNITY Intriguingly, the campaign for the tunnel – called “Vou de Tunel” (“I’m going by tunnel”) is being assisted by Casemiro Tercio Carvalho, the former CEO of the Santos Port Authority (SPA, or formerly Codesp). Carvalho left his post back in May 2020 but did not declare that his “new challenge” was helping co-ordinate a project costing between Reais5 billion and Reais 6billion.

Now a shocked Santos port community is aware that Carvalho is not leaving Santos at all but an active member of the consortium, DAGNL, that has won the bid to draw up the privatisation concession document for the port of Santos.

(DAGNL comprises DTA Engenharia (a dredging company), Garín, Alvarez & Marsal (a global firm specialising in management turnarounds) and the law firms Lobo De Rizzo and Navarro Prado Advogados, Vou de Tunel has the full backing of BTP, Brazil’s president Jair Bolsonaro and Infrastructure Minister, Tarcisio Freitas de Gomes, plus Carvalho’s former colleagues at the SPA, notably the new President Fernando Biral. SPA, argues that any bridge might restrict the future expansion of the port by impacting future vessel size.

Those backing the “Bridge” alternative are EcoRodovias, Ecoporto Santos (the fully owned subsidiary of EcoRodovias which operates a breakbulk and general cargo terminal at Saboó and the Sao Paulo State Government. Its Governor, Joao Doria, who intends to stand against Bolsonaro in the next Presidential elections in Brazil, to be held on October 2, 2022, is in favour too.

OPTION THREE Of course, there is one more option. “Nothing!” declared Leandro Carelli Barreto, a director with the Solve Shipping consultancy. “I believe the best option, from a Santos port and cargo perspective, is to leave things exactly as they are,” he explained, adding, “These plans have basically come more than 10 years too late. I think that either the Road or Tunnel options would have been a good idea 10 to 15 years ago but nowadays less bank-to-bank trucking transfers are required.”

He justifies his thinking further: “Back then we used to have at least 45 deep-sea services calling along our coastline, nearly all berthing at Santos. Today we have less than 20.

Cargo on the Asia service on the right bank for onward connections, especially to and from Manaus [where there is a Free Trade Zone and huge component assembly plants of all the major electronics firms] has trucks to provide this service.”

And Gustavo Costa, a Sao Paulo based shipping consultant and former logistics director with Hamburg Sud, concurs with Barreto.

“I don’t believe the port of Santos needs either of these

Source: Rob Ward

to a lesser extent, would be very handy for that infrastructure project too,” added the terminal executive.

two projects,” he told Port Strategy. “Santos needs a lot of things, especially better management and both capital dredging and regular maintenance dredging but I don’t think it needs to spend vast sums on either crossing. It doesn’t need either a bridge or a tunnel, in my opinion.”

8 BTP Terminal in Santos is close to where the new bridge, if built, would be located and will gain an immediate logistics benefit

A NEW DIMENSION TO THE ARGUMENT Antonio Carlos Sepulveda, CEO for Santos Brasil, added a new dimension, saying some factions in Santos, and especially BTP, do not want a bridge because it might affect the maximum air draft and size of vessels that can call at Santos, creating manoeuvring restrictions.

“However, the only feasible project on the table today is the bridge,” he argued. “I have not seen any proper plan for the tunnel but I have been to several presentations for the bridge and it is viable. Ecovias has listened to initial criticisms and has offered to increase the span of the bridge, the distance between the pillars, so this will allow for the transit of larger vessels.”

He explained further. “It seems the main people complaining are BTP because the bridge is right on their boundary and nobody wants to be next to a bridge, even though this one will go over the terminal so they will still be able to extend their area.”

Mark Juzwiak, Director for Institutional Relations for Hamburg Sud, said he believes a tunnel “makes more sense even if it is more expensive” as it will more easily allow for the bigger post Panamax vessels – of between 18,000 and 21,000 TEU capacity – to call.

“It could also more effectively reduce congestion on the roads and the concessionaire could get its money back after 10 to 15 years,” he asserts, adding that a bridge might reduce the size of vessels that can call in the future at BTP or the DP World box facilities that are upriver.

The Numbers Around 1500 one-way trucking moves occur per day from one bank to the other within the port of Santos. According to Santos Brasil’s Tecon Santos Terminal, the costs are Reais600 (US$107.06) per trip.

