Port Strategy October 2020

OCTOBER 2020 VOL 1020 ISSUE 8

portstrategy.com

Confidential reporting | Trucking challenges in Chile | The fourth industrial revolution

TERMINAL INVESTMENT STRATEGIES INDUSTRIAL RELATIONS FOCUS SUEZ VERSUS PANAMA

PORTSTRATEGY INSIGHT FOR PORT EXECUTIVES

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

VIEWPOINT MIKE MUNDY

It’s not ‘dobbing-in,’ it’s ok!

The fundamental difference between confidential reporting and ‘dobbing in’ is that the former is intended to have a constructive purpose whereas the latter is invariably conducted with some degree of malice or spite involved

The so-called ‘rule of six’ in the UK is a COVID-19 regulation that restricts social gatherings to a maximum of six people. If the regulation is breached then the offending party can be fined up to GBP3200.00 (US$4095.00).

The introduction of this new rule has been the cause of some controversy as it has been suggested by some senior government ministers that should anyone become aware of neighbours or friends or anyone in general breaking this regulation then it is quite alright to report them to the authorities or to put it in British parlance “to dob them in!”

“Dobbing in” is an English phrase which is particularly associated with English public schools and basically involves one pupil telling on another – i.e. bringing to the attention of the teaching staff some sort of wrong-doing on the part of a fellow pupil.

In this context and generally, the practice is widely frowned upon, being seen by many as bordering on unethical or to use another English phrase “not the done thing.”

Given this view of the world – shared by many in the UK – it is thus interesting to read the article in this issue of PS by the Confidential Incident Reporting & Analysis Service (CIRAS) which maps out the practice of confidential reporting and the positive role it can play in promoting port and terminal safety. As its name suggests, confidential reporting is a formalised system of reporting incidents or making suggestions in a safety and other contexts with complete anonymity. It has a track record outside the port sector of being highly successful in delivering meaningful feedback from the front line leading to positive enhancements in safety programmes etc. Clearly, there is good potential for use of the concept in the ports sector in a safety context and in other areas too.

The fundamental difference between confidential reporting and ‘dobbing in’ is that the former is intended to have a constructive purpose whereas the latter is invariably conducted with some degree of malice or spite involved.

The scope for the use of the system is also further underlined by the article in this issue which looks at the comprehensive risk assessment exercise recently conducted in conjunction with container terminals in Tanjung Priok, Indonesia. The assessment undertaken identifies 16 causes of high-risk accidents and in response to these details 14 “Risk Control Options” covering a wide range of measures across both front line and back-up activities in a container terminal.

The two articles either directly or implicitly highlight the importance of good communication as a path to promoting safe working practices. The value of this is further highlighted in The Strategist column in the news pages which addresses the increasingly complex nature of the relationship between port authorities and their tenants, and in particular the importance of maintaining a level playing field between different terminal operations.

Management in the ports sector is generally becoming more challenging, but on the other hand industry professionals and associated bodies are becoming increasingly innovative in meeting today’s challenges.

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

News Reporter: Rebecca Strong rstrong@mercatormedia.com Regular Correspondents: Dave MacIntyre; Iain MacIntyre; Felicity Landon; Alex Hughes; Martin Rushmere; Stevie Knight; John Bensalhia; Kate Jones; Ben Hackett; Peter de Langen; Barry Parker; Charles Haine; Charlie Bartlett; Maurice Jansen; Bob Post; Tero Hottinen Production Ian Swain, David Blake, Gary Betteridge production@mercatormedia.com SALES & MARKETING t +44 1329 825335 f +44 1329 550192 Media Sales Manager: Tim Hills thills@portstrategy.com Media Sales Executive: Hannah Bolland hbolland@portstrategy.com Marketing marketing@mercatormedia.com Chief Executive: Andrew Webster awebster@mercatormedia.com PS magazine is published monthly by Mercator Media Limited, Spinnaker House, Waterside Gardens, Fareham, Hants PO16 8SD UK t +44 1329 825335 f +44 1329 550192 info@mercatormedia.com www.mercatormedia.com

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©Mercator Media Limited 2020. ISSN 1740-2638 (print) ISSN 2633-4232 (online). Port Strategy is a trade mark of Mercator Media Ltd. All rights reserved. No part of this magazine can be reproduced without the written consent of Mercator Media Ltd. Registered in England Company Number 2427909. Registered office: c/o Spinnaker House, Waterside Gardens, Fareham, Hampshire, PO16 8SD, UK. Printed in the UK by Holbrooks Printers Ltd, Portsmouth, PO3 5HX. Distributed by Mail Options Ltd, Unit 41, Waterside Trading Centre, Trumpers Way, London W7 2QD, UK.

OCTOBER 2020 | 3

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Parts

CONTENTS OCTOBER 2020 VOL 1020 ISSUE 8

portstrategy.com

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NEWS 16 Iran-China deal Port plans

16 Chink of light

Australian dispute

OCTOBER 2020 FEATURE ARTICLES 19 Bueted by COVID-19

Container terminal investment trends

17 Bauxite Plan Douala exports

TERMINAL INVESTMENT STRATEGIES INDUSTRIAL RELATIONS FOCUS SUEZ VERSUS PANAMA

On the cover PSA now has six joint venture terminal arrangements with container lines

17 Abidjan too New terminal

17 Genoa duo PSA and GIP

11 Tough H1 2020

Cargo down for lines

11 Bleak H1 2020

China ports struggle

12 Szczecin funding EU cohesion boost

12 Quebec Interest New MOUs signed

is a proud support of Greenport and GreenPort Congress

14 Sideloader innovation

Fuel saving proof

GreenPort magazine is a business information resource on how best to meet the environmental and CSR demands in marine ports and terminals.

Sign up at greenport.com

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

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14 Sustainable strategy HHLA project ongoing

14 Boluda renews

Zeebrugge concession

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Continued port strife in Australia

25 Timely for Montreal

Strike o, just in time!

27 The human factor

Route to safe operation

30 Speaking up

Confidential reporting

33 Chile truck crisis Fragile peace holding….just

37 PNW competition builds Challenge for new terminal in Seale

39 Old rivals

New canal trends

43 Fourth Industrial revolution New requirements

15 Clear as mud

45 Maintenance outsourcing

15 Keep it simple

49 Seal of approval

Concern over growth

Online portstrategy.com 5 Latest news 5 Comment & analysis 5 Industry database 5 Events

23 Waterfront challenges

Port relationships

17 Green wins

Infrastructure agenda

17 Malaga’s oil

Contract or on-call?

Container security innovation

54 Postscript

Liner shipping profits in 2020?

Circular cargo

18 Higher status

Carbon oseing

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

OCTOBER 2020 | 5

NEWS REVIEW

NEW IRAN – CHINA PARTNERSHIP HAS PORT IMPLICATIONS

As Port Strategy goes to press, the first chink of light in a fullon confrontation between the Maritime Union of Australia (MUA) and the Australian terminal operators DP World Australia, Hutchison and Patrick became visible.

In early September following approval by Australia’s Fair Work Commission to hold a ballot, unionised-workers voted to implement protected industrial action at Patrick, Hutchison and DP World terminals in the key

CHINK OF LIGHT IN AUSTRALIAN DISPUTE

BRIEFS Botany fast track

Port Botany’s Rail Line Duplication and Cabramatta Passing Loop is being fasttracked by the New South Wales Government. The project is essential to handle growth in freight moving through the port. Around 18 per cent of containers are currently railed to/from Port Botany each year and NSW Ports is committed to a long-term strategy to move three million TEU by rail to relieve pressure from the road network.

6 | OCTOBER 2020

Bandar-e-Jask is also notable as it has recently been spoken of by Iranian President Hassan Rouhani as the location in which Iran’s main oil export terminal will be relocated from Kharg Island, deep in the Arabian Gulf. He claimed the move would be completed by the end of 2021.

Reports further suggest that the new strategic partnership will result in India being excluded from a project to establish a rail connection between the Iranian port city of Chabahar and Zahedan, the capital of Baluchistan province in Iran, situated near the Afghanistan border.

Chabahar is designated a key hub in the International North South Transport Corridor, a 7200km freight corridor connecting Mumbai to Moscow.

Source: Maritime Security Review

Iran and China are forging a new strategic partnership which reportedly will include port development in Iran.

The broad scope of the agreement so far as it concerns Iran will entail China investing a total of US$400 billion in transport, banking, petrochemical, telecom and other development sectors in Iran. In exchange, China will be the beneficiary of regular, discounted, oil supplies from Iran over the next 25 years with the overall deal falling under the auspices of China’s Belt and Road Initiative (BRI), which has already captured diverse port projects in Eurasia.

Only a few details of the Iranian ports that this new strategic partnership will cover are currently available. What is known is that it is expected to cover Iran’s Bandar-e-Jask port which is strategically situated to the east of the Strait of Hormuz. This will deliver to China influence over one of the seven maritime ‘chokepoints’ in the world.

8 Bandar-e-Jask, set to become the home of Iran’s main oil export terminal, will soon be under Chinese influence along with other Iranian ports

ports of Brisbane, Freemantle, Sydney and Melbourne. This followed the break down of negotiations on new enterprise agreements with employers.

Practically speaking, this resulted in a series of work stoppages which have progressively resulted in the serious impairment of efficient operations on the waterfront, in turn resulting in vessel delays, the imposition of Sydney congestion charges by four container lines and certain vessels deciding to bypass Sydney altogether. Sydney/

Port Botany is clearly the most severely impacted with supporting Empty Container Parks reported to be either full or nearly full and concerns generally rising about widespread increased costs and the overall impairment of import and export supply chains.

The ’chink of light’ came in the second half of September with DP World announcing that….”the Maritime Union has withdrawn all industrial action at DP World Sydney effective immediately.”

And that: “Additionally, the union have confirmed via written

undertaking that they will not be taking any industrial action of any kind at our Port Botany terminal before 1 November.” And significantly, that: “Without the distraction of bans and limitations, we anticipate that we’ll be able to progress outstanding local matters at DP World Sydney in the pursuit of a finalised enterprise agreement.”

Clearly, this is a step in the right direction but considerable progress still remains to be made especially and not least with Hutchison and Patricks.

Le Havre gears up

PSA & HMM link

W.A. Kwinana Port

GMP-PortSynergy operating at the Port of Le Havre has received four new Super Post-Panamax cranes, to complement the 10 existing units on site and enable the largest ships in service to be handled. The new cranes will be operational during October 2020. Also, plans for Le Havre’s Port 2000 completion are continuing, with a further 42ha and 700m of linear quay under development with operations due to start in 2024.

PSA and HMM have established a new terminal joint-venture in Singapore.

HMM-PSA Singapore Terminal (HPST) will commence by the end of 2020, subject to regulatory approvals, with PSA holding a 58 per cent share and HMM the remaining 42 per cent. The deal reflects similar arrangements PSA holds in Singapore with MSC and Cosco, and guarantees HMM access for its new 24,000TEU vessels.

The Government of Western Australia has approved the location and design of a future container port at Kwinana. The appointed taskforce confirmed that the transport network supporting Fremantle Inner Harbour will reach capacity by the mid2030s. The proposed new container port at Kwinana would be linked by an inland freight route directly to the highway network and logistics facilities in outer Perth.

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

NEWS REVIEW Australia- based Canyon Resources has signed a Memorandum of Understanding (MOU) with the Port Authority of Douala (PAD) covering the development of port infrastructure to facilitate the export of up to 5 million tonnes per annum of bauxite in conjunction with its Minim Martrap project.

The Minim Martrap Project is said to feature one of the highest quality bauxites in the world.

The plan is to move bauxite by rail from central Cameroon where the project is located to Douala.

Production under Phase One is expected to be 4 million tonnes per annum.

Under Phase Two export operations also envisage using the port of Kribi, Cameroon, with connection also achieved by rail, A pre-feasibility study for the project was finalised in mid-2020, a mining convention is under

CANYON RESOURCES PLANS BAUXITE EXPORTS VIA DOUALA AND KRIBI

negotiation and the final investment decision is expected mid-2021. The timetable for the start of export operations is end 2023.

8 Canyon Resources is gearing up for bauxite export operations via the Cameroon ports of Douala, (pictured) and under its phase two development the port of Kribi

APMT-BOLLORE – ABIDJAN SECOND TERMINAL APM Terminals has confirmed signing of a new contract with French logistics specialist Bolloré Group to jointly develop the new Côte d’Ivoire Terminal (CIT) in the port of Abidjan.

The €400 million investment is for a new facility located adjacent to the existing Abidjan Terminal.

The first phase of the project will generate an additional 1.2 million TEU in throughput capacity per annum, with operations slated to commence before the end of 2021.

The concession is for 20 years, whereupon all assets will then be returned to the Port Autonome d’Abidjan (PAA - Port Authority).

The existing current Côte d’Ivoire Terminal was constructed in 2013 by the PAA and involved the deepening and widening of the Vridi Canal access channel, with 45ha of land reclaimed for the creation of the container facility and an adjacent ro-ro operation. In 2015, an US$80 million expansion was completed to increase annual container capacity from 800,000 TEU to 1.5 million TEU. The current container terminal can accommodate vessels up to 11.5m draft, whereas the new facility will be offering a maximum draft of 18m at its 1100m of quay - supported by six

8 APMT and Bollore are targeting cross border gateway cargo moved by rail as part of the new Abidjan container terminal development

Post-Panamax gantry cranes and 13 e-RTGs. The call of bigger container vessels in the region is expected

by APM Terminals. It foresees new generation ships calling (from Maersk Line) in the size

classification of 14,000TEU and up to 350m in length.

While transshipment to locations such as Guinea (Conakry), Sierra Leone (Freetown) and Liberia (Monrovia) is expected, the additional capacity will also be utilised by growing gateway volumes. Current Abidjan container volumes totaled almost 731,000 TEU in 2019, consuming around 50 per cent of the existing terminal’s capacity.

The new project makes substantial use of the associated rail yard with two tracks of 300 meters each in place as part of plans to access additional inland cargo from countries such as Burkina Faso, Mali and Niger.

GENOA TERMINAL MERGER Approval has been granted by the Genoa Port Authority for PSA Investments (PSA) and Gruppo Investimenti Portuali (GIP) to restructure their Genoa terminal operations – PSA Genova Pra (formerly known as Voltri Terminal Europa) and the Southern European Container Hub (SECH).

