OCTOBER 2022 VOL 1022 ISSUE 8 portstrategy.com
Peru
Port Plans Progress | STS Crane Refurb’ | VTMS: Breaking New Ground CONGESTION MISCONCEPTION BREXIT – UK TRADE IMPACT: Forward Trend Lines TERMINAL VALUATION MOVES NO SUMMER OF LOVE IN EUROPE
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A good ‘defence attorney’ can, however, soon unveil this proposition for what it is – largely spin or as certain ebullient character used to spout ‘fakeEssentially,news.’ the case for the defence usually has a good shot at exploding this myth by detailing how problems along the supply chain manifest themselves in the container terminal sector while they are not container terminal generated – late arriving vessels, truck driver shortages and parties exploiting the low characteristics of terminal storage when it is at a premium elsewhere.
The view appears to be gaining ground that the party is over in container shipping and normal operating conditions are on the way back. This may be true – only time will tell – but for sure there are still significant problems in the supply chain.
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BREXIT two years on and emerging trend lines also comes into our focus, paying particular attention to trade between the UK and Europe. The structure of trade is changing, there is less accompanied ro-ro traffic, unaccompanied ro-ro has increased its market share and short-sea lo-lo also emerges as a winner – p24. There will be plenty to discuss in this sector overall at Port Strategy’s affiliated Coastlink Conference, scheduled to take place in the port city of Liverpool, 3-4 May 2023 and hosted by Peel Ports.
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Container terminals are often ‘put in the dock’ in this respect – guilty without trial as they say!
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Something of an a la carte menu is served up in this issue of Port Strategy – we venture to say ‘something for everyone.’ It is also, believe it or not, that time of year when we start to think about editorial coverage for 2023 and we would like to invite you to submit any thoughts you may have in this respect. As always, we welcome your feedback and thank you for your engagementregular
If finance is your focus or terminal acquisitions then a must read is Terminal Valuation Moves – p26.
MIKE MUNDY VIEWPOINT
Congestion is also a big factor in our coverage of northern European containerport operations and development plans. A lot of effort is being directed at piling on new capacity – with MSC’s Terminal Investments Limited being at the forefront of this, a major new facility in Rotterdam and a much bigger presence in Le Havre being key examples.
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Whose problems are they is a fundamental question?
In this issue, we consider generally the levels of challenge in conjunction with congestion, the steps that can be taken to overcome problems and initiate a rolling series of Case Studies intended to share experience for the benefit of all concerned. First up is the Manila International Container Terminal which continues to experience new dimensions of challenge – p20.
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The October 2022 issue of Port Strategy is busy both in terms of volume and wide-ranging coverage. We trust, as always, it will play a valuable part in fulfilling your information needs and would welcome any thoughts you may have regarding future areas of coverage.
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PORT
Various terminals around the world have been successful at overcoming many of the significant challenges posed by congestion – a fact often overlooked a media environment where bad news is good news!
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 5 Social Media links YouTubeportstrPortStrategyLinkedInategy
OCTOBER 2022 is a proud support of Greenport and GreenPort Congress 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 The Congress is a meeting point that provides senior executives with the solutions they require to meet regulatory and operational environmental challenges. Stay in touch at greenport.com Social Media links YouTubeportstrPortStrategyLinkedInategy
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The Congress is a meeting point provides to meet regulatory challenges.operationalenvirStayintouch at Joingreenport.comleadingport executives in Athens, Greece from 14-16 October www.greenport.com/congress2019 Joingreenport.comleadingport structure of UK-Brexit ro-ro operations is changing. Unaccompanied ro-ro to the UK is growing and there is increased interest in finding new gateways into the UK especially those well placed to serve Midlands distribution centres. The future promises to see new investment in both ro-ro vessels and terminal capacity
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NEWS FEATURE ARTICLES REGULARS 18 The New Yorker Optimising Berthing 18 The Analyst Tailwind - Here to Stay? 19 The Economist The Silly Season 19 The Strategist Out of the Shadows 20 MisconceptionConestion The Real Story 24 Brexit Update Ro-Ro/Lo-Lo Futures 26 Terminal Valuations Pricing Analysis 28 No Summer of Love North ChallengesContinent 31 CrucialTransshipment German Muscle 32 HurdlesHeavyweight Rotterdam & Antwerp Challenges 35 LooksKazakhstanWest Commodity Exports 37 Help with Benefits Simulation Solutions 39 Fueling ChangesService Game-changing hub? 41 Chancay Takes Shape Port ProgressDevelopment 43 Agri-Product Play Paita Making its Mark 45 Taking a Slice of EAS APMT Foothold in Suape 46 Life Extension Crane PossibilitiesRefurb 48 Breaking New Ground New Generation VTMS 54 Postscript DPW Realities OCTOBER 2022 VOL 1022 ISSUE 8 portstrategy.com Congestion Misconception STS Crane Refurb’ VTMS: Breaking New Ground TERMINAL VALUATION MOVES BREXIT – UK TRADE IMPACT: Forward Trend Lines NO SUMMER OF LOVE IN EUROPE PERU PORT PLANS PROGRESS 16 TiL Spending Spree Rolls into Rotterdam 16 Cambodia Terminal Funding from Japan 19 Simandou Ore Stop to Start Again 19 Two in Egypt More ConcessionsHutchison 11 TruckingTransforming PSA Digital Access 11 Bristol 5G Advanced Tests Ongoing 13 Smart Spending Zim Invests 13 ABP Going Digital Wärtsilä ContractedVoyage 15 Hydrogen Power Option NYK Makes Provisions 15 Camblift Goes Live New Reach Stacker 17 TractorAutonomous Live Port Trials 17 Boskalis Deal HAL Offer Recommended
Online portstrategy.com 5 Latest news 5 Comment & analysis 5 Industry database 5 Events Weekly E-News Sign up for www.portstrategy.com/enewsFREEat: Social Media links YouTubeportstrPortStrategyLinkedInategy The Congress is a meeting point that provides senior executives with the solutions they require to meet regulatory and challenges.operationalenvironmentalStayintouchat
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CONTENTS
BRIEFS
PORT & TERMINAL NEWS
TIL SPENDING SPREE ROLLS
8 Sihanoukville – funding for modern container capacity agreed
The project is seen as a major component of works aimed at transforming the Port of Sihanoukville into a principal major deep-sea port for Cambodia. These works will include extensive dredging in order to facilitate access for container vessels of around 4000TEU.
STS10, the planned new Santos mega-terminal, will not now be offered for concession until after the privatisation of the Santos Port Authority with the whole process subject to the outcome of Brazil’s upcoming presidential elections for which the first round of voting is scheduled to take place in early October. The planned concession has already seen significant controversy over who can bid, in which structure, and whether the terminal should be offered for concession with the idea of combining it with an existing terminal to pursue major hub status or simply on the basis of providing another facility to broaden competition in the port.
APM Divests GPI
This announcement follows hot on the heels of other recently announced developments which include: the acquisition of 16 container terminals as part of the €5.7 billion acquisition of Bollore Africa Logistics; a proposal submitted in conjunction with Vietnam Marine Corporation to build a massive new transshipment terminal near Ho Chi Minh City at cost of US$6
STS10 When?
The V.O. Chidambaranar (VOC) Port Authority has confirmed a new concession agreement has been signed with Tuticorin cost&subsidiarybecontainerNoThoothukudiLimitedContainerInternationalTerminalPrivate(TICTPL)toconvertPort’sBerth9intoa600,000TEU/yrterminal.ItwilldevelopedbyTICTPL,aofJMBaxiPortsLogisticsLimitedataofUS$54million.
VOC Port Award
JAPAN FUNDS CAMBODIA CONTAINER TERMINAL
APM Terminals (APMT) has entered into an agreement to sell its 30.75 per cent shareholding in Global Ports Investments (GPI), the Russian ports business, to its long-established partner Delo Group. The binding agreement is subject to regulatory approvals and follows assetsentitiesanyAPMTcompletionactivitiesthiscommitment,Maersk’smadeearlieryear,todiscontinueinRussia.OnofthesalewillnolongerhaveinvolvementinoperatinginRussiaorownanyinthecountry.
The scale of the spending undoubtedly reflects the new-found wealth of shipping lines fostered by COVID-19 and the ensuing volatility in supply lines. Effectively, it has provided MSC/TIL with the opportunity to establish its own container handling capacity in key locations as a path to bolstering freight volumes.
6 | OCTOBER 2022 For the latest news and analysis go to www.portstrategy.com
Rotterdam, where the north side of the Hutchison Ports ECT Delta Terminal and Hutchison Ports Delta II are located. Both locations will be reconfigured to form part of the new facility which will also see the development of new terminal area with quay line development undertaken by the Port of Rotterdam Authority. Overall, the new terminal will consist of five deep-sea berths with a total length of 2.6 km. It will be developed on a phased basis with the first phase expected to commence operations in 2027.
MSC/TIL together with Hutchison
Located in the southwestern province of Preah Sihanouk, in 2021 the port handled 6.9 million tons of containerised cargo, representing a six per cent increase over the previous year.
million and taking a leading role in the development of the port of Valencia’s new container terminal at the port’s northern extension.
The new Hutchison Ports/TIL container terminal will be
Japan has recently agreed a US$300 million loan to develop a new container terminal at the Port of Sihanoukville, Cambodia.
Terminal Investments Limited (TIL), the terminal division of MSC, is continuing its spending spree on securing new container terminal capacity with the announcement of the development of a new mega-terminal in Rotterdam in conjunction with Hutchison Ports, which will eventually offer a capacity of up to seven million TEU per annum.
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APM Terminals, the port operating arm of AP Moller Maersk and affiliate to Maersk Line, has confirmed that it is developing a new, one kilometre-long berth line at its East Port Said, Egypt facility, at a cost of US$500 million. This new development follows on from APM Terminal’s long established presence as the major shareholder in the Suez Canal Container Terminal (SCCT), a hub port facility serving the East Mediterranean region.
In Sokhna CMA CGM and COSCO Shipping Ports are partners in the project and in El Dekheila Terminal Investment Limited, the terminal arm of MSC is involved.AbuElDekheila is west of Alexandria. Ain Sokhna Port is south of the existing Sokhna Port on the Red Sea Coast.
Total investment for the two projects, covering the early phases of development, is put at US$700 million.
Tuas Adds Three
The terminal will be located inside the Abu Qir Naval Base where it has natural protection and will be connected to a new two-way highway, with three traffic lanes on each side, linking to Alexandria and the national road network. To be developed in phases, the terminal will, on full build-out, possess an annual throughput capacity of two million TEU.
8 A 600+ kilometre rail line from the Simandou mines to a new port near Conarky has been agreed as part of large-scale export operations for Guinean’ iron ore
Now the partners in the project have agreed a new equity split –42.5 per cent Rio Tinto’s Guinea subsidiary, Winning Consortium Simandou (WCS) 42.5 per cent and the government 15 per cent – and the partners have formed a
Miami Grant
The Port of Miami has been awarded a US$16 million Rebuilding cargo
When Guinea’s ruling junta assumed power last year all work on the project was halted with the new ruling body requiring a larger stake in the business.
SIMANDOU ORE PROJECT: FROM STOP TO START AGAIN!
The Saudi Ports Authority (MAWANI) has officially launched the new Gate 9 expansion at Jeddah Islamic Port. The project has been completed in partnership with the Emirate of Makkah Province at a cost of SAR 17.5 million ($4.6 million) and is expected to increase the average truck exit rate from 3,600 to 8,000 vehicles per day, as well as shorten the transition time between Jeddah Islamic Port and Al Khumra Warehouse City from 40 to 25 minutes.