The bridge and/or tunnel could produce massive savings for beneficial cargo owners of up to $58.8 million per year

(subject to what the bridge/tunnel tolls are set at).

The calculation is based on an exchange rate of 5.6 to the greenback – which is at its lowest for more than 30 years - but for the previous five years it ranged between 1.5 to 3.8 and averaged 2.5. On this basis, if and when the currencies return to “normality”

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

post COVID-19, the savings could be more like US$135 million per annum.

In addition, savings of time, pollution, road wear and tear etc. from the 40km round trip mean overall reductions could be higher still.

Perhaps easy to see why shippers and carriers might like to see a new crossing for the Santos channel.

NOVEMBER 2020 | 41

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NEW GENERATION TECHNOLOGY

RFID: BUILDING MOMENTUM John Bensalhia looks at how RFID technology is being used by in the ports sector and what the premier trends are

8 RFID manufacturers are containing the technology in smaller units but ensuring that it can cover bigger distances

From the latest sounds crackling through hi-fi speakers through to walkie talkie communication, radio waves are part and parcel of everyday life.

With continued improvements in modern technology, the radio wave repertoire continues to positively penetrate the ports and terminal sector. Specifically, Radio Frequency Identification (RFID) – technology, which can play a positive role in tracking assets, equipment and machinery over quite long distances and in sizable numbers.

CHANGING WITH THE TIMES One catalyst to RFID sector growth is the reality that terminal operators continue to embrace new technology in pursuit of enhanced performance and cost reduction. Introducing new technology to streamline terminal operations inevitably means that RFID is a serious ingredient.

The Port of Felixstowe, for example, has introduced remote control quay cranes and yard cranes to its portfolio. As a way of allocating the relevant jobs to the remote yard cranes, information about vehicles is held in RFID tags, which interface with the port’s terminal operating system. Visiting hauliers therefore need two RFID tags per vehicle, one positioned in the passenger seat window, the other for the driver seat window. When the vehicle passes through an antenna/reader the RFID tag data is automatically read.

Felixstowe’s Automatic Truck Identification System holds vehicle registration numbers, and checks the data read by the RFID tag.

MANY BENEFITS UK-based Core RFID states that there are many benefits of RFID technology, which “make it possible to build a solid business case for its use in different industries and for

different applications.” Improved productivity at a lower cost is seen as high on the list.

Core RFID underlines this is because it can collate data about assets, components and stock, not only in great detail, but at a faster pace and with a higher rate of accuracy and reliability. Practically speaking, this means it is less timeconsuming than previous generation methods such as manual recording and barcode scanning.

RFID also offers greater clarity in real time. A port or terminal can garner up-to-date information for planning and operations management. This fast and accurate data capture thereby significantly reduces the potential for mistakes being made across a wide range of everyday tasks.

Another key advantage cited by Core RFID is the beneficial impact on security levels. The tagging of cargo, for example, enables a port company to monitor and track this. In the case of any problems, RFID technology can alert the relevant party to rectify the situation as swiftly as possible.

FIXED AND MOBILE RFID technology is available in the form of fixed readers and mobile devices. A case in point of a fixed point reader system is Core RFID’s gateway, which can be used at a port to detect and monitor cargo, goods and containers, and to ensure that everything is present and correct. In order to ensure accurate positioning of the antennas, Core RFID also provides a consultancy service to clients.

An example of a mobile reader is Core RFID CheckedOK solution, which is geared towards complying with and enhancing safety levels. It can be used in conjunction with laptops, mobiles, Android devices and tablets, through which the relevant data can be collected and accessed.

The CheckedOK device is a mobile method of testing and

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

NOVEMBER 2020 | 43

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‘‘

The Smarter Technologies Orion Data Network uses radio spectrum to allow monitoring devices to be read at distance and the information is passed back via an internet connection to a device – tablet, mobile or desktop inspecting machinery and equipment including cranes, forklifts (and other lifting machines), work platforms, PPE, fire escape and safety facilities, as well as pumps, valves and pipelines.

The technology can spotlight any items that have been omitted during inspections, past and present, and provide reports that are in line with the relevant regulations.

Hence by using CheckedOK, it can be instrumental in reducing the risk of accidents, equipment failure and ensuing legal action.

