Port Strategy October 2019

OCTOBER 2019 ❘ VOL. 1019

portstrategy.com

ISSUE 8

INSIGHT FOR PORT EXECUTIVES PLA going Green | USEC on the rails | Kicking off in LatAm | West Med on the up

INLAND SHIPPING GOING GREEN Is it too complex?

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

VIEWPOINT MIKE MUNDY ❘ Editor

Change must be justified

Often a lot of trouble is taken to offer new concessions with the assistance of independent advisors or arms’ length government bodies but strangely this type of independent appraisal is not yet a major feature of concession renewals, which invariably involve a bigger business than a new concession offering

As recent events in Douala, Cameroon have demonstrated, we are now in the era of concession renewals and there is not always a guarantee of continuity for existing incumbents. Terminal Investment Limited (TIL) the terminal arm of the major liner operator Mediterranean Shipping Company (MSC) has been awarded the concession for the Douala Container Terminal following the removal of the existing operating consortium of Bollore-APM Terminals from the bidding process for the new concession term.

In general, it is true to say that concession renewal with the existing operator is the sensible option. If such an operator can be seen to have done a good job – invested properly, raised service levels, applied good health and safety standards, engaged positively with all stakeholders and paid concession fees on time – then there is little incentive to remove such the incumbent party.

This is easy enough to measure in terms of monitoring vessel turn-round times, over the-quay box moves, dwell time on the terminal and other proven industry indicators.

There are, however, a few host port authorities who despite seeing such benefits opt for the tactic of offering a concession to the market again rather than a straightforward renewal. In such circumstances the motivation for doing so seems questionable – and may indeed be the result of a subjective decision at a senior port authority level as opposed to an objective decision. This can also incorporate some sort of outside influence ‘below the radar.’ When this happens, it is perhaps worthy of a closer look by the government agency that sits above the port authority concerned – a Ministry of Transport, for instance.

Often a lot of trouble is taken to offer new concessions with the assistance of independent advisors or arms’ length government bodies but strangely this type of independent appraisal is not yet a major feature of concession renewals, which invariably involve a bigger business than a new concession offering.

Not to say that there is not a case for offering a concession to the market on the expiry of an existing concession’s term but the bonafide grounds for this are clearly poor performance or undue exploitation of the asset to the detriment of the terminal’s customers and a country’s broad economic objectives.

It also doesn’t help if the concession holder falls into a major dispute with the host port authority – such as the one APM-Bollore has with the Port Autonome de Douala (PAD), involving an amount of €37.5 million which PAD says is owed for breaches of the concession terms and for charges relating to vessel calls. Such circumstances do promote the idea of concession renewal to a new operator.

Where original concession holders have clearly done a very good job, however, there are less grounds for removal and if this is proposed then there is a strong case for scrutiny of the motivation in this respect.

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

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OCTOBER 2019 | 3

CONTENTS

OCTOBER 2019

12

NEWS

FEATURES

10

14 COLUMNS

16 Profits up for Codesp in Santos Profits are 16 times higher for Santos port authority in Brazil for first half of 2019 and plans exist to modernise procedures further

18 Expansion on agenda for major ports in Chile The Chilean port of Talcahuano is expanding with additional land to raise capacity by 50%, while San Antonio is expecting to be full by 2026-2027

18 Mexico’s ports to develop Four new terminals at planned at the Port of Manzanillo, which will include a new 1.75 million TEU container terminal

12 Sustainable conferences With conference season upon the industry, port professionals are faced with tough choices of which event to attend, although expect common themes of technology and sustainability

14 Put on warm winter clothes

10 Further investment in key Spanish ports Valencia is due to spend €1 billion in the next 10 years on its port infrastructure, as Las Palmas targets terminal expansion

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

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The message for the port sector is clear, it’s time to tighten the belts and put on the warm winter clothes. The cold chill of winter is bringing icy economic concerns

15 The cleaning of inland shipping The CLeaning INland Shipping (CLINSH) consortium told London Shipping Week how it is striving to improve air quality in urban areas.

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

17

17 Area Survey: United States East Coast Use of intermodal rail is featuring heavily at several major ports on the highly-competitive US East Coast, with investment at NY/NJ, Virginia and Savannah to target US MidWest more efficiently, while the region welcomes a new global operator.

28 Regional Focus: Latin America Delays to the new, largescale tender process in Buenos Aries comes at a time when the future of the port as a direct-call option is under review. At the same time, a revolutionary approach at Santos, Brazil, may be about to kickstart, as Port Strategy discovers.

48 Taking up the Challenge for Greener Inland Shipping From fuel choices to finance models, the challenges of ‘greening’ inland shipping are complex, delegates heard at the PLA’s London conference. Port Strategy was there to hear more.

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OCTOBER 2019 | 5

THE STRATEGY

Codesp, the port authority for Santos in Brazil, has posted net income of Reais63.5 million ($15.9 million) for the first half of this year, almost 16 times greater than for the same period of last year, when only Reais4 million profit was recorded.

Under new management since February 2019, Codesp has been trying to “modernise” its procedures to be a more effective organization, according to new port authority president Casemiro Tércio Carvalho.

“Last year Codesp posted a loss of Reais 468.7 million [$125.3 million] and that is totally unacceptable,” Carvalho told Port Strategy. “So earlier this year we started raising our tariffs and cutting our costs and now we are seeing the benefits. We have much better control over our expenses now.”

Increased throughput has also helped, for Codesp and Carvalho, who was personally appointed, in February 2019, by Tarcísio Gomes de Freitas, the minister for Infrastructure and Transport and one of the most powerful ministers in Brasilia.

PROFITS UP FOR CODESP IN SANTOS

The concession covering the Chilean Port of Talcahuano has been expanded by a further 110,000m2 through the incorporation of former Benavente Fort. The new land is located on the northern edge of the port, on the Punta Pardo coastal side. According to the government, this additional land will allow the port to increase its handling capacity by 50%.

Currently, it can handle one

CHILE’S PORTS HOT ON EXPANSION

The port of Santos – South America’s largest container volume facility, with 4.2 million TEU handled in 2019 – saw boxed cargoes rise by a very healthy 12.5% to 356,993 TEU, with June registering a total of 11,576,036 metric tons handled.

Corn was the biggest riser with 1.24 million metric tons being 18 times more than volumes in June of last

8 Port of Santos is South America’s largest container volume facility

year, with Brazil gaining some reefer markets from the US trade war with China (notably beef and pork exports), the forecast for the second semester also looks good, say various Port Strategy sources in Santos.

For the first six months as a

whole, throughput was slightly down, by 1.4%, to 63,583,391 metric tons, after a “tough start to the year” and a new government in Brasilia.

The current management practice of reviewing and renegotiating service contracts and entering into new lease transition agreements at market value were fundamental to the significant change in Codesp’s financial result, said Fernando Biral, Director of Administration and Finance for Codesp. Evidence of this position is net revenue growth of 12% over the first half of 2018 - up to Reais 468.4 million – while service costs decreased 23.3%, down to Reais175.9 million.

“The result reflects daily efforts to meet the challenges ahead, such as the Portus pension fund [which Codesp wants to curtail] and the PIDV [Voluntary Dismissal Incentive Plan],”added Biral, with a reference to the bid by Codesp to reduce port authority staff numbers from today’s 1,300 down to 500 within a “couple of years”.

million TEU and this will now rise to two million TEU, says Rodrigo Monsalve, the managing direct of Puertos de Talcahuano.

At the end of August, Servicios de la Empresa Portuaria Austral is to issue a tender for work on improving the Arturo Prat terminal at the Port of Punta Arenas. Work is expected to start in November or December and take around six months to complete. A total of $3 million will be spent on a new berthing dolphin and 130m berth

to allow the port to receive vessels of up to 317 metres in length.

Growth estimates show that the Chilean Port of San Antonio will reach its container handling capacity between 2026 and 2027 – to coincide with the opening of the first phase of a new deepwater port in the region.

Ronald Fischer, a researcher at the Complex Systems Engineering Institute, ISCI, at the University of Chile, was asked by the San Antonio Port Company (EPSA) to

advise if rules put forward in the proposed concession would promote competition in Chile’s V region. The report leverages earlier conclusions that suggested there would be a significant reduction in capacity if four concessions were offered in place of two, while also resulting in less competition.

It was stated that two 3 million TEU terminals would be significantly larger than other regional operators, so prices would be more competitive.

South Korea 12-Port Expansion

Another $30 million for Guayaquil

New Bay of Bengal Port?

Japanese continue port investment

South Korea has unveiled 41.8 trillion won (US$35.2 billion) spending plans to boost cargohandling capacity at 12 ports by 20140. Government plans to spend 16.08 trillion won but wants private sector funding of 25.7 trillion won. Capacity will increase to 1.85 billion tons per year from the 1.32 billion tons in recorded 2017, with Busan becoming a "mega port" capable of handling several 25,000-TEU vessels.

Concession holder at Guayaquil, Contecon, is to invest a further $30 million in upgrades above the $315 million envisaged in the original contract to extend crane outreach and dredging of berths from 10m to 13m. Contecon handles 43% of the port’s container traffic, down from 70% in the past due to giving 9.5% of revenue for use of facilities, which private terminals do not have to do.

India has reportedly called for proposals to build a container port on the Andaman & Nicobar Islands in the Bay of Bengal.

If it goes ahead the facility could threaten Sri Lanka’s transhipment business at Colombo port. An international public tender will see the chosen bidder design, build, finance, operate, and maintain the container port and logistics facility.

The Japanese government is to continue to financially support port projects located in Angola’s Namibe province. Currently, it is contributing $60 million to the second phase of the Namibe Port Renovation and Modernisation Project, which is being undertaken

by Japanese company TOA Corporation. Work includes expansion of the container terminal and renovation of Saco-Mar Port.

BRIEFS

6 | OCTOBER 2019

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

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Terberg YT182

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Terberg YT182

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Terberg RT223

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THE STRATEGY

BRIEFS Cosco’s big logistics plans at Klang COSCO plans to build logistics warehouse of 300,000ft2 Malaysia’s Port Klang as part of its expanding logistics strategy.

The move is part of an acquisition of existing assets and development of new facilities in the Port Klang region after COSCO pointed a long-term shortage of quality warehousing serving its operations at this Malaysian port.

Alcântara terminal modernisation Lisbon Port Authority (APL) and Yilport are to develop Alcântara Container Terminal (Liscont) with €122 million of new investment. Under the development plan, new equipment will be acquired and dredging work undertaken to allow larger ships to dock, with new cranes able to handle vessels of up to 22,000TEU. Yilport acquired the facility in 2016.

Government agrees terminal The new Vasco da Gama Container Terminal at the Portuguese Port of Sines will be built with an annual capacity of 3 million TEU from investment of €642 million. A 1,375m-long quay, with three berths and draft of 17.5 metres is planned, with 15 cranes. Construction is expected to take four years to complete, with a rail siding of at least two lines planned.

Tenders due for Bulgaria Bulgaria’s State Concessions 2019-2020 plan confirms the launch of 35-year operating tenders (with an optional extension of 11.5 years) for its major Black Sea and River Danube facilities in 2020. Ports involved are Varna-East and Varna-West ports, plus a range of facilities on the Danube.

8 | OCTOBER 2019

MEXICO’S PORTS CONTINUE TO DEVELOP The Ministry of Communications and Transportation (SCT) in Mexico has confirmed that the port of Manzanillo is to be extended to the Cuyutlán Lagoon through a public-private investment of $1.18 billion. This project will encompass four new terminals, comprising a 1.75 million TEU container terminal, an agribulk handling facility, a bulk minerals installation and a terminal for fuel.

In the first five months of this year, Manzanillo reported cargo volume of 13.5 million tonnes and a container throughput of 1.24 million TEU, reflecting growth of 1.2% and 4.8%, respectively, on the corresponding 2018 period.

At the same time, Héctor López Gutiérrez, General Coordinator of Ports and Merchant Marine has confirmed that 16 companies have indicated an interest in bidding for two container terminal concessions in the ports of Salina Cruz and Coatzacoalcos.

The two terminals will contribute to the economic development of the Isthmus of Tehuantepec, where a new decentralised finance and public credit agency has been established. A multipurpose quay Dear Editor, I have with great interest read your article in Port Strategy magazine on bollards. I agree with what you are saying and concluding. There are however some other points I like to stress. The responsibility for the good functioning of all mooring systems is left to an asset manager with a civil technical background is “possibly” the correct decision.

However, the user of the bollard, i.e. the marine departments in ports, are not aware of maintenance and technical issues around the bollards and other mooring systems. This is wrong and should be addressed, with safety provided for all ships, as stated in the SOLAS recommendation’s.

Ports fail bitterly in accepting this responsibility. This leads to incidents as with the Seabourn Encore. It is sad to see that the report on the accident is showing pictures of the “repaired” bollards

at Salina Cruz, which is on the verge of completion, is expected to increase cabotage traffic between Guaymas and Lázaro Cardenas, plus deep-sea trade with Canada involving export wheat and sugar. At Coatzacoalcos, a box terminal is planned on land ceded by Petróleos Mexicanos.

Meanwhile, APM Terminals Yucatán has confirmed it is expanding and modernising container terminal operations at the Mexican Port of Progreso. In the past two years, the facility has increased throughput from 80,000TEU to 140,000TEU thanks to improved economic activity in

8 Port of Manzanillo – cargo volume of 13.5 million tonnes and a container throughput of 1.24 million TEU by May

the region. For 2019, a further increase of 20% - 35% is anticipated by the operator.

An addendum agreed with the port authority will allow the existing terminal space to be expanded by 20%, which will trigger the release of additional investment further to the $22.6 million that has been spent since the concession started in 2005.

Extra yard space will require investment of $714,000 and two more reachstackers will be added, the first of which has already been put into service.

LETTER TO THE EDITOR and quaysides which look worse than before.

The test methods in use by the load testers is totally inadequate as they are putting forces on the bollards not replicating any direction a mooring line normally goes into, or a bollard is designed for. These companies are again created by engineers who do not understand the way bollards are used in the maritime industry. For example, every time a ship is moored on a bollard, forces are put on the bollards and the surrounding quayside, so why load-test at all?

The finding of a deficiency in a bollard or its anchoring is the only way of assuring the correct working of the bollard. The fact that there are, in the main, no obvious markings on the bollard indicating its safe working load does not help either. Education on

shore and seafaring staff is lacking when it comes to mooring plans.

At a recent presentation I gave to a Nautical College to students for Second and First mate certificates on the subject of “safe mooring” I was astounded by the lack of knowledge of these students.