Gate 9 in Jeddah
railway and port joint venture on the same equity basis. A 600km rail line will be built to transport ore from the mine sites to a port in the Forecariah district, about 80km south of the capital Conarky. New port infrastructure and equipment will be required to load cargo into Cape Size vessels.
Hutchison Adds Two Concessions in Egypt
These concessions follow on from Hutchison signing, in 2020, a long-term agreement with the Egyptian Navy for the development and operation of a new container terminal at Abu Qir. The total investment for this new terminal is estimated to reach $730m.
The construction of the rail line was a major point of negotiation in the latest talks between the partners with the ruling junta understood to be looking for equity without cost.
Simandou is split up into four blocks – blocks 1 and 2 are controlled by Winning Consortium Simandou, an entity supported by Chinese and Singaporean companies and blocks 3 and 4 owned by Rio Tinto and Aluminium Corp. of China.
Simandou represents a huge new source of iron ore supply for the partners in the project and for China a major route via which to reduce dependency on Australian iron ore.
BRIEFS
APM Invests
Following on from the start-up of operations of the first two berths at Singapore’s new Tuas port in December 2021, three more berths are scheduled to come into operation by December 2022. The Port of Singapore Authority (PSA) intends to move all of its operations at Tanjong Pagzar 1, the Keppel and Brani terminals to Tuas Port by 2027. Activities at the Pasir Panjang Terminal will be switched to Tuas Port by the 2040, offering 65 million TEU/yr.
Hutchison Ports has signed two new concessions for container terminals with the Egyptian Government, one in Ain Sokhna Port and the other in El Dekheila Port.
gantries,ctric-poweredtracksincludeexpansion.theused(RAISE)SustainabilityInfrastructureAmericanwithandEquitygrantwhichwillbetohelpimplementport’sintermodalrailKeyworksinvolvedaddingtwonewrailandthreenewelerubbertyredandexpeditecargo flow and reduce
dwell time.
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 9 PORT & TERMINAL NEWS
A deal has been concluded that will get work moving again to unlock the world’s largest untapped iron ore deposits at Simandou, Guinea.
YOUR INTERMODAL PORT IN THE MEDITERRANEAN AND
greater efficiency, reliability, timeliness, and transparency in the movement of goods across supply chains.
The benefit of these new APIs is that it allows a transport company’s own in-house system to connect digitally to PSA’s Portnet® and thereby offers modernising and automating work processes
8 PSA is committed to greater use of digital transformation interfaces and has launched 50 examples to support localised trucking
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 11 DIGITAL NEWS
stated as the first-of-itskind digital tool to give companies information to combat the lack of transparency across supply chain networks that spans shipping lines, ports, truckers, railroads, warehouses, and cargo owners.
Autonomous ADP
PSA adds that it is committed to working closely with key stakeholders to create digital capabilities to strengthen the overall business ecosystem, particularly targeting small and medium-sized enterprises.
from the University of Bristol and Cardiff University, to conduct more robust tests throughout the Port of Bristol.
5G TESTS COMMENCE IN BRISTOL
BRIEFS
Live FLOW in US
As a consequence, the need for manual documentation or completion of work orders will be removed because the digitalised processes provided generate
A range of advanced 5G-related tests have been occurring at the UK Port of Bristol. The benefits of a 5G network allow the transfer of greater volumes of data at much lower latency, thereby helping to develop new uses for intelligent, interconnected and digitally enabled devices.
which trucks
The company reports that it has received favourable feedback from hauliers involved to date and this is a view endorsed by Oh Bee Lock, CEO, Singapore Logistics Association, who elaborates: “This latest initiative by PSA to enable quick and reliable data connectivity amongst stakeholders will help the logistics industry continue our transformation journey to leverage technology effectively and build new capabilities to better serve our customers.”
AD Ports Group has kicked off a proof-of-concept exercise with Aidrivers to explore the potential for the deployment of autonomous transport solutions at its ports and terminals. The process will involve the implementation of autonomous terminal trucks and other advanced transport equipment from Aidrivers’
Indeed, over 100,000 containers have been transported through use of API applications since first launched in 2021.
congestion.applied,apportionmanagementapproachautonomously,communicatesignallingtheirtojunctions.ThesystemwillthenprioritywherebesttherebyreducingThisprocesshasthecapability of improving logistical efficiency throughout the port and its terminals and can assist in cargo arriving where it is needed more quickly. Moreover, by reducing the stop time at junctions, it dramatically reduces local-level particulate emissions from trucking and port equipment.
PSA Singapore has confirmed the development and launch of over 50 application programming interfaces (APIs) to support digital transformation of the trucking industry in Singapore.
Seow Hwee, Head of Cargo Solutions Business, Southeast Asia, PSA, notes: “Agility is a prerequisite in meeting today’s complex and dynamic nature of logistics management, and PSA recognises the industry’s need for data and information sharing to improve resilience in supply chain systems. We are pleased to stand
One specific example involves security. Here, using drones equipped with video surveillance technology to monitor the perimeter boundary of the site, the feed is analysed in real time to identify breaches and threats, according to Airspan.
GSBNofZayedandautonomousFleetsystemsAutonomousecosystem,autonomousincludingtruck-relatedofV2X-enabledOperator(AIFO)withsimulationdigitaltwinning(AISE).Portisthelocationtheexercise.inLatAm
Global Shipping Business Network (GSBN) has confirmed that its Cargo Release application is now available in Mexico and Panama, as part of a roll-out across Latin America. Cargo Release is a paperless transport solution that connects all stakeholders at the port of import including shipping lines, consignees, agents and terminals. GSBN is an independent, non-profit technology consortium building a blockchainenabled operating system.
alongside our haulage partners in unlocking the value of digitalisation to build a resilient, agile and sustainable green supply chain ecosystem.”
The U.S. inchallenges.toanWorksLogisticspartnersnowDepartmentTransportation(USDOT)issharingdatawithofitsFreightOptimization(FLOW)programme,initiativedesignedaddresssupplychainLaunchedMarch2002,FLOWis
In an officially prepared statement, PSA explains that its business-to-business port community solution, Portnet® is able to provide real-time and detailed information on all port, shipping, and logistics processes.
Traffic management is another area of interest according to the company. By installing 5G routers in vehicle cabs, a central traffic management can be created in
PSA MOVES TO DIGITALLY TRANSFORM TRUCKING SECTOR
Previous tests have been conducted across some UK ports, including Felixstowe, but now a specialist provider, Airspan is working with a consortium of partners including ADVA, AttoCore, Cellnex, and Unmanned Life, as well as research groups
The new LHM Designed for the future of maritime cargo handling. www.liebherr.com Mobile harbour crane Discover
The project officially commenced in June 2022 and is going to span multiple phases across all ABP ports.
Sodyo is a specialist in developing scanning technology to create function offline to online (O2O) solutions, which in turn allows users to gain access to information that enables a better understanding of workflows and facilitates online interaction with customers.
including Navi-Port, NaviHarbour Vessel Traffic Services, and Port InformationManagementSystem(PMIS).“Holisticandseamless
technological solutions are critical to ensuring that ports, and the maritime industry more broadly, are ahead of the curve in terms of supply chain modernisation, that operations are future-proofed, and that data underpins decisions,” explains Sean Fernback, President of Wärtsilä Voyage, before adding
Google in Nairobi
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 13 DIGITAL NEWS
Zim has confirmed that the investment it is making will support the further development and expansion of Sodyo technology, while also aiding implementation. Part of the planned process is to support a Sodyo-Zim joint venture that applies Sodyo’s scanning capability to the logistics sector and supply chain activities.
8 Zim is widening its investment in digital companies in pursuit of deploying new generation scanning technology, securing enhanced operations and improved management processes along the supply chain
A range of different Wärtsilä Voyage technologies are to be used under the new contract,
As part of the deal, there is a specific aim to accelerate the digital transformation of port calls and operations, in order to make activities as efficient, sustainable, and secure as possible.
As a result of Zim’s support, the first major equity investment in DSG, the company is able to further develop its e-volve AI governance and decision-making management system.
The Maritime and Port Authority of Singapore (MPA) and the Port of Rotterdam have signed a memorandum of understanding (MoU) to establish the world’s longest Green and Digital Corridor to enable low and zero carbon shipping. The port authorities will work with the Global Centre for Maritime Decarbonisation and the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping as action partners, as well as other industry partners across the supply chain.
transforming unpowered assets into connected fleets, enabling better monitoring and managing of operations, inventory and equipment through real-time data and analytics across logistics operations, including transportation and shipping.
Zim Integrated Shipping Services Ltd (Zim) has confirmed a US$5 million spend of Series B financing in Sodyo Ltd (Sodyo) to support use of smart solutions across the supply chain.
WÄRTSILIÄ TO TAKE ABP PORTS DIGITAL
These latest developments follow a similar US$6 million investment, in June 2022, in Data Science Consulting Group (DSG) an Israeli-based organisation that specialises in artificial intelligence (AI) products and services.
The size of the deal has not been disclosed but does represent the company’s third investment from its US$50 million Africa Investment Fund that was announced in October 2021 and forms part of a bigger desire to invest US$1 billion in this area over the next five years.
OCEAN Launched
Eli Glickman, President and
Hutchison Ports, via its UK Port of Felixstowe operation, has launched a new online platform for providing fast and accurate real-time information to its customers.
that he believes the new agreement will help ABP “maintain its competitive advantage.”
CEO of Zim underlines: “Sodyo continues to make important progress in developing its revolutionary scanning technology. Under the leadership teams at Sodyo and ZIMARK, the two companies have executed a number of successful POCs that demonstrate the potential this technology has to become the new global standard for scanning technology – with business uses and applications in various industries. We will continue to leverage our position within the start-up ecosystem in Israel to identify other attractive innovative technologies and companies, complementary to ZIM’s core business, which can serve as growth engines for ZIM.”
Digital Corridor
Of note, is confirmation that Wärtsilä’ Voyage’s Vessel Traffic Services system and Port Management Information System are both expected to be integrated into the Port of Southampton before April 2023.
SMART SPENDING BY ZIM
Google has announced another investment in a tech-led company, with its confirmation of an interest in Lori Systems, a Nairobibased e-logistics company providing shippers with digital solutions to manage cargo and transporters.
BRIEFS
Named “OCEAN” (Online Container Enquiry Analytics Notifications), the system allows port users to track up to 200 simultaneouslycontainersandquickly, while filtering information based on estimated vessel arrival times, actual arrival times, when a container is unloaded, when it is cleared for collection, when road freight or rail services are booked and the time of port departure.
At the same time, Zim has also confirmed participation, to the sum of US$5.5 million, in the first round of venture capital financing in Hoopo Systems Ltd.
Hoopo specialises in
Associated British Ports (ABP) has a signed a five-year framework contract with Wärtsilä Voyage to digitalise operations at the company’s 21 ports.
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TransshipmentElectricinfrastructure.
completelengthsuppliedmoresafelyofwithbeenfender(FE-SElementFrance,athaswithGroupShibataFenderTeam(SFT),togetherSoletancheBachy,equippednewberthsthePortofLeHavre,with45SpecialFenderSystems1250).The7.2m-highsystemshavedesignedtoworkbigtidalvariationsaround8m,whilealsoberthingvesselsofthan300m.SFTalso20setsofvaryingsteelladders,totheprocess.
All three of these companies have signed up to a 20-year plan to switch operations to zeroemission yard cranes and stop using cargo-handlingfossil-fuel-poweredequipment, with a specific focus on accelerating the use of hydrogen as a fuel for power across terminals.
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 15 EQUIPMENT NEWS
The new cranes have been developed by Mitsui E & S Machinery and each unit comes initially equipped with a downsized diesel engine that reduces carbon dioxide (CO2) emissions and diesel exhaust, but with an option to replace these engines with a hydrogen fuel cell power supply in the future.