Both parties held shareholdings in each terminal but under the restructuring PSA becomes the majority

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

shareholder (62 per cent) and has management control of both PSA Genova Pra’ and SECH through a new company, Merge Co. PSA Genova Pra’ handles approximately 1.5 million TEU annually and SECH 0.4 million TEU. The merger is forecast to enable the group to better serve its shipping line clients, meet the requirements of modern supply chains and enhance financial strength during the current volatile trading period and beyond.

BRIEFS Hutchison Egypt Terminal

Hutchison Ports is developing a new container terminal in Abu Qir, Egypt. The US$730 million greenfield investment is located inside the Abu Qir Naval base, connected to Alexandria and the national road network to Cairo. The new 100ha facility is due to commence operations in 2022 and offer 18m draft, 1200m of quay and ultimately a two million TEU capacity per annum.

The new concession is to run for 38 years.

SIGP prepares HAIFA

Four new cranes have arrived at the new Southport Container Terminal in Haifa, Israel. A further 19 units are planned for the facility which is to be operated by Shanghai International Port Group (SIGP). The terminal will offer an initial 1.86 million TEU per annum capacity when it opens, which is currently estimated to be during 2021. Haifa Port Company is expected to see the privatisation process gain traction in Q4 2020/Q1 2021.

APMT Aarhus acquisition

APM Terminals has confirmed that APM Terminals Aarhus has acquired the neighbouring container terminal, Aarhus Logistics Center (ALC).

ALC was established in 2017 and operates the quays of 404/406/308, adjacent to APM Terminals Aarhus. The transfer took place with effect from September 1st, 2020 and follows ALC deciding to divest due to a lack of cargo prospects to justify continuing with the operation.

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NEWS REVIEW

2020 H1 RESULTS – CONTAINER SHIPPING LINES AND REGIONAL PORT PERFORMANCE

Taranaki record

Port Taranaki has delivered a record net profit after tax (NPAT) and its secondhighest revenue return in the financial year to June 30, 2020. Trade volumes rose 8.4 per cent to 5.46 million tonnes, as the port’s eorts to diversify activities recorded a comparable 62.7 per cent lift in NPAT to NZ$12.2 million (albeit,including a NZ$1.1 million boost from the Government’s tax depreciation changes

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the pandemic causing considerable uncertainties.

Maersk Line is predicting that Q3 2020 will result in a “midsingle digit contraction� while CMA CGM, which saw EBITDA rise

$--- .."6-/ .."513 6"4.3 2"422 %% %% /"05- ."446 ."/5-

/-/- /-.6 %.-9 %29 %69 %19 %% %% %.-9 %/.9 %59

Source: Dynamar

CHALLENGING H1 2020 FOR BOX LINES

8 Table 1: Summary of Revenues and Carryings for Major Container Shipping Lines, H1 2020 vs. H1 2019

by 30 per cent for Q2 2020 over Q2 2019 and revenues increase by three per cent too, is expecting “further significant improvement in its operating margin in the third quarter, driven

by strong momentum in shipping markets, driving both volumes and freight rates.�

BLEAK H1 2020 FOR CHINA’S CONTAINER PORTS Current estimates indicate that total global container port handling fell by around 4.0 per cent in Q1 2020, compared with Q1 2019 due to the COVID-19 pandemic.

This position is replicated in China for the same period. With the COVID-19 outbreak commencing in China, ports in the country were hit first as a lockdown was introduced and factories were closed. As the pandemic became more widespread globally in Q2 2020, China’s key exporting markets were shutting down, especially in Europe and North America.

Based on Dynamar data, the H1 2020 throughput for the top 10 largest container volume ports, predominantly located in China,

reached 118.29 million TEU for the January to end of June 2020 period.

This activity reflected a drop of -3.8 per cent on the 122.91 million TEU

APMM axe is out

Mexico down in 2020

AP Moller Maersk (APMM) is phasing out the Damco and Safmarine brands by the end of 2020. The major restructuring could impact 27,000 jobs with a possible 3,400 positions being removed. APMM confirmed that Safmarine is being “integrated� into Maersk Line, with the Damco air and LCL businesses being “combined� into other APMM products. Cape Townheadquartered Safmarine was established in 1946 and acquired by APMM in 1999.

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

8 Figure 1: Total Port Throughput – Largest Volume Container Ports, H1 2020 vs H1 2019, in ‘000 Million TEU

Mexico’s container port traďŹƒc was down by 11.1 per cent in H1 2020 compared to H1 2019. Total throughput was 3.13 million TEU versus 3.52 million TEU. Pacific coast ports registered a 9.8 per cent drop, with Manzanillo down 7.1 per cent and LĂĄzaro CĂĄrdenas down by 20.9 per cent. Gulf of Mexico ports saw a 13.6 per cent overall decline, with Veracruz down by 13.1 per cent and Altamira down 15.7 per cent.

moved in the comparable six-month period of 2019.

Figure 1 provides a summary of the container volumes.

BRIEFS South Port deepens

South Port (NZ) is investigating deepening its channel entrance from the current 9.7m draft to allow ships to carry additional cargo. The port has completed preliminary feasibility studies and is now consulting stakeholders.

With South Port facing the loss of major business through the potential closure of the New Zealand Aluminium Smelter, it has to target new cargo opportunities to secure its future and the ability to service larger ships is seen as a key factor.

OCTOBER 2020 | 11

Source: Dynamar data

Unsurprisingly, the first half of 2020 proved challenging for almost all container shipping lines, with declining revenues and volumes carried compared to the COVID-free H1 2019 period.

Of the ocean carriers that release or produce information, all major operators saw a decline in carryings, based on data collated

by Dynamar. Table 1 provides a summary of revenues and volumes for H1 2020 and H1 2019 and a consistent picture can be seen.

Looking at some of the specific operators, Maersk Line states that its lower volumes were partly oset by “agile capacity deploymentâ€? which translates into matching supply to demand and lower costs and maintaining healthy freight rates while lower fuel prices also played their part.

Cosco Shipping subsidiary OOIL, reported a net profit of US$102 million for the first half of 2020, down slightly on the US$139 million for the 2019 period, although revenues for the comparable six-month periods for OOCL liner services were US$3,430 million in 2020 and US$3,300 million for 2019.

Nevertheless, OOCL definitely helped ensure Cosco could record a one per cent improvement in H1 2020 revenues over H1 2019 – one of the few carriers not seeing red ink on its balance sheet.

Moving forward, all liner operators are expecting the second half of 2020 to remain challenging due to the lingering impact of COVID-19, with the potential for a further outbreak of

NEWS REVIEW

BRIEFS Monopoly in Chile?

In Chile, the Chacabuco Port Company (Emporcha) has presented the competition authority (TDLC) with a report arguing that it should be allowed to become a monopoly operator at its installations in the south of the country. The company’s President, María Francisca Yáñez, stressed that seven ports in the country already operate in this way.

Newcastle ro-ro

Economic recovery of the Hunter region in New South Wales is being boosted by a new ro-ro service by Hoegh Autoliners calling at the Port of Newcastle. Hoegh is targeting project cargo and heavy equipment to the region’s agricultural and mining areas. Hoegh’s New Horizon vessel series, with a ramp capacity of 375 metric tonnes, 14 decks and more than 71,000m3 of cargo space, will be calling.

SZCZECIN FUNDING FROM EU COHESION FUND The Port of Szczecin in northern Poland is receiving funding to the tune of €52.5 million from the EU Cohesion Fund to widen and deepen the port’s Debicki Canal as part of works designed to provide access for larger vessels.

Elisa Ferreira, Commissioner for Cohesion and Reforms, noted with regard to the funding approval: “The project will contribute to the socio-economic development of the region by increasing the amount of cargo that the port can

handle. Thanks to this project, transport will become more efficient while operating costs for shipping companies as well as the time the cargo spends at sea and the distances needed to transport it will be reduced”.

Szczecin is one of the four main Polish ports and has the status of being a port which is part of the Trans-European Transport Network (TEN-T) and the Baltic-Adriatic Corridor.

The project is estimated to be

realised by the end of 2023. It comes at a time when major capacity additions are scheduled in the ports of Gdansk and Gydina and as such has led some market analysts to question the rationale of piling on so much capacity within a relatively short timeframe.

The view is that the capacity additions overall will significantly outstrip demand leading to an erosion of acceptable levels of return on investment in Poland’s port sector.

SEVEN MOUs FOR QUEBEC EXPANSION The Quebec Port Authority, Canada has recently announced the signing of Memorandums of Understanding (MOUs) with seven major partners from the transportation and research sectors to advance its port expansion project.

The expansion project, named Laurentia, has a core investment of C$775 million for construction.

The project, according to the port authority; “…is expected

to provide 1000 sustainable jobs related to the terminal operation,” with a further estimated C$100 million of annual economic impact.

The MOUs connect the port with Hutchison Ports (the designated concession holder for the new container terminal planned as part of the expansion project), the Port of Rotterdam, Canadian National Railway, Port XL, Quebec

International, Uinversite Laval and Quebec City.

The container terminal development will draw on the latest technologies and in this respect is expected to benefit from the presence of Universite Laval and research chairs recognised in Quebec for advances made in the field of artificial intelligence, supply chain optimisation and green technologies.

Export record

The Port of Leixões established a new first half record in H1 2020 for export traffic of 2.7 million tonnes, up 4.2 per cent over the previous year. Key exports were refined products, iron and steel, paper and cardboard and stone.

Container exports were also up against H1 2019 by 3.4 per cent to 3.5 million tonnes. Overall traffic was down by 5.6 per cent due to COVID-19, with liquid bulk (-15.8 per cent) hardest hit.

Smart RTGs for Cambodia

Kalmar is to supply four SmartPower Rubber-Tyred Gantry (RTG) Cranes to Phnom Penh Autonomous Port (PPAP) for its LM17 Container Terminal in Cambodia. Delivery is scheduled to be completed in Q3 of 2021. This terminal has a capacity of 150,000TEU per annum.

12 | OCTOBER 2020

8 Thursday, 7 September, 2020: the 14,414TEU capacity CMA CGM T. Roosevelt on its maiden voyage to the Port of New York City & New Jersey transits under the Bayonne Bridge formally marking the completion of the Bayonne Bridge Navigational Clearance Project. The project which entailed “giraffing” the bridge to raise its clearance capacity (air draft) from 151ft to 215ft facilitates unimpeded access to the port for vessels of up to 18,000TEU.

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

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Auckland goes deep

Ports of Auckland (PoAL) has been granted consent to deepen its harbour channel from 12.5m to 14.0-14.2m. As a result of the process, the port will be able to accommodate 366m-long New Panamax vessels to its terminals.

PoAL unusually requested the application to be made public and received over 200 submissions.

Port management is already working with key stakeholders to address any concerns over the disposal of dredged material.

NSW coal collective

The New South Wales Minerals Council and 10 coal producers are being allowed to collectively negotiate access to the Port of Newcastle for coal and minerals exports. Permission has been granted because the Australian Competition and Consumer Commission “…believes that collective bargaining is likely to generate public benefits, including enabling coal producers to have greater input into the terms and conditions of access, and increasing transparency around capital expenditure plans and cost allocation at the port.”

Congestion

The British International Freight Association (BIFA) has confirmed that there is ongoing and severe congestion at the Port of Felixstowe in the UK. A surge in imports from China and issues with the port’s Vehicle Booking System (VBS) are the cause. BIFA says the problems have been ongoing since 2018, but with the latest problems particularly severe. The port has apologised, saying it is alleviating issues.

14 | OCTOBER 2020

SIDELOADER INNOVATION

Source: Hammar

BRIEFS

Olsfors (Sweden)-based container sideloader manufacturing specialist, Hammar, has confirmed how much fuel can be saved using equipment with lower tare weights.

In conjunction with Martin Andreasson Transport AB in Gothenburg, a live test confirmed that significant gains can be achieved, both in terms of fuel economy and environmental impact.

The test was performed by comparing the fuel consumption of the latest model from Hammar, the Hammar 110, with its closest predecessor – the Hammar 155.

The Hammar 110 used in the test had a tare weight of 8,220kg, compared to the Hammar 155 tare weight of 10,530kg, confirming a net difference of 2,310kg.

The trailers were pulled by the same truck, by the same driver along the same route which covered between 330-380km per day, mostly city driving, picking up and leaving containers in the Port of Gothenburg.

The trial process was performed over several weeks and then the average fuel consumption was compared between the two different sideloader options.

The results conclude that a minimum saving of 1.2 litres of diesel per 100km is possible,

representing a saving of about three per cent using the new Hammar 100 option.

Hammar added that in many situations it is also possible to increase the payload the Sideloader can carry and this will make the overall transport activity even more efficient.

8 The new Hammar 110 with its lower tare weight offers savings of around 1000 litres of diesel a year

Over a one-year period of activity, the basic savings outlined will add up to around 1000 litres of diesel on a per annum basis.

HHLA INVESTING IN SUSTAINABILITY Hamburg container terminal operator HHLA is progressing its sustainability strategy at its Container Terminal Altenwerder (CTA). An additional 16 l lithium-ion Automated Guided Vehicles (AGVs) and six more green energy charging stations for the AGVs will be put into service by the end of the year.

This will raise the number of charging stations to 13 by the end of 2020 with five more scheduled

for delivery in 2021. By the end of 2022 HHLA estimates that all of the almost 100 vehicles it operates will be powered by lithium-ion batteries. This is forecast to reduce annual emissions of CO2 by 15,500 tonnes and nitrogen oxide by 118 tonnes - electric AGVs do not generate either of these emissions or fine particulate matter emissions.

This is a planned shift to an

all-electric AGV fleet at CTA with support given to the initiative by Hamburg’s Ministry for Environment, Climate, Energy and Agriculture and by the European Regional Development Fund as part of the “Energiewende in Unternehmen” subsidy programme.

HHLA’s overall goal is to halve CO2 emissions by 2030 and secure climate neutrality across all its operations by 2040.

BOLUDA RENEWS FIVE YEAR CONCESSION AT ZEEBRUGGE Boluda Towage Europe has renewed, for five years with an option for extension for a further three years, the concession it holds for the provision of sustainable towage services in the Belgian port of Zeebrugge..

The agreement forged with the

port of Zeebrugge provides for the supply of eight powerful and modern tugboats and as part of this Boluda Towage Europe will bring in two Damen newbuild 85 tonnes bollard pull ASD Tugs 2813, both of which comply with the

IMO Tier III emission standards.

Other tugs that form part of the concession agreement will be retrofitted to conform to IMO Tier III standards over the next two years.

One, the Union Koala, has already been retrofitted.