At Bollardscan we seek to address all the points you make in the article and have been operational for three years. We prevent incidents by exactly pinpointing problems in bollards and advise ports how to remedy the problem. Our system has been subjected to the scrutiny of Vienna Consulting Engineers and Lloyds, while insurers underwrite our work, meaning every bollard we test is insured, provided the bollard is used in the correct way.

I hope, with you, that ports can act together and start taking the right action.

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

THE STRATEGY

BRIEFS Cabello box traffic down The Venezuelan Port of Cabello has seen an 80% drop in container traffic, with around 200,000 boxes a year now being handled. It used to attract more than one million.

Although the city continues to attract some bulk shipments, around 30 to 40 significant businesses have closed in recent years.

New bulk terminal for Honduras The National Ports Company, Empresa Nacional Portuaria de Honduras, is partnering with the Avanza Group to open a new terminal at the Port of Cortés. It will import stone aggregates, pet coke, minerals, coal and iron oxide and boost the port’s capacity by 30%.

The terminal, which will open in February 2020, is absorbing new investment of $18.5 million.

Tilbury2 On-Target Forth Ports Group has confirmed that with the first concrete now poured for the new Tilbury2 terminal at the site of the old Tilbury Power Station the project will be operational by mid-2020.

The new ferry, ro-ro, storage and distribution facility will complement the new London Distribution Park opened in 2017 and where Amazon UK is located. Also, P&O has commenced a new Tilbury-Calais service to avoid potential congestion at Dover. It operates twice-daily during the week and once-aday at weekends, with capacity for 100 units (trailers) of freight. A total of 50,000 units are expected to be shipped in the first 12 months and this new service will complement the existing Tilbury-Zeebrugge option already operating.

10 | OCTOBER 2019

VALENCIA’S €1bn SPEND AS LAS PALMAS TARGETS NEW PROJECTS The Port of Valencia is to invest €1 billion over the next ten years.

During this period, it aims to become self-sufficient in energy and set itself a target of becoming Europe’s first port to be selfsufficient in energy. By 2030, it will also have zero net emissions. One recent project involves the installation of seven wind power towers, generating a total of 12 Mwh and by the end of 2019 a tender will be issued covering the installation of an 800 kWh photovoltaic solar energy array.

Investment to date has resulted in a reduction in the port’s carbon footprint (down by 17% in the 2008-2016 period) and moving forward the placing of wind turbines at sea is under consideration. According to port authority president, Aurelio Martínez, these would be located at a safe distance from the coast to minimise their visual impact as much as possible.

In addition, major spending will take place on establishing a new container terminal at Valencia’s northern extension, while at the Port of Sagunto, a new rail access line is planned and upgrades made to the railway line to Zaragoza.

The three ports managed by the Port Authority of Valencia (Valencia, Sagunto and Gandia) handled more than 41 million tonnes in the first two quarters of 2019, up 7%

year-on-year. Box traffic was up 8.7%, reaching 2.7 million TEU, while dry bulk fell 18.7% to around one million tonnes and liquid bulk fell 10.6%. Finished vehicles decreased 12% to 391,987 units, although Ro-Ro traffic, overall, went up 12.7% to 6.9 million tons.

The Port of Las Palmas has commenced on the second phase extension of Reino Sofía Quay. The extra space is needed give that existing berths are currently operating at 90% of capacity. Civil works will cost €23.9 million and be completed within 18 months.

Separately, the port authority has presented the National Ports Authority (PdelE) with other new projects costing €8 million, which

8 The Port of Valencia – zero net emissions by 2030

it wants included in its 2019-2020 investment plan. Currently, work costing $42.5 million is scheduled to take place in this period, which will increase to €50.5 million. The most important project involves major infrastructure development of container terminal’s OPCSA Muelle de León y Castillo quay.

This is budgeted at €5 million and has an implementation period of less than a year, with a tender due to be issued shortly. Work costing €3 million is also to be carried out in the operations area of Virgen Quay, which is home to the Boluda shipping line. A tender is due imminently.

NEW SYSTEM TO DETECT CONTAINER CONES LASE has unveiled a new application, LaseUCD Unremoved Cone Detection, to detect whether container cones (twistlocks) are still connected to the container while being lifted.

The system also detects open doors of containers and has been successfully implemented at PNC Busan Port in South Korea.

In container terminals it is quite a common problem that container cones are not completely taken out and can stay attached to the container after being unloaded from the vessel. In total more than 2 billion cones are removed manually worldwide in every year.

When a container with connected

cones is transported to the yard and dropped on another container, it will be locked with this subjacent container by the self-locking function of the cone.

Consequently, it is quite possible that both containers are subsequently lifted at the same time, resulting in potential damage of falling containers, or in the worst examples, deadly accidents.

The new LaseUCD Unremoved Cone Detection system consists of two 2D laser scanners which are mounted at the sill beam of a yard crane in a height of around 5m above the truck lane. Both 2D laser scanners build a horizontal scan plane in

direction to the truck lane.

When a container is hoisted from the truck chassis by the yard crane it passes the scan plane where the profile of the container is scanned. The scanned data is processed in the application software LaseUCD, which generates a 3D point cloud of the container in the first step.

If any obstacle underneath the container protrudes from the unit, it indicates that one or more cones are still connected to the container. The application software sends an alarm signal to stop the crane hoist move and to allow a visual inspection of the detected container issue.

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

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THENEWYORKER

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BARRY PARKER

SUSTAINABLE CONFERENCES The conference season is upon us with a vengeance, after a summer lull, back-at-work shipping and port professionals are faced with tough choices of which events (often overlapping, or worse, simultaneous) to attend. Two themes looming large this year are information technology and sustainability; they are not new, but have seen a big ramp up throughout the transportation world.

While I’ve made jokes about Blockchain (even referring to “the dreaded B-word” more than once), the major liner shipping carriers, who have the potential to drive standardisation, or not, have indeed set their cooperation ship sailing. It was heartening to see an agenda item for the 2019 annual confab (which I will miss due to events closer to home) for a session about port “communities”. “Big Data” (with the not-so-dreaded B-word fitting snugly in the midst of it) is really upon us. The port has an important role to play in putting all layers of supply-chains onto the same page, by no means an easy job. Landlord type ports, who might consider themselves mainly in the property and leasing business might disagree. With “discretionary cargo”

on the minds of port planners on all coasts, my retort would be that the value of that property, and the desirability of routing cargo through a particular port will depend, to a considerable extent, on how that port can fit into supply chain “eco-systems” (another session topic at the convention), these days increasingly about information flow.

As we monitor coastal storms (this being hurricane season), “sustainability” is on everyone’s

THESTRATEGIST

minds. In my work with deep sea ship finance, I have seen a trend where financiers of vessels are now set to be giving environmental matters more than just polite lip service. The same can be said of big cargo providers. Indeed, a consortium of major shipping funds providers (initially commercial banks, but soon expected to see an uptake across other types of debt, including providers of longer duration lease finance). Ports of course have long been sensitive to

8 Technology and sustainability on conference agendas

broader social winds, but others in the chains (notably the carriers), not so much, historically. With reputational issues (which can also be positive, not necessarily negative) always a concern, it would behove port finance folks to keep a weather eye on the broader E-S-G (environment, social, governance) matters, a different type of ecosystem, at the carriers calling there.

COLUMNIST

MIKE MUNDY

TIME FOR A CHANGE Isn’t it about time that political appointments at the top of port management bodies were stopped? In today’s manifestly commercial world, what is needed to put a port management body on the right track is sector knowledge and professional expertise, not political acumen.

We all know that in certain locations political appointments at the top of a port authority are regarded as a reward system. “You have done well there and so now we are going to give you this job to say thank you.” Relevant expertise does not always come into the equation – certainly not to the highest level available in the open market.

12 | OCTOBER 2019

Equally, we know, and have seen many times, the short-termism regarding policy development that can come with political appointees at the top of a port authority. Policy A is implemented under one President but is cancelled and replaced with Policy B when another political party takes power.

Such a lack of continuity comes at a price both literally and as regards implementing a long-term, sustainable, development plan.

Perhaps the worst thing about political appointees in a port management body, however, is when they allow political considerations to influence rational decision making (if I do this will my political masters be happy?). What happens in reality is that they “sit on

the fence” and nothing happens.

This situation can get even worse if you have an individual who is in the latter years of serving his or her term and does not want to rock the boat by taking or backing any big decisions.

The counter argument about political appointees in a port authority is that they can provide a direct line to government, get things done and oversee the strategic interests of government.

To be frank, however, when you consider this proposition in the real world the regular signs of impairment of rational planning and development due to ‘political process’ overshadow any benefits almost every time. The ‘signs’ are applications for soft funding or

grants from institutions where there is no real project need involved or where a project if realised will commence operation in a market with excess capacity. The big indicators are facilities that should never have been built, equipment that should never have been ordered and, ultimately, facilities built more as a memorial to a given senior political figure than for any rational purpose. The facts tell us that the best path to achieving rational and sustainable development in the interest of all port stakeholders is via the appointment of senior industry professionals rather than risk the vagaries of political appointees. It is clearly time for a move away from this outdated system.

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

THEECONOMIST COLUMNIST BEN HACKETT

PUT ON WARM WINTER CLOTHES The Game of Thrones aficionados will fully understand the doomsday phrase that “winter is coming”. There are few signs in the European and global economies that suggest that economic growth will improve in the foreseeable future. There are far more indicators that we are facing a potential recession at the global levels caused in large part by the trade wars being triggered by the Trump administration.

China’s economy and therefore its ability to rely on exports, is in serious trouble. Investment, retail sales, industrial production and trade are all in a funk. Even the Belt and Road strategy is beginning to suffer from a reality check as China finds that many of the ambitious investments are big money losers. The slowdown in China has a sharp knock on effect in the rest of Asia, where economic growth and trade are in decline.

The US, for all its blustering, is rapidly being dragged into the slowdown as various sectors of the economy, particularly manufacturing, are impacted by the foolish tariff and sanctions

strategies that are driving the country’s foreign policy. The US Federal Reserve industrial production index indicates that manufacturing production also decreased during the first two quarters on 2019, suggesting the US may be headed for a recession.

What trade growth there is, can be attributed to growing increases in inventory ahead of newly announced tariff rates.

In Europe, the various think tanks are suggesting that

THEANALYST

Germany, the EU’s largest economy, could fall into a recession as data indicates that the third quarter will also have negative growth. The Munichbased forecasting house, the IFO, has cut Germany’s gross domestic product (GDP) forecasts for the rest of 2019 and the whole of 2020. The Eurozone, overall, is not managing to find much to be cheerful about.

Oddly enough, the UK, the world’s 5th largest economy is in better shape, Brexit madness or not.

8 Tough times ahead for ports

For the port sector this is not good news. Sailings are being dropped on the major trade routes, even with part of capacity out of service to get new scrubbers fitted. Volume growth is declining, even as ships are getting bigger.

All sectors are being impacted.

The message is, time to tighten the belts and put on the warm winter clothes.

COLUMNIST

PETER DE LANGEN

The recent news that the Singapore sovereign wealth fund, Temasek, and the global freight forwarder, Kuehne + Nagel, will start a venture fund, to be based in Singapore and called Reefknot Investments, is the latest of various initiatives that have emerged over the recent years.

Some major other venture funds include Copenhagen-based Rainmaking Transport, PortXL, based in Rotterdam but with other locations in some other major ports, Hamburg-based Next Logistics Accelerator, and Marseille-based ZeBox. Not surprisingly, many of these initiatives are in so-called ‘maritime capitals’, even though other venture capital initiatives in logistics are located in

14 | OCTOBER 2019

EMERGING COMPETITION BETWEEN ‘PORT INNOVATION SYSTEMS’ Chattanooga, Tennessee (Dynamo) and San Francisco (Schematic Ventures).

Singapore seems to be ahead of other maritime capitals, as both PSA International’s unboxed and Pier 71 are also based in Singapore.

Insights in the differences between the venture funds and the innovation systems they are embedded in (for instance PortXL is not a true venture capital fund and Pier 71 is driven by stateentities, while Schematic Ventures is a focused and fully return driven venture capital fund) are still largely missing.

While for most of the start-ups and some of the venture funds

location is not top of their mind, in my view this wave of venture capital initiatives is relevant for port cities. All port cities seek to find ways in which the port activities continue to create value for their regional economies, in the context of increasing automation and digitalization which transform port activities, as well as the increased competition between urban economies for attracting innovative minds and companies.

In this context attracting start-ups is a key challenge for all port cities. Venture capital initiatives are a powerful perhaps even indispensable element of the ‘port innovation system’. Other

important elements of such an innovation ecosystem are industry-university research partnerships as well as high quality university programs that attract talent.

Given the fact that most start-ups in ports and (maritime) logistics aim to serve the global industry and ultimately may only survive if they are successful internationally, there is obviously competition between start-ups as well as competition between the (port) innovation systems in which they are embedded. Let’s see which ecosystem (if any) produces the first large IPO of a maritime logistics start-up.

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

THEENVIRONMENTALIST COLUMNIST CHARLES HAINE

THE CLEANING OF INLAND SHIPPING The first London conference dedicated to accelerating the uptake of disruptive and lower emissions’ propulsion technologies for inland shipping has been held at The Crystal by the Port of London Authority.

Speakers from Finland, Norway, Germany and the Netherlands stood out because they could share examples of electric/hybrid engines and battery energy storage in action. Needless to say, they’ve been incentivised financially. Little will change without funding and investment, or new legal requirements.

London is pinning its hopes on bagging some of the Mayor’s Clean Air Fund, while the Department for Transport has mobilised a package of support for clean maritime innovation worth £1 million, in smaller grants, to be delivered through MarRI-UK. It’s a start.

The CLeaning INland SHipping (CLINSH) initiative is a DutchBelgian-German-English consortium striving to improve air quality in urban areas by accelerating emissions’ reductions in the transport of freight in inland waterways. This extensive pilot study has selected 30 vessels for detailed measurement (nitrogen oxides and particulates) and performance-testing of alternative fuels and operational techniques.

Unlike the fantastical claims you see in car advertisements, the emissions monitoring here is ‘live’ and on board covering all kinds of working scenarios and weather conditions. The resulting database will provide an evidence base and tool for operators, governments, engineers and investors. Skippers need to be interested too.

Bagging €12 million from EU Horizon, the aim of the Norway-led TrAM (Transport Advanced and Modular) Project is to develop a zero-emission speedy urban water shuttle for passengers. Using new manufacturing methods, production costs should be cut by 25% and engineering by 70%. Hans Thornell of Green City Ferries, Stockholm, showcased an allelectric ferry floating on a cushion of air to reduce friction. A stalwart of electrification, he previously invested in the Movitz, the first in

the world with supercharging. This inner-city ferry used 50% less energy and has almost 100% emissions (charging is from renewable energy sources!). For those that say, “this simply can’t be replicated where we are”, the Movitz was converted from a diesel operation. The ferry can charge in 10 minutes to run for an hour at nine knots. The technology exists. It is people, behaviours and attitudes, the excuses of the supply chain and factors of profit/money holding back a faster transition.