SFT in Le Havre
NYK BUILDS IN HYDROGEN POWER OPTION FOR CONTAINER HANDLING
The
A similar process is also being targeted for another NYK Line facility, the NYK Kobe Container Terminal (NYKT), which is operated with UNI-X and Mitsubishi Logistics. Again, the date set is 2040.
This initiative and the targets set are in line with carbon neutral and decarbonisation objectives
outlined and promoted by Japan’s Land, Infrastructure, Transport and Tourism department. A reduction in greenhouse gas (GHG) emissions to zero across all functions of a port is wanted.
8 NYK has made provision for the adoption of hydrogen fuelled power to be adopted in container handling transfer cranes in Tokyo and Kobe
The new unit combines drive technologies with Liebherr’s own crane control system “Master V” while also utilising the energy recovery system LiCaTronic®, which makes optimum use of the energy available with all-electric drives in combination with the supercapacitors.
collaboratingcompany,TheInnovationChargingAPMollerMaerskStillstrom,iswiththe Port of Aberdeen, Scotland to assess vesselsalternativeschargingforidlingoutsidetheport in a bid to reduce emissions. Under the agreement, Stillstrom and the Port of Aberdeen are conducting a joint feasibility study into an innovative offshore renewable charging hub. Stillstrom has confirmed that results are expected at the end of 2022 and will then be used to develop a roadmap for the potential introduction of offshore charging
8 Camblift of Sweden has launched is first product, a reach stacker that has the ability to be driven on clean energy electric or diesel. Although the exact specifications of this new reach stacker are yet to be revealed, Carl-Olof Eckerman, CEO, Camblift, states it will offer, “high output … in a sustainable and reliable way” with the driver experiencing a “safe and ergonomic workplace.” The company was formed at the end of 2019 in Ljungby and is based in a factory that previously produced equipment for Kalmar.
Liebherr has introduced its first ever all-electric transshipment crane. The CBG 500 E crane reportedly offers a handling performance of up to 2000 tonnes per hour.
The terminal is operated by NYK Line and UNI-X-NCT and the companies have confirmed that the yard cranes, which are 25m high, and possess a 40.6-ton rated load capacity, represent a step towards the goal of achieving carbon neutrality by 2040. This goal was set in mid-2021, with the two companies expecting to convert all cargo-handling equipment at the facility to zero-emission units.
BRIEFS
The NYK Tokyo Container Terminal has started operating new yard cranes with an option for hydrogen fuel cell power in the future.
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According to local reports, the Boskalis board has concluded that the increased offer is reasonable and fair and recommended to its shareholders that it be accepted.
capable of meeting real-life terminal operational needs in a large and modern container terminal,” states Dr Rafiq Swash, Founder and CEO of Aidrivers.
RTGs for GPA
8 TMM and Aidrivers are introducing transportationautonomousautomation based on TMM’s Terberg YT223-T3 terminal tractor and Aidrivers autonomous mobility solutions
and TTM’s expertise in manufacturing industry-leading heavy equipment and machinery including its terminal tractor range.
The move represents an increased offer of €1 per share and values Boskalis at €4.2bn, representing a premium of 32 per cent to the Boskalis closing price on March 9, 2022.
In the initial announcement of a planned takeover by HAL Holding, the company stated that it had no intention of changing the Boskalis management or governance and did not envisage any workforce reductions.
The two companies point to having compatible goals and clear potential synergies, drawing on Aidrivers’ AI-enabled autonomous mobility solutions and platforms
shuttle from warehouse to quay, this requires an initial investment of only US$150,000. Graviti claims attractive savings compared to the costs of traditional conveyor systems and tippers etc. It also provides an interesting benchmark against rotating spreaders, where their tare weight of 10-15 tonnes, reduces the lifting capacity.
The technology is flexible and adaptive and fits well with smaller ports handing a
HAL offer for recommendedBoskalis
ISO containerised bulk handing is being considered for a wide range of cargoes from grains, minerals, and sands, to biofuels, coal, and scrap. A system with revolving spreaders to tip open top containers, is being used in bulk ports in Australia and Chile, handling copper and ore, while at TOC Europe in Rotterdam, PS came across a system called Graviti using purpose built top load/bottom discharge, bulk containers.
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 17 EQUIPMENT NEWS
With five Graviti units for a short
HAL Holding has been a major shareholder of Boskalis since 1989, retaining 55 per cent of shares in the issued share capital and this new share acquisition move effectively consolidates and expands its interest.
produced with in-design drive-by-wire that is compatible with Aidrivers’ autonomous ecosystem, including Navigator “AIOS”, Operator “AIFO” and Simulator “AISE”.
AUTONOMOUS TRACTOR TRIALS
Kalmar Expansion…
USA Rail Funding
Since commencing a partnership in 2019, the two companies have developed a joint vision of delivering more accessible (diesel)logisticstransportationautonomousacrosstheindustry.Now,aTerbergYT223-T3terminaltractorhas
GRAVITI OFFERS LOW-COST FLEXIBLE HANDLING
In a move welcomed by US railroad operators, The US Department of Transportation (USDOT) has confirmed that it is making more than US$1.4 billion in Consolidated Rail Infrastructure and Safety Improvement (CRISI) Grant funding available. The CRISI Program is being administered by the Federal Railroad Administration (FRA) and will promote projects to modernise America’s rail infrastructure to expedite freight movements.
mixture of cargoes. Graviti units can be handled by mobile harbour and STS cranes using an existing ISO spreader and can employ standard terminal shuttle trailers for the warehouse to crane move.
been
The technology, suitable for ship-loading, can be employed in conjunction with feeding cargo from a remote storage point to the load point with the optimum distance said to be no more than 1-5 km away. A reduction of ships time of up to 30 per cent and for grain cargo the minimisation of cargo loss and reduced contamination are said to be major advantages.
In addition to investment, Kalmar has been reporting a number of new orders for equipment across its portfolio on a global basis. Recent cargo handling system sales announced by Kalmar include: three T2i terminal tractors for the Maldives Port Authority; three Kalmar dieselelectric straddle carriers for Tropical Shipping and 11 Kalmar Hybrid Shuttle Carriers for Virginia on the US EAST Coast. Delivery of the latter units is scheduled for Q3 2023.
The Georgia Ports Authority (GPA) is buying a further 12 Konecranes Rubber-Tyred Gantries (RTGs) for the Port of Savannah, GA. These new units are diesel-electric machines but have the ability to be powered by electric using cable reels. The RTGs have a stacking height of one-overfive and can go six plus truck lane in terms of width and are due for delivery before the end of 2024. The Port of Savannah already operates 198 RTGs.
Terberg Tractors Malaysia (TTM) and Aidrivers are currently undertaking live autonomous terminal tractor trials within ongoing port operations.
At the time of writing in early September 2022, Dutch investor HAL Holding, had raised its offer to acquire Dutch dredging and marine services provider Boskalis, to €33 per share.
Kalmar has confirmed that it is upgrading and expanding its manufacturing plant in Ottawa, Kansas, in a deal worth close to US$21.5 million. The location is its US home for terminal tractor manufacturing operations across North America and the spend will eventually see annual production capacity to be doubled. The expansion is expected to be completed in 2023 offering fully digitalised assembly processes.
“We are pleased to be working with TTM on bringing autonomous truck into reality and together we will demonstrate the autonomous transportation automation which is
…and Busy Sales
BRIEFS
PIVOTAL PORT OPTIMISATION
Tailwind is much smaller than the established carriers and consequently needs to compensate the scale disadvantage to be viable in the long run. at could be ways to achieve this? The most feasible option seems to be a network design based on the volumes of Lidl and potentially a few other major shippers. This would contrast with the main shipping lines that have developed
However, long term success still seems an uphill battle, as the scale advantages of large carriers are huge, and include access to dedicated terminals, better rates for terminal handling, towage bunkering and other port services (due to larger volumes) and lower port dues (as port authorities often provide volume rebates).
8 Has Lidl enough wind in its sails for Tailwind to be a long-term option?
THENEWYORKER
Driven by high shipping costs and poor reliability due to congestion and equipment shortage, Lidl decided to start its own shipping line, Tailwind. Is this a temporary phenomenon or here to stay? There is a clear short-term logic, with shipping lines having a profit margin of well above 50 per cent and in some cases around 70 per cent. However, it remains to be seen if the initiative is viable in the long run, as one would assume profit levels return to more normal levels.
volumes moved in the shipping network. A less complex network with fewer ports may suit the needs of Lidl and other large
templates, ports may need to join together to work with the optimisers, to develop common protocols, in order to increase the likelihood of wider penetration.
shippers and give Tailwind an edge in terms of reliability and
Tailwind’s ports in Europe, Koper, Rotterdam and Barcelona (with additional ‘ad-hoc’ calls added occasionally) are nicely spread to serve Europe’s main markets. One would assume Tailwind is looking for high-volume shippers willing to commit volumes on this network for a substantial period.
The development of Tailwind (and other entrants) will be closely watched, not only by shippers but also by regulators, as their fate provides useful clues about the contestability of container shipping.
PETER DE LANGEN
THEANALYST
IS TAILWIND HERE TO STAY?
As test projects roll out, I am predicting that port planners will see a flurry of simulations, and actual prototypes, of efforts to link deepwater optimisations to landside scheduling of berths. Clearly, vessel contracting mechanisms, and practices surrounding notices of arrival (NOA), commencement of laytime, and other provisions related to time counting, need a fresh look.
The early digital offerings that I’ve seen were made possible, in part, because of the cooperation of port interests (which, in some instances, are the operators of the landside facilities that are part of the optimisation package). However, vessels will call at multiple ports in their geographic rotations; in the bulk markets, where I am most familiar, the ships are “fixed” with various options for loading and discharging ports. As a practical matter, an optimisation protocol that includes the land-side
BARRY PARKER
Decarbonisation efforts supported by heavy duty digitalisation have been abundant; most of these efforts are tied to the routing and performance of vessels when they are out at sea. There are inchoate efforts underway to tie such optimisation to what happens upon vessel arrival.
scheduling will really need to encompass all of the origin or destination port options; otherwise, it’s a matter of luck where a proper linkage will occur.
Organisations like BIMCO, which is taking a fresh look at tanker charter parties, may wish to survey the wider array of documents. The International Maritime Organisation (IMO), in conjunction with regional groups, is going to be rolling out “Green Corridors”- which will look selectively at system-wide optimsations, albeit with very specific geographies.
ROLE: BERTHING BENEFITS
18 | OCTOBER 2022 For the latest news and analysis go to www.portstrategy.com
One effort worth watching, spearheaded by a Finlandbased software outfit with the support of a large international law firm (with a substantial maritime practice), is the Blue Visby project - which hopes to go live in early 2023 with prototype projects. Its organisers estimate the cost of “hurry up and wait” (proceeding quickly at sea only to spend days sitting at an anchorage area, prior to cargo operations, upon arrival) at multiple $billions; the extra GHG emissions are also substantial.
There is a cliché along the lines of, “You’ve seen one port, then you’ve seen one port…” meaning that each port will be a little different with its own peculiarities and ways of doing business. But, just as coalitions of vessels and cargo owners are being formed to try out the new commercial
shipping networks without taking into account the volumes of the main customers – simply because even the largest customers only provide a relatively small share of the total
usually confined to attention taking place in an internal industry sector context.
This reality brings with it the
The expectation of inflation is reflected by the workforces in Europe that are going on strike or threatening to, in order to main parity with the rising cost of living. Port congestion in Europe is being driven by labour unrest and staff shortages in Germany, the Netherlands, France and the UK.
The bad news is that the expectation of inflation is becoming self-fulfilling and also aided by increasing interest rates that are slowing consumer demand which will, in turn, lead to a downturn in trade and economic growth. The good news, not much to be seen at the moment!