SIZE IS IMPORTANT RFID manufacturers are coming up with smaller technology.

France-based Maintag, for example, offers a range of compact ceramic tags.

Among the CERAtag range are CERAtag D10 and the CERAtag stick, both of which use ceramic material which Maintag claims offers better operating and further reading distance properties than other conventional tag materials.

At only 10mm x 1.6mm, both of these tags are small enough to be fitted on narrow, metallic surfaces. The tags, which are compatible with a standard Gen2 reader, are said to have a memory service life of in excess of 30 years at a temperature of up to 50degC. Smarter Technologies’ similarly claims superior benefits from its RFID technology. The UK-based company states it is able to offer RFID solutions (such as the Orion Data Network) that work efficiently over longer distances. This facilitates the timely and accurate identification of thousands of different assets. The location and status of assets is achieved in real time, with messages and alerts sent to mobile devices, which can prove vital in the case of an emergency.

“The Smarter Technologies Orion Data Network uses radio spectrum to allow monitoring devices to be read at distance

and the information is passed back via an internet connection to a device – tablet, mobile or desktop,” explains Matthew Margetts, Director - Sales & Marketing, Smarter Technologies.

“The client,” he elaborates, “can then use the data to make decisions or because the Orion network allows for two-way communication to make required changes.”

Asset tracking devices can be placed on cargo, containers, vehicles, forklift trucks and vessels. By keeping an eye on the location of each asset, ports can make sure that each of these is safe. It can warn the port operator if, for example, a cargo or cargo container is damaged or tampered with.

8 Orion Data Network uses radio spectrum to allow monitoring devices to be read at distance - the information is passed back via an internet connection to a device – tablet, mobile or desktop

DRIVE FOR ECONOMIES AND EFFICIENCY Margetts says that on large sites as exemplified by high capacity ports, the network is used to track and locate assets that because the size of the operation may be misplaced.

“Equally,” he says, “the network can be used to monitor the state and status of equipment to detect potential failure ahead of time. For example, a temperature monitor can be used to identify a faulty part as heat builds up allowing for an engineer to take corrective action before something turns critical.”

In the case of a lost or stolen asset, Smarter Technologies further points out that its hand-held readers can help locate these by tracking down their precise location – using the system of far-reaching radio waves.

System suppliers generally underline the increasing versatility of RFID technology in terms of scope of and range of application. R&D work is forecast to bring bigger and better benefits ultimately helping the ports sector in pursuit of new economies and levels of efficiency.

Encouraging Predictions for RFID Sector While COVID-19 has affected – and continues to affect – businesses around the globe, a recent report from Technavio (September 2020) posted some encouraging predictions about the RFID sector.

The main talking point of the report, Global Radio Frequency Identification (RFID) Market 2020-2024, is a market growth prediction of more than nine per cent per annum during this period. This increase equates to a rise of around $11.26 billion in the noted time frame.

The report asserts that while the

pandemic remains, and that some industries will be affected other industries will remain unaffected, realising the potential for ongoing growth.

Accordingly, the report suggests, vendors will be able to make the most of available potential by concentrating on opportunities in the faster-growing sectors while cementing positions in slower-growing areas.

One significant spur to growth cited is that RFID is a compulsory requirement in many locations. For example, at the Norfolk

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

International and Virginia International terminals in Hampton Roads, Virginia, USA truckers are not permitted to proceed unless they have a valid reservation within PRO-PASS. Likewise, at the Port of New York and New Jersey marine terminals all Class 8 drayage trucks entering these locations are required to have a valid RFID tag that is clearly mounted on each vehicle coming through.

If a tag is not obtained for the vehicle, then the driver is denied entry. Similar rules apply at diverse other locations.

NOVEMBER 2020 | 45

CONTAINER HANDLING

ECH FLTs ADVANCE AT PACE Backed by strong demand, design innovation with empty container handling FLT product lines continues apace. John Bensalhia investigates There has been consistent demand for empty container handling Fork Lift Trucks (FLTs) from the ports sector in 2020, with strong interest being driven by current operating circumstances as Richard Root, EMEA Big Truck Director, Hyster, explains.

“Demand for container movements remains strong and many of our customers are seeing an increase in container volumes. However, in some regions, more containers are imported than exported, causing an imbalance and an excess of empty containers. This is driving the usage of empty container yards, where these containers can be stored, inspected or repaired. This is especially true for reefer containers, which require cleaning and thorough inspection before they can be re-used.”