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

THEECONOMIST BEN HACKETT

NEW NORMAL IS AS CLEAR AS MUD Container carriers appear to have found the “yellow brick road” to recovery this year with strict capacity management, while the rest of the industry is in the doldrums.

As countries around the world slowly exited from their various “lockdowns” there was optimism that the worst was over and that it would be easy to get people back to work in factories and offices. It soon became clear that this was not going to be the case.

Big cities suffered as people continued to work from home.

Service sectors suffered the most as foreign travel was not easy with quarantine rules in place.

The lockdowns played havoc with the economies to such an extent that the lack of growth during the Great Depression paled in comparison to the collapse in economic activity that virtually all countries experienced in the second quarter of 2020.

Europe and North America led the field in the collapse of Gross

8 Concern remains about growth prospects, with the new normal currently as clear as mud

Domestic Production (GDP), with much of Asia and Latin America not far behind.

The result is that the pandemic has pushed the global economy into what may be its deepest slump since the Great Depression. Views differ on the impact on the level of trade. After

a hesitant start, trade has re-bounded dramatically this summer, particularly on the Asia-Europe and Asia-US trade lanes. The Atlantic trade is slower to gain traction. With global trade projections ranging from -6 to -10 per cent the rest of the year is anyone’s guess.

Dry bulk shipping time charter rates, after an initial growth spurt have settled back, but tankers have suffered significant reductions in income due to the lack of demand for oil along with low prices. Only the container sector seems to have found the “yellow brick road” to recovery.

For virtually the first time they have managed capacity without breaking ranks, obviously helped by the strength of the three super alliances along with cheap bunker prices. This has pushed up freight rates beyond what one would expect given global trade levels.

The port sector is seeing lower throughput of cargoes and investment in new ports is stifled due to COVID-19 uncertainty as fears of a second wave continue.

Concern remains about growth prospects. What the new normal will be is currently as clear as mud.

THESTRATEGIST MIKE MUNDY

KEEPING IT SIMPLE IN A COMPLICATED WORLD The bedrock of any port’s efficient operations is a strong working relationship between a port authority and its private sector tenants, particularly terminal operators.

Too often, however, the fact that such relationships need to be worked at in order to stay strong and purposeful is a reality that gets shuffled down the list of priorities.

The framework for a port authority-tenant relationship is invariably shaped through a concession agreement or contract of some description.

And there have been lessons learnt in this respect over the years – concession agreements, for example, tend nowadays to pay much more attention to how they end as well as how they

start, the options for renewal etc.

Equally, there is more recognition of the potential for structural changes such as industry consolidation leading to acquisitions which can potentially mean that a port authority can end up in ‘partnership’ with a different party than it originally entered into an agreement with. Progressively, concession agreements are being fine-tuned to take account of such aspects and as a result they remove the scope for misunderstandings and thereby strengthen the port authority – terminal operator relationship.

A core job on the part of a port authority is to maintain a level playing field between terminal operators working in the same sector – container handling for example. Striking such a balance

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

is not always easy, however, particularly when it comes to planning an expansion of capacity. It is this fact though that should stay at the forefront of a port authority’s mind as opposed to other factors such as setting a new benchmark for port rents via a proposed new terminal or other facility.

Promoting effective competition between terminals is fundamental to delivering cost effective and efficient supply chain operations, and thereby complementing general economic objectives and serving the interests of business and the consumer.

The picture can get more complicated when a port authority does not occupy a position of neutrality – for example, has an equity stake in one terminal operation and

not another. Or when it has allowed use of fundamentally different contractual mechanisms to be employed within its port perimeters – for instance concession and freehold.

Such arrangements can be worked around but experience over recent decades confirms that neutrality – or practically speaking operating off a level playing field – is the best path to keeping all stakeholders happy and thereby open to further investment and other positives.

Port authorities today operate in an inherently potentially more complicated world but in essence the main challenge remains to ‘keep it simple’ to the benefit of all stakeholders/port users and in line with the fundamentals of a public service remit.

OCTOBER 2020 | 15

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THENEWYORKER BARRY PARKER

GREEN WINS IN RED AND BLUE RACE All eyes are on the U.S. Presidential election, being held on November 3rd. New York, always a “Blue” state, will go for Joe Biden, but it’s a big country out there and many pundits are predicting a close election. Readers have possibly grown tired of learning about candidates’ plans to revitalise the U.S. infrastructure, but it’s important to note that Trump and Biden are both placing importance on it. Biden has been advocating a vast investment in a greener infrastructure.

While Trump’s administration has rolled back certain Obamaera environmental initiatives, the path forward may show surprising commonality rather than polar opposites. Indeed, Trump’s actions banning drilling off Florida’s Gulf Coast (extending an existing ban) and instituting a similar ban in Florida’s Atlantic coastal waters, and those of Georgia and South Carolina, are very telling. So, whichever

candidate wins, the Red side (Republicans) or the Blue side (I am not picking a side here), “Green” considerations will dominate, on the money front and in terms of sustainability.

With the pandemic forcing massive amounts of spending at all levels of government, the reliance on private capital to support infrastructure investment will grow. Within the investment world, capital providers will be sharpening their ESG (Environmental, Social and

8 Investment in green infrastructure could be the big winner in the upcoming US Presidential elections

Governance) lenses, accelerating a trend in evidence over the past few years. In a year of extensive hurricanes and forest fires, the investors’ attention, and the focus on sustainability (by credit rating agencies and financiers alike) will only grow. The port business can find many “win-win” situations here, because their customers – the shipping lines

and shipowners (and the next layer of customers – the cargo interests) are all being placed under ESG microscopes.

An area that continues to attract attention is decarbonisation of shipping, as the industry shifts away from traditional fuels. Facilities for LNG fueling, now in the mainstream for deepsea vessels (and viewed as an important fuel on the pathway to reduced carbon emissions), is squarely in the ESG camp. For short sea and inland trades, the US will be following the lead of Europeans towards electrification and battery power; the money men, the “private” tranche backing capital investments, will also take a favorable look at infrastructure for supplying electrons to the maritime sector. In 2020, a dim year that many readers surely wish to forget, we can point to the shifting pattern of infrastructure investing as a bright spot.

THEANALYST PETER DE LANGEN

RECYCLING SUPPLY CHAINS AND NEW BUSINESS: EXPERIENCES IN MALAGA While we may associate the circular economy with more local value chains, a recent initiative from Malaga shows that this is not necessarily the case. Malaga has developed a triple function in the used (cooking) oil supply chain activities: import port for used oil, mainly from Asia, export port of biodiesel produced with the used oil and ‘distribution hub’ for used oil. The oil from Asia is stored in tanks in Malaga and then transported to other European destinations, especially Marseille-Fos. While the volumes are limited, for a relatively small port like Malaga, the impact is substantial.

For instance, the hinterland transport of the used oil, as well as the return cargo (biodiesel) to the biodiesel plant in Linares is

completed by rail. Currently, the used oil and biodiesel is the only regular user of rail in the port of Malaga, and therefore pivotal in Malaga’s ambitions to improve its rail accessibility.

Paradoxically, global sourcing, through the use of used cooking oil enabled restarting the plant.

The operation, developed initially with substantial subsidies to turn

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

8 With the cruise industry stalled and uncertainty of containers, Malaga needs to expand into other cargo areas

locally produced crops and residues into biodiesel, had been idle for almost a decade. Now, with imports of cooking oil from Asia and export of biodiesel, the plant is profitable.

The first relevant insight is that

global supply chains are often driven by incidents, historical decisions and unforeseen events.

Second, the case also suggests that for circular activities, ports may turn out to be attractive manufacturing locations. If this plant is profitable in Linares (about 250km from Malaga), imagine the competitiveness of a plant in Malaga’s port, or for that matter the nearby port of Motril.

Third, Malaga’s development shows that attracting circular cargo flows - and manufacturing - deserves to be high on agenda of port development companies/ port authorities. In a difficult environment, with cruise stalled and containers uncertain, it is the new development Malaga has been looking for.

OCTOBER 2020 | 17

THEENVIRONMENTALIST CHARLES HAINE

It was once said of carbon offsetting that it is a tool used by rich societies to carry on polluting without the guilt.

Certainly, if businesses and individuals choose to compensate for their pollution as a strategy, rather than actually reduce the GHG emissions for which they are responsible, they run the risk of being nominated for the Greenwashing Oscars. A famous brand of petrol station claims it offsets – without any cost to you – to make the fuel you buy ‘carbon neutral’. And in one foul swoop, that explains perfectly this type of ‘avoidance’ offset.

What has changed recently is that investors, stakeholders and Governments are looking to pursue binding ‘net zero emissions’ in a race to 2050, or in some cases as early as 2030. Net zero status is a big step beyond carbon neutrality because it requires you to also look at your supply chain (e.g. customers using your services).

In the coming decades and at current levels of know-how, almost every organisation is still going to be engaging in activities (e.g. heating/cooling, travelling to places, purchasing materials, receiving deliveries) that emit the gases causing global warming. So in order to truly achieve the ‘zero’ bit, you’ll need to either: a) invest in technology, for instance carbon capture and storage (CCS), that physically takes GHGs out of the atmosphere (cue Financial Director breaking into a sweat upon seeing the CAPEX estimate); or b) seek and own (so that you have control over it) biological solutions, such as planting trees.

Items a) and/or b) are termed ‘authentic’ offsets. You may have caught the news that BrewDog – the independent beer maker in Ellon, north of Aberdeen, UK – has just gone ‘carbon negative’. It’s doing this by investing in renewable energy to strip carbon out of the brewing process, using electric vehicles while also committing to planting one million trees in its own 2000-acre woodland in Loch Lomond. That’s real action!

18 | OCTOBER 2020

CARBON OFFSETTING GAINING A HIGHER STATUS

What’s all this got to do with the maritime industry? Quite a lot, for a sector that is in lag. Shell’s 2020 ‘All hands-on deck’ report corroborated the elevation of decarbonisation – in the last 18 months – as a top priority for shipping companies. The 28 companies that launched the ‘Getting to Zero Coalition’ (to seek a working zero emissions’ vessel and fuel) a year ago, now boast a membership of 110!

Until researching this column, I was not aware the Mediterranean Shipping Company (MSC) already has a Carbon Neutral Programme. What’s more, its website allows customers to select a project steeped in climate action (hydropower in China or forest conservation in Zimbabwe) to help offset unavoidable emissions.

As a bonus, such projects improve local lives and economies, and can therefore be aligned with the aims of the UN Sustainable Development Goals.

MSC correctly acknowledges that this is a ‘bridge solution’ to a net zero future. As the world’s second largest box shipping company by volume, MSC will clearly also have to be at the forefront of researching,

ordering and operating a net zero vessel in order to remain credible on offsetting.

It will come as no surprise to you that in true Orwellian style, not all offset programmes are created equal. Remember the horror stories – of carbon cowboys and their flantations (fake plantations) in far flung corners of the world, print-yourown-certificates and your reduced current account. You cannot even think about entering the world of carbon offsetting until you have a comprehensive knowledge of your GHG emissions’ footprint (including multiple years of robust measurement), and a full due diligence exercise into the organisations promising to deliver certificates that verify the carbon actually saved. To be frank, I would want to see the offsetting project myself (thus, adding more transport carbon to the total needing to be offset).

8 MSC already has a Carbon Neutral Programme, but will have to be at the forefront of researching, ordering and operating a net zero vessel to remain credible on offsetting

I am studying the blue economy at the moment, and the latest shiny toy in the store is ‘blue carbon’ projects. Coastal habitats such as mangroves, marshes, tidal creeks, reefs and seagrass beds are getting attention. This is because as highly productive parts of the ecosystem, they have carbon production rates equivalent to tropical humid forests. Mangroves allocate more carbon below ground in soil and dead roots.

This could be news for port authorities and terminals.

Ecology, biodiversity and ecosystem services need to be as high on the agenda as air quality, waste and noise. There could be a carbon goldmine within your jurisdiction or right there on the doorstep!

‘‘

What has changed recently is that investors, stakeholders and Governments are looking to pursue binding ‘net zero emissions’ in a race to 2050, or in some cases as early as 2030 For the latest news and analysis go to www.portstrategy.com/news101

TERMINAL INVESTMENT

BUFFETED BY COVID-19 Leading analyst, Andrew Penfold, examines the latest trends in container terminal investment and assesses activities in an era increasingly buffeted by the impact of COVID-19

8 Hyundai Merchant Marine (HMM) has become the sixth container line to enter into a joint venture terminal in Singapore with PSA

The container terminal market has seen some major trend developments in recent years. As shipping line (and alliance) volumes have consolidated and expanded there has been an increase in line investment in dedicated terminals. This has squeezed the market share of the major international stevedoring companies.

True multi-use terminals have seen market share fall from around 70 per cent of capacity in 2010 to around 40 per cent at present. In addition to this trend – and further complicating the picture – joint ventures between lines and stevedores have played an increasing role.

Of course, this is not unique to the port market – downstream investment in related sectors has long been a focus for the oil business and other transport sectors. The degree to which this has been successful has repeatedly moved into and out focus over the years.

As the COVID-19 demand shakeout progresses, what will be the impact on ownership in the terminal sector?

WHY HAVE LINES INVESTED IN TERMINALS? The advantages are clear: 5 Lines have been aware that in past years the profitability of terminals has far exceeded the returns from container shipping. As the lines are delivering demand, this has incentivised investments.

5 Technical changes – much larger vessels and consignment sizes – raised concerns about the ability of existing

‘‘

Multi-use terminals have seen market share fall from around 70 per cent of capacity in 2010 to around 40 per cent at present stevedores to deliver required capacity. As vessel sizes increase, the control available by integrating stevedoring with vessel scheduling becomes increasingly attractive.

Terminal investment has allowed increased control over the transport chain – at least in theory.

5 Control of demand – especially during the early period of development – offers rapid ramp-up capabilities.

But there are downsides: 5 Although the returns are potentially strong, the costs of development are very high. Most shipping lines (except for the state-controlled sector) have been under financial pressure at least since the Financial Crisis. Providing investment has been problematic. During the recent market downturns most lines were focused on survival and have started to downplay direct terminal investment as available financing has dried-up.

5 Lines have found it very hard to sell capacity to third party lines. Why would a line use a competitor’s facilities?

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

OCTOBER 2020 | 19

TERMINAL INVESTMENT 5 Despite best intentions, a controlled facility is a cost centre, rather than a profit focus. Motivation for efficiency and marketing will inevitably be different than with a commonuser terminal. It is far from clear that line-owned terminals are cheaper for the line.