8 Energy price hikes are pushing inflation to highs not see for decades
logistics – higher cost, delays and overall poorer service. Words such as supply-chain and congestion are now in common usage in the population with the attendant degree of increased political scrutiny accompanying this.
In days of yore ports generally ticked over quietly in the background only rarely achieving a high-profile political exposure with the accompanying amount of media attention – perhaps a strike or a major incident such as an explosion in the port area. Even then, these events fairly-quickly receded into the background and a quieter life
THE SILLY SHORTAGESSEASON:ANDINFLATION
on these two events? Yes, certainly in Germany where the polices of the Merkel Government made the country energy dependent on Russian gas as nuclear power stations were being de-commissioned. The UK was hardly dependent on Russian gas and appears to have overcome shortage of supply, yet we hear of policies to reduce
BEN HACKETT ECONOMIST
peak consumption in order to avoid electricity blackouts. Now that should be classified as a feature of the silly season when there are no political leaders to interview.Whatwe are seeing, in full reality, are price hikes based on expected shortages which have
Life under COVID-19, however, has provided added impetus to political attention, fuelled by the man in the street being made much more aware of the negative consequences of impaired
It is a sad reality that while in the world at large there is increased recognition of supply chain problems and congestion there is not a understandingcommensurateofthesource of these problems, and that invariably the blame is laid at the door of ports – the most visible choke point in the supply chain. Effectively, the port is the point in the supply chain where the problems pile-up, like driftwood on a beach, but it is by no means the source of the resulting congestion problems.
THE
MIKE MUNDY
THESTRATEGIST
Ports have traditionally had a link to politics but under the influence of COVID-19, lockdowns, congestion, environmental goals, strikes, exceptional geo-political events and other key influential factors the political dimension has grown significantly larger. The combined effect of these factors, or sometimes just one, such as supply chain gridlock, has been to push ports deeper into the political spotlight.
This year is no different, or perhaps worse as headlines are filled with doom and gloom and impending catastrophes that will push us all into poverty along with lack of food and energy. Influencers and commentators are desperately seeking pieces of information, usually overstated and possibly inaccurate, to write about and to warn us of the disasters facing us in the coming months and years.
Furthermore, it is clear that ports have globalisationfacilitatedwithlimited difficulties. They now stand accused, in the eyes of the ill-informed, of causing problems when the blame lies elsewhere. Resulting political interference can only make matters worse.
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 19
Pre COVID-19 it is true to say ports were being drawn slowly but surely into the political spotlight with comparativelyon.emissions,portactivitiestoday,camedriverconsiderationsenvironmentalbeingamajorofthis.Buildingrecognitionintoplay,whichcontinuesoftheneedtodecarboniseintheindustrialarenaofactivities–toreducevesseltruckqueuesandsoNevertheless,thisremaineda‘lighttouch,’
PREPARE FOR LIFE OUT OF THE SHADOWS
created a serious inflationary issue as energy traders, transportation providers and producers have taken advantage of expectations and seriously raised prices resulting in some eyewatering profits.
The COVID-19 pandemic started it all with the logistics and transportation snafus, followed by the war in Ukraine which has exacerbated shortages and caused inflation. In reality, can we really blame all the problems
resumed, as a rule out of the political dimension.
greater political focus but again invariably with a lack of understanding.Thebottomline is that ports and terminals are faced with the challenge of learning how to deal with this new era of increased attention and must introduce the resource and tools to both offset potential problems through a proactive approach and to respond to events in an informed and constructive manner. Now is the time to prepare for life out of the shadows!
Typically, when it comes to July and August, summer vacations are the main focus for many people as they disappear from their normal routines and try to “switch off”. So it has been for as long as we can remember, certainly in Europe.
TERMINAL OPERATIONS 20 | OCTOBER 2022 For the latest news and analysis go to www.portstrategy.com
CONGESTION MISCONCEPTION
The steps to performing well under such circumstances always have a bespoke element related to individual terminals but in general include:
The causes of congestion, however, to a large extent do not lie at their door. The bottom-line is that ports are in effect the choke point for container traffic caused by a variety of actions along the supply chain invariably beyond their control. Typically, these encompass:
REALISTIC APPRAISAL
8 There has been an uptake in implementationthe of Vehicle SystemsBooking(VBS)as a path to fighting smoothingcongestion,out traffic flow and expediting turnaroundtruck
Another common example is container availability. It has been a fairly regular statement from lines to shippers wanting containers to ship their goods that they are unavailable as a result of import terminal congestion. In truth, the real answer is that lines have been slow to address container imbalance problems – bringing in sufficient empty containers to meet demand – in favour of serving pent-up demand and
5 At the point of cargo origin: factory shutdowns or complete local or regional lockdowns.
Lines have been happy to earn sky-high freight rates and almost ignore the empty issue. Containers have piled-up not just in ports but at rail terminals and distribution centres. The costs of this to the lines pale into insignificance when freight rates are at unprecedented levels.
The foregoing is not to suggest that all container ports and terminals are entirely blame free with regard to congestion but, rather, that there are many that face problems that are not of their own making and that there are others maintaining a good position and some doing very well in difficult circumstances.
The “difficult circumstances” aspect can really be defined as a port or terminal that has in the recent past and/or today faced the problems referenced earlier plus other factors such as: vessel bunching, big upturns in per call box exchange volumes, a much greater number of over-staying containers – dry van and reefer – and other local factors such as Customs constraints on being able to move Customs cleared over-staying containers to off-terminal bonded depots, poor offtake infrastructure, road traffic management and so on.
EASY TARGET
5 En route to the port: stop-start operations caused by shutdowns, lockdowns, trucker shortages and disrupted rail services.
“When ocean carriers continue to bring thousands of containers per month to a port and pick up a fraction of that number it creates an untenable situation for terminals, importers and exporters, trucking companies and the port itself.”
This perception is understandable – it is easy to think of a port or terminal as the cause of congestion when it is most severely manifested within in its perimeter. The fact that it will to a large extent have come about as a result of factors such as waves of cargo being received due to vessels out of berthing schedule, slow Customs clearance, trucker shortages or any number of other external problems is easy to overlook.
Such factors have been massively in-play since the advent of COVID-19 and their collective impact on port and terminal operations has generated unprecedented levels of challenge. Container terminals, as the interface between ocean-side and landside transport systems, are in effect the collection point for many of the problems generated elsewhere along the transport chain that are the root causes of what many parties mistakenly identify as port generated congestion.
It is true that diverse ports in Asia, the Americas and Europe have experienced congestion with some struggling to operate effectively but, on the other hand, there are those that have performed well in the face of extremely volatile operating conditions.
Furthermore, speaking frankly, it is an easy option for other players in the supply chain to promote the view that ports and terminals are the sole cause of congestion to divert attention from their own inadequacies in this respect. The regular operational bulletins issued by key shipping lines which cite port congestion, are a good example of the promotion of this view. Never mind the fact that many terminals have in recent months experienced near 100 per cent zero adherence to shipping lines calling in their allocated berthing windows. Such bulletins conveniently promote the view that it is the container terminal that is wholly at fault and not themselves.
There are a lot of misconceptions about congestion. In this definitive article Mike Mundy digs behind the scenes, identifies the root causes and highlights the first of a series of Case Studies that shows that there are those getting it right in the face of adversity
5 At the port/terminal: vessels arriving outside their allocated berthing window/bad weather and staff shortages caused by the pandemic.
There is a common perception that ports are the cause of congestion. This is not entirely correct – ports are a single (very obvious) link in the chain, usually with little control over other links.
capitalising on high freight rates. Indeed, blaming terminals while creaming massive freight rates has been a key feature of the market. One indicator of this is the relatively few vessels deployed, up until recently, to achieve the large volume movement of empty containers back from the US West Coast to Asia to meet expressed needs, a point amplified by Daniel Maffei, Chairman, US Federal Maritime Commission, recently when commenting on US port congestion. He underlined:
Administrative Level
5 Increased collaboration with the host Port Authority and other government agencies.
5 Focus on billing strategies to minimise overstays.
Major areas of challenge he identifies include the following:
Case Study
5 Use of off-terminal bonded depots to hold Customs cleared over-staying containers and maximise yard capacity.
5 Working with cargo owners/shippers to optimise container drop-off and pick-up arrangements.
5 Over-staying reefer containers accounting for as much as 21 per cent of available reefer storage capacity and overstaying containers overall occupying up to 2500TEU of yard capacity. (Interestingly, MICT cites two influential factors in
MICT ranks among those terminals that have performed well in the face of adversity ‘‘
5 Despite half year volume in 2022 increasing by 15 per cent compared to the same period in 2019 and significant over-
5 A reassessment and potential modification of internal and external rules covering container operations – for example, rules covering container stack heights, hours of trucking operations…
5 More than 90 per cent of vessels since November 2020 to end July 2022 arriving outside of their allocated berthing windows – Figure 1.
Kicking off the first in a series of PS Case Studies on combating congestion, Phillip Marsham, Executive Director, Manila International Container Terminal (MICT) and Manila Harbor Centre, ICTSI Group companies, confirms a long list of daily congestion-generated challenges, identifies key tools/actions deployed to minimise their negative impact and highlights the positive results achieved.
5 Enhanced vessel planning procedures/shipping line/ agent contact.
– Table 1.
“The combined impact of these and other factors is potentially very severe,” elaborates Marsham, “but we believe that we have responded well and as judged by our peers have delivered an exceptional performance.” The clearly visible wins identified include:
5 The application of digital processes to expedite back-office functions.
TERMINAL OPERATIONS For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 21
The causes of congestion to a great extent do not lie at the door of terminals ‘‘
5 The deployment of digital systems to enhance operational efficiency.
5 Vaccination of the workforce against COVID-19.
5 Implementation and enforcement of COVID-19 prevention protocols.
5 MICT’s average vessel serving time only increasing by three per cent compared to 2019, in sharp contrast to the 29 per cent increase in vessel terminal time recorded at a global level.
Terminals seeking to continue to perform well in the face of major upheavals as exemplified by the pandemic will pursue these courses of action as appropriate, as confirmed to Port Strategy by diverse terminals across the globe.
5 Carrier rationalisation measures that have seen a 18 per cent uplift in per call over-the-quay box movements in the period Jan-Aug’ 2022 compared to the same period in 2019
5 Use of a mandatory Vehicle Booking System to manage the flow of containers through the terminal.
Operational
5 24/7, 24-hour working if required.
5 Occasions when 2.5 x more vessels than anticipated have arrived on a daily basis creating severe incidences of vessel bunching.
this area: higher utilisation of reefer storage capacity is to a significant extent being driven by the lower power costs and similarly increases in land transportation costs pushing up import and empty dwell times).
8 Yard utilisation is not simply a function of volume –containersover-stayingcan have a major impact on reducing available capacity
8 Table Performance3: in Relation to BenchmarksIndustryMICT Drewry TEU per metre of quay 2021 1,358.77 1,281.00 2020 1,234.50 1,157.00 TEU per STS 2021 147,865.75 146,539
22 | OCTOBER 2022 For the latest news and analysis go to www.portstrategy.com TERMINAL OPERATIONS 4.84.9 6.56.6 7.9 7.4 5.5 6.6 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 import dwell days export dwell days Container Dwell Days for Jan to Jun 1H 2019 1H 2020 1H 2021 1H 2022 days 7.9 7.4 5.5 6.6 days 4.9 4.8 6.6 6.5 75.2 33.0 50.8 52.4 2019 2020 2021 1H 2022 Yearly Truck Dwell Time for Jan to Jun Period Truck Turnaround Time (minutes) 2019 75.2 2020 33.0 2021 50.8 1H 2022 52.4
8 Figure 3: Truck Turnround Time (from Gate-In to Last Execution by Minutes), January –June, 2019 – 2022 (a 30% reduction was achieved Jan-Jun 2022 compared to the same period in 2019)
5 Truck service time inside the terminal decreased by 30 per cent compared to 2019 – Figure 3. In addition, there are independent benchmarks, as set by Drewry, that confirm MICT’s resilience in the face of difficult operating conditions. These benchmarks and the standards achieved in relation to them are particularly important for all terminals as they basically highlight a terminal’s fundamentally important ability to keep cargo moving – Table 3.