Root further notes that intertwined with this positive demand trend is a need for improved handling efficiency which, in many cases, is supported through double container handling with a Hyster Empty Container Handler.

Konecranes also notes the continuing requirement for empty container handling FLTs.. “We have seen this trend before when the actual market is below average,” explain Patrik Lundbäck, Director and Head of Sales & Distribution, and Håkan Andersson, Product manager, Konecranes Lift Trucks.

“This means lower volumes of laden containers. Also, the demand for reefer containers has been kept on a good level.”

INNOVATION FOR ENHANCED EFFICIENCY In search of greater efficiency, a notable concept offered by Konecranes is Smart Lift, an automatic height positioning system for empty container handlers. Andersson says that this innovation means improving efficiency and reducing driver stress. The first Konecranes Lift Truck to use Smart Lift was 2019’s SMV ECC 6/7 110 DS, an Empty Container Handler with a double stack capacity of up to 11 tons.

The Smart Lift is also a feature of the Empty Container Handler model SMV 6/7 ECC 100DS, using lasers to automatically select lifting height based on container size and stack position. The SMV 6/7 ECC 100DS has also seen the addition of a triplex mast and free-lift option, which enables customers to use the same lift truck to move containers both inside and outside a storage building. The free-lift facility means that container handling can be managed indoors, keeping the total mast height under set limits.

To make work easy and comfortable for operators, Hyster Empty Container Handlers feature a new ‘cockpit style’ cabin, which places all truck information and controls at the driver’s fingertips. “With more glass integral to its design the new premium cab also provides excellent visibility during driving, reversing and manoeuvring,” says Root.

He elaborates:: “The dedicated cabin has more floor space and a re-designed joystick control. To help operations keep control of costs, the cabin also includes a performance counter which reports usage data such as the number of containers moved, fuel used per container and distance covered per container.”

Further facets of the new cabin style include low in-cab noise levels, which help drivers to keep concentration during long shifts, plus heating and ventilation options to suit summer or winter conditions.

46 | NOVEMBER 2020

Root adds that the new cab features a user-friendly seven-inch touch screen display as standard, but there is also the option of a second seven-inch display that can be used to clearly inform the operator about the status of the container engagement.

“The optional second display can provide a clear visual indication on whether the containers are positively locked or not, as well as any limitations the operator should be aware of. This may help the driver to pick more efficiently and reduce “mispicks”, especially when double handling.”

Furthermore, to increase visibility for specific applications, Hyster offers Empty Container Handlers with technical innovations, such as camera systems and active obstacle detection systems. Spreader mounted cameras for container handling operations are also available.

8 Konecranes’ has placed greater emphasis on eco-lifting features in its empty container handling FLT range

ECO-FRIENDLY An advantage claimed for Empty Container Handling FLTs is that they are environmentally friendly. “Empty Container Handlers have a dedicated design for the required lifting capacity,” explain Lundbäck and Andersson, noting that:: “This is more fuel efficient than using the same lifter for full and empty containers.”

Three features are highlighted by Konecranes as geared towards eco-friendly operations that reduce CO2 emissions:

‘‘

The optional second display helps the driver pick more efficiently and reduce “mispicks,” especially when double-handling For the latest news and analysis go to www.portstrategy.com/news101

CONTAINER HANDLING fuel consumption and costs – Power Drive is said to reduce these by up to 15 per cent, Flow Drive (featuring hydromechanical-variable transmission) by up to 25 per cent and Hybrid Drive by around 40 per cent.

“Technology never stops advancing,” says Lundbäck. “New products and upgrades improve the safety, productivity and cost- effectiveness of our equipment. Our aim with this new technology is to give every one of our customers exactly what they need for their own particular set of circumstances – in other words, for their own worlds.”

Root says that compared to a Reachstacker handling empty containers, a dedicated Empty Container Handler has significantly less fuel consumption, and therefore, less CO2 emissions.

“The Hyster H9- H11XM-ECD9 Empty Container Handler series is also capable of double handling, even reefer containers,” he states, adding: “As two containers can be moved at once, this also results in less CO2 output per container moved. With double handling, fewer trucks are needed to get the job done which also offers positive environmental benefits. Hyster can also assist customers with a yard optimisation service. This looks at how to optimise double handling operations and achieve better throughput, which in turn helps reduce truck queueing and idle times and the associated emissions.”