5 Port Authorities are sometimes concerned – rightly – that a line terminal will allow a dominant position within a port, especially in a lower volume Developing World situation.

THE COMMON-USER TERMINAL In most competitive market situations – in higher volume ports with several terminals – the common-user facility offers a highly competitive option. Efficiency is run at high levels and costs contained by the competitive nature of the market. However, this model has come under pressure from the lines as their buying power has increased.

Following a rear-guard action terminal operators have sought to square the circle of different interest groups by developing the Joint Venture approach, with shareholdings split between specialist terminal operators and shipping lines – usually with the undertaking that these shareholders will commit their volumes (sometimes at a discount) to the joint-venture terminal. This model has become increasingly dominant in Europe and southeast Asia and offers some comfort in an increasingly competitive market.

WHAT IS THE OPTIMUM APPROACH? This is a matter of perspective and the pros and cons differ for different interest groups: For the Port Authority seeking to develop overall port

volumes and increase their presence in a port range, the lineowned terminal is attractive. It serves to anchor discretionary business in the port and offers a degree of security not necessarily available from a common-user alternative.

Demand growth will be strong during ramp-up as the line owner concentrates its demand at the terminal.

This is why some Port Authorities have encouraged this approach – often at the expense of existing common-user terminals in their port. Such an approach can be justified, but it is very important that transparency is maintained in the bidding process.

Problems can be acute where the terminal is the primary (or only) access point for a key hinterland. Giving a line priority in these situations will have a negative impact and can generate a de facto monopoly. This is especially the case in some Developing World locations.

Perhaps the biggest uncertainty for the Port Authority in taking this approach is the issue of ‘counterparty risk’.

Some line-owned deals have involved consortia of shipping lines but – as we know – shipping lines are vulnerable nerable entities.

Commercial pressures and changed ownership can significantly antly change the market position of line owned terminals.

Managing these situations ns can be highly problematic for a Port Authority. uthority.

For the shipping line the advantages are clear. ar.

There is the potential to o

8 Highly-respecte Highly-respected market analyst, Andrew Penfold, ta talks terminal investment investme strategies and the impact of COVIDCOVID-19

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

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

20 | OCTOBER 2020

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

TERMINAL INVESTMENT shift the profits from a stevedore company to their own bottom line and – perhaps more problematically – it offers the chance to increase control of a particular market. If funds are available, then this is a highly logical move. Where the origin of these funds is is opaque, i.e. where there is de facto state control, then this can be seen as unfair competition. It can be anticipated that more of these issues will emerge in coming years.

Often the interests of the shipper (the cargo owner) are ignored in these decisions. What the exporter or importer requires is simple: a reliable service at a competitive cost with the ability to handle current and future needs. On this basis, it would seem to matter little if the terminal is owned by a line or by a common-user operator. However, the prudent shipper will not place all his business with a single line and if that line also owns the terminal, then there will be increased reluctance.

Generally speaking, the cargo owner will benefit from a common-user terminal in a competitive market and will favour such a terminal – especially if it can offer supporting facilities such as inland terminals and transport facilities.

SO HOW HAS COVID IMPACTED ON THIS? There are several key points that have been accelerated by the current crisis: 5 Although lines have successfully managed lower demand by reducing services and benefiting from much lower bunker prices, the basic balance of supply and demand remains highly unfavourable on high volume trades. The lines financial vulnerability has been obscured but not

‘‘

Volume downturns have impacted both terminal models, but the common-user model has had much more flexibility to revise services and prices and has proved quicker off the mark in responding to the downturn altered. Independent lines will have even fewer resources to invest in terminals.

5 Volume downturns have impacted both terminal models, but the common-user model has had much more flexibility to revise services and prices and has proved quicker off the mark in responding to the downturn. The JV has allowed stevedores to benefit in the discretionary cargo sector and compete for other business.

5 The financing of new capacity will become much harder.

The confidence provided by a volume guarantee offered by an equity owner will come under much closer examination in coming years. The more diversified common-use stevedore company will enjoy an advantage here.

The crisis has underlined the need for rapid and flexible responses to short term market shifts. It is clear that the changes precipitated by the virus will have a sustained impact on the structure of the container terminal sector.

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

OCTOBER 2020 | 21

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INDUSTRIAL RELATIONS: AUSTRALIA DISPUTE

ECHOES OF THE PAST IN OZ The industrial action underway on the Australian waterfront at the time of writing has echoes of the protracted action that took place in the 1990s, not least due to the intransigence of the MUA The “protected industrial action” implemented by the Maritime Union of Australia (MUA) in the country’s key ports – Brisbane, Freemantle, Sydney and Melbourne – has drawn strong criticism. The MUA’s decision to implement the industrial action due to a lack of progress in negotiating new enterprise agreements with port employers is seen by many as a callous action at a time when the country is battling the COVID-19 Pandemic.

Simon Birmingham, Trade Minister, speaking in early September, said the COVID-19 pandemic was already placing global supply chains under great pressure and further disruptions were the last thing exporters needed.

“Our exporters are already having to grapple with significant pressures as a result of the pandemic and now is the worst possible time for such actions that only compound these pressures.

“It’s hard enough for our farmers and businesses right now and the last thing they need is further uncertainty and delays in getting their product out of Australia,” he said.

Similarly, other government ministers banged the drum on the importance of complying with workforce laws and the responsibility of the various parties to positively engage and make agreements that deliver higher productivity.

Editorial in the leading Australian publication, the Financial Review, also captures the view of many on the MUA industrial action entailing a series of stoppages across the terminals of the container terminal operators; Hutchison, Patricks and DP World Australia. It highlights the particularly difficult situation in Port Botany and the consequential damage that will inevitably flow from the stoppages.

“Port Botany is Australia’s second-largest container port, serving the nation’s largest metropolitan population centre and biggest state economy. The escalating industrial conflict and extended delays on the Sydney waterfront will inflict significant damage and additional costs, uncertainty, and supply constraints on an already virus-hit economy and vulnerable businesses, by holding up the flow of imports, including critical supplies, and preventing exports from reaching overseas markets.

And it continues: “There’s no faux working-class solidarity here, as this action threatens the job prospects of the million or so Australians now officially out of work. It recalls the treasonous behaviour of the 1940s when strikes, sabotage and go-slows by wharfies – at the command of Communistcontrolled unions – held up the loading of troop ships and undermined the nation’s war effort.”

Just for good measure it also adds: “Two decades on (from the major strikes on the Australian waterfront in the late 1990s), the maritime unionist dinosaurs of the labour movement have clearly learnt something, but also forgotten nothing. The MUA position is that 1,000 or so waterside workers should hold port operators, shipping companies and other businesses to ransom by exploiting their chokehold on a critical supply point in the economy.”

No punches pulled by the Financial Review for sure, and to be frank it does have a point!

One aspect of the industrial action seen as particularly unpalatable is the imposition of a port-wide ban across all

‘‘

One aspect of the industrial action seen as particularly unpalatable is the imposition of a port-wide ban across all three Sydney stevedoring companies to prevent them from subcontracting delayed vessels to each other

8 As PS goes to press, DP World Australia reports that the MUA has withdrawn industrial action at Sydney

three Sydney stevedoring companies to prevent them from subcontracting delayed vessels to each other. This did not even happen during the notorious waterfront strikes in the late 1990s.

ROOTS OF THE CONFLICT On the face of things, the roots of the conflict between the port employers and MUA is the inability of both parties to negotiate new enterprise agreements.

Behind this broad statement, however, are a lot of details.

In the case of Patrick, for instance, the MUA instead of sticking with the original plan to roll over the existing enterprise agreement with a 2.5 per cent pay rise is introducing a range of new issues into the negotiation. It reportedly wants to ban outsourcing and limit automation. To be fair Patrick for its part wants to remove a large slab of prescriptive rules that dictate how things are done on the docks and which in its view impede efficient working.

Bottom line, to a significant extent the current dispute is very reminiscent of the industrial action taken against Patrick in the late 1990s. On the employer side there is a desire to advance, to utilise new technology, to introduce proven new work practices and on the side of the MUA just to maintain the status quo!

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

OCTOBER 2020 | 23

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INDUSTRIAL RELATIONS: MONTREAL DISPUTE

JUST IN TIME FOR MONTREAL Striking dockers and cargo diverted to other ports. It has been a tough July and August for the Port of Montreal. But with returning workers, AJ Keyes asks if any lasting damage has been done

COLLECTIVE BARGAINING Despite the obvious impasse and inability to resolve it, the Federal Government in Canada has consistently refused to intervene. Instead, it simply placed the onus of resolving the matter directly on to the parties involved. Filomena Tassi, Canada’s Minister of Labour, made the Federal Government stance very clear, stating: “Our government has faith in the collective bargaining process, as we know the best deals are made at the table.�

However, the Minister did subsequently add that Transport Minister Marc Garneau and the Ministry of Labour had “reached outâ€? to all parties involved, stressing that there was a Federal Government “expectationâ€? to focus all eorts on finding an agreement.

The pressure must have worked because on August 24th, the striking workers agreed a seven-month truce with employers while a new collective bargaining agreement is negotiated, hopefully by March 2021. While negotiations are ongoing, there will be no lockouts or strikes.

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

Media sources additionally confirmed that the HapagLloyd/OOCL/Mediterranean Shipping Co vessel, the 4,872TEU MSC Leigh, deployed on GEX1/Montreal Express/AT1 service, was still due to divert from its usual Montreal call to the Ceres Terminal in Halifax.

POSITIVE IMPACT The positive impact of the end of the strike was, however, immediately confirmed by the Montreal Port Authority. In the week after the return to work it notes that: “Seven container ships called at our terminals. Thousands of trucks and about 10 trains picked up the slack to move goods to importers in Quebec, Ontario and the U.S. Midwest.�

Like all ports on a global basis, Montreal is continuing to feel the impact of the COVID-19 pandemic. Figure 1 compares the January to July position for total container volumes for 2019 and 2020.

The drop in activity in April and May due to COVID-19 is easy to see. Overall, the seven-month 2020 period of 945,000 TEU compares to just over 1.01 million TEU for the comparable 2019 timeframe and confirming a drop for 2020 of 6.5 per cent.

The combination of COVID-19 and the strike action comes at a time when Montreal is still investing and planning for new capacity. In 2016, it opened the new VIAU terminal and is raising capacity to 600,000TEU per annum at this facility.

Additional long-standing plans to develop 1.15 million TEU annual capacity at a new container terminal at the site at Contrecoeur on the St. Lawrence River, where it retains 468ha of land and 4km of shoreline, is still on target according to Port Authority sources.

8 Figure 1: Port of Montreal January to July Total Container Volumes, 2019 vs 2020

CLEARING THE BACKLOG With the extensive backlog that built-up during the strike, it is estimated that it will take between two and four weeks before shippers have caught up and operations are back to normal, according to container line Hapag-Lloyd. “It will take some weeks to clear the backlog of vessels and cargo in the terminals which were impacted because of this interruption.

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

The resolution to the strike may itself have arrived just-intime. In the short-term for Montreal’s local shippers and consumers who have had to wait longer for cargo to arrive recently‌ (a full-stop added after just-in-time and new sentence with In the short-term‌ For the Port Authority, resolution could not have been quick enough to stay on track to deliver long-term objectives particularly in connection with the Contrecoeur project.

‘‘

Our government has faith in the collective bargaining process, as we know the best deals are made at the table

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

Source: WSP

One individual close to the Montreal Port Authority, who wished not to be named, said that recent events at the port were “a complete mess.� With a striking workforce and cargo diverted to competing ports, he may indeed have a valid point.

A dispute between terminal operators and the Local 375 of the Canadian Union of Public Employees (CUPE) erupted in July. There has been no contract in force since the end of December 2018, when the previous collective bargaining agreement expired, and a deal could not be reached.

Initial stoppages for four days occurred in late July 2019, which impacted import and export container handling. These were followed by further action between August 3rd and August 7th that closed the Termont Terminal. The situation worsened with an indefinite strike commencing from August 10th stopping all container cargo handling and mooring services being provided by longshoremen.

OCTOBER 2020 | 25

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CONTAINER TERMINAL: RISK ASSESSMENT

THE HUMAN FACTOR ABOVE ALL Authors of a new risk assessment of work accidents in container terminals built their analysis around data from the Port of Tanjung Priok. As Felicity Landon reports, all container terminals can learn from the conclusions drawn

8 Port of Tanjung Priok data supported the risk assessment of work accidents

Fire, loading/unloading accidents, non-loading/ unloading accidents, traffic accidents, work accidents and environmental/pollution accidents; in their research and analysis of work accidents in container terminals, Muhammad Arif Budiyanto and Haris Fernanda identified six categories to cover all relevant hazards and risks. They then set about analysing the frequency of accidents, pinpointing the direct and underlying causes, and drawing up a table of risk control options.

Probably the least surprising finding (and a timely reminder) is this - that human factors are the most common causes of accidents.

THE ‘FAULT TREE’ ANALYSIS APPROACH The authors, from the department of mechanical engineering at Universitas Indonesia, carried out their formal safety assessment method, combined with the ‘Fault Tree Analysis’ approach to assessing the risks, at container terminals 2 and 3 at Tanjung Priok. Their research was based on interviews, direct observation and accident data over a five-year period to 2017, and accidents were categorised according to the level of severity and frequency.

During the five years analysed at the Tanjung Priok terminals, there were 117 accidents, with the highest rate being in 2015. The most prevalent type of incident during the period was traffic accidents, which accounted for almost 42 per cent of the total.

More notable is the analysis which showed that across all types of accidents, human factors were the most common cause – at 53 per cent. This included driver/pilotage error (at 36 per cent easily the highest), poor supervision, negligence

when working, inadequate tool or equipment maintenance, and miscommunication when working or navigation error.

Nearly 30 per cent of accidents had machinery as their common cause, including equipment damage, engine damage and electrical error. “The machinery factor is also important because it contributed almost 30 per cent, especially engine damage which was discovered to be 25 per cent,” says the report. “These are generally related to other factors such as improper training for humans operating the equipment leading to unexpected damage or abnormal operation.”

The accidents caused by environmental factors accounted for almost 15 per cent but, as the report explains, these factors were sometimes controllable and sometimes not.

“The uncontrollable ones include floods or other disasters, while the controllable ones are road damage, lack of lighting, cargo spills or noisy equipment which are closely related to poor supervision and maintenance,” says the report. If a floor is slippery, roads are damaged or warning signs are missing, one would imagine these could be moved across to the ‘human error’ column too.