Congestion has been a feature of the container supply chain, but this has been driven primarily by factors outside the direct control of the container terminal. As is illustrated at the Manila International Container Terminal, ICTSI’s flagship terminal, effective terminal management and innovations can minimise these difficulties. It would be fundamentally wrong to suggest that terminals have under-invested, and that this is the route of the problem. Simple moves like Customs approval of cleared containers for off-dock storage – together with effective terminal management – present the correct solution to (often other people’s) problems.
THE CORRECT SOLUTION
8 Table 1: (Compared to Jan-Aug the period Jan-Aug 22
Source: MICT
Source:
MICT/Drewry TEU per metre of quay and STS
Average Box Volume Per Call
staying container problems, MICT has rarely gone past the 80 per cent mark in yard utilisation from 2019 right through to the first half of 2022 – Figure 2.
2019
registered an 18% increase) Source: MICT 83% 73% 63% 71% 71% 65% 40% 59% 62% 40% 70% 76% 68% 66% 75% 77% 60% 55% 71% 80% 90% 88% 96% 98% 93% 92% 89% 92% 95% 96% 95% 99% 94% 94% 98% 100% 99% 97% 96% 97% 92% 93% 92% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2019 2020 2021 2022 Off Window Vessel Arrivals 91% 86% 76% 76% 71% 63% 60% 63% 68% 70% 77% 72% 82% 58% 63% 72% 51% 48% 53% 61% 67% 66% 67% 73% 70% 63% 55% 67% 69% 67% 68% 71% 72% 71% 77% 78% 79% 76% 73% 76% 80% 78% 82% 80% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 2019 2020 2021 2022 Terminal Yard Utilization 8 Figure 1: Off Berthing Window Vessels (exceeded the 90 per cent mark in the period November 2020 to end July 2022) 8 Figure 2: Terminal Yard Utilisation: 2019 to mid-2022 Source: MICT Source: MICT 4.84.9 6.56.6 7.9 7.4 5.5 6.6 3.0 4.0 5.0 6.0 7.0 8.0 9.0 import dwell days export dwell days Container Dwell Days for Jan to Jun 1H 2019 1H 2020 1H 2021 1H 2022 days 7.9 7.4 5.5 6.6 days 4.9 4.8 6.6 6.5 75.2 33.0 50.8 52.4 2019 2020 2021 1H 2022 Yearly Truck Dwell Time for Jan to Jun Period Truck Turnaround Time (minutes) 2019 75.2 2020 33.0 2021 50.8 1H 2022 52.4 Half Year Average Truck Dwell Time, 2019-2022 (by minutes) Key Congestion Beating Actions 5 Vaccination of entire workforce against Covid-19 5 Implementation of strict health and safety protocols 5 24/7 working/weekend working 5 Ongoing communication with stakeholders 5 Market responsive rules and actions 5 Accelerated implementation of operational and administrative processes 5 Strict berthing rules, prioritization and appointments 5 Enhanced over-the-quay output 5 Vehicle Booking System for Smooth Gate Flow and Enhanced Terminal Cycle Times
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 23
Total shortsea trade volumes have been partially constrained by Brexit, but this effect is limited. However, increased bureaucratic pressures at Channel ports has seen
Its very important to weed-out various issues that have impacted the entire European market and not confuse these with the emerging underlying structure of UK trade. All of Europe has seen supply chain disruption in the wake of the pandemic and uncertainties at the macro level, with the war in Ukraine further complicating the analysis. In addition, specific factors such as the continent-wide shortage of truck drivers, port congestion and mounting green pressures are all shaping the Nevertheless,situation.asimple assessment of the numbers of containers handled at UK ports in terms of shortsea and deepsea volume provides a good summary of non-EU trade and allows an assessment of influential macro factorsFigure 1. This is highly simplified data and includes empty container moves. The position is further clouded by the failure of the stats to factor-in non-EU cargoes feedered across North Continent ports.
UK – BREXIT: EMERGING TRADE PATTERNS
It’s now nearly two years since the UK (excluding Northern Ireland) left the EU’s Single Market. The impact to-date has been uncertain as a result of continuing COVID-19-related distortions and other factors that have shaped trade vectors since early 2020.
5 Unaccompanied RoRo has benefited from this trend, with market share increasing over the period. The greater land requirement for storing trailers prior to collection has driven these cargoes to ports providing greater available areas. It is anticipated that this will continue.
Data is, however, now becoming available that allows the shape of future trade patterns to be established. This data is virtually complete for 2021 and meaningful estimates can be made for 2022. So, what has happened and what is the outlook? How will these trends impact on port development in the UK and for major North Continent trading partners?
The key area of interest, however, is trade with the EU and other secondary European markets which are captured in the UK port statistics as ‘shortsea’. So, what has actually happened?
Table 1 provides a summary of developments since 2015 in terms of cargo tonnages. Trade volumes expanded by around 6.5 per cent between 2015 and 2018 and then contracted in 2019 with this reflecting the stock build-up period ahead of the planned EU exit. Further contractions were noted in 2020 due to COVID-19 and there has since been a limited recovery. Total volumes remain below the peak 2018 total, however. The bias in favour of imports remains, but this has declined slightly over the period. Within this there are very important trends:
14.2 million TEU this year. Within this, there has been a limited proportional decline in direct deepsea, with this reflecting increased continental feedering to smaller ports as a result of well-publicised congestion in the major gateways.
SIFTING DIFFERENT FACTORS
SHORTSEA TRADE STRUCTURE
BREXIT - UK TRADE IMPACT
8 Riding the changes Associated- British Ports plans to construct a new roll-on roll-off facility within the eastern side of the port of Immingham
5 Accompanied RoRo has contracted sharply and seen market share fall from 46 per cent in 2015 to a current level of around 34 per cent. This reflects the trend towards avoiding congestion at Dover and moves to route cargoes closer to ultimate destination (and origin).
Andrew Penfold analyses the impact of Brexit on UK trade to-date and identifies forward trend lines with particular reference to trade with the EU and secondary European markets
However, it is apparent that UK deepsea trade continues to be driven by macro-economic factors and is linked to the scale of the economy. This has not changed, although the use of continental feeder hubs for this traffic complicates the analysis. In 2019 total TEU volumes reached some 14.3 million TEU, with this contracting in 2020 and since recording some recovery. Preliminary estimations indicate a total of some
5 Shortsea LoLo has been the major beneficiary, with market share jumping from 23 per cent to 33 per cent over the period. This has followed from greater penetration into the lower value consumer and intermediates markets and the greater role of feedering of deepsea boxes. The situation is further summarised in Figure 2.
per cent between 2015 and 2018 and then contracted in 2019 with this UK - Shortsea Trade Since 2015 - million tonnes 2015 2016 2017 2018 2019 2020 2021 2022E Import
5 The imbalance in the UK shortsea trades is also influencing developments. There is very limited export potential in the south, but the north of England offers much more potential. An improved trade balance (with resulting lower overall costs) is also influencing demand.
It may well be the case that the accompanied truck sector will become increasingly focused on perishable goods and other very high value cargoes that are truly time sensitive.
5 These benefits have been further underlined by the broader trend towards green initiatives. Using a vessel to deliver goods nearer to destination is a positive in this respect.
The factors driving changes in post-Brexit shortsea trade are seen to be complex and still have a long way to play out. But these changes offer major potential for such developments.
a redirection of demand to other ports – especially those nearer to Midlands distribution centres and with available land for storage. The dwell time for a trailer is around 1.5 days for an import unit on average, while (historically at least) dwell time at Dover – under good conditions – was a matter of minutes. This factor, and increased use of containers, will continue to shape the market.
UK – BREXIT: EMERGING TRADE
Accompanied 20.25 20.10 19.11 18.19 17.64 16.79 16.42 15.66 RoRo Unaccompanied 13.60 13.28 13.84 14.14 13.91 13.39 14.55 14.85 LoLo 10.44 9.96 13.75 14.92 13.83 12.61 14.70 15.33 Total UK Shortsea Import 44.28 43.34 46.70 47.25 45.38 42.79 45.68 45.84 Exports RoRo Accompanied 13.13 13.42 13.21 12.28 11.44 10.08 10.89 10.44 RoRo Unaccompanied 7.13 7.30 7.79 8.08 7.62 7.10 8.06 8.35 LoLo 5.06 4.72 6.49 6.52 6.08 5.06 5.49 5.50 Total UK Shortsea Export 25.31 25.44 27.49 26.88 25.13 22.24 24.44 24.29 TOTAL 69.60 68.78 74.19 74.13 70.50 65.03 70.11 70.13 - excludes Ireland Source: DfT / MPL
100%90%80%70%60%50%40%30%20%10%0% 2015 2016 2017 2018 2019 2020 2021 2022E UK Shortsea Imports by Mode 2015 2022 percent of tonnages RoRo Accompanied RoRo Unaccompanied LoLo 8 Figure 1 8 Figure 2
expanded by around
1614121086420 2015 2016 2017 2018 2019 2020 2021 2022E UK Container Port Demand 2015 2022 million TEUs Deepsea Shortsea
However, a simple assessment of the numbers of containers handled at UK ports in terms of shortsea and deepsea volume provides a good summary of non EU trade and allows an assessment of influential macro factors Figure 1. This is highly simplified data and includes empty container moves. The position is further clouded by the failure of the stats to factor in non EU cargoes feedered across North Continent ports.
Total shortsea trade volumes have been partially constrained by Brexit, but this effect is limited. However, increased bureaucratic pressures at Channel ports has seen a redirection of demand other ports especially those nearer to Midlands distribution centres and with available land storage. The dwell time for a trailer is around 1.5 days for an import unit on average, while (historically at least) dwell time at Dover under good conditions was a matter of minutes. factor, and increased use of containers, will continue to shape the market.
The key area of interest, however, is trade with the EU and other secondary European markets which are captured in the UK port statistics as ‘shortsea’. So, what has actually happened?
1: UK Shortsea Trade, 2015 2022E, million tonnes
SHORTSEA TRADE STRUCTURE
5 There has been much talk of increasing direct freight flows between Ireland and the rest of the EU by eliminating the UK landbridge and some services have been increased. So far, however, this has been limited and Irish Sea traffic remains robust.
§ Increased Brexit bureaucracy is an issue but is likely to be eased as a new equilibrium finally achieved as the political temperature cools.
1: UK –Shortsea Trade, 2015 – 2022E, million tonnes DfT/MPLSource:
§ The imbalance in the UK shortsea trades is also influencing developments. There is very limited export potential in the south, but the north of England offers much more potential. An improved trade balance (with resulting lower overall costs) is also influencing demand.
8 Table
However, it is apparent that UK deepsea trade continues to be driven by macro economic factors and is linked to the scale of the economy. This has not changed, although the use of continental feeder hubs for this traffic complicates the analysis. In 2019 total TEU volumes reached some 14.3m TEU, with this contracting in 2020 and since recording some recovery. Preliminary estimations indicate a total of some 14.2m TEU this year. Within this, there has been a limited proportional decline in direct deepsea, with this reflecting increased continental feedering to smaller ports as a result of well publicised congestion in the major gateways.