With the cost of a bridge across the Thames to Canary Wharf escalating to £600 million, MBNA Thames Clippers has set out plans for the UK’s first all-electric self-

docking (and charging) ferry at Rotherhithe. This is very welcome, not least on the grounds of speed (2 minutes turnaround), less pollution and less road traffic.

HySeas III is the final stage of a programme mentioned in the UK’s Clean Maritime Plan. The consortium aims to launch the world’s first sea-going vehicle and passenger ferry fuelled by hydrogen produced from local renewable energy sources in and around Orkney. Luckily, the Isles have an excess of energy from offshore wind so are more than entitled to use the ‘zero emissions’ and ‘greening’ tags.

From the Q&A sessions in the Conference, the penny has not dropped with some that we are

8 CLINSH assessing inland shipping emissions

now in an officially-declared “Climate Emergency”. The UK Government has announced it, your local authority has no doubt also signed-up and the tide may be turning towards more truthtelling in the media. There simply is no time for delay. Producing marine fuel from local renewable energy sources would be transformative for coastal communities, especially where remote. This would retain value locally and increase energy security while promoting cleantech. The cargo carrying sector needs to be watching and taking copious notes.

HySeas III is the final stage of a programme mentioned in the UK’s Clean Maritime Plan. The consortium aims to launch the world’s first sea-going vehicle and passenger ferry fuelled by hydrogen produced from local renewable energy sources in and around Orkney. Luckily, the Isles have an excess of energy from offshore wind so are more than entitled to use the ‘zero emissions’ and ‘greening’ tags

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

OCTOBER 2019 | 15

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AREA SURVEY: UNITED STATES EAST COAST

PSA INTERNATIONAL GAINS FIRST FOOTHOLD IN US PSA International, has secured its first terminal facility in the US, with Penn Terminals on the Delaware River. AJ Keyes looks at what this means to the Singapore-based company Singapore-based PSA Corp. is one of the leading container terminal operators worldwide. It has a network of over 50 coastal, rail and inland terminals in 18 countries. In 2018 the company handled an estimated 81 million TEU globally, an increase of 9.1% over 2017, with the PSA Singapore terminals contributing 36.3 million TEU and the operations outside Singapore collectively providing almost 44.7 million TEU. Despite the global footprint, it is only in 2019 that the company finally secured marine assets in North America. In August, approval was gained for the purchase of Halterm at the Port of Halifax, Canada and now regulatory authorities in the US have approved the purchase of Penn Terminals on the Delaware River The acquisition of Penn Terminals and Halterm were from Australian investment fund Macquarie Infrastructure and Real Assets (MIRA) has been approved by the necessary regulatory authorities in the US, although the global operator has also recently bought into the largescale inland port facility, Ashcroft Terminal, in British Columbia, Canada.

Tan Chong Meng, Group CEO of PSA International, has already been quoted in various trade publications and news sources confirming that the Penn Terminals acquisition represented “PSA’s very first foray into the US” before adding that he expected, “continued growth and expansion.”

Located on the Delaware River, Penn Terminals is a “wellequipped multi-purpose marine facility,” according to PSA. It comprises a 32ha site and currently handles around 200,000 TEU per annum, with an annual container capacity of 425,000 TEU. Clearly, this means estimated utilisation is under 50%, so room to grow volumes will fall to major shipping line customers, Seaboard Marine, Independent Container Line (ICL) and Crowley, although the facility has generated double-digit growth annually over the past five years. In addition, 200,000 tonnes of breakbulk cargo a year is handled, with facilities served by intermodal operators Norfolk Southern and CSX. Recent investment at Penn Terminals has been undertaken to increase capacity and operating efficiencies, with the addition of two new Post-Panamax cranes bringing the total available to four.

Aside from gaining its first terminal operation in the US, the appeal of Penn Terminals is its location and ability to serve the localised specialist markets.

The geographic positioning on the Delaware River offers access to the surrounding logistics clusters that focus on perishable supply chains. With 2.85 million ft3 (80,400m3) of on-dock reefer warehouse space, Penn Terminals can play an important role in helping to service the estimated 40% of US fruit imports, an estimated 4 million tonnes per annum, that enter the country in the competitive Philadelphia area.

PSA endorsed the potential by confirming that there are more than 40 refrigerated warehousing and logistics operators supporting the chilled and frozen foodstuffs industries “within 1 hour’s drive” from the Delaware Port complex it now operates.

It does mean that the main competitors for cargo are Packer Avenue Marine Terminal, which is the largest container handling

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

facility on the Delaware River and the Port of Wilmington (DE), which now has Gulfport as the new concession holder.

The one key differentiator of Penn Terminals, according to Dean Davison, Technical Director at WSP’s Maritime Advisory group, when compared to the regional competition is its status as an independent terminal, not part of the ILA labour arrangements that are dominant on the East Coast.

“Penn Terminals can operate in a niche in the broader regional market due to its potentially lower cost structure than other ILA terminals. We believe that it could ultimately see savings of more than 20%,” he said, although a word of clarity was also provided. “Not being part of the ILA union means that the number of liner customers is reduced. This is important because while it means that the terminal’s shipping line customers are unable to call to ILA terminals, it also precludes those carriers who use ILA terminals also then calling to Penn,” Davison added.

8 Penn Terminals is now under stewardship of PSA International

Not being part of the ILA union means that the number of liner customers is reduced. This is important because while it means that the terminal’s shipping line customers are unable to call to ILA terminals, it also precludes those carriers who use ILA terminals also then calling to Penn

OCTOBER 2019 | 17

AREA SURVEY: UNITED STATES EAST COAST

SOARING SAVANNAH SOWING FURTHER SEEDS FOR GROWTH

Photo/Stephen B. Morton

With strong year-on-year volume growth continuing into 2019, Georgia Ports Authority is pushing ahead with investment and expansion plans to support future container increases, as AJ Keyes discovers

The Port of Savannah has been one of the most, if not the most, successful container ports in recent years in North America, based on year-on-year annual growth. Recent increases between 2012 and 2018 have seen average growth of 6.7% per annum, as the port’s throughput rose from just under 2.95 million TEU to more than 4.35 million TEU over this period.

To further facilitate future container throughput demand growth, the Georgia Ports Authority (GPA) has several infrastructure initiatives for shipping and inland transportation at existing and new facilities.

In his annual state of the port address in September 2019 GPA executive director, Griff Lynch, confirmed that the $200 million Mason Mega Rail Terminal at the Port of Savannah’s Garden City Terminal is on schedule to see its first phase of operations in six months. This new development is part of a 10-year $2.5 billion expansion that is planning to double the current annual throughput of 5.5 million TEU to 11 million TEU per annum, by 2035.

In the address Lynch acknowledged that “the market has clearly chosen the Port of Savannah as the South-eastern hub for containerised trade,” before adding, “To fulfil the growing responsibility placed on our deepwater terminals, as have developed a plan to double capacity.”

Phase two of the Mason Mega Rail Terminal is due to be operational by the end of 2020 and will then offer an annual life capacity of 2 million TEU per annum, reflective of double the port’s current handling capabilities.

To emphasise the importance of intermodal rail in Savannah, and reflecting a similar objective noted at the Port of Virginia, GPA has also confirmed that it is now regularly moving containers from the ship berthed at the Garden City Terminal to a departing intermodal rail service in 24 hours, which Lynch confirmed was “two-and-a-half time faster than previous schedules” offered to cargo shippers and owners.

In operating terms, this means that Chicago is now within reach from the Port of Savannah in 67 hours, or less than three

18 | OCTOBER 2019

8 Mason Mega Rail Terminal is due to be fully operational in 2020

days. Dean Davison, Technical Director for WSP’s Maritime Advisory Group in London confirmed that “this speed of service is the level of operating benchmark that beneficial cargo owners need to see, but have delivered to them on a regular, consistent basis,” before adding that cost also remains a crucial factor to supplement efficient service levels.

The continued investment in intermodal rail capacity at Savannah is certainly justified. Currently, around 20% of all containers entering / leaving the port utilise intermodal rail and although Lynch feels this total will not surpass 25%, it is still of a growing port throughput. In the January to July 2019 period, for example, Savannah handled over 387,000 TEU and rail activity has seen growth during the past three years of 35%.

Investment is also to continue at Garden City Terminal as GPA seeks to maximise capacity potential at the existing 1,200-acre facility. A further six ship-to-shore container cranes are being added during 2020, to bring the total to 36, while an initiative to realign berthing space at the terminal’s downriver end will facilitate berthing for more ships in the 14,000 TEU size range.

This is all occurring as the U.S. Army Corps of Engineers is in the final phase of the $1 billion Savannah Harbor Expansion Project that deepens the Savannah River to 47ft at mean low water.

Moving forward, there are other initiatives being undertaken

by GPA to support its container activities beyond the 1,200-acre Garden City Terminal. There are known plans to develop a facility on Hutchison Island, a 200-acrs site across the Savannah River that could offer a capacity of 2.5 million TEU per annum when fully developed.

As Savannah continues to target the Mid-America Arc of Memphis, St. Louis, Chicago and Columbus, the greater its need for efficient, competitive intermodal rail services becomes. It also means that if Chicago and Columbus are the main target focal points, the port’s true competitors will even more primarily become the San Pedro ports of Los Angeles and Long Beach.

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

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AREA SURVEY: UNITED STATES EAST COAST

SMART BUSINESS DECISIONS AT NEW YORK/NEW JERSEY It could be a very good year for New York/New Jersey, securing No.2 in North American container volume rankings, adding rail capacity and release of a new Masterplan, as AJ Keyes discovers

8 GCT Bayonne is now connected to CSX and Norfolk Southern rail networks

It is probably hard to argue against the success of the Master Plan 2030 strategy adopted by the Port Authority of New York/New Jersey (PANYNJ) and everything that PANYNJ achieved while following its recommendations. It is also timely that as the bi-state authority recently released its new Master Plan 2050 document, the port is targeting the ranking of second largest container port in North America in 2019, over-taking the Port of Long Beach, with only the Port of Los Angeles handling more containers in the current calendar year, as Dean Davison, Technical Director, WSP Maritime Advisory group confirmed. “At the end of July 2019, with solid growth continuing, the Port of New York/New Jersey had not only closed the gap on Long Beach but surpassed the San Pedro facility, holding the number two ranking in North America, the first time in nearly two decades that New York/New Jersey held this position.”

Looking at the numbers Davison refers to more specifically, in the year-to-date July period, New York/New Jersey handled just over 4.31 million TEU in total, with Long Beach recording just under 4.31 million TEU. In fact, the difference between these two facilities was a mere 8,410 TEU – a tiny proportion of the overall figures for both facilities. Five years ago, for 2014, Long Beach recorded 6.82 million TEU and New York/New Jersey 5.77 million TEU, so a significant difference.

So, volumes have continued to grow and increase strongly year-on-year, as WSP’s Davison notes. “New York/New Jersey remains a key port for Asian cargo via the Suez Canal All-Water routing. Shipping lines want to come to the port because of the massive local market that is available, while increasing overall intermodal rail capacity to around 1.5 million lifts annually also appeals to serve the US Midwest.”

This is a viewed endorsed by terminal operator GCT Bayonne at the port, with GCT USA President confirming at the that time of the company’s $149 million rail terminal project completion

20 | OCTOBER 2019

in June this year that the aim was to “go after the West Coast” port volumes. This seems a valid claim now that the new GCT Bayonne terminal is operating with an annual capacity of 250,000 lifts and connectivity to both CSX and Norfolk Southern (NS) networks. Indeed, NS stated that shippers of 20ft, 40ft and 45ft containers will now have a “new alternative” for moving between GCT Bayonne and Chicago, Cleveland, Pittsburgh, Columbus and Detroit – all key inland markets.

Increasing intermodal rail capacity is part of the PANYNJ’s strategic five-year goal to handle the equivalent of 1.5 million fewer truck trips on local roads and significantly reducing road congestion and enhancing air quality.

The true test of the new Master Plan 2050 will be how quickly it begins to implement the strategy and starts to meet its objectives. While the omens may be good, based on the port authority’s recent record of achievements, competition for serving key hinterland markets in the US remains as fierce as other, with almost all other major container ports investing heavily to handle larger ships, increase terminal capacity and putting pressure on service providers in the intermodal rail industry to ensure cost-efficient transportation.

PANYNJ may be sitting high standards for its new masterplan, but these are targets that must be achieved. Port Authority Executive Director, Rick Cotton, recently confirmed the broader position when he stated that the port is a “pivotal gateway not only for goods destined for the 27 million consumers in the New York-New Jersey metropolitan area, but for the millions of others in markets within 250 miles of the port.”

However, the executive also emphasised the importance of rail too, stating that the rail expansion and the ability to “move cargo by rail is a smart business decision” when it is completed in a “quick, cost efficient and environmentally-friendly, sustainable way.” Smart business decisions, indeed.

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

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AREA SURVEY: UNITED STATES EAST COAST

LETTING THE TRAIN TAKE THE STRAIN IN VIRGINIA AJ Keyes looks at Virginia’s recent port growth and awareness of the importance of intermodal rail as it operates in the highly competitive US East Coast region With New York/New Jersey to the North and Savannah/ Charleston to the South, the port facilities at Virginia are sandwiched between these two, largescale, container regions where substantial volumes are handled.

Virginia’s container terminals have deep water depth and largescale, modern, high-capacity facilities. Yet unlike New York/New Jersey with its massive local cargo consuming regions and Savannah with its distribution centres and intermodal rail activities adjacent to the marine terminals, how does it overcome the geographic location and small localised hinterland to be successful?

To put the recent container port activity in Virginia into perspective, recent volume trends show that the port remains a viable option for shipping lines and beneficial cargo owners.

Technical Director for WSP’s Maritime Advisory Group in the UK, Dean Davison, explains further. “In the 2012 to 2018 period, Virginia’s total container volumes increased by an average of 5.2% per annum. This compares to 4.4% per annum for New York/New Jersey and 6.7% per annum for Savannah and although Virginia’s starting volumes were lower, the port is clearly an important port of call on the US East Coast.”

Based on the year-to-date information available, then 2019 looks set to be an improvement on the position from 2018, as Figure 1 shows. Total TEU volumes are up from 1.62 million TEU in 2018 to 1.72 million for 2019, although small declines in loaded imports and loaded exports are being offset by increased empties – an indication of greater Asian containers probably being handled through the port and being returned.