RISK INDEX By bringing together the severity and frequency stats, the authors produced a Risk Index. The resulting high-risk incidents were container damage when unloading, stacking or transferring to truck trailer; equipment damage when loading and unloading; traffic accidents involving loading/ unloading equipment, other trucks, vehicles and port support facilities; and workers getting run over or knocked over. In the next category, ‘significant risk’ incidents were loading/ unloading equipment fires; trucks crashing into a guardrail;

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

OCTOBER 2020 | 27

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CONTAINER TERMINAL: RISK ASSESSMENT workers falling from the top of a container or a ship; and environmental pollution from the contents of containers.

The authors list 16 root causes of high-risk accidents – from poor weather, which is no one’s fault, to not sticking to the safety rules, which clearly is.

The root causes were used as the basis for drawing up 14 detailed Risk Control Options (RCOs), which range from coordination over the maintenance of tools and facilities to ensuring clarity of regulations relating to matters such as speed limits. There are also ‘soft’ steps such as adjusting working hours and putting in place double supervision during certain work hours when people have begun to experience fatigue – through increasing the number of supervisors or general monitoring via surveillance cameras.

Importantly, the authors also align the short-term benefits of the RCO actions with long-term benefits – for example, fostering a good working atmosphere; delivering good cooperation and coordination in order to improve the quality, safety and welfare of several parties; operators acting faster and more precisely, working more professionally and providing better service; increased discipline and professionalism of port management; improving port performance; and reducing the costs of damage to equipment.

“The use of containers in the world is increasing every year in line with international trade flows,” say the authors. Some of the largest container terminals in the world are competing to improve terminal productivity through various approaches, and measures are being introduced to increase energy efficiency and reduce emissions.

“In very complex container terminal operations, the risk of work accidents is inevitable and can happen at any time,” they say. There are complex work processes on a container terminal, and they include stevedoring, delivery and receiving, “each of which is contributing to the unexpectedly high risk” experienced by people, the environment, properties and facilities at the port.

SAFETY AFFECTS OTHER PARTIES In their conclusion, they also point out that the safety of the port is not restricted to the activities being conducted on the site, but also affects other parties such as the police, the ministry of transport and shipping companies.

The COVID-19 pandemic has served to concentrate minds on a different type of ‘health and safety’, with ports having to set up work patterns that keep groups of workers apart and maximise social distancing to minimise the risk of infection.

That does not mean a lack of focus on other safety matters

‘‘

In very complex container terminal operations, the risk of work accidents is inevitable and can happen at any time – far from it. In mid-September 2020, five freight transport and cargo handling organisations announced they were collaborating on packing standards for freight containers and other cargo units.

The Container Owners Association, the Global Shippers Forum, the International Cargo Handling Co-operation Association, the TT Club and the World Shipping Council say they are working together on a range of activities to improve safety practices throughout the global supply chain.

They have published a ‘Quick Guide’ to the Code of Practice for Packing of Cargo Transport Units (CTU Code), and a checklist of actions and responsibilities for those packing containers.

“There have been several widely reported container fires aboard ships, where containerised cargoes may have been the cause of, or contributed to, such fires,” said the group.

“The organisations believe that consistent, widespread and diligent adherence to the CTU Code by all parties within global CTU supply chains would significantly reduce these types of incidents.”

Poor packing practices can lead to incidents such as container stack failures, vehicle rollovers, train derailments, internal cargo collapses and invasive pest contamination, it added, and greater awareness of the CTU Code could help to reduce these.

Lars Kjaer, senior vice president of the World Shipping Council (WSC) said: “We believe it is important to proactively review and, where needed, revise existing regulatory provisions to enhance ship, crew and worker safety.”

James Hookham, secretary general of the Global Shippers Forum, said the publication of the CTU Code guide by the five organisations was ‘a marker on a journey to raise wider awareness of this critical issue across the globe and adoption of safe practices’.

He added: “Our organisation cannot do this on their own and we are reaching out to other bodies in the supply chain and in governmental agencies to join with us in promoting high standards of the packing of all cargo transport units and understanding the inter-connectedness of different objectives.”

PSS launches safety in ports survey rvey The UK organisation Port Skills and Safety (PSS) has launched a Safety in Ports (SiP) impact survey, based on guidance from the Health & Safety Executive (HSE), trade union Unite and the wider industry. It aims to help ports benchmark their procedures against nationally recognised standards, and to develop improvement actions tailored to their needs.

“We were spurred on to develop the survey process by an HSE challenge,” said PSS chief executive Richard Steele. “The Safety in Ports Guidance is best in class. It is endorsed by HSE, Unit and the whole

industry. The question was, as, how to make sure that it was being used. ed.”

Rather than just going out and ticking things off a list, he e said, ports needed to have real opportunities ortunities for value-added learning.

The survey will be splitt into two phases – the first using a remote questionnaire, the second nd to be a physical, COVID-secure visit using a bespoke SiP analysis tool. ool. This second part, to be carried out jointly ntly by PSS and port staff, will check the practical uidance. implementation of SiP guidance.

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

8 Richard Steele, Chief Executive, PSS says, “We were spurred on to develop the survey process by an HSE challenge”

OCTOBER 2020 | 29

SAFETY: CONFIDENTIAL REPORTING

SPEAKING UP TO IMPROVE SAFETY Marc Spillman, of CIRAS explains how confidential reporting can play a positive role in promoting port safety and what makes it different from whistleblowing

8 Frontline staff are often best placed to see hazards first-hand

Different operational environments share similar challenges, and workforce safety is one of these. Operational staff on the frontline of your port business – quayside, working cargo plant, dealing with ro-ro ferry movements – are dealing with day-to-day issues not unlike those facing workers in the railway industry, for example.

Although ports and the railway work with different modes of transport, both move goods and passengers from ‘A’ to ‘B’, and some ports also handle marine, leisure and fishing facilities. Many operate 24/7, increasing the possibility of health and safety issues. Frontline staff are often best placed to see hazards first-hand.

What is the nature of hazards and risks in port operations?

According to Port Skills & Safety (PSS) – Britain’s professional port health and safety membership organisation – slips, trips and falls account for the largest percentage of safety incidents that result in people being off work for at least one day (Lost Time Injury or LTI). Perhaps unsurprisingly, this is also a frequent workforce safety issue impacting railway operations.

Other risks shared by the port and railway sectors include: driving and operating vehicles and machinery, as well as being around these, with the risk of being trapped, crushed or run over; manual handling and the risk of associated muscular injuries; falling or moving objects, such as cargo being transferred from sea to land side; working at height and the associated risk of falling.

30 | OCTOBER 2020

‘‘

Confidential reporting…. offers anonymity that can remove anxiety around speaking up – so nobody needs to feel excluded While there are differences between different transport and logistics operations, there is plenty of health and safety learning to be shared. One of the differences between ports and the railway is that the railway has a well-established confidential reporting service. The Confidential Incident Reporting and Analysis Service (CIRAS) has been fully embedded in railway operations for many years – from the supply chain, train and freight operating companies to infrastructure managers – and is increasingly used in the bus and tram sector, but is still relatively new to ports.

Confidential reporting in the rail sector helps to reduce operational risks. Frontline staff of CIRAS member companies can use it to speak out about health, safety and wellbeing issues without colleagues or managers linking the concern to them personally. This encourages employees to report proactively and means the company can investigate and act on the intelligence. In 2019-2020, 85 per cent of CIRAS

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

SAFETY: CONFIDENTIAL REPORTING

reports led to at least one action, so may have uncovered new information for the companies that received them.

WHAT IS DIFFERENT ABOUT CONFIDENTIAL REPORTING? With the best will in the world and even with even with a topperforming safety culture, you will not hear about all concerns through internal reporting channels. Your operational staff are the eyes and ears of your company, seeing what really happens day to day. But not everyone is comfortable reporting safety issues internally. Research released by Nottingham Business School at Nottingham Trent University in May this year, in conjunction with CIPD, demonstrates this. It shows that frontline operational staff feel less able or confident to raise concerns than officebased staff, with more barriers and fewer channels.

Confidential reporting can help to address this because it is inclusive. It offers anonymity that can remove anxiety around speaking up – so nobody needs to feel excluded. We know from our own 2019-20 data that a fifth of the people who contacted CIRAS directly, without first using internal channels, did so because of fear of retribution. Meanwhile, 15 per cent cited culture and for a quarter there was no other option because their concerns were about a company other than their employer.

Confidential reporting is different from whistleblowing.

Whistleblowing presumes wrongdoing and exposes illegal, unethical or otherwise wrong actions. In contrast, confidential reporting focuses on safety improvement: revealing hazards that managers have not noticed; highlighting procedures or rules that have good intentions but are not working in practice and could cause unsafe actions; alerting companies to fatigue and other personal wellbeing issues that could affect safety performance; problems with equipment, and so on. The big difference for staff is that those who report confidentially have their identity protected, guaranteed.

Although there are legal protections for whistleblowers, high-profile examples of people losing jobs and reputation as a result of speaking up can put off many.

Providing a blame-free confidential reporting channel for frontline concerns could raise morale, especially in these uncertain and isolating times, as people know that no matter what the circumstances are, there will always be someone who will genuinely listen and take an interest in what they have to say. And 360-degree feedback means they have a

What is CIRAS? The Confidential Incident Reporting and Analysis Service (CIRAS) is funded by 1,900 member companies in transport, logistics and construction.

As a not-for-profit. CIRAS’ mission is to improve the health, safety and wellbeing of its members’ workforce, customers and the public by providing a confidential reporting service for employees, protecting their identities and sharing their concerns so the company can act. CIRAS closes the loop with the employee so they can see the impact of their courage to speak up.

‘‘

Increasingly, information and data are the bedrock of risk management and business decisions. Confidential reporting provides an additional source of safety intelligence chance to raise follow-up questions and comments about the response they receive.

As companies worldwide deal with the fallout of COVID-19, it has never been more apparent that prevention is better than cure. The best way to minimise the loss associated with health and safety incidents – whether a minor slip that leads to a short time off work, or a RIDDOR with more serious implications – is to prevent them in the first place. Increasingly, information and data are the bedrock of risk management and business decisions. Confidential reporting provides an additional source of safety intelligence that h-as the potential to identify risks that might otherwise be missed and so predict and prevent incidents, revealing cross-sector and industry-wide issues and learning.

We are always looking to improve health and safety in ports and that means making it as easy as possible for everyone in the industry to be pro-active safety champions,” says Richard Steele, chief executive of PSS. “UK ports work hard to deliver employee health and safety inclusion and engagement. Just some of the actions that you will see in ports include visible felt leadership, employee representative forums, safety conversations, spot-it schemes and workforce project groups. Mechanisms such as confidential reporting can complement and support ports’ successes in building ever more effective health and safety cultures.”

Now is the time for companies to look beyond traditional practices and reach out across sectors, working together to build safer workplaces.

8 Workforce safety is a challenge for all operational environments and confidential reporting has been proven to have a role to play in risk management 8 TOP LEFT: Confidential reporting is inclusive and gives everyone a chance to speak up

8 Visit ciras.org.uk, email marc.spillman@ciras.org.uk or call Marc, Business Development Manager on 07876 578981

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

OCTOBER 2020 | 31

CHILE: TRUCKING CRISIS

TRYING TRUCK TIMES IN CHILE Rob Ward investigates the impact of the strike by truckers in Chile that ended in September 2020

8 Chile Today reported that truckers blocked three major routes, Highways 68, 78, and 5, on day one of the strike

Owing to a long, drawn-out blockade by truck drivers, most of the leading ports in Chile have been finding themselves overflowing with containers and other cargoes as merchandise – apart from essential medical and food items – could neither exit nor enter terminal gates.

The Chilean blockades never quite hit the levels of the Brazilian tuckers dispute (back in May 2018), which brought that South American country to a complete standstill. Yet in early September 2020 it was feared – right up until the government in Santiago issued a new Lei de Seguro del Estado (A Special Security Law of the State) aimed at beefing up security for truckers and doing more to punish law breakers - that the Chilean version was heading in that direction, with supermarkets running out of stock and gas stations low in fuel reserves .

FAILURE TO KEEP PROMISES MEANS MORE STRIKES Jose Villagran, vice president of the National Confederation of Chilean Cargo Transport (CNTC), which represents the tens of thousands of truck drivers that went on strike, and was keeping the key container ports of Valparaiso and San Antonio, among others, blockaded for more than a week, said that the truckers will go on strike again if the government of President Sebastien Pinera failed to keep its promises.

“We will be very attentive that what has been agreed [with the government] is fulfilled because if it is not, we will return to the roads,” stated Villagran, who is also president of the Federation of Truck Drivers in the south of Chile (or Fedesur).

Yet he was also in conciliatory mood, when he added: “We are going to go back to all the supermarkets to supply what is lacking. And we will be telling all those people that if we have done any harm, we ask for their forgiveness.”

The Chilean National Association of Fruit Exporters (Asoex) is breathing a sigh of relief for its members as several thousand container loads of perishables – namely kiwi fruit, pomegranates and citrus fruits - piled up at San Antonio and Valparaiso. Port managers in both ports assured Port Strategy

that no calls were skipped but admitted a lot of cargo was rolled over.

A shooting incident, allegedly, involving sympathisers to the Mapuche Indian cause (trying to regain rights to lost ancestral lands, and more autonomy for the Region IX government in Araucania) that led to an innocent nine-yearold daughter of a truck driver being shot and going to hospital was the final incident for the Chilean truck drivers, of which there are around 200,000 in the country.

ROOTS OF DISPUTE GOES BACK DECADES The roots of the dispute, however, go back decades, but have been exacerbated in recent years and some 500 trucks have been burnt and/or damaged in Chile since 2010 predominantly in the Araucania region.

Chile in general suffered a series of riots and social disturbances in October 2019 after bus and metro fare increases of a few Pesos, but that, again, was a step too far (of growing dissatisfaction with the ruling elites and growing inequalities, along with falling average standards of living), and it ended up with 19 dead and 2,600 injured.

In 2018 another incident in southern Chile saw 16 trucks and diggers burnt out after 10 masked attackers entered a gravel factory, threatened the caretaker and fired weapons before setting light to 12 trucks and four earthmovers The governor of the Araucania region, Governor Luis Mayol, said at the time, “This is pure terrorism,”

‘‘

We are going to go back to all the supermarkets to supply what is lacking. And we will be telling all those people that if we have done any harm, we ask for their forgiveness

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

OCTOBER 2020 | 33

CHILE: TRUCKING CRISIS Many middle-class Chileans fear that successive governments have been too lenient towards the “undemocratic and violent insurgencies” especially, but not only, in the Mapuche territories in the south. There have also been some, so far unsubstantiated, reports that narcotics gangs, displaced from Colombia, are starting to operate in these mountainous areas.