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Figure 2:
The overall development of demand and its modal distribution has also been influenced by several non Brexit factors
§ The shortage of truck drivers is a pan European issue and is forecast to worsen in the few years. This has increasingly favoured the unaccompanied sector. The use of ferries northern ports significantly reduces driver demand, with multiple daily pick up journeys to/from ports serving the Midlands and the North becoming an increasingly viable possibility. This shift favours ports with available land.
These changes are already having a direct influence. The development of terminals on the East Coast, where land is relatively cheap (and available) and larger vessels can be
It may well be the case that the accompanied truck sector will become increasingly focused on perishable goods and other very high value cargoes that are truly time sensitive.
RoRo
The overall development of demand – and its modal distribution – has also been influenced by several non-Brexit factors:
5 Increased Brexit bureaucracy is an issue but is likely to be eased as a new equilibrium is finally achieved as the political temperature cools.
5 The shortage of truck drivers is a pan-European issue and is forecast to worsen in the next few years. This has increasingly favoured the unaccompanied sector. The use of ferries to northern ports significantly reduces driver demand, with multiple daily pick-up journeys to/from ports serving the Midlands and the North becoming an increasingly viable possibility. This shift favours ports with available land.
The situation is further summarised in Figure 2.
NON BREXIT INFLUENTIAL FACTORS
NON-BREXIT INFLUENTIAL FACTORS
Table
It might be assumed that all this will result in the reanimation of smaller ports in the south that have had a role in these trades in the past. This could be a factor, but the introduction of much larger RoRo freight ferries in the North Sea will ultimately limit the potential here.
The shift to increased use of unaccompanied trucks and LoLo containers seem certain to further increase interest in hitherto ‘unfashionable’ ports on the North Sea coast and new investment can clearly be anticipated. Far-reaching changes are underway. PATTERNS
handled, has been directly behind the initiative from Associated British Ports (ABP) to develop increased facilities and new berths at Immingham on the Humber. Further south, the Medway ports are also recording increased unaccompanied trailer volumes as a direct result of difficulties in Dover and are said to be targeting developments.
PORT INVESTMENT IMPLICATIONS
§ These benefits have been further underlined by the broader trend towards green initiatives. Using a vessel to deliver goods nearer to destination is a positive in this respect.
Table 1 provides a summary of developments since 2015 in terms of cargo tonnages. Trade volumes 6.5
The global port industry rollercoaster has not stopped with fresh surprises popping up. Sharp rises in interest rates, increased revenues for terminal operators and strong variations in demand growth across continents are key themes in 2022. These factors are “shifting the box business” with different types of investors taking charge, a new port finance landscape and a new balance of power. Although the future is highly uncertain some early conclusions can be INTERESTdrawn.
PRICING
APMT and ICTSI are showing an improvement in margin, while DPW is facing a high growth in its cost base offsetting very healthy revenue growth. The rising costs are most likely an effect of the congestion witnessed at the terminals in
In 2022 strong regional differences in container demand are underway. While inflation has been soaring for several months, consumer spending (in particular in the US) has held up surprisingly well. This was undoubtedly partly due to large savings built up during the COVID-19 years, but even with a return to more typical conditions, demand has kept up in recent months with fresh throughput records noted in some ports. Similarly, in the Far East the picture is also positive.
INCREASED REVENUES?
Supported by current massive liner profits, industry players have begun to take back control in the M&A market. An increasing number of deals in recent months involve shipping line linked terminal operators. It is also notable that overall the number of deals processed this year has actually increased relative to 2021. Privatisation and greenfield developments have seemingly taken the upper hand after years of infrastructure funds dominating M&A headlines.
TERMINAL VALUATION MOVES
However, the corresponding EBITDA grew at a marginally slower pace. Although terminal operators may have had some flexibility with front loading expenditure now that revenues have increased.
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 25
combination with COVID-19 measures reducing the efficiency of operations and resulting in additional costs for the operators. However, if the tariff levels can be maintained and efficiency improves in the coming years, the upside may still come.
RATE HIKES
Looking, however, at the deals in 2022 so far, it seems that the activity of the financials is at the same level as last year. The scenario has not yet emerged of rising interest rates lowering deal activity and valuations. One explanation for this could be that the deals undertaken so far this year were already partially prepared last year
Rapidly rising interest rates will theoretically impact valuations for port assets. Increased cost of capital, by definition, will drive down the high multiples seen in the last few years. Where historically EBITDA multiples are typically between 12 and 15, several recent transactions reached over 20 times EBITDA. Currently the base interest rate on US 10year government bonds is still hovering at the peaks of 2013 and 2018 and in that sense remain historically relatively low. Using standard valuation metrics with average two per cent growth per year and an increase in cost of capital from 5 to
Despite a jump in revenues in 2021, financial results do not point to a much more profitable business model for the sector. Global Terminal Operators (GTOs) were faced with increased costs which has partially offset the jump in revenues. When reviewing the financial accounts for nine of the ten largest port operators, combined revenues jumped by 24 per cent in 2021 vis-à-vis 2020. This is much higher than the 2.6 per cent in 2020 and average of 10.4 per cent between 2017-2019.Theanalysed major port operators saw their combined volumes increase by 8.7 per cent in 2021 – significantly exceeding the earlier average. On a terminal ownership adjusted basis, volumes grew by just over seven per cent in 2021 for these operators, according to Drewry. Higher storage revenues, therefore, seem to be the main reason for the revenue jump, followed by increased volumes.
TRENDS
IMPACT ON VALUATIONS
Johan-Paul Verschuure of Rebel examines valuation activity in the container terminal sector: current and forward trends; investor profiles and strategic thinking
In contrast, Europe has witnessed a steep drop in demand, mainly due to a drop in Russian trade. Africa and South America also recorded declines in comparison to last year. Overall demand has not yet taken the hit many were expecting given the global macro-economic conditions. As a consequence, strategic port investments and even greenfield ports are popular topics again. If inflation remains high, container demand will soften further. And with the first newbuilds ordered during the first COVID-19 wave coming into operation, the ‘bullwhip’ effect could lead to fast adjusting conditions in the opposite direction. This is something Maersk’s CEO indicated in June as a possible scenario. In addition to downward pressure on freight rates, it may also impact confidence in the container terminal business.
The increase in interest rates is expected to result in lower M&A activity from the financial sector. Infrastructure funds have been benefitting from the low interest rates for some time increasing their stake in the port and terminal industry. Their leveraged deals and low return requirements from the partners of these funds has driven high valuations and delivered winning bids.
TERMINAL ACQUISITIONS: ACTIVITY
8 The winning bid for Jawaharlal Nehru valueterminal’sfactoredSheva(JNPCT)ContainerPortTerminalatNhavaPort,Mumbaiinthestrategictoamajor liner affiliate – -
REGIONAL DEMAND DIFFERENCES
The container lines are under intense scrutiny over high freight rates and policy makers are openly targeting the alliance structure and block exemptions. In an attempt to bring down rates and thereby inflation, it is possible the shipping markets will be reformed to reintroduce competitive market forces. An end to the alliances may reshuffle the container terminal industry after years of increased focus for terminals serving mainly their own alliance. For liners anticipating these moves the strategic value of port assets coming on to the market will be even greater. Just in case policy makers are successful, it may prove wise to have secured alternatives.
So far in 2022 no real drop in appetite and valuations has been witnessed. Valuations like those for Haifa and more recently for Mumbai are indications of this. Naturally, the cash flooded shipping lines are partly helping to keep up prices for particular strategic assets supporting the shipping network of the lines. In addition, the typical time which it takes to prepare a bid for a port asset will influence the lag in price reaction to the liquid bond markets. A typical transaction will take more than half a year to complete and, in most cases, even longer. The new financial conditions will take a while before they work through in the valuations for port assets. Thirdly, port assets and infrastructure in general are typically good hedges against inflation. With, as a rule, sufficient space to increase tariffs when costs are rising, there is little exposure to inflationary woes.
LINER RESHUFFLE?
If it can be proven that the shipping market has indeed become too concentrated for healthy market dynamics, one can wonder whether the same would hold for the terminal business in some places? In several locations alliance partners control the majority of the terminal market. After MSC acquires Bollore, the 2M alliance will have an extremely strong foothold in the terminal business in Africa, for example. Also, greenfield projects are increasingly difficult to finance without the involvement of one of the major shipping lines. In this case, the strategic value may be for port authorities and local governments to select multi-user-operators and not become too dependent on a single major player. This way smaller liners are also able to secure the right conditions for running a profitable shipping line and optimising the connectivity of a port.
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RebelSource:
8 Which parties are buying port terminal assets?
market An increasing number of deals in recent months involve shipping line linked terminal operators
It is also notable that overall the number of deals processed this year has actually increased relative to 2021. Privatisation and greenfield developments have seemingly taken the upper hand after years of infrastructure funds dominating M&A headlines.
Many industry players are more focused on equity based financing or corporate financing for their investments. The rising interest rates will impact their investment appetite to a lesser extent than it will the financials. However, rising interest rates also have implications for operators with business models reliant on high levels of debt when they need to refinance. The credit rating agencies recently lowered Adani’s rating due to its exposure to increasing interest rates. Other terminal operators relying on leveraged deals will also face different financing conditions when their debt matures.
INCREASED REVENUES?
Source: Rebel
Even though current macro-economic conditions seem to suggest that port asset prices will drop, this is not noted – so far. The strategic value of port assets has been proven in the last few years and it is likely that this will be increasingly recognised rather than a narrow focus on financial expectations. It is, however, likely that other industry players will be more in a position to capture this than has been the case in the past few years. The stock prices of listed terminal operators have mostly moved sideways. Perhaps in an uncertain overall market this should be viewed as a healthy performance with a positive outlook?
IN CONCLUSION
Another group which may be affected in the medium term if rates stay up are the funds which need to find an exit for their assets. Although valuations will likely exceed the acquisition price in many cases, the achieved returns may disappoint if interest rates do not come down again.
Typically, infrastructure funds and financial investors by using larger amounts of debt with low rates at the acquisition stage could ultimately achieve higher valuations on exit.
of controlling the entire supply chain will be incorporated in future bids, more than was the case pre-COVID-19. Financials and smaller operators will struggle to incorporate this value component. The shipping lines focusing on this strategy and who have cash to burn are in pole position to benefit with nobody close behind them.
6.5 per cent (following the 1.5 per cent increase in base interest rates since the beginning of the year) will result in a reduction in valuation of up to around 30 per cent. Part of that will be compensated by the inflation affecting cash flows, but a relatively small increase in interest rates can result in large variations in valuation.
TERMINAL ACQUISITIONS: ACTIVITY – PRICING - TRENDS
Another key reason for port valuations staying up is reappraisal of the strategic nature of port assets. The last few years underlined that having secure access to berthing windows is valuable to shipping lines and alliances. In combination with the liners’ and GTOs’ shift in focus to integrating the entire supply chain, the container terminal is a must have asset rather than a profit centre by itself. The value
STRATEGIC VALUE
While page 31 addresses the position in more detail for German ports, notably Hamburg (plus a consideration of the development of DCT Gdansk), and pages 32-33 cover the Antwerp & Rotterdam issues (with the expansion of Le Havre included), the recent and ongoing challenges being faced can be summarised as follows.
This port range is not a single market but instead a series of intersecting markets, hence French ports compete with Antwerp and (to a lesser degree) Rotterdam for northern French cargoes and Antwerp and Rotterdam directly compete for local and transit markets to the Ruhr and
THE BIG THREE Figure 2 offers a summary snapshot of total container volumes by country, for facilities included in this competitive port range. It can be seen that between Belgium, Germany and the Netherlands there is a reasonably consistent split, with little difference between the 30 per cent retained by German ports up to 33 per cent by the Netherlands – with Belgium sandwiched in between the two on 31 per cent –making up the “Big Three” container port volume countries.