With an estimated 35% of current containers moving at Virginia by rail, it is essential that sufficient capacity is available.

It is, therefore, no surprise to see that there has been recent investment in this area of the port’s operations.

In June 2019 the size of the rail yard at Virginia International Gateway (VIG) was doubled, as part of a total terminal renovation costing $320 million which saw investment in shipto-shore cranes and rail and truck connectivity improvements.

Yet with the port authority openly seeking to raise the share of containers moving via intermodal rail to 40% by 2022, increased capacity at VIG is required. This is a crucial factor, as WSP’s Davison notes, “Cargo shippers wants reliable and predictable service levels across the whore terminal. Efficient ship to shore crane moves are important, but it is pointless if the box then struggles to get out of the terminal on time or when required.”

John Reinhart, CEO at Virginia Port Authority is already fully aware of the objectives that need to be achieved, outlining initiatives to making sure import dwell times from vessel discharge to the container being on an intermodal train moving to a key US Midwest market like Chicago are under 24 hours.

The port’s plans include improving velocity per hour in the rail yard with additional cranes and cassettes (which hold containers while the train is being assembled) to deliver 100 lifts per hour. During a recent announcement of fiscal year results, he confirmed that port volumes “are increasing and we are processing that volume with greater efficiency because we

have completed the optimization at VIG, where we are on-line and fully-operational.”

At the same time, investment is also well underway at another major container facility at Virginia, Norfolk International Terminals (NIT), with planned investment more than 50% completed. A total of 12 new container stacks served by 24 new rail-mounted gantry cranes are already working, following phase two of the stack expansion completed and phase three starting in June 2019 and the final phase four process just last month in September 2019.

With growing volumes in a competitive market, Virginia is continuing to invest in its facilities. Yet, most importantly, it is also aware that the ability to move containers away from the marine terminals is a crucial factor, if it wants to continue to be an effective option for serving the key US locations in the Midwest throughout Ohio, Michigan, Missouri and Kentucky.

8 Virginia is continuing to target terminal rail investment

8 Figure 1: Container Volumes by Activity at Virginia January-July Period, 2018 vs. 2019

Source: Data from Port of Virginia

22 | OCTOBER 2019

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

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PORT REVIEW: LA/LB UPDATE

HAMLET IS ALIVE AND WELL IN SAN PEDRO Working together, trade wars and cyber threats are all on the agendas of the two ports which comprise the massive San Pedro complex, as Martin Rushmere discovers

8 LA waiting for resolution to USChina trade issues

To some observers, Long Beach and Los Angeles ports' denials over the last 15 years about a closer business relationship brings to mind "The lady doth protest too much" from Shakespeare's Hamlet.

The Clean Air Action Plan partnership has been an outstanding success and industry expectation was that this was the limit of closer cooperation. Suggestions and queries about steps to a business tie up have met an official "no".

Now the two are proposing a broader joint effort, although not in a straightforward commercial and business sense. Executive director at Los Angeles, Gene Seroka, says the memorandum of understanding between the two covers efficiency improvements at "landside transfer points" (presumably dockside and rail loading/unloading), cargo transfer predictability, supply chain connectivity, workforce development, training, cyber security, and "metrics" (again presumably, KPIs such as vehicle turnarounds and crane moves per hour).

The respective boards of harbour commissions must give their approvals / recommendations and the Federal Maritime Commission must give its blessing. Gene Seroka stresses that the proposal is distinct from that between Washington's Seattle and Tacoma (the Northwest Seaport alliance), where revenue and traffic are shared.

Mr. Seroka said: "The fight is not Los Angeles versus Long Beach for that last container. It’s about keeping cargo here in

24 | OCTOBER 2019

southern California. That is the battle that we face — price competitiveness, labor cost, environmental cost, regulations."

Industry executives welcome the proposal, saying it is overdue, with developments over the last few years giving clear signs of changes in cargo handling, traffic patterns and port efficiency. They also say that closer business cooperation is the way to go if the San Pedro ports want to stop the growing leakage of cargo.

Consultant Dan Smith, a principal at The Tioga Group, says:" Long Beach and Los Angeles still view each other as friendly competitors. I do not see anything like Northwest Seaport Authority in the works.

"What do industry critics want the ports to do?" he asks, adding, "What business matters should they coordinate on? I do not see the two port organisations taking divergent directions on anything of consequence. Remember, they are landlord ports. They can’t make vessels run on time, control demurrage claims, or widen the freeways. Most of the improvements and changes industry participants are seeking, such as improved appointment systems' and faster truck turn times, are on the terminal level, not at the port level."

Mr. Smith continue this theme, stating "Likewise, concerns such as chassis supply during the “frontloading” earlier this year are not under the control of either port. They have certainly not ignored loss of market share to other ports. On the port level,

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

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PORT REVIEW: LA/LB UPDATE

Los Angeles started the GE (now WABTEC) Port Optimizer information system a couple years ago, and Long Beach is now part of it. Long Beach and Los Angeles now have the two most advanced terminals in North America and they are spending serious money on rail improvements."

Mr. Smith also points out that most of the shift to other coasts has been driven by changing trade patterns (e.g. sourcing from Vietnam and India rather than China), the new Panama Canal locks, and strong economic development in the Southeast.

"If developers of new factories and distribution centers have a choice, they build outside California because California has become too difficult and expensive. The ports can’t control that," he says.

For the moment, the ports are more concerned about the effects of the trade war – about which there is no difference of opinion. Gene Seroka has presented a pessimistic scenario of how it will play out for the ports. He said that 55% of cargo that comes into the port has a tariff or tax on it and 98% of Chinese goods have tariffs.

China was the largest foreign trading partner with the port last year, with $153 billion in cargo value. Its second-largest trade partner was Japan, with $36 billion in cargo value.

To assertions that other countries will make up for the loss of China volumes (Vietnam's TEU cargo in 2018 rose 8% to 13 million), Mr. Seroka adds perspective. "It takes seven Vietnams to make a China." He confirms, saying that for every shipping container the port gains from other countries, it loses two and a half from what it got from China.

"We don't see a way out of this until (the U.S. and China) come to an active negotiated settlement," the Los Angeles executive director says. "Realistically speaking, the growth is in southeast Asia. I think we're well-poised to capture that growth."

He says the White House has very little interest in Southern California's problems. "During the last administration, I had four cabinet members' numbers on speed dial. Today, I find it very difficult to make it to even mid-level staff."

In a letter to the US Trade Representative agency, he said 50% of exports by value, 50% by tonnage and 78% by container volumes are at risk of China's retaliatory tariffs.

According to the Pacific Maritime Association (which represents employers at the ports), the two ports in 2003 accounted for at least 55% of discretionary imports from Asia, which fell to almost 45% in 2018.

An equally alarming issue, which everyone seems to have glossed over, is the return of militancy by the ILWU dockworker union. With very little warning, the union objected strongly to automation at the Pier 400 APM terminal at Los Angeles. This had been accepted and established in the last contract with the ILWU, due to end in 2022.

The port is legally and financially a division of the city council and industry speculation is that the union piled unspecified pressure on City Hall, which led to Mayor Eric Garcetti abruptly ordering the port to halt plans for automation (even though the terminal is owned and operated by commercial companies).

A workforce "training programme" will be established for the local branch of the union and, the union's biggest victory, automation will be delayed until at least July 2022. Of wider concern is that the California legislature is debating a proposal for all projects in the state involving automation to be decided on a case-by-case basis.

The resulting "resolution" is a familiar example of public relations spin. Julie A. Su, California Labor Secretary, spoke of "career mobility" and guaranteed "economic security for California’s working people.”

Jim McKenna, head of the Pacific Maritime Association said: “This will help longshore workers prepare for the port jobs of the

26 | OCTOBER 2019

future.” Cynics note that usually when the PMA tries to do this, the dockworkers' union finds new objections and threatens strikes.

The two ports are taking a more recent threat, cyber security, seriously. Los Angeles has issued a request for proposals for a "Cyber Resilience Centre" which customers will use to identify and share security threats and get information after a cyberattack.

The centre will include two ISP connections with a minimum of one gigabyte per second capacity each, a video wall with at least six monitors plus video wall controller, and include machine learning/artificial intelligence capability.

Confusingly, the centre will be separate from the existing Cyber Security Operations Centre.

Long Beach foresees itself as being junior to Los Angeles for at least the next 20 years. Its draft master plan covering 2020 to 2040 (issued in July this year), forecasts its container throughput as 18.5 million TEU, 45% of the combined total of 41.1 million TEU. "Container capacity is approximately 13.6 million TEU per year, which is roughly double the throughput in 2017, says the port.

"The is sufficient capacity to accommodate 45% of the demand forecasted for San Pedro Bay up to year 2032."

Long Beach acknowledges that the two ports will need to deal with vessel cascading. It confirmed: "Studies indicate there will be a cascading effect on the size of container vessels between 10,000 and 16,000 TEUs, which will affect the number and capacity of terminal services. In the long term, future navigation needs may require accommodation of the emerging 20,000TEU - 24,000TEU vessels."

Los Angeles is set to remain the main container port for some years yet, but Long Beach and New York/New Jersey are slugging it out for second place. The East Coast port handled more boxes for two months, but Long Beach reasserted itself later.

8 Long Beach has just released new Master Plan

8 Gene Seroka

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REGIONAL FOCUS: LATIN AMERICA

DELAY TO NEW $1.9bn BUENOS AIRES TENDER The tender for the $1.9bn development of Puerto Nuevo has been delayed until December 2, owing to shock results of the Primary Presidential elections in early August, as Rob Ward discovers

8 Cruise vessel leaving Puerto Nuevo. Container terminals to be relocated for passenger activity

Earlier this year, the Administracion General de Puertos (AGP), the port authority for Buenos Aires, released its detailed tender document for a 50-year concession (consisting of 35 years, plus further 15 years) for the re-development of the port area at Puerto Nuevo, a downtown area of the Argentine capital.

AGP decreed in its release that the existing three terminals will be converted in just the one, as various experts had been hinting at in Port Strategy over the past year.

After several years of deliberations and delays, port users have been keen for the project to gain traction but when Mauricio Macri, the market-friendly and sitting president of Argentina, polled 15% less votes than the Alberto Fernandez/ Cristina Kirchner joint-ticket, the surprise possibility of another left-wing government taking over in November means potential investors could be wary.

Consequently, shortly after the primaries when AGP then agreed to delay the tender, feedback to Port Strategy from local sources regard it as a wise decision.

Patricio Campbell, who is the president of the Centro de Navegacion in Argentina (which represents the interests of all maritime and port operators) as well as president of ONE Argentina, said that after Macri’s poll defeat, the delay was almost inevitable. “Since the Primary results, there have been many doubts about the future course of Argentine politics and the economy, so the investors will need to know what kind of political scenarios are in place before allowing their bid envelopes to be opened.” He confirmed.

Meanwhile, while some port users fear the reduction of options at Puerto Nuevo (from three to two) may lead to extra costs, others believe that the economies of scale will reduce operating costs at the downtown port installation, which

28 | OCTOBER 2019

accounts for more than 50 percent of all Argentina’s containerised traffic.

Several of the major international port operators are expected to bid for the project, which is expected to cost nearly $2billion over the 50-year period, although the winning bidder will only have to provide $100 million initially, with the state giving $530million over the concession’s duration.

SEEKING AQUISITIONS It is expected that the bidding companies will include Hutchison Ports, DP World and APM Terminals, (each of which already have an interest in the Argentine capital city, in BACTSA, TRP and Terminal 4, respectively) plus China Merchants Port Holdings (CMPH), who now operate the TCP container terminal in Paranagua, Brazil’s second biggest, and who are clearly seeking acquisitions in South America. The three existing concessions are due to end in May 2020.

The Chinese carrier, Cosco Shipping, is also a major operator in the Argentine markets and is said to be backing a CMPH bid to win the concession, said a reliable source in Buenos Aires, who works closely with the Chinese, but wished to remain anonymous.

According to the Minister of Transportation, Guillermo Dietrich, the renewal of Puerto Nuevo’s port infrastructure will eventually see cargo capacity at the three terminals (currently 1.4 million TEU per annum) more than doubled, with the new facility having a “flexible design, adaptable to market needs”.

It will also see the current “comb [finger] shaped piers” redeveloped into more modern linear quays and a further 10 hectares will be added via landfill and reclamation from the River Plate.

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REGIONAL FOCUS: LATIN AMERICA

The draft will also be improved from the current 32.5ft (9.9 metres) to 34.5ft (10.5 metres) and this, together with the new quay configuration, will allow for vessels bigger than 10,000 TEU to call, albeit with draft and capacity restrictions.

Dietrich has worked closely with the AGP, (the administrator of Puerto Nuevo but not Exolgan, which also serves Buenos Aires from the south of the city), and several years of research and consultations have gone into the final document, which totals a rather lengthy 250 pages.

Commander Flavio Galanis, the planning director for AGP, told Port Strategy earlier this year that the international auction would commence in August, but this was then delayed until October (the same month as the Argentine Presidential elections, with the first round due on October 27). However, port users will not know who the winning bidder will be until December.

The winning bidder will get to operate a terminal with an initial capacity of 1.4m TEU per annum, rising to 2.7 million TEU by 2030. It will cover 45 hectares and include 900 metres of pier to begin with, later rising to 1,200 metres.

TWO PHASES Galanis confirmed that the concession will be carried out in two phases, with phase one scheduled to finish by 2025. It will see Terminals 1 and 2 (Terminales Rio della Plata, currently DP World’s operation) becoming a dedicated cruise terminal (cruise ships already call there) and all container operations moving to Terminals 3 to 5, while landfill continues to the northwest of Terminal 5 (which is the Hutchison Ports facility).

Once that component is completed, new port installations will

I am also worried about rising charges following the decision imposed by the government on terminal operators to grant stevedores a 40 percent pay rise following strike actions this year gradually be moved to the new site and new equipment will be purchased, which could take an extra three to five years, he stated. Terminal 4 is currently operated by Maersk subsidiary, APM Terminals.

As soon as the old installations and infrastructure of the area now hosting Terminals 1 to 3 are cleared they will be redeveloped into shopping malls, offices, and residential use.

They will become a new “Porto Madero”, which is adjacent to Puerto Nuevo and has already undergone transformation (and which are similar to re-developed areas near the Port of Barcelona) from the very old and historic port of BA. “All the land close to the downtown area of Buenos Aires is very expensive,” explained Galanis, “and so this is also driving the new developments.”

One experienced Buenos Aires based consultant, who does not wish to be identified, said that the number of boxes handled annually at Puerto Nuevo (up from 888,019 TEU in 2017 to 968,000 TEU in 2018, according to AGP) was not sufficient to provide business for two new terminals, which was the original plan.