For emissions-regulated markets, Stage V engines are available for Hyster Empty Container Handlers. The Stage V Hyster trucks also incorporate smart monitoring and service to optimise uptime in demanding applications. “The new truck engines will use a combination of a Selective Catalytic Reduction (SCR) and DEF like AdBlue and a Diesel Particle Filter (DPF),” says Root. “The engines are equipped with a cooled EGR, which minimises the creation of NOx, resulting in less DEF usage.”

Root adds that projects are also underway concerning the development of zero-emissions – Hyster ReachStackers and Laden Container Handlers – either fully electric, powered by a battery or by hydrogen fuel cell. “It is possible that there will be demand for similar projects for zero-emission Empty Container Handlers in the future,” He says.

SAFETY FIRST Empty container handling FLT design innovations also feature a strong focus on safety.

Kalmar’s Empty Container Handlers include a number of elements that boost safety. The Drive Speed Limiter System can help reduce potential risks and accidents during work, while the camera-based Reverse Warning System warns the operator of any obstacles in the way when reversing the vehicle.

Nine of the Kalmar Empty Container Handlers (as well as a Kalmar Gloria Reachstacker) were recently confirmed for Rotterdam-based empty container storage, repair and

service operator, DR Depots, with delivery expected sometime in the final quarter of 2020.

Also due in the fourth quarter of 2020 is a delivery of five Empty Container Handlers (plus 10 Eco Reachstackers and one medium Forklift) for Australian-based ACFS Port Logistics Pty Limited. Built on Kalmar’s G-Generation platform, the Empty Container Handlers are designed to both provide easier maintenance and a comfortable, ergonomic working environment for operators. The machines have been purchased for an intermodal rail facility, an empty-container park and a distribution depot in Melbourne, Sydney and Brisbane, respectively.

8 Hyster reports strong demand for empty container handlers in 2020, boosted by imbalanced trades and the resulting excess of empty units

POWER PACKED The power of Empty Container Handlers is another reason said to underpin their popularity. Hyster’s H8- H11XM-ECD9 Empty Container Handlers, for example, include a tough mast to accommodate heavier weights and offset loading, achieving power and speed in every lift.

“The high strength truck can handle net loads of up to 11 tonnes,” says Root. “For optimal performance and durability, the variable lap mast features a heavy-duty chain system.

This design enhances structural strength and significantly improves chain life, contributing to lower costs and reduced downtime.”

However, it is not only strength that is important. The Hyster H8- H11XM-ECD9 Empty Container Handler also enables operators to work container stacks up to nine tiers high, optimising yard space and providing both cost and time efficiencies. “Even where difficult weather conditions, local policy or other constraints prevent operations from stacking nine high, increasing stacks from five to six containers with a Hyster Empty Container Handler can still result in a capacity increase of up to 20 per cent,” says Root.

The Virtual World of Empty Container Handlers Terminal operators considering investment in a new Empty Container Handler have the option of trying one out for size – in the virtual world.

CM Labs’ ECH Simulator is a training method that provides terminals with an opportunity to prepare for using this machine in a busy environment – but without adversely impacting real operations.

As well as the two-stage mast ECH, the

simulator includes equipment lights, mirrors and sounds.

The simulator is based on the real handler’s operating features, allowing the user to virtually pick and stack 20’, 40’ and 45’ containers up to eight-high.

It is fully aware of the real machine’s capabilities, such as its load limits, improper handling (which can cause the virtual equivalent to topple over), as well

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

as external factors such as poor weather conditions.

The simulator allows the operator to monitor performance levels with the help of an ECH Simulator Training Pack that automatically tracks operator performance metrics, collating these into one score. It is also possible to use specific scoring criteria in accordance with each terminal’s circumstances and priorities.

NOVEMBER 2020 | 47

INDIA TRANSSHIPMENT: NEW DIMENSIONS

GREAT EXPECTATIONS India is targeting a high capacity transshipment operation on Great Nicobar, the largest of the Nicobar Islands ruled by India, north of Sumatra. Michael Mackay examines the project

Plans to develop a big transshipment port on India’s Andaman and Nicobar Islands seem set to spur competition in the regional transshipment business. The islands consist of two groups of islands at the southeastern edge of the Bay of Bengal.