NO SUMMER OF LOVE IN EUROPE
southern Germany. At the same time, German ports are competing for domestic cargoes with Rotterdam and Antwerp, with DCT Gdansk also now of note.
NORTHERN EUROPE: CONTAINER HANDLING
8….poor vessel schedule reliability on the Asia-Europe trades remains a concern for North-Continentall ports….
The importance of the Hamburg-Le Havre port range in North Europe is undeniable to the container industry. It drives demand on the Asia-Europe container trades, which services the largest vessels in operation on a global basis.
…the last thing the industry needed were continued bottlenecks across the logistics supply chain. Little relief was expected, and this is exactly what has been occurring ‘‘
Figure 1 over the page provides a summary of the location of the ports in this region.
A tough 2022 is underway for the major ports in the region. For H1 2022, Rotterdam handled 7.3 million TEU (down 6.2 per cent on H1 2021), with Antwerp seeing 6.8 million TEU
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 27
A combination of system congestion further aggravated by strikes present a challenging scenario for container ports in the Hamburg-Le Havre range. AJ Keyes assesses the situation and what the rest of 2022 will bring
The North Continent port region is well established and remains a key element in Asia-Europe liner schedules, but if the ports thought the position would return to normality quickly after COVID-19, they were very much mistaken. There are now challenges with system congestion and industrial unrest, with the latter brought on by a growing energy and cost of living crisis. Add in strong competition from DCT Gdansk, collapse of the Russian feeder market and uncertain UK traffic flows then there is certainly, no “Summer of Love” for the container port industry in this port range. So, can the major ports recover, and if so, over what timeframe?
So, while the make-up of this port market is well-established, how have the different facilities in different countries fared over 2021-2022 and what are each expecting moving forward?
The largest container volume ports of Rotterdam, Antwerp and Hamburg are all major hub operations, with consistent and steady trades/liner calls and significant investment by the shipping lines.
Since July 2022 there have been “warning strikes” in German ports by 12,000 dockworkers, which shut down terminals in Bremerhaven, Hamburg and Wilhelmshaven, while a one-day national strike in Belgium impacted operations at Antwerp as unions in the country are seeking better pay and increased investment in the public sector, and
A tough 2022 is underway for the major ports in the region.
Figure 1 provides a summary of the location of the ports in this region.
Figure 2 offers a summary snapshot of total container volumes by country, for facilities included in this competitive port range. It can be seen that between Belgium, Germany and the Netherlands there is a reasonably consistent split, with little difference between the 30 per cent retained by German ports up to 33 per cent by the Netherlands with Belgium sandwiched in between the two on 31 per cent making up the “Big Three” container port volume countries.
Figure 2: Estimated Country Volumes With Share by Major Port in 2021
THE BIG THREE
Figure 2: Estimated Country Volumes – With Share by Major
Source: www.dataand.com
From a port perspective, the perennial subject of poor vessel schedule reliability on the Asia-Europe trades remains a concern and an influencing factor here. Current indications from specialist information supplier, Data&, is that for Q1 this year average delays for late-running vessels was up to 10 days, with little change expected for Q2.
NB CAPT: CAN THESE TWO CHARTS BE PLACED SIDE BY SIDE OR SOMETHING, TO LOOK LIKE ONE CHART AND SAVE SPACE?
THE BIG THREE
NB CAPT: CAN THESE TWO CHARTS BE PLACED SIDE BY SIDE OR SOMETHING, TO LOOK LIKE ONE CHART AND SAVE SPACE?
Figure 2 offers a summary snapshot of total container volumes this competitive port range. It can be seen that between Belgium, there is a reasonably consistent split, with little difference between German ports up to 33 per cent by the Netherlands with Belgium on 31 per cent making up the “Big Three” container port volume
NB – CAPT: CAN THESE TWO CHARTS BE PLACED SIDE BY SIDE CHART AND SAVE SPACE?
Figure 2 offers a summary snapshot of total container this competitive port range. It can be seen that between there is a reasonably consistent split, with little difference German ports up to 33 per cent by the Netherlands –on 31 per cent making up the “Big Three” container
Source: www.dataand.com
Figure 2 offers a summary snapshot of total container volumes by country, for facilities included in this competitive port range. It can be seen that between Belgium, Germany and the Netherlands there is a reasonably consistent split, with little difference between the 30 per cent retained by German ports up to 33 per cent by the Netherlands with Belgium sandwiched in between the two on 31 per cent making up the “Big Three” container port volume countries.
A recent trend in the region is the use of secondary ports –ports traditionally less favoured on liner schedules – such as Zeebrugge, Le Havre, Wilhelmsen etc. which are benefitting from port congestion elsewhere. They are, however, unlikely to maintain this position when current logistics problems are resolved, and “normal” conditions re-emerge. These ports are included in the assessment on subsequent pages.
Source: www.dataand.com
NORTHERN EUROPE: CONTAINER HANDLING
8 Figure 1: Location of Ports PortHamburg-LeContainersHandlingintheHavreRange
Source: www.dataand.com
A tough 2022 is underway for the major ports in the region. For
“WARNING STRIKES” HIT REGION
Any planned strike or industrial unrest is against a backdrop of persistent congestion across the North Continent region which continues to delay ships. One shipping line executive, who did not wish to be named, elaborates: “After the lifting of Shanghai’s two-month lockdown and with the peak season then upon us, the last thing the industry needed were continued bottlenecks across the logistics supply chain. Little relief was expected, and this is exactly what has been occurring.”
While the German port strike situation has recently been resolved, the Europe-wide discontent has spread to the UK, with port strikes in Felixstowe and Liverpool either planned or ongoing (at the time of writing, end of August 2022). This is of relevance to North Continent ports, notably Antwerp and Rotterdam, who serve the UK market via regular, daily, transshipment feeder services. This latter trade route is the subject of detailed analysis in the article, Brexit: UK Trade Impact Unfolds on p22.
THE BIG THREE
Source: www.dataand.com
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Figure 1: Location of Ports Handling Containers in the Hamburg Le Havre Port Range
NB – CAPT: CAN THESE TWO CHARTS BE PLACED SIDE CHART AND SAVE SPACE?
(down 4.4 per cent), although Hamburg did manage to record a 3.3 per cent improvement to just under 3.2 million.
8 Figure inShareVolumesEstimated2:Country–WithbyMajorPort2021
Figure 2: Estimated Country Volumes – With Share by
THE BIG THREE
Source: www.dataand.com
Figure 2: Estimated Country Volumes – With Share by Major Port in 2021
similar industrial action was seen in France.
Germany. At the same time, German ports are competing for domestic cargoes with Rotterdam and Antwerp, with DCT Gdansk also now of note.
Source: www.dataand.com
PERFORMANCE – CHALLENGES - STRATEGIES
TRANSSHIPMENT CRUCIAL
Bremerhaven has seen transshipment reduce from 65 per cent to under 60 per cent, Hamburg has maintained a consistent 40 per cent, while at Wilhelmshaven transshipment accounts for around 75 per cent of annual volume. By comparison, transshipment incidence has remained lower at under 40 per cent in Antwerp and fallen from around 35 per cent to 30 per cent in Rotterdam, leaving German ports more exposed to volatile hubbing activities.
Wilhelmshaven continues to service unscheduled ship calls caused by temporary route changes from other northern European ports. During 2021 nearly 713,000TEU were handled, which compares to 423,000TEU in 2020 and exceeded the best pre-crisis result of almost 656,000TEU in 2018.
DCT Gdansk – Expanding Capacity and Reach
Transshipment is a crucial activity for German ports. Figure 1 compares this activity at ports in Germany in 2012 and 2021 to other facilities in the North Continent region – clearly, German ports are more reliant on transshipment activity than their competitors. This remains the case despite the cessation of container traffic to/from Russia in early 2022 in compliance with sanctions.
The company states that demand from China was the driving factor here. This position has been helped by Cosco Shipping Ports Limited (CSPL) acquiring a 35 per cent stake in HHLA Container Terminal Tollerort (CTT) in late 2021, marking the first investment by a non-German operator into the country’s main container port. CTT now operates as a preferred hub location for the major liner operator Cosco Shipping, although this may change as German government officials are reportedly now reassessing the deal’s approval.
GERMANY: CONTAINER HANDLING
PERFORMANCE CHALLENGES STRATEGIES
8 Comparison IncidenceTransshipmentofatPorts in Hamburg-Le Havre Range, 2012 vs 2021
Bremerhaven has seen transshipment reduce from 65 per cent to under 60 per cent, Hamburg has maintained a consistent 40 per cent, while at Wilhelmshaven transshipment accounts for around 75 per cent of annual volume. By comparison, transshipment incidence has remained lower at under 40 per cent in Antwerp and fallen from around 35 per cent to 30 per cent in Rotterdam, leaving German ports more exposed to volatile hubbing activities.
Yet, challenges in Hamburg remain. The 2M Alliance has recently had to switch calls at Hamburg to Bremerhaven on its AE7/Condor service due to what it describes as “severe congestion issues” at Hamburg Eurogate Terminal. The problem continues at the time of writing, particularly due to recent strikes and although this situation has now been resolved allied congestion issues remain ongoing.
DCT is making significant progress in increasing its rail capabilities by adding additional capacity at the railhead in the terminal to help support growing transit volumes to more distant Polish hinterlands, Central Europe and established Hamburg hinterlands in Poland.
To handle the largest container ships in service, seven new ship-to-shore gantry cranes will be commissioned by DCT Gdansk for its T3 project with these supported by 20 semi-automatic Rail Mounted Gantry (RMG) cranes for the container yard. Construction commenced in September 2022, comprising a 717m quay, with a water depth of 17.5m alongside, and a supporting yard area of 36,500m2
Hamburg is a key port serving German hinterlands and as a hub port for the Baltic region, while Bremen/Bremerhaven’s is an established transshipment hub port, and Wilhelmshaven offers deep water and largescale infrastructure but lacks access to import export hinterlands. Quite a mixed bag.
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 29
To supplement transshipment business, DCT Gdansk, a PSA International terminal, is
Transshipment is a crucial activity for German ports…‘‘
Source: www.datanand.com
strong presence in the transshipment theatre of operations. A J Keyes reviews recent performance
For DCT Gdansk, the 2010 total of 452,000TEU has long since been left behind surpassing 2.09 million TEU in 2021, with 2022 expected to exceed this figure.
Despite a combination of regional and international challenges, Hamburger Hafen und Logistik AG (HHLA) has announced that the total container volume handled at its three Hamburg container terminals was up by 3.1 per cent for the year to date to end of June 2022, compared to the same period in 2021, with 3.17 million TEU handled.
Figure: Comparison of Transshipment Incidence at Ports in Hamburg Le Havre Range, 2012 vs 2021
So, in this highly competitive regional port market, especially for transshipment, how are German ports faring and are there any specific strategies in place that might alter the status quo?
The continued success of DCT Gdansk is undeniable. Now, the fast-growing facility is expanding its container terminal capacity to handle 4.65 million TEU per annum (up from 2.9 million TEU) with the construction of a third deep-water terminal (T3) adjacent to the existing DCT Terminals – T1 and T2.
Source: dataand.com
anticipating future demand growth in conjunction with more distant transit markets such as Czech Republic, Slovakia, Belarus, Ukraine, Austria and Hungary, with these areas better served by rail.
Moving forward, prospects for this port remain positive, according to Bernd Althusmann, Minister of Economic Affairs, Lower Saxony: “Hapag-Lloyd has now gained a stake in Jade Weser Port, and the terminal operator Eurogate has also announced that it will invest around €150 million over the next three years. Our deep-water port has very good growth prospects in the coming years due to the trend towards ever larger container ships,” he says.