“It really does makes sense to have just one winner of this process,” he told Port Strategy. “In my view Exolgan [which

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REGIONAL FOCUS: LATIN AMERICA

handled 604,891 TEU last year, up from 554,458 TEU in 2017 and has a capacity of 820,000 TEU] and Zarate [270,000 TEU capacity] can provide sufficient competition. The beginning of operations at Tecplata will also add much-needed capacity, especially while works are progressing.”

“GRAN CABOTAGE” Tecplata, owned and operated by ICTSI of the Philippines, opened for business in April of this year, with Brazilian carrier Log-In Logistica adding a Tecplata call to its Mercosur “Gran Cabotage” service linking the River Plate to Pecem, in northeast Brazil. The service includes a call at Suape, where another ICTSI terminal, Tecon Suape, is in operation.

This consultant’s view of “sufficient competition” was echoed by several others in the Argentine capital, including Robert Murchison, the CEO for Murchison SA, a diverse shipping group that includes stevedoring services in Buenos Aires and the small Terminal Zarate box terminal about 90 miles outside the city. He is convinced that just one new operator is all that is needed for Puerto Nuevo.

“Because of the many problems with the Argentine economy, Puerto Nuevo is handling more or less the same volume for the past 15 years or so and as most container terminals operate better on a larger scale, I think one operator for that size of facility seems just about right,” Murchison argued. Terminal Zarate handled 129,294 TEU last year, up from 119,993 TEU in 2017 (according to figures from AGP).

However, carriers and shippers were not so pleased that Dietrich and the AGP have decided to merge three into one.

“We will undoubtedly see costs come down to begin with, but once the Argentine economy revives and imports start picking up again we might see terminal handling costs rise again,” one Buenos Aires based line manager for a major carrier told Port Strategy “I am also worried about rising charges following the decision imposed by the government on terminal operators to grant stevedores a 40 percent pay rise following strike actions this year,” he concluded.

8 Tender delay for Buenos Aires

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OCTOBER 2019 | 31

REGIONAL FOCUS: BRAZIL

KICK STARTING BRAZILIAN PORTS REVOLUTION South America’s biggest container volume port, Santos, is forging closer ties with China and targeting profitability, as Rob Ward discovers

8 New Codesp has big plans for future of Santos

Casemiro Tércio Carvalho is CEO for Codesp, the port authority for Santos and he is a man on a mission to forge closer ties with China and making South America’s largest volume container port profitable through incentives that “internationalize and modernize” the facilities.

It is a mission to shake the foundations of the way Codesp has been operated for the past 30 years and it includes renegotiating dozens of expiring concession contracts, taking on the dockers and port authority unions, slashing costs, raising revenues and finding new revenue sources. He also wants to formulate new dredging contracts that can guarantee a permanent draft of 15m for the arrival of the next generation of big vessels for the East Coast of South America that are larger than the 12,000 TEU maximum-sized capacity vessels handled today.

There are dozens of other “Tercio” initiatives in the pipeline and the process should end up, according to the ambitious Carvalho, with the privatisation of Codesp and it being floated, uniquely for a port authority in South America, on the Bovespa, the Sao Paulo Stock Exchange.

Last year, Codesp posted a loss of Reais 468.7 million ( $125.3 million) and that, according to Carvalho, who was personally appointed by Tarcísio Gomes de Freitas, the Minister for Infrastructure and Transport, was a “terrible state of affairs” and he argues strongly that the port should be making money not losing it. Codesp and Carvalho have already made

32 | OCTOBER 2019

progress vis-a-vis this mission and for the first half of this year posted profits of Reais63.5 million, 16 times more than the Reais4 million made during the same period of 2018.

“We are increasing the fees we charge and although I don’t want to bite too much into the profit of companies operating in the port, I really have to make sure that we make our margin,” Carvalho told Port Strategy.

Codesp’s president has the full backing of Gomes de Freitas, one of the most powerful ministers in Brasilia, as well as President Jair Bolsonaro himself - the “Tropical Trump” who rules with a maverick flair and wants to cut back on public companies and encourage more privatizations.

Carvalho is not, however, supported by many companies working in the port of Santos, which accounted for 4.2 million TEU in 2018, some 45% of all Brazil’s containerised trade as well as about 32% of all foreign trade.

“One problem he has is that every time you increase your rates, the shipping lines, then the shipper and finally the consumer ends up paying for it and I am not sure Bolsonaro and his government want to see an increase in transport costs,” said one box terminal manager. “In fact, it’s quite the opposite.

Carvalho is rattling a lot of cages in Santos and not always to good effect. We need changes here but there is a correct way to do this and he doesn’t always grasp that. He has no experience of managing a major port and this is counting against him.” Previously, Carvalho worked mostly for investment

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REGIONAL FOCUS: BRAZIL

funds in the financial sector and served just two years as an executive at the small liquid bulk port of Sao Sebastiao.

Despite the lack of experience, he is convinced his methods will work and that, being an outsider, this will help him to “clear the dead wood”.

“We want to cut costs and increase revenues and I began to do this almost from day one,” added Carvalho, confirming, “The idea is to make the dock company leaner and fitter and to do that we have to understand better the existing costs and then cut them, and this means firing people.”

BOTTLENECKS? “In order to raise revenues we have been re-negotiating new contracts. The aim is to increase the fees, where possible, by up to twice what they are today. We will do all this in an open and transparent way.” Carvalho stated.

The Codesp president said he had already signed a new contract with port operator Tranbrasa that will bring in 32% higher revenues than the previous one and he was working on raising prices for other concessionaires.

He admitted, however, that negotiating increases with big port powerhouses like Petrobras (the state controlled oil giant) might “prove more difficult”.

Carvalho confirmed that in return for higher tariffs, shipping lines and port operators would get to use a better infrastructure, with more money being spent on roads, rail and dredging and “we will also see better, more professional management systems put in place”.

Carvalho further stressed to Port Strategy that it was his intention to slash the number of employees at Codesp from 1300 to 500, maybe even less, but attempts by him to reduce some payments and work benefits to Codesp’s workforce have already been delayed after fierce resistance from the Sindaport trade union representing those workers.

A truce in that dispute has been called until the end of the year but Carvalho did have some success with his “intervention” in 21-day strike action back in March by the Sindestiva trade union (which represents the casual labour, or OGMO, workers in Santos). Under his initiative Codesp obtained a “liminar” (an immediate court order) which restricted OGMO workers from “invading” any vessels in Santos - as they had done in the past to win previous disputes - by threatening them with a Reais 100,000 per day fine. Since the days of Presidents Dilma Rousseff and Lula labour unions have been in retreat in all sectors throughout Brazil, but are still a potentially potent force.

The Codesp executive also has a mission to “internationalise the port of Santos and attract more foreign investment and business” and this received an extra boost when Carvalho attended the Shanghai for the 5th Maritime Silk Road Port International Cooperation Forum”, Prior to the conference he met logistics operators and shippers in Hong Kong and Shanghai and has declared an intention to set up an office for Codesp in Shanghai.

Once new contracts are in place and more revenue is forthcoming Carvalho hopes, in about three years’ time, to “propose an IPO on the Bovespa, our stock market” for about 40% of the shares. He added, “Because of the share structure, Codesp will still be in the control of Government hands but this will create an environment where the private sector has a much greater say, on compliance and transparency and it can also share in the profits of a revitalised Codesp and a new way of governance. Also, if we get more people on the board from the private sector we can protect the dock company from the politicians.”

Carvalho has also commissioned a study into a long-term

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

concession for dredging operations in the port of Santos, to reduce the expensive short-term maintenance contracts that have dominated dredging in recent years. He told Port Strategy that dredging contracts in recent years had been “expensive, erratic and not sharply focussed on the port’s needs” and that the best solution would be to have a dredger positioned permanently in Santos for both maintenance and deepening dredging.

“I think the best solution to achieve and keep a regular 14m would be to have a long-term contract, a concession of 30 or 35 years. This is what I will be working on,” he explained.

However, not all parties in Santos are pleased about potential developments. One Santos-based shipping agent told Port Strategy that Carvalho’s actions this year have, ironically, often been political and are having the opposite effect to those intended and he is not at all optimistic that the private sector will be interested in buying shares of a state controlled entity.

“It saddens me to say it, but the new Codesp president has upset a lot of people when he tried to force CMA CGM into taking out a temporary contract at Libra Terminais in April, when the carrier was moving its Asia joint service to DP World and Libra had its financial problems,” said the Santos veteran, who was lived and worked his whole life in the port city.

“He’s supposed to be trying to reduce political interference but that move smelt very strongly of political meddling. Also, I have no idea who will buy the 40% of the new company without knowing the whole set of rules. While the government has the majority of shares this would be a bad investment,” he stated, before concluding, “Some of the projects Carvalho is promoting might arouse the interest of Cade, the monopolies commission, in my view.”

8 Cut costs, raise revenues is Codesp aim

8 Tercio Carvalho Codesp president

OCTOBER 2019 | 35

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REGIONAL FOCUS: BUENOS AIRES

DIRECT CALLS OR A FUTURE OF FEEDERING FOR BUENOS AIRES? Buenos Aires may soon have a new $1.9 billion container terminal in Puerto Nuevo, but will this occur just as carriers stop direct calls and start feedering from Montevideo or Brazil, asks Rob Ward

8 Feedering from Port of Montevideo could, possibly, replace direct calls at Buenos Aires

Bigger and bigger vessels are starting to call on the East Coast of South America. The current maximum size of vessel calling at Puerto Nuevo (close to downtown Buenos Aires) and Exolgan, (six miles away at Dock Sud) measures just over 10,000 TEU (even with hefty draft restrictions), so logistics managers and route planners for major carriers are already lining up future strategies to possibly avoid direct calling at Buenos Aires.

Even with the proposed draft increase to 34.5 feet (10.5m) down from 32.5 feet, at Puerto Nuevo, many believe that the maximum draft for the facility with the optimum dredging, would be about 12.0m and that would not be enough to accommodate the 14,000 TEU vessels that are now on the horizon and lining up to call ECSA. In addition to draft, the beam of vessels will also be a restricting factor for Puerto Nuevo.

Leandro Carelli Barreto, a director with the Solve Shipping consultancy in Sao Paulo, Brazil, said that Buenos Aires terminals has “pulled off miracles over the years” to be able to accommodate larger vessels.

Indeed, Hamburg Sud originally achieved a competitive coup back in 2005 when it persuaded Exolgan at Dock Sul to widen and deepen the berth and turning circle to accommodate a shift from 5,000 TEU to 7,000 TEU ships, with Puerto Nuevo terminal managers subsequently equally astute since then in maximising the restrictions of operating in a “downtown port scenario”.

“The question of when the carriers will start feedering into the River Plate has always been a difficult one,” Barreto explained to Port Strategy. “When I used to work with Hamburg Sud [just over a decade ago] we used to carry out various simulations, but at the end of the day Buenos Aires attracts

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

some significant volumes and we always found out it was cheaper to continue calling direct to the port.”

However, the new logistical equations being carried out today are suggesting that a different outcome will lead to best practice for shippers and carriers in the future.

Barreto, like many of the other experts focused on the ECSA region, believes that the imminent arrival of the 14,000 TEU vessels will be a game changer. It could then see the beginning of more feeder services from Santos or Sepetiba in Brazil.

Montevideo's draft is 11.5m which is 1.5m deeper than at Buenos Aires, so that might be an option for carriers.

Neil Davidson, senior analyst for Ports and Shipping for Drewry’s Maritime Research, believes smaller vessels (12,000 TEU or less) will continue to call directly because of the size of the Buenos Aires conurbation (which comprises 16 million consumers out of Argentina’s total of 45 million). He says carriers have worked with the restrictions and found solutions because it is about the cargo and not the ships. If the cargo demand is there (and Buenos Aires is the second largest container port market in ECSA), then the desire to continue to make direct calls will remain, he feels, adding that Montevideo is a significant size market and the overall importance of the River Plate to the ECSA market is high (over 20% of ECSA port volumes).

Patricio Campbell, the president of ONE Argentina, says that Buenos Aires could “in certain circumstances” host bigger vessels than 12,000 TEU but it would need a lot of investment.

“It is possible, but instead of the 10.0m Puerto Nuevo has today, it will have to go to 14.0m and that will need the construction of completely new berthing substructure and that will cost a lot of money,” said Campbell, who is also the president of the Centro de Navegacion in Argentina (which represents the shipping and port community of Buenos Aires).

OCTOBER 2019 | 37

TRANSHIPMENT: WEST MEDITERRANEAN

VELOCITY AT VALENCIA AND BEST AT BARCELONA West Mediterranean container ports are adding equipment and expanding terminal areas to continue to attract larger container ships, writes Alex Hughes

8 BEST granted additional land

The Port of Valencia has moved from being the third largest container volume port in Spain the take the number one position. In 2018, it handled a total of 5.2 million TEU, equivalent to growth of 7.2% and for the first eight months of 2019, performance has been even better, rising 9.2% to 3.7 million TEU. “We have recorded two years of impressive growth, which we attribute to shipping companies beginning to concentrate their activities in Valencia,” confirmed press spokesperson Vicent Palací. He points out that the port’s hinterland, which covers the city of Valencia the Spanish capital Madrid, as well as important cities in Catilla-La Mancha, Aragón and Murcia, generates 60% of Spanish GDP. “When you add our strong import-export traffic to our transhipment traffic, there are obvious economies of scale, which means shipping lines like calling here,” says Mr Palací.

He further confirms that Maersk Line, Mediterranean Shipping Co (MSC) and Cosco – the world’s three largest container shipping lines – all have major terminal presences in Valencia, so have incentives to bring transhipment on the vessels with gateway traffic.

Figures released covering the seven months to July, show that transhipment now accounts for 53% of total traffic, amounting to 3.2 million TEU. Interestingly, it is trade with the US and Turkey that are seeing strong growth, while activity with China is down by 1%.

38 | OCTOBER 2019

“Our connections are improving all the time,” says Mr Palací.

“We recognise we are, nowadays, a hub port, but not just serving regional ports, but also those in the US, Canada, Mexico, Brazil, Africa, and North Europe, too.”

The port authority has backed future growth in the form of a fourth container terminal, for which MSC’s terminal arm, TIL, was the only bidder. The project will absorb total investment of €1.01 billion, of which €400 million will come from the port authority. Once operational, it will increase total capacity at Valencia from 7.5 million TEU to 12.5 million TEU. Mr Palací confirmed that the concessionaire is not obliged to guarantee transhipment levels as part of the contract, but did outline the level of infrastructure to be offered.

“There will be 18m of draft at the new terminal, which means we will be able to accommodate 23,000TEU vessels. We are already receiving calls from 400m-long ships at our existing terminals, so we feel Valencia is at the forefront of the container market in the Mediterranean,” he said.