“It is now proposed to construct a Transshipment Port in Great Nicobar at an estimated cost of about 10 thousand crores (USD133.7 million). The effort is to complete its first phase in the coming 4-5 years. Once this port is ready, big ships will also be able to stay here. This will increase India’s share in maritime trade,” Narendra Modi, India’s Prime Minister said in an August 10 speech.

THE PLAN What has been suggested, although not yet confirmed, is for the new port to be built at either Campbell Bay or South Bay on Great Nicobar Island. The proposal is for a port with a draft of circa twenty metres that will allow high capacity vessels to berth and off/upload transshipment cargo.

Both sites are in the immediate proximity to the main east – west shipping lanes and are said to offer naturally deep water without a major requirement for regular maintenance dredging.

Great Nicobar Island is the southernmost and the largest of the Nicobar Islands of India, located at the mouth of the Strait of Malacca adjacent to the main shipping channel between the Indian Ocean and the Pacific Ocean.

Built on Indian territory the new port will be much closer to the economic hotspots of South East Asia than mainland India which is close to 1000km to the West. Thailand is around a quarter of that distance, at 270 km to the east, with Indonesia, South East Asia’s largest single economy, under a tenth at a mere 90km.

The proposed new Great Nicobar port also complements two of India’s key policies: sagarmala or port-led development

‘‘

Grand Nicobar is in close proximity to the main East-West shipping routes where ships start funneling to go through theMalacca Straits 48 | NOVEMBER 2020

8 Will theory go into practice at Great Nicobar and a major new transhipment hub be created? Some view this as a marketplace which is already adequately served especially given firm plans for new capacity already being progressed and developments such as the liberalisation of cabotage which has benefitted Mundra, pictured

‘‘

…capacity in the sector is coming on-line at a potentially rapid rate and looking to the Indo-Pacific region to increase trade.

“Under the Act-east policy, the Andaman and Nicobar island’s role in India’s strong relations with East Asian countries and other countries connected to the sea is very high and is going to increase,” elaborated Prime Minister Narendra Modi.

And further positives are seen. Within the same range is Colombo, which as a port does a significant amount of India’s transshipment trade. There is also Bangladesh where a growing export-oriented economy is stifled by the limited port facilities at Chattogram.

LESS ROSY Placed in the context of national and regional transshipment capacity development the outlook is a bit less rosy. Not only is India battling COVID-19 but more capacity in the sector is coming on-line at a potentially rapid rate.

The state government of Kerala has given more time to Adani Ports and Special Economic Zone Ltd (APSEZ) to complete construction and start commercial operations on the first phase of the deep-water multi-purpose port at Vizhinjam, which was also to be a transshipment facility.

Under a 2015 concession agreement Adani should have started commercial operations by the end of last year.

The state agreed with Adani the project has been delayed due to force majeure events including the pandemic according to local media reports. One recent report – July 2020 – suggests that this ambitious new facility will now open next year with joint venture operations with shipping lines being targeted.

Adani has also seen transshipment volumes rise at Mundra, where it controls four terminals, following India’s cabotage liberalisation. The company has additionally been reported as a potential nominee of the Indian Government to participate in an India-Japan-Sri Lanka partnership to jointly run the East Coast Container Terminal, the fourth at Colombo Port, Sri Lanka.

A lot of transshipment capacity is in the pipeline.

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

PRODUCTS & SERVICES DIRECTORY

WASA WASA Dredring Dredring Directory_Wasa Directory_Wasa Director Director

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

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

+44 1329 825335 www.portstrategy.com

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

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G-SERIES

Dellner Dampers is an innovative Swedish company that supplies solutions to mitigate vibrations and absorb kinetic energy. Standard and customised buffers and dampers for port side applications such as cranes, spreaders and more. All designed and produced in Sweden.

Tel: +46-(0)157-45 43 40 Email: info@dellnerdampers.se

Web: dellnerdampers.se

D REDGING

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.

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.

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

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

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

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

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

E LECTRIFICATION SOLUTIONS

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

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

Contact Tim Hills or Hannah Bolland

DEME Directory Jan 2020_DEME Directo

D REDGING EQUIPMENT

Port Strategy Directory

C RANE COMPONENTS

C OMPONENTS

NEUERO Industrietechnik GmbH

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

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LASE Industrielle Lasertechnik GmbH

14/07/2020 10:56

When experience really does matter!