“We need some powerful actions to stop such reckless acts of violence that the truckers have suffered, and we all suffered back in October 2019,” one shipping consultant told Port Strategy. “When the police did get tough back then they were condemned by the Opposition parties and human rights organisations for being excessive,” he opined.

For decades, Chile has been a beacon of calm in often chaotic, unstable South America, but in recent years discontent has been building. “As a long, narrow country we need to keep our roads and transport arteries for geopolitical as well as logistical and economic reasons,” the shipping consultant explained.

GOVERNMENT PRESSURE TO RETURN TO WORK Francesco Schiaffino, a Santiago based port consultant, told Port Strategy that the government applied a lot of pressure on the truckers to go back to work.

“They had to apply pressure because the economy cannot move forward if the ports are blocked,” he explained.

“Violence in Chile is a deep-seated problem nowadays and many people say this is the effect of major societal changes.

Hopefully the new law will ease the problem.”

The blockade was finally lifted on September 2, 2020, and Simon MacKenzie, the President of Asonave (the Chilean

THE ! /./-

National Ship Agents’ Association), said that it would probably take from five to seven working days to clear the backlog.

One container terminal manager in San Antonio said he thought everything would be “back to normal” by September 13 or 14, 2020. “Vessels commenced calling as per normal, but by the end of this first week they could not pick up exports because the imports were filling all the space and the trucks were not bringing in more exports. We have been over-loaded with offloaded import boxes,” MacKenzie confirmed.

The Empresa Porturaia Valparaiso (EPV, or Valparaiso port authority) said it had serious problems finding space for containers and had to add “emergency areas” to its Logistics Support extension Zone (ore Zeal) to accommodate the extra containers “with nowhere to go” during the blockade.

“The biggest problems were in the Zeal, which were blocked by trucks, preventing their passage, either to bring export cargo or to remove import cargoes,” said EPV logistics manager Juan Marcos Mancilla.

“The key port terminals are now getting cargoes moving again and the bottlenecks caused by the strike are gone,” said MacKenzie, who is also a director of Ian Taylor SA, the Santiago based shipping agency which employs more than 200 in Chile (where it represents CMA CGM in all ports) and another 300 in Peru, Ecuador, Colombia and Bolivia.

He also explained the stance of the government. “It issued a strong statement that it will push through some new laws regarding the prosecution of perpetrators of damages and attacks on truck drivers and increased penalties.”

During the blockade (which was concentrated in the south and central regions), local reports indicated that ships were

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CHILE: TRUCKING CRISIS diverting some of their cargoes to the north Chilean ports of Iquique and Arica for onward travel, and even as far north as Callao, in Peru, some 1540 miles from Santiago, the Chilean capital (with 5.2 million inhabitants out of Chile’s 18.75 million) and main destination for imports.

Latest figures released by Camport (The Chilean Association of Shipping and Port Agents) show that Chile handled 2326,163 TEU during the first six months of this year, a fall of 11.6 per cent compared to the first half of 2019. June was the worst month, down 22 per cent, with February (up by 3.2 per cent ) the best month. The slide was worse during the second quarter (-12.7 per cent) than in the first quarter (-9.7%), as the COVID-19 pandemic also took hold.

The key Centro region (that includes San Antonio – STI, which is owned and operated by leading Chilean stevedoring outfit SAAM as well as Porto Central, which is owned by DP World Chile - and Valparaiso, where MSC-backed Terminal Pacifico Sul (TPS) operates nearly all containers) handled 1.13million TEU during the first six months of this year, representing -14.8 per cent on H1 2019.

The Centro South region (including San Vicente Terminal International, also operated by SAAM, Puerto Lirquen - DP World - and Puerto Coronel) handled 613,255 TEU, equal to -5.1 per cent over the same period in 2019.

GRAVE COVID-19 IMPACT After a relatively effective start in dealing with COVID-19, Chile has witnessed massive and grave increases in reported cases and deaths from the deadly virus. On May 21 confirmed cases were 49,579 and deaths were 509, but less than a

month later, by June 14, cases were 175,000 and deaths rose to 3,323 (official government figures).

During the first two weeks of September Chile’s number of infections has continued to rise, with the number of deaths now standing at 12,013 (up from 11,321 at the start of September) which is high for the population.

Port authorities and terminal operators say they are still ramping up testing and cleansing practises to protect their staff and keep all facilities open.

The last thing Chile needs is the recurrence of trucking issues. For the moment, a much-welcomed peace is holding, though for how long is simply not known.

8 Around 500 trucks have been burnt and/or damaged in Chile since 2010, including 18 trucks set on fire in the southern Chilean city of Temuco in 2017 – tensions are still running very high in 2020

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OCTOBER 2020 | 35

PACIFIC NORTH WEST: GATEWAY COMPETITION

PNW COMPETITION BUILDS Seattle’s new Terminal 5 modernisation project has a lot riding on it, as the port continues to see strong competition from Canada’s Pacific Gateway ports. AJ Keyes investigates “Today we begin the modernisation of Terminal 5, the best container handling terminal in the Pacific Northwest. When complete, it will be a cornerstone of our region’s economic activity for decades to come,� stated Stephanie Bowman, Port of Seattle, Commission President and Co-Chair of The Northwest Seaport Alliance, as ground was broken in July 2019.

Terminal 5 is a US$500 million project to modernise a facility unused since 2014. The project is providing a 1.0 million TEU per annum terminal that will be able to receive 2 x 18,000TEU ships when it opens at the end of 2020. Before construction, Terminal 5 could not handle vessels larger than 6,000TEU.

INLAND CONNECTIVITY IS THE KEY FACTOR The completion of Terminal 5 in Seattle will certainly improve the port’s ability to receive ships up to 18,000TEU. However, that is only part of the process. Prince Rupert, for example, has excellent intermodal rail capabilities to ensure containers are onto the rails quickly.

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8 Terminal 5 is due to be operational by the end of 2020, allowing bigger ships to call – but Seattle’s competitive future hinges on appetite from US railroads too

8 Figure 1: Total Container Volumes for Seattle-Tacoma, Pacific Gateway and other PNW Ports, 2000-2019, in ‘000 TEU

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

Source: Chart supplied by WSP

VANCOUVER BUILDS MARKET SHARE In terms of historic volumes, Figure 1 confirms that while SeaTac (combined) has the highest volumes, Vancouver has continued to close the gap. In 2000, the Sea-Tac complex (the port’s operated separately at the time, so the individual total container volumes have been combined) handled almost 2.86 million TEU and Vancouver saw 1.16 million TEU. At the end of 2019, Sea-Tac recorded just under 3.78 million TEU and Vancouver experienced 3.40 million TEU, a considerably smaller gap. In addition, the emergence of Prince Rupert and its continued very strong growth taking the new port to 1.2 million TEU, has added another competitive dimension in the competitive region.

While Canadian Pacific Railway and Maersk Line have just confirmed that a new transload and distribution facility is to be built in Vancouver, to further boost the competitiveness of this Canadian port. The CP transload facility will be an expansion of CP’s existing Vancouver Intermodal Facility and thereby be able to benefit from excellent rail infrastructure, when it opens in 2021.

Omar Shamsie, president of Maersk Canada explained the value of the facility. “This agreement installs more agile supply chain options and capacity to and from Vancouver for our North American customers. Marketplace fluctuations, e-commerce demands and omnichannel fulfilment are testing every company – so this integrated logistics solution with CP will clearly elevate supply chain performance.�

The competitiveness of the Canadian Pacific gateway ports means that the pressure is on Seattle-Tacoma for inland activities. The FAST (Freight Action Strategy for Seattle-Tacoma) represents up to 25 projects aimed at improving cargo flow (faster trains and raising intermodal train capacity) and linking the ports with rail networks, to aid container flows from the Seattle-Tacoma region.

Terminal 5 is a needed, largescale investment project that will allow bigger ships to call to Seattle, while FAST initiatives will smooth container flows on the rail network. Ultimately, though, the desire of the US railroads to help win intermodal traďŹƒc for discretionary markets will be the key driver of the future success of Terminal 5.

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NEED TO SERVICE BIGGER SHIPS So, why is it required? Quite simply, for bigger ships. For a port in the Pacific North West to be competitive, it must be able to eďŹƒciently handle ships of 18,000TEU, with good ondock intermodal rail accessible.

Container terminal volume growth over the past 10 years has grown by an average of 2.4 per cent through the SeattleTacoma port complex that comprises the Northwest Seaport Alliance.

As a stand-alone figure in a very mature and established market such as North America, this total may actually seem quite reasonable. However, if Vancouver at 4.8 per cent and Prince Rupert with 16.3 per cent over the same comparable period are added to the equation, then all of a sudden the increase for Seattle-Tacoma seems more worrying.

The Northwest Seaport Alliance is a marine cargo operating partnership of the Port of Seattle and Port of Tacoma. The ports joined forces in August 2015 to unify management of marine cargo facilities and business to strengthen the Puget Sound gateway and attract more marine cargo and jobs for the region. Collectively the two ports are the fourth-largest container gateway in North America - Seattle is the “North Harbor� with the Tacoma terminals designated the “South Harbour.�

OCTOBER 2020 | 37

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2021

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CANALS: SHIPPING SYSTEM ANALYSIS

VOLUMES, COSTS, ALTERNATIVES The world’s most famous waterways, the Suez and Panama canals, have been rivals for over a century. But the flows are now changing, says Stevie Knight “Taking a well-known yardstick, the Hong Kong to New York route, there is not much difference between the canals, transit time-wise,” says Nivesh Chaudhary of ASCELA Advisors. “Assuming a typical call along the way, the duration is roughly the same, 640 to 660 hours,” he says, the Panama route being 11,200 nautical miles (nm), the Suez route coming in at 11,600 nm.

“Five years ago, the canals saw yearly aggregated services capacity of around 2.5 million and 2.4 million TEU, with the Suez a little ahead,” explains Darron Wadey of Dynamar, adding “It’s bigger ships lowered slot costs, offsetting somewhat higher charges and slightly longer run time.”

ALTERING THE DYNAMICS But then two things began to alter the dynamics. In 2016, the Panama Canal commissioned its new set of locks.

Expansion released the Panama Canal from its previous 5000TEU limit, triggering immediate vessel size uptick, explains Wadey confirming that by 2020 the average boxship – across both canals – was 40 per cent larger, at around 10,000TEU. Despite service and vessel numbers dropping significantly, (by 17 per cent and 18 per cent), he says that annual trade capacity simultaneously “grew spectacularly, rising by nearly half again”.

However, the Panama Canal routing has actually sliced a big chunk from the Suez Canal’s share of North America East Coast cargo. “The number of services sailing to North America via Suez has reduced by nearly 40 per cent,” Wadey explains.

Although the Suez Canal authorities are filling the gaps left by containerships by offering cheaper deals to tankers and energy carriers, Wadey confirms that, “Its annual container trade capacity has still dropped by close to a fifth”. In contrast, “Both average vessel size and annual capacities on the Panama Canal route have more than doubled,” he adds.

So, why has the Panama Canal won over so much of the container market?

While the Suez Canal option is better for countries such as Vietnam and those southeast of Hong Kong, cargo on the China to US route is more likely to come from the manufacturing powerhouses further north, such as the ports of Dalian, Ningbo, Shanghai, while others in the Bohai region are actually closer to the Panama Canal route.

WAITING GAME MEANS COST However, there is a third metric for shippers which could impact this trend, namely transportation time and, specifically, waiting time.

Here, the Panama Canal’s recent performance has been distinctly lacklustre, as Chaudhary explains. “Panama’s water levels have not been that great, certainly not what they are supposed to be. The area suffers a cyclic, six to seven-year El Niño related drought. However, recently these low-water periods have become more frequent and more problematic.

Last year saw 20 per cent below average rainfall, depleting the Gatun and Alhajuela Lake reservoirs, which fill the locks.”

As a result, things have slowed down. “It is supposed to be a nine to ten-hour transit, but it is taking double that these days,” says Chaudhary. Moreover, temporary limits on draft and available slots have increased the queues, so although

the larger, New-Panamax ships transiting the bigger lock can often get through in a day-and-a-half, “At time of writing container vessels are observing waiting-times as long as 10 days for the Panamax locks, from the previous normal of three to four days,” he confirms.

This situation results in additional costs which are being passed onto the ships. Likely to be in place for several years, this freshwater charge adds an extra $10,000 to the price, with an additional fee based on the reservoir levels at time of crossing.

The Panama Canal Authorities are acutely aware of this issue and have issued an RfP for water management solutions to improve the quantity, quality and control of its water supply, citing that there is a “need for a new water management system due to drought and water level drops” of major lakes in Panama.

The Suez Canal could potentially pull back some of the lost volumes if the situation continues. It has not hit size limits, accommodating the 23,000TEU vessels now in service and there have been recent upgrades. The Suez Canal Axis, a 35km parallel cut, and the separate two-way passage along the channel to Port Said, have both helped to halve the daylong transit time and drop the wait to just a few hours.

However, the total charges on both routes are significant, as the calculations from ASCELA Advisors show. “At present, a Panama Canal transit will cost something in the range of US$780,000 for container ships of 13,000TEU capacity,” says Chaudhary. It is higher through the Suez Canal, he adds. “For a similarly-sized vessel, charges come to around US$830,000.”

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

8 Transiting through Panama is cheaper, but involves a longer wait compared to the Suez option

OCTOBER 2020 | 39

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CANALS: SHIPPING SYSTEM ANALYSIS

8 Comparison of the numbers – according to ASCELA Advisors

ALTERNATIVES? Shippers are obviously interested in alternatives. Back in 2015 the overall transpacific route, including the North America West Coast, generated 13.2 million TEU in annual trade capacity, confirmed Wadey.

Despite gradual erosion by both the canal routes (around 6 per cent so far), the Far East to US West Coast trade is still relatively healthy. It is also around a third cheaper to sail to Los Angeles/Long Beach, so, the question has to be, is it worth stopping there and moving deep inland to reach the US East Coast’s hinterland?