Significantly, the concession does specify “at least” semi-automated operation in the new terminal, which is what TIL intends to implement. Mr. Palací says that automation allows greater added value jobs to be created.

“In the past, vessels were

8 Vicent Palaci

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TRANSHIPMENT: WEST MEDITERRANEAN

8 Valencia capacity to rise to 12.5 million TEU, eventually

loaded manually. Nowadays, the rising number of containers, as well as larger cranes and better IT back up is resulting in more employment thanks to rising levels of business,” he says.

Interestingly, the concession signed by TIL does allow the operator to exit the box terminal operation it has in Valencia’s southern harbour, meaning that the port would be in the interesting position of trying to find another concessionaire or amend the terminal’s use. MSC did move terminals at the Port of Antwerp in 2015-2016, so has experience of such an undertaking.

Asked about competition, Mr Palací concedes that Algeciras is Spain’s leading transhipment port, although stresses that the type of activity handled would not come to Valencia anyway. He is right, with Algeciras handling relay transhipment (deep-sea to deep-sea vessel) and Valencia more hub & spoke activity.

The Port of Algeciras enjoyed good volume growth in 2018, seeing a record year with total box traffic of 4.8 million TEU, up 9%. By the end of July 2019, it had surpassed 3.0 million TEU, 8% growth year-on-year. For the full-year 2019 period, port authority president, Gerardo Landaluce, is forecasting total container volumes of close to 5.0 million TEU. “The main factors driving growth are our connectivity and the ability to operate several mega-ships simultaneously,” he confirmed.

In 2018, transshipment accounted for 4.1 million TEU (85% of total volumes), although the ratio between import-export and transshipment is gradually changing because 10 years ago gateway traffic was 5% of the port total, but for the January to July 2019 total the figure was 13%.

“Our main clients are Maersk Line, CMA CGM and MSC, although more than twenty shipping companies transship containers at our terminals,” confirmed Mr. Landaluce, although did stress that the broadening of the traffic base coincided with the opening of the TTIA public terminal in the port a decade ago.

He also states a belief that Algeciras is very much a transshipment alternative compared to other Mediterranean ports and should be viewed as the reference hub in the Straits of Gibraltar. He adds that the port’s terminals are now extremely experienced and have some of the highest productivity rates in the region.

40 | OCTOBER 2019

“We are also one of the few ports able to handle various megaships at the same time and at maximum load capacity,” he stresses.

Capacity continues to increase and when Phase B of the Isla Verde Outer Harbour project enters operational service 8.0 million TEU per annum will be offered.

“Our terminals are currently handling the largest ships afloat.

We were the first European port where both the MSC Gülsün and the MSC Mina made stopovers. These both have 23,756 TEU capacity. Every week we also handle Maersk Line and CMA CGM megaships. Last year, for example, 122 vessels of greater than 16,000 TEU capacity called here,” says Mr. Landaluce.

Algeciras, he notes, is continually upgrading its facilities in line with the growth in size of vessel. Most of the work is concentrating in deepening draft alongside the berths, as well as in increasing the structural capacity of the quay to allow it to support ever bigger crane loads. Quays in the Isla Verde Outer Harbour can already handle any container vessel currently in service with the largest possible cranes.

“Between August and December 2019, we will undertake draft improvement work on a stretch of the Juan Carlos I Pier to improve draft to 18.5m in preparation for the arrival of even larger vessels that will pass through the Suez Canal in 2020.”

Mr. Landaluce says that either automated or semi-automated terminal operational is becoming a fundamental factor in handling transshipment traffic passing through the Strait. He says that in 2010 Algeciras was the first Spanish, and Mediterranean, port to introduce semi-automatic terminal handling, which was at TTIA and that performance has since been the benchmark for other terminals.

8 Gerardo Landaluce

BARCELONA In 2018, Barcelona handled almost 3.5 million TEU, an increase of 17% compared to the 3.0 million TEU seen in 2017.

Transhipment was the

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TRANSHIPMENT: WEST MEDITERRANEAN

8 Promoting transhipment at Maerseille-Fos

key driver, with a 37.1% improvement to reach just under 1.5 million TEU. The port’s traditional role has been as a gateway facility, primarily handling imports to local hinterland markets, but following the strong transhipment increase in 2018, this activity now equates to 42% of the port’s overall container total.

The position for the first seven months of the current year further endorses the trend. While overall throughput rose by 2.8% to 2.0 million TEU, transhipment increased by 7.81% to reach 873,192TEU, equal to 43% of Barcelona’s total container traffic.

Currently, the capacity at Barcelona is estimated to be around 5.0 million TEU annually and the port has already received container vessels larger than 19,000 TEU. However, both box terminals at the port - BEST (operated by Hutchison Ports) and APM Terminals Barcelona – are making investments in equipment and systems to accommodate the largest container ships now in service.

BEST, for example, received 139 vessels last year larger than 13,000TEU at its semi-automated terminal at El Prat, which opened in September 2012 and now has 11 ship-to-shore gantry cranes. Significantly, it has also been granted a further extension of 65,350m2 to its existing concession, meaning that when fully operational the semi-automated facility will occupy 100ha.

Since the introduction of France’s National Port Reform, the Port of Marseille-Fos has registered continuous growth in container activity, with an increase of 49% from 2011 when 944,047 TEU was handled to 1.4 million handled in 2018.

Christine Rosso, the port’s Head of Development, notes that growth in 2018 was 3.3% overall but already in the first two quarters of 2019 volumes are up by 6.0%.

“Growth in box traffic can be primarily attributed to two factors: port reform carried out by the state in 2008-2010, and the opening of two new container terminals (2XL) in that same period,” she said.

The additional capacity at newly-developed terminals will have improved operational capabilities, while also helping to eliminate a reputation for unreliability that the port had acquired. Notable, terminal operators also invested in new cranes, recruited new dockers, and permanently enhanced productivity, she added.

“The port authority also pursued a policy of developing new services to connect our middle and long-distance hinterlands,” she explained, which helped to offset any slowdown in Mediterranean traffic and changes to calling patterns of

42 | OCTOBER 2019

shipping lines and alliances. The result was that Marseille-Fos was one of the least negatively impacted Mediterranean ports,” the executive stressed.

Today, the port retains a key role in servicing North African and Far Eastern trades, having attracted back services to/from these destinations.

“We are now in a good position to act as a Mediterranean gateway to access European markets, historically addressed through northern range ports,” noted Ms. Rosso.

In terms of transhipment, around 5% of Marseille-Fos throughput is rotated in and out by sea, although drops to just 3% on East-West trades and 19% for north-south trades.

“Transhipment is evolving slowly, given that, in 2011, for us the figure was just 1% being generated on East-West services and 14% on north-south traffic,” said Ms Rosso, adding, “However, upgrades and changes made by terminal operators to boost productivity and introduce more cost-effective handling is allowing shipping lines to reconsider new opportunities for transhipment at the port.”

As far as the port authority is concerned, promoting transhipment helps to strengthen lines and increase the Marseille-Fos share of the overall Mediterranean loop, allowing them to benefit from certain economies of scale from concentrating traffic in one area.

Historically, transhipment traffic has been more closely aligned to Mediterranean traffic, although the recent boost in transhipment activity at Fos, which was just 1% in 2016 and is now 3%, indicates a longer-term trend, albeit a slowly evolving one.

According to Ms Rosso, the adoption of port operating methods more closely aligned to what shipping lines need, means that Marseille-Fos is now in a more competitive position to compete for transhipment. The port’s terminals are, she emphasises, in the perfect location to attract east-west, north-south and intra-Med traffic.

The largest vessels now calling are in the 16,500TEU range, although draft deepening in the coming years will make it possible to accept even larger vessels or allow existing ones to enter and leave fully loaded.

8 Christine Rosso

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CONTAINER HANDLING: AUTOMATED LASHING

MANUFACTURERS STRUGGLE TO AUTOMATE LASHING Automation is changing the way terminals handle containers but automated box lashing has only been partially successful, writes Alex Hughes

8 Twistlock handling

Richard Brough, Head of the International Cargo Handling Coordination Association (ICHCA), identifies systems under development at RAM and Bromma as potentially automating twistlock handling. The technology behind the Bromma development first emerged at the beginning of the current decade, although has yet to successfully complete live trials, while RAM’s PinSmart solution was given a “soft launch” earlier this year.

“Half the problem is that this type of research is very expensive,” says Mr Brough. “It takes a long time to get it right and requires active testing in an operating terminal. Interested operators would have to change their systems, which could prove highly disruptive and would also require agreement from their shipping line customers.”

There are also more than 50 semi-automatic and automatic twistlocks on the market, he adds, meaning individual interfaces must be developed for each of them. “Getting twistlocks off is the relatively easy part,” he says. “The problem remains in putting them on, which in the Bromma system requires a magazine arrangement, with each magazine costing in the region of £1 million.”

Other solutions are under development, he notes, including robotic arms and the integration of twistlocks into the corner castings so they never have to be removed from the containers.

Another company, he recalls, is working on a block system, which would allow six empties to be lashed together, thereby reducing twistlock handling. However, for this to be adopted

44 | OCTOBER 2019

requires major changes on behalf of both the terminal and vessel.

While he remains relatively confident that a solution for twistlock handling is within the industry’s grasp, he is yet to be persuaded that much more can be done to automate lashing bars manipulation, which remains one of the most dangerous tasks.

“Lashing gangs already have tools that use compressed air to tighten and loosen lashing bars, but the only way I can envisage this manual task being eliminated is through a complete redesign of the vessels themselves. The obvious solution would be to develop fully cellular vessels, although the pressure on productivity that this implies would preclude any such development of that kind,” stressed Mr Brough.

RAM Spreaders remains one of the few manufacturers that is publicly making progress with automating twistlock handling on or under quay cranes. PinSmart I was first introduced

by RAM in 2007 and implemented at terminals in the Europe, the US and Singapore.

“The original machine performed very well, but there were labour and equipment integration issues,” notes project manager Cameron Hay. The concept has evolved since then. Pinsmart I was semi-automated, while Pinsmart II is now fully automated, incorporating a robotic arm with interchangeable interfaces that can remove or install a range of common twistlocks.

8 Richard Brough, ICHCSA: “Getting twistlocks off is the relatively easy part”

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CONTAINER HANDLING: AUTOMATED LASHING

“Our main customers are automated terminals, who want all functions automated. With two billion twistlocks handled every year, PinSmart II will make the task of removing or replacing twistlock cones safer, faster and cost-effective,” says Mr Hay, adding that there will not only be savings in respect of pin men wages, but also in the cost to terminals of fatal and other injuries, given that around four to eight people die annually.

“We calculate that return on investment from labour savings alone would be generated in six to 12 months,” confirms Mr Hay. “Given that many other types of technology only give a payback in excess of five years, many terminals could make a financial case for acquiring.”

While earlier versions of PinSmart did require some manual input, PinSmart II has eliminated this entirely. However, RAM recommends the deployment of one highly qualified technician per berth to oversee up to six cranes to manage exceptions and twistlock logistics. There will also be an extra technician for engineering support. “However, we envisage a total reduction per berth of 10 people,” says Mr Hay. Interestingly, of the more than 50 twistlock types in circulation, PinSmart II is capable of handling around 25 of the most common, but RAM is open to customer requests to adapt it to handle others as required.

With new technology, there is always the risk that something might go wrong and that testing has not identified.

Nevertheless, Mr Hay stresses that, in terms of PinSmart II, it is unlikely that the whole machine would break down, although he concedes that highly used end effectors that manipulate the twistlocks could possibly breakdown. “In that case there are extras on the machine that can be swapped over in 20 seconds. If a more major incident takes place, where a unit

sustained external damage, entire units can be lifted off and replaced in ten minutes, which is a similar time it takes to swap over spreaders.”

He concedes that integrating PinSmart II into terminal systems is a complex process to start with, but once it is in place, the trained teams who maintain and manage twistlock handling then become skilled technicians, while the extensive training of experienced qualified tradesmen will make it easy to maintain.

8 Eliminating manual input

Seeking Safer Lashing According to Richard Brough, work undertaken by lashing and pin crews is “extremely dangerous”. This is a view echoed

by Laurence Jones, Director Global Risk Assessment, at insurance specialist TT Club.

They both agree that the main danger faced by the pin crew comes from the risk of collisions with terminal vehicles, operating either automatically or manually, as well as from quayside equipment such as straddle carriers.

Containers being handled by the gantry crane overhead also remain a real and present danger.

As for lashing duties, slips, trips and falls, as well as the potential to be hit by falling objects such as twistlocks or lashing bars, not to mention the containers themselves, are the main hazards. These risks are even more visceral when having to work on stacks of 12high deck-stowed boxes.

“To mitigate such risks, some terminals have adopted portable barriers to act as ‘pinning stations’, while others have moved the operation to the cross beam of the quay crane to keep personnel off the terminal paving and away from vehicles,” says Mr Jones, who adds that, “Most terminal operators are doing their best at fulfilling their

46 | OCTOBER 2019

duty of care for what remain risky tasks, but with comprehensive training and good systems and procedures in place these risks can be mitigated.”

However, Mr Jones believes that more can be done to make the lashing and container securing environment a safer one. He stresses that safety in the working area for lashers on board ships can be improved. “Measures such as adopting minimum walkway clearances, improved lashing bridge dimensions, better fencing, securing on opening hatches, proper platforms to work from, bins for lashing rods and safe access plans for the ship,” he outlines, also suggesting that potential remains to develop lighter lashing bars too.

“We would also like research to continue into ways of automating the entire process of lashing containers on the deck of a ship,” he adds.

Quizzed as to whether automation would automatically lead to cheaper insurance premiums, he remains cautious. “As with the introduction of any new equipment, system or procedure, automation will not reduce insurance premiums straight away. If, over a period of time, fewer accidents and insurance claims arise because of the introduction of this new technology, then premiums may reduce.”

According to Mr Jones, it is hard to picture lashing being entirely automated, although the hope remains that this will eventually happen.

Finally, asked whether reducing the insurance risk for terminals would be a driver in developing new automated equipment for lashing and twist lock handling, Mr Jones emphasises that the number one driver in automating lashing and pinning tasks is primarily to remove personnel from these duties and therefore reduce injuries.

“Reducing the insurance risk may be a result of automation in the longer term, but is a negligible driver compared to saving lives,” he says.