Tel: +65 9186 6846 jon.arnup@trent-global.com www.trent-global.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 Faartoftvej 22 D-46485 Wesel, Germany 7700 Thisted, Denmark Tel: +49 (0) 281 - 9 59 90 - 0 Tel: 0045 96 17 90 00 info@lase.de Neuro Directory Jan-Feb 2020_Neuero 29/ cimbria.holding@agcocorp.com www.lase.de www.cimbria.com

Cimbria Directory.indd 1

D REDGING

C ARGO HANDLING SYSTEMS

A/S Cimbria Cimbria is a global leader in the conveying, drying, processing, sorting and storage of grains, seeds, food and bulk products. Cimbria designs, manufactures and services customized high-tech solutions, from stand-alone machines to large turnkey plants. Our broad experience ensures our clients the targeted advice and range of solutions they need to grow their business.

C ONSULTING ENGINEERS

C ARGO HANDLING EQUIPMENT

B ULK HANDLING

Bedeschi S.p.A

Taylor Machine Works, Inc. For more than a century, Bedeschi is providing effective and Taylor Machine Works designs, reliable solutions in a wide variety engineers, and manufactures more of industries (bulk handling, than 100 models of industrial lift marine logistics and mining), equipment with lift capacities from capitalizing on synergies and 4,000-lbs. to 125,000-lbs. cross competences.

YOU CAN DEPEND ON BIG RED! Via Praimbole 38, 3690 N Church Avenue 35010 Limena (PD) – Italy Louisville, MS 39339 USA Tel: : +39 049 7663100 +1 662 773 3421 Fax: +39 049 8848006 Neuro Directory Jan-Feb 2020_Neuerocontact_sales@taylorbigred.com 29/ Email: sales@bedeschi.com www.taylorbigred.com Web: www.bedeschi.com

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

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

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

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

Westicker Str. 52, 59174 Kamen, Germany

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

NOVEMBER 2020 | 49

PRODUCTS & SERVICES DIRECTORY

Künz GmbH

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

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.

Contact Tim Hills or Hannah Bolland

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

+44 1329 825335 www.portstrategy.com

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

Port Strategy Directory

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.

+44 1329 825335 www.portstrategy.com

Port Strategy Directory

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

www.certusportautomation.com

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.

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CAMCO Technologies NV

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

ShibataFenderTeam Group

info@shibata-fender.team www.shibata-fender.team

Port Strategy Directory

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

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

CERTUS provides Automatic Container Recognition systems in ports and terminals all across the globe.

Our systems have consistently demonstrated high reliability and overall high OCR accuracy, streamlining customer operations.

Check out our Mobile OCR!

Visy systems reduce VISY Oy expenses, optimize safety & security, and increase throughput capacity via process automation. Our singleplatform gate operating system and OCR solutions manage all cargo, assets & personnel movements via quay, rail or road to keep operations moving.

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

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

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Sany Europe GmbH

Contact Tim Hills or Hannah Bolland

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I T PORT AUTOMATION

Verstegen is worlds leading manufacturer of rope operated mechanical grabs for the dry bulk industry. Stevedoring companies and ports are using our grabs for handling all kinds of bulk materials.

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

Liebherr-MCCtec Rostock GmbH

Verstegen Grijpers BV

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.

M ARINE FENDERS

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

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

I T PORT AUTOMATION

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.

BLOK Container Systems Ltd

I NSURANCE

Orts GMBH Maschinenfabrik

H ANDLING EQUIPMENT

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

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

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

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

50 | NOVEMBER 2020

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

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

PRODUCTS & SERVICES DIRECTORY

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.solvosys.com

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

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

T RACTORS

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

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

Solvo Europe B.V.

T ERMINAL OPERATIONS SYSTEMS

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

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

T ERMINAL OPERATIONS SYSTEMS

S PREADERS

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

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

T ERMINAL OPERATIONS SYSTEMS

S PARE PARTS

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

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

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

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

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

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07/05/2019 14:25

POSTSCRIPT THE WRONG ROUTE TO MARKET? The development of the new container/multipurpose terminal at the port of Takoradi, Ghana is advancing but questions remain about the process – or lack of process – which is bringing it to the market.