Based on ASCELA Advisors’ calculations, the sea leg can be as short as 360 hours “so it looks attractive,” says Chaudhary, at least at first glance. But moving on from Southern California, the necessary intermodal transfers add time, cost and effort, meaning that “trucks and rolling stock need to be coordinated,” he explains.

Consequently, total time ends up being rather costly. The journey to New York comes in at little over 400 hours, although it works out at US$6,640 per TEU. However, there’s more to life than New York. Getting to, say, Montgomery via Los Angeles and moving on by train takes around 410 hours for a total of US$5,250. This begins to look interesting against the overall Panama Canal journey to the same place, which while totalling US$4,420 per TEU, actually takes around 700 hours in total.

It is also not a large-scale solution as there are practical limits. “Even if only 80 per cent of your cargo is going on to the East Coast, you’ll probably need several thousand trucks to unload a 13,000TEU ship,” Chaudhary points out. So, despite the efficiencies of the US road and rail network, it probably will not replace the big vessel transits, but it does “still make sense” for smaller volumes, he adds.

While bunker prices are low – as has been the case for a significant part of this year – the African Cape of Good Hope route is also appealing – albeit that it is extra sailing time. This is less of a problem for tankers, as the cargo is not usually so time-sensitive, “and if you can, it definitely makes sense to save the money” says Chaudhary.

Wadey adds that several container services have taken advantage of this route for the return journey, including 2M’s Far East-Europe AE6/Lion service, Ocean Alliance’s CEM, THE Alliance’s Transpacific AWE4 to the US East Coast, and others.

Interestingly, there is also the old Panama railway link which is still running beside the canal. “This is now experiencing notable container transhipment growth, as it is possible to unload here, move it onto the train, then put in on another ship calling at the other end While less pricey, it does, admittedly, mean slicing the route in two, losing oceantransit slot benefits and adding double-handling charges,” according to Chaudhary.

CUTTING THROUGH Could all this prompt further interest in creating more shortcuts?

It is questionable whether the Nicaragua Canal project, raised, then dropped by Chinese interests, will return to the table. It is a vast, US$50bn project, and Chaudhary comments that nobody yet has found a way to fill the finance gap.

Other waterways are still being considered, including the Kra Canal (bisecting Thailand), Kanal Istanbul (the Bosporus alternative) plus the Eurasia Canal linking the Caspian and Black Seas. All of these ideas have the potential for substantially altering a swathe of cargo patterns.

However, Wadey reiterates that across the world, even before COVID-19, boxship canal transits were “generally down”, partially reflecting larger vessel sizes.

Even if environmental and geopolitical implications can be overcome, any new containership route will have to offer a convincing draft, which inevitably entails a higher upfront cost. The charging structure will need to find a balance between lower transit numbers, competitive pricing, and yet still yield a return against sizeable investment.

In short, “all of these projects will have to offer a value proposition that is much better than the current alternatives, to justify the cost of using them,” says Wadey. He is, in general, sceptical about commercial viability, but adds that, “It does not mean one or more of these canals won’t be built”.

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

OCTOBER 2020 | 41

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BALANCING ENVIRONMENTAL CHALLENGES WITH ECONOMIC DEMANDS

DIGITAL INNOVATION

THE 4th INDUSTRIAL REVOLUTION The Fourth Industrial Revolution is underway, but what specific job skills are needed in conjunction with technology for the port industry to thrive in it? AJ Keyes investigates One description of the Fourth Industrial Revolution is the ongoing automation of traditional manufacturing and industrial practices, using modern smart technology. Clearly applicable to ports.

According to Klaus Schwab, founder and executive of the world economic forum, a key characteristic of the Fourth Industrial Revolution is the need to “shape a future that works for all by putting people first, empowering them and constantly reminding ourselves that all of these new technologies are first and foremost tools made by people for people.”

So, it is interesting to see where the ports industry currently sits in terms of new technologies and tools designed to transform processes and activities for those involved.

Matthew Wittemeier, Marketing Manager, INFORM, explains that the Fourth Industrial Revolution is already underway. “It is no secret that many would argue, myself included, that we are well into the Fourth Industrial Revolution. INFORM was 50 years old last year and has seen and measured digitalisation over decades in a broad scope of industries from aviation, banking to currently port and terminal operations.”

INCREMENTAL – THE KEY What this means, Wittemeier adds, is that digitalisation can enable terminals and ports to incrementally improve their operational efficiency, their strategic planning, and, consequently, their profitability.

The key word here is “incrementally.” It is, of course, very important to remain flexible because often stakeholders expect immediate returns on their investments in digital processes, but like all processes (manual and digital alike), with change it takes time to gain benefits.

The port industry requires a reality check too, as Wittemeier explains. “You go in with a plan – what you think will work best on what you know. But there are things you do not know, and these will, of course, have an impact. A good digitalisation partner will work with you to sort through those unknowns to fine-tune your process and improve your results step-by-step.”

SKILLS REQUIRED The World Economic Forum has stated what it regards as the top 10 job skills required to thrive in the Fourth Industrial Revolution.

These are listed in Table 1 and almost all, if not all, can certainly be applied to the port industry, although must then be used in conjunction with digital innovation and technology.

Two key areas in the ports industry where these job skills are seen to be needed immediately are in conjunction with collaboration and harmonisation.

Wittemeier explains: “There is a need to achieve a ‘standard,’ whereby as many stakeholders as possible participate in the creation and adoption of those standards.

The idea that a single standard will cover all of the maritime industry with each of the individual elements (shipping, port operations, terminal operations, etc.) is not a likely outcome.

As such, where we have collaboration within an element, we

‘‘

You go in with a plan – what you think will work best on what you know.

also need a degree of cross-collaboration within the broader maritime industry.”

TOP 10 IN PORTS Many of the top 10 job skills listed in Table 1 are needed daily in ports. For example, a successful cargo terminal is built on the basis of people management and coordinating with others, whereas ship berthing, and application of equipment, can easily require complex problem solving, negotiation and service orientation.

However, application of the required job skills still needs help, especially for harmonisation, and this is where smart technology is relevant, according to Wittemeier.

“Take, for instance, date and time formatting. The International Standards Organisation (ISO) defines a concise standard for the definition of formatting and interchange format for date and time elements – ISO 8601. As opposed to implementing a new standard,” he elaborates, “harmonisation suggests that we should adopt the established standard. The second element is that we should, as an industry, agree on a single set of harmonised elements that are common among various systems across the industry’s individual elements.

Having a single, harmonised standard would decrease difficulties in interfacing between systems and sharing data among the entire ecosystem.”

Achieving what may be seen as a relatively simple process of harmonised date and time formatting requires negotiation, coordinating with others and critical thinking – to name but three from the World Economic Forum job list.

Ports are a key part of the Fourth Industrial Revolution, but there is still a long way to go.

Job/Work Skill

Job/Work Skill

1

Complex problem solving

2

Critical thinking

7

Judgment and decision making

3

Creativity

8

Service orientation

4

People Management

9

Negotiation

5

Coordinating with others

10

Cognitive flexibility

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

6

Emotional intelligence

8 The Fourth Industrial Revolution is here……..but specific job skills are needed to thrive in it

8 Table 1: Top 10 Job/Work Skills to Thrive in the Fourth Industrial Revolution

OCTOBER 2020 | 43

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TERMINAL MAINTENANCE OUTSOURCING

MAINTENANCE OUTSOURCING John Bensalhia takes a look at how independent specialists provide container terminal maintenance services and are adapting to the automated age The smooth and efficient running of daily terminal routines requires reliable and well-maintained equipment. To achieve this, key questions must be answered such as, is the equipment functioning properly? Are the vehicles running smoothly? Is the environment safe?

The scope of port maintenance spans large cargo-handling specialist equipment, vehicles, yard equipment, quays, hardstanding in yards, computer systems...the list goes on.

on entering EU ports and an easy, convenient source of information on regulations relating to hazardous materials.

For automated terminals, Kalmar offers a wide range of services targeting design and analysis, testing and optimising, as well as outlining operational readiness of the automated solution.

Seppä explains further. “We provide software maintenance and support services and other remote services to ensure the lifetime support of the software systems and guaranteed availability of the automated solution at a terminal.”

Kalmar Insight and Kalmar Pulse are the main services based on connected equipment for maintenance support.

“Kalmar Insight enables remote monitoring of technical information in real time and the maintenance scheduler module is the tool for effective planning of equipment availability in the terminal,” says Alverönn, before explaining other benefits. “Kalmar Insight includes operational data for identification and understanding of work cycles, frequencies, productivity, driving behaviour, etc... which enable adaption and enhancement of a preventive and predictive maintenance programme for specific applications.”

Seppä adds that the Kalmar Pulse service automates the ordering process of maintenance and material needed at the point in time when it’s required. “It keeps track of the intervals and ensures execution in time, same time reducing administration efforts.”

SCOPE FROM THE DIGITAL AGE The digital age allows for greater scope in the field of maintenance. Terminals can have access giving up-to-date status reports. Verifavia Shipping-IHM is a god example, with its three-way Plug and Play IHM Maintenance Dashboard.

This dashboard is inserted into a procurement system or suppliers’ portal via an Application Programming Interface, and relayed live on the Hazinvent-M survey record tool.

With up-to-date information relayed, this provides a number of advantages - constant, automated preparation for any potential inspections, avoidance of penalties and bans

NEED TO BE FLEXIBLE Flexibility is a key consideration understood by maintenance companies, which provide services tailored to each client’s needs.

Trent Port Services, which operates in a wide-range of locations, including Singapore, Australia and Hong Kong, offers solutions to each terminal’s specific requirements.

Whether a one-off or full-time deal, Trent’s maintenance and repair solutions reportedly include the procurement of spare parts and the assessment and development of staff skills in maintenance proficiency.

Source: Kalmar

CONTRACT OR ON-CALL? The first question for a port or terminal considering the outsourcing of maintenance services is whether to choose between a contract or an on-call option. Kalmar is a good example of an independent specialist providing both types of service.

Svante Alverönn, Vice President, Contracts & On Call, Kalmar and Mika Seppä, Vice President Customer and Project Services, Kalmar, jointly explain further. “Our range of maintenance contract solutions are framed in the Kalmar Care programme, ranging from Essential Care, including preventive maintenance to Complete Care including preventive maintenance, predictive maintenance and corrective maintenance.”

The past 12 months has seen growth in new maintenance clients for Kalmar. The signing of a comprehensive software maintenance and support agreement with Australian terminal operator, Patrick Terminals, was announced at the start of 2020. This deal covers the automated equipment systems at the company’s Brisbane and Sydney AutoStrad terminals, with effect from November 2019.

In April 2020, Kalmar finalised an agreement to supply comprehensive preventive and corrective maintenance services to Wallenius Wilhelmsen Ocean (WWO) at Manzanillo International Terminal (MIT) in Panama. The threeyear Kalmar Care service contract covers ro-ro handling equipment on the operator’s North and South American routes, centralised at MIT. Kalmar established a dedicated service team at this port location, combining its existing local service organisation, with technical experience and manpower to guarantee onsite resource availability, stability, flexibility and long-term cooperation with WWO. In addition, Kalmar provides WWO with spare part planning and follow-up support as needed via its web-based MyKalmar platform. The aim here is simple – effective, transparent collaboration.

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

8 When outsourcing maintenance there are different service packages to choose from

OCTOBER 2020 | 45

The ability to give port customers a turnkey solution that can lower both time input and costs when seeking assistance with maintenance is in demand.

The announced partnership between Trent Port Services and iSpec creator Remy InfoSource has resulted in a combined service solution that enables ports to use a single Capital Expenditure Budget for the sourcing of equipment, third party inspections and project management.

Staying with the theme of flexibility, Alverönn confirms that the objective for all maintenance planning is to provide required production capacity in a defined schedule of need.

“The need is always in some way specific for each terminal and the maintenance setting must be adapted to meet the defined need. Safety and effectiveness must develop and in order for the port to progress, standardised processes for execution of maintenance are essential. Kalmar Care is our modular programme where standardised services are configured to design the solution for a specific need.”

Seppä explains further. “As the automated solutions at terminals tend to be bespoke solutions, the related services are often bespoke. However, as automation is becoming more widely accepted in ports and terminals, we are gradually moving towards more standardised maintenance services also for the automated solutions.”

Maintenance services require co-operation between provider and client. In some cases, the company will use their staff to carry out the required tasks.

Portunus’ maintenance and equipment inspections are performed by fully-trained technicians. The company conducts detailed examinations of port machinery in

46 | OCTOBER 2020

Source: Kalmar

TERMINAL MAINTENANCE OUTSOURCING

8 The environment for executing maintenance in port terminals is highly risky and achieving this safely is a major consideration

accordance with up-to-date industry standards, health and safety regulations and customer needs and presents conclusions to the terminal that highlights the need for any possible intervention.

SAFETY AND DIGITAL SUPPORT One of the most important considerations is, of course, safety. “Everyone working in the industry must continue to work hard to improve safety,” says Alverönn, before warning, “The environment for our colleagues executing maintenance in port terminals is highly risky and the number of incidents is still higher than in other sectors.”

Digital technology can support a safer way of working, according to Alverönn, who explains that digitalisation will further drive efficiency and effectiveness as development continues towards self-correcting systems by IoT. “Even with today’s technology, we are able to get more value just by enabling applications and changing our

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

TERMINAL MAINTENANCE OUTSOURCING behaviour. This is already happening, with new capabilities that are being introduced, step by step.”

While the electrification of mobile material handling equipment is not new, electric forklifts with heavier lifting capabilities are new, with Kalmar introducing an electric version that can lift up to 18 tons.

“The next step in the electrification of mobile equipment is to electrify the heavy range,” says Alverönn. “This step means more change from a maintenance perspective, high voltage and lithium-ion technology. Terminals are, in many cases, quite well experienced in the area of electrified equipment, as rail mounted cranes have been electrified as long as the container industry. However, maintenance teams must be

divided between cranes and mobile equipment, as the competences are quite different.”

He explains further. “For the industry it means that new competences need to be added to maintenance teams and processes will change in accordance with the new technology.”

Moving forward, Alverönn foresees an increasing demand for flexible service solutions: “Traffic flows and market demands are changing more rapidly in the world of globalisation and drives actors in the chain to models for quick adaptation to a new environment.

Although the current situation with the COVID-19 pandemic generates ideas on more regional supply chains, the need for flexibility will most probably remain a strong trend.”

Instant Remote Support One of the latest additions to Kalmar’s maintenance offerings is Kalmar OnWatch, a remote operations and IT support service.