8 Laurence Jones: “More can be done to make the lashing and container securing environment a safer one”

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ENVIRONMENT: INLAND SHIPPING

TAKING UP THE CHALLENGE FOR GREENER INLAND SHIPPING From fuel choices to finance models, the challenges of ‘greening’ inland shipping are complex, delegates heard at the PLA’s London conference. Felicity Landon reports

8 A need to confront change for greener inland shipping success

‘We are all going to have to confront change’ said the Port of London Authority (PLA) chairman Christopher Rodrigues, as he reflected on a full day of discussions at the PLA’s Greening Inland Shipping conference, held as part of London International Shipping Week.

Speakers had covered the political and environmental context, international projects, the lessons learned from specific case studies, and how green tech for inland vessels can be financed. The conference focus overall was on accelerating the adoption of cleaner propulsion technologies on the Thames.

Mr. Rodrigues said anyone speaking out for improving air quality was hardly going to be shouted down – but he warned: “I think the regulatory horizon is going to tighten in on us much more quickly than people might think.”

Shifting to greener vessels and fuels to reduce or eliminate emissions “isn’t going to be a free choice for operators for very much longer – five to ten years, perhaps,” he said. “You need to think about it, and so do we. At the PLA we talk a lot about how do we create a green river. We have to show leadership.”

The maritime sector and shipping is playing ‘catch-up’ when it comes to lowering its carbon footprint, whether in terms of air quality or GHG emissions, said Robin Mortimer, chief executive of the PLA. “If you look at the long-term picture, while other sectors de-carbon fast, shipping has taken time to catch

48 | OCTOBER 2019

up. That means, if we look forward, we will become a bigger proportion of the challenge.”

Shirley Rodrigues, the Greater London Authority’s deputy mayor for the environment and energy, described air pollution as a global crisis and said millions of Londoners ‘breathe in air so filthy that it shortens life expectancy’. More than two million Londoners live in areas exceeding the legal limits for NOx, she added.

As road traffic emissions are increasingly brought under control in the capital, so the river’s emissions will grow as a proportion, she warned.

“We are working very hard with stakeholders such as the PLA to make sure the River Thames doesn’t become an underachiever compared to other modes.”

This is a tricky balance for the PLA, which has worked hard to promote the benefits of moving freight by water. In 2017, 3.4m tonnes of freight was moved between wharfs on the Thames, which equates to taking 340,000 lorries off London’s roads.

Several speakers highlighted regulatory confusion, especially relating to London. The tidal Thames has 21 regulators in all, the conference heard – including the PLA, the GLA, the Maritime and Coastguard Agency, the Canal and River Trust and all the riparian boroughs neighbouring the river.

“This means there cannot be a level playing field,” said the deputy mayor. “We continue to press our case for a single

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regulatory regime. We need more clarity and simplification – the existing system means we don’t know quite what is going on and people don’t want to take up new technology because it is not being driven by one regulator. We need that regime to support that change. We can’t wait for natural churn and inactivity by some to respond to the climate emergency.”

Robin Mortimer agreed: “It needs looking at, the regulatory regime is very fragmented and we are willing to look at whether there is a different role for the PLA in this.”

Figures for 2016 showed that domestic shipping counted for 10% of UK total domestic NOx and ten times more SOx than road transport, said Claire McAllister, deputy director at the Department for Transport.

“Society is demanding change across all industries. This is not just shipping,” she said.

The UK’s focus has traditionally been on how change could be achieved through international means, she added. “The global nature of shipping means we have global challenges.

But also, there is value in having a UK-specific strategy to complement that international effort and lead change – we want to be a global leader.”

She noted that the UK became the first major economy to pass a net zero emissions law and that while this will not apply to international shipping, it will apply to inland shipping.

Time is of the essence, she said, if emissions targets set out in Maritime 2050 and in the Clean Maritime Plan are to be met. The DfT is requiring all English ports to have air quality plans in place by next year, it has put out a call for evidence from domestic shipping for proposals moving forward, and it is to launch a consultation on the possible expansion of the North Sea ECA. Hege Økland, general manager maritime at the Norwegian cluster NCE Maritime CleanTech, described the innovation approach in the cluster, Norway’s push for zero-emission ferries and the way that this technology is being transferred to other segments, including offshore and coastal vessels. She also outlined the EU TrAM project which is which is focusing on advanced modular production so that standardised green vessel models can be used, taking a lesson from the mass production of the car industry.

Thames Clippers set out its plans for the UK’s first all-electric ferry, destined for the Thames at Rotherhithe, and Hans Thornell of Green City Ferries, outlined an all-electric ferry which floats on a cushion of air to reduce friction. The hydrogen-focused projects HySeas III and FLAGSHIPS were also covered.

Ports have their part to play in greening shipping, including providing onshore power supply, said Annet van Lier, the programme manager for CLINSH (CLean INland Shipping), another European project. “One of the things we are trying to promote is onshore power supply. It has been installed in Ghent and Nijmegen and will provide a best practice guide for ports

and local authorities to select the appropriate OPS solution,” she said.

A point raised by speakers and audience during the conference was the speed of technology development and the reluctance of operators and others to invest without clarity on future regulation and certainty on future technology.

“It took us quite some time to get ship operators participating [in CLINSH) because they were very hesitant to invest in any technology not knowing whether it would be approved or have to be different again in five years from now,” said Ms van Lier.

Hege Økland said: “The lesson I have learned from working on projects is the speed of technology development. It is crucial to have close collaboration with partners outside the traditional value chain. You need to involve grid owners, harbours, maybe other transport sectors, especially for hydrogen.

Donato Agostinelli Capaldo, business development general manager at Wartsila, said: “I think a lot of the inaction is because there is no clear path forward and things change so fast that people are standing by to see what happens. But these are exciting times to be in because we are part of the change and can contribute if we want to do so.”

Bjorn Gunnerholm of the Blue Advisory Group, commented: “There are so many misconceptions that going green is going to cost a lot more and we can’t afford to do it until we see some new technology development. It is not true. Going hybrid/ electric/for fuel cells will reduce pollution and reduce cost in terms of poor health – and ship owners/operators will reduce their opex.”

New financial methods might include leasing models and there are investors looking to invest money into green projects, he said.

8 Robin Mortimer, PLA chief executive

PLA Launches Practical Roadmap Chief executive Robin Mortimer announced at the conference that the PLA is launching a road map exercise with sustainable energy consultant E4tech, “to help us work out on practical terms how we get from A to B, how we employ these technologies on the river – looking at the technologies, opportunities, costs, etc., to get from theory to practice.”

The PLA has been something of green

50 | OCTOBER 2019

pioneer in the UK. In 2017, it was the first port in the UK to offer a discount for vessels with lower emissions – the discount was doubled to 10% this year, and the PLA is considering extending the ‘Green Tariff’ to inland vessels.

London was also the first in the UK to set out a detailed, long-term Air Quality Strategy to reduce emissions, and recently purchased the UK’s first hybrid pilot cutter.

The PLA is a partner in the Cross-River Partnership, which has been granted £500,000 from the Mayor’s Air Quality Fund to retrofit 11 river vessels, including tugs and passenger vessels, with the aim of cutting their emissions by up to 90%. This is part of the Clean Air Thames project, in which the GLA, the City of London and vessel operators are also partners.

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BULK HANDLING: MOBILE PNEUMATIC UNLOADERS

PNEUMATIC UNLOADERS RESPOND TO GREATER CARGO DEMANDS Increasing demand for grain storage solutions and silos with larger storage capacities is translating into bigger demand for pneumatic unloaders, as Dave Macintyre discovers

8 A Vigan pneumatic unloader NIV 600 tph on rubber tyres loading trucks

Increased capacity and speed are the main reasons why largersized equipment is required for unloading increasingly-larger vessels. At the same time, minimising dust emissions, grain spillages and noise pollution are important considerations in the design of the unloaders.

Progress in design is occurring rapidly, giving ports and terminals increased choice for handling free-flowing agribulk cargoes such as grains and meals, chemicals, wood pellets and animal feed pellets.

For other cargoes, both mechanical and pneumatic unloaders can be fitted with optional devices to break the cargo before it is lifted, such as a cutting nozzle or screw attachment.

Mechanical unloaders may have the edge in terms of speed, perhaps 200 tph (tonnes per hour) up to 1200 tph, compared to 200 tph up to 800 tph per pipe for pneumatic unloaders, but the pneumatic types have versatility – they can work on most quays due to light loadings, can be moved between quays and handle ship-to-barge transfers etc.

With a lifetime of a ship unloader being about 25-35 years, it is critical the customer makes the right choice of equipment.

General Manager of Vigan, Luc Sallets, confirms progress in pneumatic technology has been so great that ten pneumatics are now sold for every mechanical unit. “It is true for Vigan and I think the whole market is the same - for grain and agribulk at least. It is different for cement, iron ore, coal,” he states.

Summarising the respective strength of pneumatic and mechanical unloaders, Mr Sallets says the three most criticallyimportant factors are efficiency, power consumption and investment cost. Pneumatic unloaders have a higher ratio between average capacity at the peak or nominal capacity (how manufacturers describe the equipment).

52 | OCTOBER 2019

Nicolas Dechamps, Managing Director of Vigan explains further. “The main reason for such higher efficiency is that the pneumatic unloader is sucking everything up from the bottom of ship. No grain remains in the suction nozzle. The result is that the total time to discharge the vessel ‘berth in – berth out’ is shorter with a pneumatic unloader compared to the same situation with a mechanical unloader of similar capacity.”

He further explains that for any type of mechanical unloader (chain, screw or double-belt type, or even grab cranes), it is necessary to have the bottom of the vertical leg and its feeder buried in at least one metre of product to keep a high unloading capacity. “The last layer of cargo in the bottom of the hatch needs much more time to be discharged with a mechanical unloader, making its efficiency lower than the pneumatic unloader.”

Mr Dechamps adds that a recent study undertaken in Hamburg on the discharge of a vessel with a combination of mechanical and pneumatic unloaders resulted in the mechanical unloader stopping because it was not efficient during the final clean-up.

In terms of power consumption, he says mechanical unloaders (chain, screw, double-belt) have a lower nominal energy consumption at full capacity ranging from 0.3 kWh/t to 0.8 kWh/t.

Pneumatic unloaders have managed to reduce their consumption to lows of about 0.7 kWh/t due to reducing the number of elbows in their pneumatic lines, using a multi-stage turbo blower instead of an old-fashioned roots-type blower and the use of inverters for the drive of the turbo blower unit (allowing power consumption to be regulated automatically according to power required).

However, the higher efficiency of the pneumatic unloader outweighs its higher electric consumption by a factor of 10 in

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

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MRS GREIFER GmbH Talweg 15-17 • 74921 Helmstadt • Germany Tel: +49 7263 912 90 • Fax: +49 7263 912 912 export@mrs-greifer.de • www.mrs-greifer.de

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BALANCING ENVIRONMENTAL CHALLENGES WITH ECONOMIC DEMANDS

BULK HANDLING: MOBILE PNEUMATIC UNLOADERS

terms of costs. In terms of investment cost, Mr Dechamps says the pneumatic unloader is significantly cheaper to buy. “In addition to the face value, other factors to be taken into consideration in investment costs are the extra cost of quay construction or quay refurbishment due to the higher weight of a mechanical unloader compared to a pneumatic unloader.

Transport costs are extremely high as mechanical unloaders are usually made in Far East countries and transported on expensive heavy-lift vessels, with all downstream equipment (conveyors, elevators) having to be sized according to the nominal capacity of the unloaders.”

He adds that financial analysis confirms that the pneumatic unloader remains globally the most economical solution and that the extra small power consumption is largely compensated by lower investment costs and its higher efficiency.”

Pneumatic unloaders also appeal due to easier maintenance (a pneumatic unloader is an enclosed machine room with pumps and suction pipes and barely any moving parts), machine weight (less need for new quay construction or refurbishment) and simple controls meaning quicker training for operators In terms of costs of operation, Mr Dechamps says that based on 0.1US$/kWh, the difference in power consumption between pneumatic and mechanical is +/- 0.2 kWh/t, which represents approximately0.02 US$/t or as little as US$1200 USD in total for a Panamax size ships.

However, thanks to higher efficiency, a pneumatic unloader of 600tph will unload a Panamax vessel faster than a mechanical of 600tph. Saving one day on average for the discharge of each vessel means a saving of one day of demurrage (currently around US$20,000) on each vessel.

SEVERAL FACTORS Tomas Kisslinger, Managing Director of German pneumatic ship unloading specialist Neuero, says there are several reasons pneumatic unloaders are the best choice, including easy and safe operation, key options like automatic lowering of the suction nozzle as the ship is being unloaded, overall efficient unloading including cleaning the ship’s hold, low dust and noise emissions, low-cost maintenance, and the flexibility to adapt to different working conditions than were originally planned.

He gives two examples of this Summer where the Rhine River water levels were lower than normal. Since the ship was sitting lower than originally planned it was easy to simply add more hollow pipe extensions for the pneumatic unloader. The cost to do this was extremely low. “Additionally, the extensions are easy to remove when the water levels return to normal. For a pneumatic unloader to make these changes is a matter of minutes, not days like it would be for mechanical unloader to make the depth change.”

The second example is where only one hold is to be completely unloaded from start to clean-up. Normally when a ship arrives several holds are partially unloaded in phases to lower the stress on the ship’s structure. As this is being done the ship is sitting higher in the water. Mr Kisslinger states that “if only one hold is being unloaded from start to finish then the ship is still sitting lower in the water and extensions can be added to the pneumatic unloader to reach the bottom of the ship’s hold for the final cleaning operation. Again, these extensions are added in a matter of minutes.”

In terms of unloading speeds, Mr Kisslinger says the Neuero turbo blowers can operate at variable speeds to automatically adjust to different material requirements. The only time a pneumatic unloader may not look as favourable to the client, he says, involves operational costs, although these are offset

54 | OCTOBER 2019

by efficiency gains, before explaining further. “For energy consumption the grab takes the least, followed by the chain.

The screw and pneumatic unloaders have similar energy consumption rates. However, the stated energy consumption is normally given at peak production under the optimum operating situation.”

Mr Kisslinger admits that average unloading efficiency needs to be considered (the time it takes to completely unload a ship’s hold). “Grabs operate at 50% efficiency, followed by a chain at 65%, followed by a screw at 70%, and the pneumatic unloader operating at 75% efficiency. The reason for the grab, chain, and screw having lower efficiency rates is due to the design of these unloaders a front-end loader is required to feed these unloaders when there is still a significant amount of material left in the ship’s hold,” he states, before adding, “A pneumatic unloader operates by suction and does not require a minimum product height to be able to enter the system.”

He agrees that a straight purchase is the normal way to go compared to hiring, because of transport and assembly costs, but adds that it could be possible to make a lease agreement with the client based on a per ton basis with a minimum tonnage agreed to in advance.