As of mid-October, the development of the new integrated container/multi-purpose terminal at the port of Takoradi, Ghana, was around the mid-way point.

The project is being watched with interest, not least because of the controversial process via which the development and operation of the terminal was awarded to local company IbisTek under a 25-year Build-Operate-Transfer (BOT) concession. The award was greeted with some surprise due to IbisTek’s lack of experience in the sector. It also drew substantial criticism due to the method of IbisTek’s selection by the Ghana Ports and Harbour Authority (GP&HA), which is politely described as more “single source” than via competitive tender.

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The Takoradi project is being watched with interest not least because of the controversial process via which the development and operation of the terminal was awarded to local company IbisTek

ENVISAGED ROLE AND PROGRESS Takoradi is Ghana’s second largest port located 225 miles to the west of the capital city of Accra.

Tema, situated in the east of the country and only 30 kilometres from Accra, enjoys the mantle of number one port and it is here that container handling operations have traditionally taken place. It too has recently been the subject of expansion works.

On April 30, 2020 Meridian Port Services, a joint venture company between GP&HA and Meridian Port Holdings (which is in turn a joint venture between APM Terminals and Bollore) completed, ahead of schedule, the Phase 1 works of the Tema Port Expansion Project (also known as Terminal 3 of Tema Port). The works included building and equipping a 1000m quay and a supporting extensive terminal area.

The new terminal in Takoradi – known as the Atlantic Terminal Services Container and Multipurpose Terminal - serves Ghana’s northern hinterland and the international trade of the three Sahelian landlocked economies of Burkina Faso, Mali and Niger. Its future role is also talked of as a container transshipment hub but the jury is out on whether theory becomes reality in this respect, especially given the ever slimmer margins now involved in transshipment activity.

In 2019, the port of Takoradi handled 38 per cent of Ghana’s seaborne traffic, 75 per cent of Ghana’s seaborne exports and 17 per cent of seaborne imports., including manganese, bauxite, clinker, wheat, bulk and bagged cocoa, quicklime, containerised cargo, and equipment for the mining and oil/gas industry.

The scheduled completion date for Phase One of the terminal, providing 600m of quay, is September 2021.

LONG SHADOWS As stated at the outset, the development of the terminal and its subsequent operation are the focus of some interest due to the non-conventional route taken to implement a Public-Private-Partnership (PPP) scheme in conjunction with it. It went something like this:

52 | NOVEMBER 2020

8 Takoradi where the new Atlantic Terminal container/ multi-purpose facility is the focus of some criticism about how the concession process was handled

5 J anuary 2017: The Director General of the GPHA – the person who had largely overseen the assembly of the Takoradi concession process – was relieved of his post by direct order of the President. No reason was given but allegations of corruption including in conjunction with both port expansion projects were made.

5 J anuary 2017: Calls made by the Junior Staff Union for the government to investigate the ownership and directorships of local companies involved in terminal companies that form part of the port expansion projects.

5A ugust 2017: GPHA signs a 25-year concession agreement with local company IbisTek for the development and operation of the new Takoradi container/multi-purpose terminal. This followed a more or less exclusive focus by GPHA on IbisTek. 5M arch 2018: Ghana’s then Minister of Finance instructed the GPHA to cancel the concession agreement with IbisTek and stated: “Thereafter GPHA – together with the Transaction Advisor – should continue the competitive procurement process….”

5 The above initiative was undertaken following criticism from the World Bank regarding the lack of competition associated with the tendering process for the concession.

5M arch 2018: Ghana’s Public Procurement Agency (PPA) pushed back on the Finance Minister’s views telling the Finance Ministry to write to the World Bank and point out that the cancellation of the concession agreement would evoke severe legal consequences for the state.

IbisTek has accordingly taken the project forward.

In so doing it has also made overtures to experienced international terminal operators but the feedback from this sector is that the company’s demands in the context of establishing a working relationship are totally unworkable – unrealistic.

The tendering of port projects in Africa has generally improved – there being fewer questionable deals. It is to be hoped that the route GPHA has taken with Takoradi is one that delivers effective port service and real economic benefit to the country and is not impeded by lack of experience, knowledge and any questionable arrangements that underpin such a reality.

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