“Onwatch enables Kalmar specialists to provide instant remote support for the customer’s automated solution from wherever the world’s best specialists are located,” says Seppä.

Kalmar’s OnWatch solution was originally designed in collaboration with TraPac in Los Angeles, USA. The TraPac terminal was the first to automate in the Los Angeles port complex

and uses a hybrid layout combining Kalmar Automated Stacking Cranes (ASCs), automated electric and hybrid Straddle Carriers, automated truck handling and Kalmar equipment control systems. The development necessitated conversion from existing manual operations based on Rubber-Tyred Gantry (RTG) cranes and reachstackers.

Due to the complexity of the system integration and testing, Kalmar’s constant presence was required, but real-time remote access and connectivity to the terminal’s

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

systems made this possible. The OnWatch solution enables Kalmar to provide instant real-time support from anywhere in the world, at any time. Portek’s Maintenance Management System is another example of technology that monitors and manages all fields of equipment maintenance. With the provision of a database, the system can report on equipment performance, inform of the maintenance tasks needed, schedule the workloads involved, and monitor the orders of required spare parts.

OCTOBER 2020 | 47

MOBILE CONTAINER HANDLING Efficiency. Safety. Versatility.

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CONTAINER SECURITY

SEAL OF APPROVAL

Source: Hoefon Security Seals

John Bensalhia investigates the latest innovations with container seals and assesses the financial and practical considerations involved

Contamination, damage or theft to the contents of a container are all potential threats with this form of transport.

One effective solution to avert these issues is the container seal, which – as Debbie Hardy, National Sales Manager, Mega Fortris UK Ltd, says – plays an integral role in securing and protecting cargo in container transportation and logistics.

“Seals are used to secure containers, thereby protecting the goods from potential theft, contamination, loss, etc, during their land and sea routes. Essentially, if a container is sealed by an ISO 17712 certified Bolt or Cable Seal, it provides an added layer of security for the contents and acts as a deterrent for potential fraudulent attacks.”

“The main benefit of container seals is the security,” agrees Niels Pas, CEO, Hoefon Security Seals. “A container seal bears a unique print such as a logo. Once a producer ships the cargo, a seal is placed on both the ship documents and the containers. Seals are produced to the relevant standards and certified in order to be eligible (such as C-TPAT).”

“All container seals offer various levels of security,” concurs Spencer Davis, General Manager, EMEA region, TydenBrooks.

“The most important factor of a security seal is to conform to customs regulations while showing clear evidence that the container has not been tampered with. The benefits are to stop illegal/forced entry of the container.”

COST BENEFIT “There is a clear cost benefit to using container seals,” says James Mulvale, Business Development Manager, Talisman Security Seals.

“For pennies, a single seal means you can ensure that the contents of your container are not tampered with in transit.

Once a seal is applied to a container, there is no way to remove it without breaking the seal, which will show that the

8 The main benefit of container seals is security, helping to prevent the constant threats of security breaches and organised criminal activities

contents have been accessed. Seals are also printed with a serial number, so you can be sure that a seal has not been broken and replaced in transit.”

Cargo thefts entail multi-billion annual losses. While buying a cheaper container seal saves money in the short-term, in the long run it can prove to be a more expensive solution.

COMBATING ORGANISED ATTACKS “European and UK road transport is the target of organised criminal attacks and security breaches from which significant financial losses can accrue,” explains Hardy.

“Everyone appreciates that logistics operations are constantly challenged to reduce operating costs, which can lead to cheap and low-quality security seals being purchased. The reality, however, is that the difference between a high-quality seal with enhanced security and tamper evident features, and a lowquality seal may be a few pounds or pennies, however the cost of a container full of goods can be thousands of pounds. The higher the level of security of a seal, the greater the protection and commensurately reduced chance of having goods compromised and consequent financial loss.”

Davis highlights the point that despite the availability of electronic seals, TydenBrooks finds that many customers are

‘‘

Cargo thefts entail multi-billion annual losses.

While buying a cheaper container seal saves money in the shortterm, in the long run it can prove to be a more expensive solution

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

OCTOBER 2020 | 49

CONTAINER SECURITY

‘‘

As criminals constantly evolve ways to compromise container seals, providers of these products are working to develop seals with higher levels of security and tamper evident features

INTRODUCING… Mega Fortris reports new container seal products. The first is the Klicker 2K Bolt Seal, to combat theft in transit. Hardy explains: “It is the latest Bolt Seal design which provides hightamper evident features and is also the world’s first container bolt seal to feature two colours in its high impact plastic design. The two unique colours act to enhance product definition, visibility and identification and also prevent cloning.”

Further, she points out that there are two core tamper evident features applied to this seal: “Firstly, the one-way locking system that stops the twist and spin attacks which can be conducted on bolt seals. Secondly, the seal is designed with a safety feature to trigger indicative tamper evidence as per ISO17712:2013 Clause 6. Any attempt to attack the seal will result in a crack in the designated weak spot in the ABS plastic thereby highlighting the attempt to tamper with the seal and thus indicating a potential security breach.”

Another new product from Mega Fortris is the MOST Tracking Device, which provides real-time monitoring and updates for all external influences affecting cargo movements.

“Fixed to the inside of the container, the device uses a GSM network connection which uploads sensor data and location to the internet, making all information constantly accessible via the control panel,” explains Hardy. “Uniquely, this device is equipped with four digital sensors which detect and monitor the temperature, light, humidity, shock and location during the journey of the container.

Source: TydenBrooks

not prepared to pay a premium price for this technology.

With that in mind, the International Seal Manufacturers Association (ISMA) has introduced the industry standard marked with an ‘H’ on the seal for High Security for shipping cargo. For all seals there are two basic requirements that must be met, as Davis confirms. “Does it meet ISO 17712:2013? and Is it a Customs Accepted Security product? All our container seals meet these criteria.”

8 Despite availability of electronic seals, TydenBrooks says many customers are not prepared to pay a premium price for the technology

R&D CRITICAL Pas says that the container seal market is a traditional one and has been this way since the early days in 2001. “It’s a cost-based market that provides good quality products.

However, as long as the economy recovers (in the wake of the COVID-19 pandemic), we predict that the market will grow in the future with this encouraged by new designs and innovations.”

As criminals constantly evolve ways to compromise container seals, providers of these products are working to develop seals with higher levels of security and tamper evident features, confirms Hardy.

Davis agrees: “The use of container seals is our security bridge between allowing us to track goods in a container that need to be safe and secure, from departure to arrival. The security chain is extremely important. COVID-19 has taught us that as the pandemic bites more into the economy, we must be more vigilant and more security-minded. We have to reduce potential theft from containers, but not take our eye off the ball for another potential terror attack.”

Track and trace initiatives building In the early stages of development is Hoefon’s GPS (Global Position System) chip, which is integrated with the plastic of the seal, so it is not visual. The product is in the developmental stage but expected to be available in the next two to three years.

Container seal technology is making sure information levels are higher than ever before. “The latest innovations at Talisman have been in the printing on a seal,” says Mulvale. “Whereas you used to just be able to fit a serial number on a seal, you can now have a QR code printed, which contains a lot more information.”

A major aim for Talisman is to improve

50 | OCTOBER 2020

sustainability. “The idea of single use plastics is far from appealing, so we are developing new products made from recycled and bio-degradable plastics,” confirms Mulvale.

TydenBrooks’ latest designs include an electronic security seal and an RFID security seal range, according to Davis. “These new seals offer additional security features to provide real-time data to our customers in the freight and logistics business sector.”

TydenBrooks is also developing a track and trace system, which will allow customers to track orders, seal numbers and outstation ordering processes. Davis states: “The new process will ensure encrypted

security delivery services with high-end reports that our customers can download from any part of the world to ensure their network of containers are safe from cloning.”

This is a crucial factor. Hoefon’s container seals are reported to be clone-resistant, thanks to a factory logo embedded in the mould. The Hoefon container seal with a Check Digit Barcode, whereby a random Check Digit is added using an algorithm at the end of the barcode, is growing in popularity confirms Pas, and adds, “Another innovation is a non-removable 3D hologram sticker which is printed on the ball seal, providing remote authentication.”

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

PRODUCTS & SERVICES DIRECTORY

YOU CAN DEPEND ON BIG RED! 3690 N Church Avenue Louisville, MS 39339 USA +1 662 773 3421 CONTACT?SALES TAYLORBIGRED COM www.taylorbigred.com

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

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

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

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G-SERIES

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

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

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/

7EB DELLNERDAMPERS SE

D REDGING

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

P4.1 e-chainÂŽ 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.

+44 1329 825335 www.portstrategy.com

Scheldedijk 30, Haven 1025 2070 Zwijndrecht, Belgium +32 3 250 52 11 info.deme@deme-group.com www.deme-group.com

E LECTRIFICATION SOLUTIONS

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

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

Contact Tim Hills or Hannah Bolland

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

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

Port Strategy Directory

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

D REDGING EQUIPMENT

NEUERO Industrietechnik GmbH

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

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LASE Industrielle Lasertechnik GmbH

14/07/2020 10:56

When experience really does matter!

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

C RANE COMPONENTS

C OMPONENTS

Cimbria Directory.indd 1

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

D REDGING

Faartoftvej 22 7700 Thisted, Denmark Tel: 0045 96 17 90 00 cimbria.holding@agcocorp.com www.cimbria.com

Taylor Machine Works, Inc.

C ONSULTING ENGINEERS

C ARGO HANDLING SYSTEMS

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

C ARGO HANDLING EQUIPMENT

B ULK HANDLING

Bedeschi S.p.A 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

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

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

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

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

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

Westicker Str. 52, 59174 Kamen, Germany

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

OCTOBER 2020 | 51

PRODUCTS & SERVICES DIRECTORY

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

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.

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

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

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.

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

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

Port Strategy Directory

SANY offers reliable quality container handling trucks.

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

Contact Tim Hills or Hannah Bolland +44 1329 825335 www.portstrategy.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

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!

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

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

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

S HIP UPLOADERS

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Sany Europe GmbH

+44 1329 825335 www.portstrategy.com P OWER TRANSMISSION

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

Contact Tim Hills or Hannah Bolland

I T PORT AUTOMATION

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

Port Strategy Directory

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

Liebherr-MCCtec Rostock GmbH

Verstegen Grijpers BV

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

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

M ARINE FENDERS

Orts GMBH Maschinenfabrik 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.

I T PORT AUTOMATION

BLOK Container Systems Ltd

I NSURANCE

H ANDLING EQUIPMENT

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

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

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

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

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

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

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

52 | OCTOBER 2020

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

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

PRODUCTS & SERVICES DIRECTORY

Solvo 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 SOLVOSYS COM

T ERMINAL OPERATIONS SYSTEMS

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

Port Strategy Directory

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

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

Contact Tim Hills or Hannah Bolland +44 1329 825335 www.portstrategy.com T RACTORS

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

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

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

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

T ERMINAL OPERATIONS SYSTEMS

S PREADERS

Bromma Conquip 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

T ERMINAL OPERATIONS SYSTEMS

S PARE PARTS

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

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

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

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

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

OCTOBER 2020 | 53

POSTSCRIPT WHAT ODDS ON LINER SHIPPING PROFITABILITY IN 2020?

‘‘

The liner shipping industry is on something close to a bull run. The question is, will it continue and deliver a multi-billion dollar profit for the sector in the face of adversity? What could possibly go wrong - volume downturn, demand for so-called normalisation?

54 | OCTOBER 2020

Who do you believe about the fortunes of the container liner industry in 2020?

Getting consensus on this appears as problematic as forecasting with certainty the result of the forthcoming US election or knowing if the UK will crash out of the EU? What we do know is that through the second quarter of 2020 the main liner operators have agilely managed capacity, implementing many void sailings to keep the demand-supply balance right, and following on from this that spot freight rate records have been broken in key trades on a regular basis.

In truth it has come as a surprise to many market participants to see the container liner sector so astutely lift freight rates at a time when it is facing a volume drop of anywhere between 10 and 20 per cent. No more rate wars or battle for market share just what looks like sound operational management leading to profitability. Key first half year/second quarter results speak for themselves: 5 Evergreen: A net profit of US$108million in the second quarter.

5 Hapag Lloyd: First half EBIT of US$563m, up from US$440m a year earlier.

5 Huyundai Merchant Marine (HMM): KRW 28.1bn (US$23m) profit compared to a loss of KRW200.7bn in the same period in 2019.

5 Maersk Line: 25 per cent EBITDA increase to US$1.7bn compared to US$1.4bn in the same period in 2019.

5 Ocean Network Express (ONE): First half 2020 profit of US126m.

5 Zim: Net profit of US$23.5m in Q2 2020 compared to US$5.1m in Q2 2019.

8 Change in container volumes from 2019 on main trade lanes and the rest of the world

5 Wan Hai: US$57m net profit, up over 100 per cent on its performance in the second quarter of 2019.

So what lies ahead? Well there are plenty of views but little consistency.

If you listen to analysts Sea Intelligence Maritime (SIM) then the view is that it is a sector profit in the order of US$9bn upwards in 2020, if current healthy rates can be maintained. Having said this it should be noted that there is a caveat to this statement, namely; “if current rate levels can be maintained.” If not and for example old habits kick in and a freight rate war commences then SIM suggest sector losses could be in the order of US$7 billion.

A party not persuaded that the Liner sector will enjoy a bonanza year is the Blue Alpha Capital consultancy based in New York. Blue Alpha suggests that carriers ability to protect freight rates as a result of reduced volumes will be limited and as a result forecasts a base line estimate of a loss of US$10.6bn for the sector in 2020. Blue Alpha’s best forecast is a loss of US$5.4bn and worst case scenario of US$15.9bn.

Another proponent of the positive view is Bluewater Reporting of Jacksonville USA which takes this view subject to strong spot rates remaining in place.

Bottom line, however, given the potential for volume fluctuations and for the intrusion of so-called normalisation initiatives regarding rates – such as those undertaken by China’s Ministry of Transport - can the march to profitability be maintained? Only time will tell!

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

CONTAINER TERMINALS: Paths to Profitability

By Remco Stenvert and Andrew Penfold

Container Terminals: Paths to Profitability

Trade Analysis ❘ Terminal Strategy ❘ Investment Trends ❘ Business Priorities 13 MAIN CHAPTERS, 220pp 5 5 5 5 5 5 5

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

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

ORDER PROCESS Copies of the Study Container Terminals: Paths to Profitability are available from Mercator Media Ltd. UK. Publishers: Mundy Penfold Limited.

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