8 Vigan say many more pneumatics are now sold compared to mechanical

8 Inverted cone unloading with Neuero

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

A HAVER & BOECKER Company

CLEAN. INTELLIGENT. PROFITABLE. Ship unloaders

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IBAU’s mechanical ship unloaders provide a highly

Phone: +49 (40) 36 13 09 0

efficient solution for discharging cement from ships,

info@ibauhamburg.de

including benefits such as low energy consumption,

www.ibauhamburg.com

low maintenance and dust-free unloading.

TERMINAL INFRASTRUCTURE: HEAVY DUTY TERMINAL PAVING

PAVING THE WAY AHEAD FOR TERMINALS Iain MacIntyre discovers how heavy-duty paving solutions for container terminals requires analysis of individual load types, weights and volumes versus capital and maintenance costs

8 Due care will maximise life span of paving

Operators must adhere to prescribed maintenance schedules to avoid potentially costly downtime, while simultaneously being tempted to skirt potential operational disruption. That’s the balancing act to be faced, according to various industry experts.

While numerous factors are noted to influence the cost to surface a given hardstand area, of the popular options it appears concrete is the most expensive, with rough estimates putting concrete block paving (CBP) and asphalt at about 10% and 30% cheaper, respectively.

Royal HaskoningDHV port paving expert Alex MacAulay provides the following assessment of the best matches of those typical surfaces to specific terminal setups.

“Concrete paving is suitable for areas trafficked by heavy, channelised wheel loads,” he says, adding, “Therefore, this type of paving lends itself to use in terminals employing equipment such as straddle carriers and rubber-tyred gantries (RTGs). It is also a popular choice on quayside areas.”

CBP generally can be adopted for container storage and for pavements subjected to heavy wheel loads. Compared to concrete paving, it is better able to cope with some settlements, being semi rigid rather than rigid. If repetitive channelised wheel loads are anticipated in areas, some terminals adopt concrete paving instead of block paving as it tends to be more resistant.” Mr. MacAuley adds to this point by stating, “Asphalt paving can be relatively cheap to construct and to maintain, but can be susceptible to damage from containers’ corner castings.”

Fulton Hogan business development and construction

56 | OCTOBER 2019

general manager, Eugene Cheah, adds that various materials make up a port pavement structure, from the running surface through to the native ground.

“The pavement material and structure will depend on a number of factors such as ground conditions, traffic and loading,” he says, and further explains, “Useful life and cost budgets are also key determinants. Each pavement structure has its own pros and cons, so consultation with experienced pavement designers and contractors is critical to seek the optimal solution.”

Port pavements are designed to a range of lifespans, with between ten to 25 years typically described, of which WSP port planning director Jonathan Tyler’s experience has more commonly been at the 25-year end.

“This is not to say that it will fall apart on the first day of year 26, but that keeping the pavement in a safe and serviceable condition may become increasingly costly and possibly uneconomic,” he says.

“For asphalt pavements in ports the following is usually anticipated – resurfacing of heavily-trafficked areas every five to seven years, partial reconstruction of heavily-trafficked areas after 12 to 15 years, total reconstruction after 25 years. Concrete, when properly maintained, has often proven to last decades beyond the design life. And block paving sits somewhere in between asphalt and concrete,” confirms Mr Tyler.

8 Eugene Cheah

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

TERMINAL INFRASTRUCTURE: HEAVY DUTY TERMINAL PAVING

Nigel Nixon and Partners Inc. chairperson, Nigel Nixon, emphasises that, although intended for specific lifespans, pavements will not achieve such numbers without due care.

“They all need maintenance during the design period,” he says, also adding that design life will be derived from such factors as the number of equipment repetitions over the planned life, plant dynamics, weight distribution, box size mix and percentage of empty and laden containers.

In a typical reach stacker container terminal, with assumption of no construction defects, Mr. Cheah describes the different surface behaviours/maintenance as likely to include: 5 concrete – periodic re-caulking between slab joints and filling any developing cracks with a repair mortar, alongside particular diligence to detecting any design or construction deficiencies 5 CBP – panels needing removal and replacement as the eventually break up and lose their interlock, with the bedding sand topped up and recompacted 5 asphalt – milling off the upper layer and replacing with fresh asphalt where container corner castings have indented significantly Mr Cheah adds to this matter too, stating, “It is often forgotten that the cost of maintenance is not only the repair costs but the cost of operational downtime – of not being able to use valuable real estate to move containers. Before undertaking any significant maintenance activity, consider whether the pavement structure is at or approaching the end of its service life and is due for rehabilitation or reconstruction.”

While the experts agree that ports will be aware of the recommended maintenance requirements for paving, it is different in a real-life operation.

Mr Nixon, whose firm proposes a 12-step maintenance protocol, says the requirements of the paving are often sacrificed to avoid operational disruption.

“Unfortunately, terminal owners tend to veer away from creating a paving maintenance regime – (a) because the planned funds aren’t often available in preference to other perceived more important operating expenditure items and (b) they often aren’t aware of the timing of the repair intervention to extend the asset’s life.

“Sadly, this is all too common – reactive maintenance takes preference to proactive maintenance” and he reports having frequently witnessed straddle drivers either repeatedly traversing potholes or swerving to avoid them – both actions raise the potential for accident and injury. “It is up to people like us to help advise owners from falling into the trap of what may be regarded as a cheap solution [but which] often results in a very expensive one,” Mr Cheah states.

Mr Tyler observes that the importance of paving maintenance may present as less obvious to a terminal operator than, for example, maintaining the operability of quay cranes.

“You can cone off and drive around a pothole, but you can’t drive a crane around a defective rail. Pavement deterioration is usually gradual and progressive over several years and, thankfully, not normally spontaneous and life-threatening.

“This means that it is difficult to look back to see if more should have been spent on preventative maintenance. This then means that it is possibly harder to look ahead and justify more preventative maintenance (which requires a bigger budget).”

Emphasising the relevance of “stitch in time” intervention, Mr Cheah nonetheless says some operators will leave their pavement until it fails – “thus risking safety, operational downtime and a very expensive fix”.

“Our more sophisticated customers have come to understand the value in monitoring and maintaining pavements. Early identification and intervention has resulted in

58 | OCTOBER 2019

8 Ports must identify optimal paving options

improved safety, improved pavement availability and reduced repair costs and time. Programmed annual maintenance sees funds being available within the businesses and outages being planned at the operator’s convenience.”

As a parting thought, Mr Cheah notes that as ports demand higher productivity and greater value for money from their infrastructure, so the need to identify their optimal infrastructure solution becomes increasingly important.

“Port infrastructure owners should not only look at the immediate capital cost but also the maintenance costs over the whole of asset life and the financial impact of operational downtime by not maintaining their assets.”

“Comparing options over the whole of the infrastructure life with differing variables can be difficult. One method is to calculate a net present value (NPV) of each infrastructure option which captures all variables including capital cost, maintenance cost, and income generated and lost from downtime time. This calculation is performed over the life of the asset and will assist in identifying the solution with the optimal value.”

While noting that maintenance budgets “understandably always come under scrutiny,” Mr Tyler also champions the early problem-solving approach. “Assessing when to do early maintenance is cheap and easy. At its simplest level, all it requires is a visual walk-over survey not less than annually, to identify any cracks, potholes and the like in need of repair and joints in need of cleaning and resealing. Water is often the most destructive force in maintaining pavement condition, so it is vitally important to keep storm water drainage networks free running, stop water from entering the pavement (seal surface cracks, repair potholes, re-seal joints), and make sure pavement subsurface drainage is not blocked.”

8 Alex MacAulay

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

PRODUCTS & SERVICES: DIRECTORY

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

LASE offers innovative and productive solutions for ports by combining state-of-the-art laser scanner devices and sophisticated software applications. We are specialised in the fully automated handling of containers, cranes or trucks.

Rudolf-Diesel-Str 111 D-46485 Wesel, Germany Tel: +49 (0) 281 - 9 59 90 - 0 info@lase.de www.lase.de

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

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

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

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

G-SERIES

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

Tel: : +46-(0)157-45 43 40 Fax: +39 049 8848006 Email: info@dellnerdampers.se Web: dellnerdampers.se

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

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

E LECTRIFICATION SOLUTIONS

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

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

When experience really does matter!

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

D REDGING EQUIPMENT

LASE Industrielle Lasertechnik GmbH

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

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

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

DREDGING

www.mcceexpo.com

YOU CAN DEPEND ON BIG RED!

C RANE COMPONENTS

TO

C OMPONENTS

9 JUNE Southampton 112020 United Kingdom

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

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

Container Terminal Altenwerder, Am Ballinkai 1 21129 Hamburg, Germany

C RANE RAIL SOLUTIONS

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

C ARGO HANDLING SYSTEMS

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

Taylor Machine Works, Inc.

HPC Hamburg Port Consulting GmbH

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

C ONSULTING ENGINEERS

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

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

VIGAN Engineering s.a.

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

C ARGO HANDLING EQUIPMENT

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

VIGAN manufactures dry agribulk materials handling systems:

C ONSULTANTS

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

Via Praimbole 38, 35010 Limena (PD) – Italy Tel: : +39 049 7663100 Fax: +39 049 8848006 Email: sales@bedeschi.com Web: www.bedeschi.com

B ULK HANDLING

B ULK HANDLING

Bedeschi S.p.A

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

OCTOBER 2019 | 59

PRODUCTS & SERVICES: DIRECTORY

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

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

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

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

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

60 | OCTOBER 2019

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

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

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

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

S IDELIFTER/SIDE LOADERS

Schwartauer Str. 99 D-23611 Sereetz • Germany Tel:+49 451 398 850 Fax: +49 451 392 374 soj@orts-gmbh.de www.orts-grabs.de

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

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

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

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

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

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

P OWER TRANSMISSION

Over 40 years experience constructing and manufacturing a wide range of grabs, including electro-hydraulic grabs (with the necessary crane equipment) radio controlled diesel hydraulic grabs, 4, 2 and single rope grabs all suitable for bulk cargo.

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

I T PORT AUTOMATION

Orts GMBH Maschinenfabrik

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

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

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

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

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

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

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

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

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

M ARINE FENDERS

info@alimak.com www.alimak.com

BLOK Container Systems Ltd

SANY offers reliable quality container handling trucks.

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

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

I NSURANCE

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

H ANDLING EQUIPMENT

E LEVATORS

Alimak Group Sweden AB

Sany Europe GmbH

I T PORT AUTOMATION

Verstegen Grijpers BV

H ANDLING EQUIPMENT

G RABS

E LECTRIFICATION SOLUTIONS

VAHLE PORT TECHNOLOGY

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

We Keep Your Vital Business Moving!

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

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

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

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

PRODUCTS & SERVICES: DIRECTORY

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

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

To advertise in the

Port Strategy Directory contact Tim Hills on

+44 1329 825335 www.portstrategy.com

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

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

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

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

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

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

9 JUNE Southampton 112020 United Kingdom TO

www.mcceexpo.com

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

T RACTORS

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

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

T ERMINAL OPERATING SUPPORT

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

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

T ERMINAL OPERATING SYSTEMS

T ERMINAL OPERATING SYSTEMS

S PREADERS

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

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

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

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

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

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

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

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

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

OCTOBER 2019 | 61

POSTSCRIPT

POLAND’S EMERGING DOMINANCE

Will the age-old problem of too much capacity too soon wreak havoc in the Polish container port sector? Some ambitious plans are being lined up which if they were all to come to fruition, even on a phased basis, signal tough times ahead. This, in turn, raises serious questions about the merits of EU funding

Poland has turned into the Baltic Sea’s main container hub, with volumes outstripping even Russia’s Baltic ports. And there are significant plans to consolidate this position, with every Polish port lining up ambitious expansion plans. Significant over investment – like that seen on the EU’s North Atlantic coastal stretch – looks likely, spurred on by seemingly unlimited EU funds.

Poland’s emergence as the dominant player is mainly due to Gdansk’s Deepwater Container Terminal’s (DCT) ability – as the only port in the Baltic - to handle the largest mainline vessels. DCT opened in 2007, owned and operated by a consortium of Australian investors, led by Macquarie Infrastructure. The investors’ business plan banked on attracting AsiaEurope mainline vessels all the way to the Baltic rather than turning in Rotterdam or Hamburg.

The reasoning was good. But timing was not quite right and initially DCT struggled. Maersk Line was the only client for many years and was able to squeeze DCT on tariffs. However, in recent years, the commercial benefits of bringing Asia-Europe vessels all the way to the Baltic have convinced most major shipping lines and they now call DCT. Notably, 2M and Ocean Alliance are the main customers.

Hapag Lloyd, ONE and Yang Ming (The Alliance) are still not bringing mainlines to the Baltic but it is just a matter of time before they will. It is unclear if Gdansk can accept the volumes of another alliance at this stage or whether they must wait for additional capacity to be built.

EXPANSION PLANS Gdansk will likely be the first terminal to add capacity in the market. But there are still some question marks. DCT can do some yard expansions but any major expansions (the so-called T3 project) will involve major land reclamations and so forth. In this context there are two factors that will stretch out the timeline. Firstly, the local communities are protesting regarding the environmental

62 | OCTOBER 2019

8 Ambition over common sense? If all the proposed container port expansion plans come to fruition in Poland there promises to be a price to pay

impact on the unspoilt nature areas adjacent to the port.

Secondly, the T3 project must be contracted out through a public tender by Gdansk Port Authority. Gdansk’s Terminal 2 was very quietly awarded to DCT without a proper public tender a few years ago. This led to protests and is unlikely to be allowed to happen again. As a result, a timeline of five years is probably a reasonable estimate.

Neighbouring Gdynia also has plans. ICTSI and Hutchison run terminals focusing on feeder volumes and short-sea business. But with limited depth and infrastructure, these facilities will struggle as mainline hubs. So, Gdynia Port Authority has introduced a 2030 Plan with a new reclaimed “Outer Harbour”. The cost of the project is quoted at €1.8 billion.

In addition, the Port of Szczecin and Świnoujście has announced a container terminal project with capacity of two million TEU per year and a price tag of about €500 million.

This appears over-ambitious. Profitability of the Polish ports is constrained by low handling tariffs, so the viability of all these projects is questionable. But with cheap financing and the EU still willing to finance infrastructure with scant regard for commercial viability, then do not bet against all projects being built.

PSA TAKES CONTROL OF POLAND As a related development in Poland, it is interesting to consider that PSA has suddenly emerged as the most influential port operator in the Polish market. Until recently, no one would have connected PSA and Poland.

But it is also the case that apart from its controlling shareholding in DCT Gdansk, PSA also has a significant presence in Gdynia. Hutchison Ports operates Gdynia Container Terminal. and PSA owns 20% of Hutchison Ports. It will be interesting to see how PSA uses its newfound dominant position.

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

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