German ports have battled through a difficult period but continue to maintain a surprisingly strong presence in the transshipment theatre of operations. A J Keyes reviews recent performance
Hamburg is a key port serving German hinterlands and as a hub port for the Baltic region, while Bremen/Bremerhaven is an established transshipment hub port, and Wilhelmshaven offers deep water and largescale infrastructure but lacks access to import-export hinterlands. Quite a mixed bag.
So, in this highly competitive regional port market, especially for transshipment, how are German ports faring and are there any specific strategies in place that might alter the status quo?
Despite a combination of regional and international challenges, Hamburger Hafen und Logistik AG (HHLA) has announced that the total container volume handled at its three Hamburg container terminals was up by 3.1 per cent for the year as of end of June 2022, compared to the same period in 2021, with 3.17 million TEU handled.
Transshipment is a crucial activity for German ports Figure 1 compares this activity at ports in Germany in 2012 and 2021 to other facilities in the North Continent region clearly, German ports are more reliant on transshipment activity than their competitors. This remains the case despite the cessation of container traffic to/from Russia in early 2021 in compliance with sanctions.
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This is a view endorsed, and expanded upon, along the North Continent coast at Rotterdam. Rob Bagchus, President, Rotterdam Terminal Operators’ Association, explains that the facilities in the port are “too full” before outlining the challenges it brings. “Containers staying longer in the terminals take up capacity, this not only applies to the deepsea terminals, but also to the inland terminals,” he says.
This trend was proven with Rotterdam seeing 5.5 per cent fewer calls in the first half of this year compared to H1 2021, although the ships that did call recorded an average 6.1 per cent rise in overall container exchanges, albeit this is also a feature of larger vessels in service.
HEAVYWEIGHT HURDLES
2022. AJ Keyes charts
Rotterdam has attributed this decline in overall volumes primarily due to a loss of traffic to and from Russia, as well as “the ongoing disruption of container logistics”.
In a statement, the Port Authority explained that container vessels were “no longer able to comply with their sailing schedules” and as a result in order to seek to make-up the missing time were omitting scheduled calls and then discharging/loading more boxes in other ports of call.
The port explained the impact of this trend: “This results in peaks of activity at the terminals, which are already very busy, since containers are left for longer periods because ship arrival times are more unreliable.”
current and forward position
For the first half of 2022, Rotterdam saw a drop of 6.2 per cent on H1 2021, to 7.3 million TEU, while for Antwerp-Bruges a 4.4 per cent decrease in the six months to June 2022 resulted in 6.8 million TEU handled.
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 31
In 2021, Rotterdam handled 15.3 million TEU and Antwerp recorded just over 12.0 million TEU, representing estimated shares of the regional market of 33 per cent and 26 per cent, respectively.
Pressure on both ports to keep pace with ever-challenging market dynamics remains and there has been little relief from congestion through the European summer after the two-month Shanghai lockdown and move into peak season during Q2 2022.
and Antwerp are two North Continent heavyweights, but both are facing challenging market dynamics in
CornelissenDannyCredit:
As Figure 1 shows, both of these ports have successfully increased their shares of the Hamburg - Le Havre port range, with Rotterdam’s up from 30 per cent in 2012 and Antwerp gaining a four per cent share on the 22 per cent figure of 2012.
This is making the remainder of 2022 challenging, despite
Rotterdam the half of the
CHALLENGES REMAIN
Jacques Vandermeiren, CEO of the port of Antwerp-Bruges, was recently quoted as saying that the container segment of its business portfolio “continues to pose significant challenges.”
To some extent, demand for terminals at these two ports is nothing new. Both are mainstays in all liner shipping schedules, which is reflected by the container volumes handled and infrastructure available.
These improvements have been secured largely at the expense of ports in Germany over the period, with Bremerhaven seeing a drop from 15 per cent in 2012 to 11 per cent by the end of 2021 and Hamburg losing three per cent on its 2012 share of 22 per cent.
While the longer-term position of Rotterdam and Antwerp remains strong and demand for access to terminals is not expected to change much, a number of challenges in 2022 remain.
A similar position is occurring at the recently merged port of Antwerp-Bruges, with the port authority outlining that its container terminals are “under constant pressure.” The organisation adds: “With globally disrupted container liner shipping, vessel delays and high volumes of import cargo, the container trade continues to face operational challenges.” The port hopes that the merger of the two complementary facilities will “reconcile economy, people and climate.” Additionally, the development of Saeftinghe dock in Antwerp will add 1400m of quay and 5.1 million TEU of capacity. This is a key part of the port’s plans to eventually add up to 7.2 million TEU of capacity – a plan formulated with the new merged entity in mind. This capacity is being matched at Rotterdam with the new 7m TEU Hutchison Ports-TiL terminal due from 2027 – see p6.
second
8 Strong volume growth for 2022, but Antwerp and Rotterdam seek more stability, with ships arriving on time and less congestion in the logistics supply chain
ROTTERDAM – ANTWERP-BRUGES: CONTAINER HANDLING
MATCHING MARKET DYNAMICS
Lennart Verstappen, spokesperson for the Port of AntwerpBruges, has stated that in the current disrupted container shipping environment, it is no longer possible to accurately make the same predictions regarding terminal operations.
Dean Davison, Head of Maritime Advisory, Infrata, elaborates: “It is reasonable to expect greater volumes to have commenced flowing after the China lockdowns with these adding to the usual peak season demand. With inventory levels already high anyway, where shippers had built up stock, then late-arriving vessels, congestion to access berths, worker strikes and inland logistics challenges, will all serve to further disrupt cargo flows to end-users.”
grow and densify our capacity to help Le Havre become an even more significant access point for the French cargo market and beyond. In order to realise Le Havre’s full potential as a gateway to Europe we are counting on the French government’s support for the development of the related intermodal rail infrastructure that will further enhance the link between our container terminals and European supply chains.”
A major concern is that it brings more stock to already high inventory levels.
Liner schedule reliability is a thorny issue. Specialist information provider, Data&, confirms that in 2019 before the COVID-19 pandemic transit time was, on average, in the AsiaEurope trades between 47-49 days, but now the figure is considerably higher, sometimes in excess of 120 days. This
8 Figure PortsatContainerofDevelopment1:ShareofTotalVolumesNorthContinentSince2012 ROTTERDAM – ANTWERP-BRUGES: CONTAINER HANDLING 32 | OCTOBER 2022 For the latest news and analysis go to www.portstrategy.com Havre port range, with Rotterdam’s up from 30 per cent in 2012 and Antwerp gaining a four per cent
This expansion project is aligned with MSC’s own fleet expansion project and comes at a time when congestion is occurring in the wider region, The question remains, however, will Le Havre have the supporting infrastructure and regulatory environment to achieve and sustain a front-rank European port and especially with a return to normal operating conditions?
TEU per annum. It comprises 4600ft of quay across four berths and claims an ability to serve ships of 20,000TEU capacity. By comparison, the smaller TPO facility can receive two ships simultaneously in the Ultra Large Container Vessel (ULCV) class.
Figure 1: Development of Share of Total Container Volumes at North Continent Ports Since 2012
Stephane Raison, CEO and Chair of the Management Board, HAROPA (which represents the merger of the ports of Le Havre, Rouen and Paris), highlights the importance of the investment: “HAROPA ports is entering a new dimension in North Europe as the first port for imports for France and Europe, and the last port for exports at the service of shipper and shipowner customers.”
Ammar Kanaan, CEO, TIL, notes: “By implementing this initiative, we will be able to
share on the 22 per cent figure of 2012. These improvements have been secured largely at the expense of ports in Germany over the period, with Bremerhaven seeing a drop from 15 per cent in 2012 to 11 per cent by the end of 2021 and Hamburg losing three per cent on its 2012 share of 22 per cent.
MSC is supporting a substantial new investment at the Port of Le Havre, France, to expand the container handling capabilities at two of the port’s terminals over the next six years.
SIGNIFICANT ACCESS POINT
www.dataand.comSource:
Terminal Investment Limited (TIL), the terminal investment arm of MSC, has confirmed that it has become the sole owner of both the larger TNMSC facility, which began as a joint venture between MSC and Terminaux de Normandie over 10 years ago, and the adjacent Terminal Porte Océane (TPO) which was owned with Ocean Terminal.
These challenges, or a selection of them, look set to continue for the remainder of 2022, regardless. From the perspective of Antwerp and Rotterdam, the respective port terminals will see strong volume growth and, potentially, higher revenues from storage, but the smoother flow of cargo from ships arriving on time and on shorter transit times would certainly be regarded as a preferable alternative.
These ownership changes facilitate MSC undertaking a US$700 million investment to expand and modernise terminal operations.
the rapidly deteriorating economic position across Europe due to cost-of-living and energy issues, along with the negative impact of Russian attacks on Ukraine. For the time being at least, it appears congestion is set to continue.
clearly makes planning a supply chain or managing inventory considerably more difficult, if not near impossible.
He lists a growing number of (clearly relevant) factors: “Congestion and disrupted shipping have been going on for months, starting with the pandemic, then intensified by the mv Ever Given Suez Canal incident, geopolitical disruptions such as the war in Ukraine, lockdowns in China, high peaks in import volumes, and delayed ships.”
The 175-acre TNMSC terminal has been MSC’s primary gateway option in Le Havre and currently offers capacity of 1.5 million
MSC Going Large in Le Havre
KAZAKHSTAN LOOKS WEST
In addition, using Russia’s rail network implies growing technical and legal risks for the Central Asian nation in view of the sanctions imposed on Moscow by the EU.
“This is not in compliance with the spirit of the Common Economic Space with Russia and Belarus [launched on 1 January 2012]. This is to be able to take advantage of these countries’ transit potential, to get access to the sea,” complains Nikolay Radostovets.
Kazakhstan can export up to 30 million tonnes of coal and 10 million tonnes of grain and flour each year, according to its Prime Minister Alikhan Smailov. Therefore, expanding its westbound exports would be a logical and reasonable step in the current global environment of soaring demand for and slumping supply of commodities.
8 The Aktau JSC “Ak Biday Grain Terminal has the capacity to receive up to three million tons of grain a day and ship up to four million tons
Raudtee, Estonia’s national railway operator, voiced its willingness to offer a preferential rate (equal to that in neighbouring Latvia) to Kazakh coal exporters, in order to attract their cargo to the Baltic country’s dedicated marine terminals at Muuga and Sillamae.
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 33
Also looking to capitalise on the opportunity, Eesti
Finally, the smallest volume, 90,000 tonnes (as opposed to 8200 tonnes in 2021) was hauled to Germany by trucks. Being the most expensive option, this is only taken up on a limited basis.The usage of the Black Sea harbours was impossible during the period due to the Russian navy impeding international commercial navigation in the region. Furthermore, many Russian coal producers hold stakes in their home country’s port terminals and thus can, according to Nikolay Radostovets, Head of Kazakhstan’s Association of Mining and Metallurgical Enterprises, influence the handling arrangements to the detriment of the Kazakhstan’s exporters.
The second largest amount, 635,000 tonnes (versus 540,000 tonnes in the course of 2021) was transported solely by rail through Russia, Belarus and Poland. Seemingly quite simple and straightforward, however, this method has a big drawback, namely the necessity to switch from the Russian (1520mm) to the European (1435mm) track gauge at the Belarusian-Polish border stations.
Semi-landlocked Kazakhstan has traditionally delivered its commodities to Europe via Russia. Thus, during the first five months of 2022, the bulk of the country’s westbound coal exports, 782.000 tonnes (as compared to 240,000 tonnes during the 12 months of 2021), were first railed through the Russian territory to the eastern shore of the Baltic Sea and then shipped to the EU.
POTENTIAL AND PROBLEMS
However, Moscow’s continuous attempts to dictate terms to Kazakhstan are making the transit of cargoes via its territory increasingly problematic. For example, the Kremlin has been hampering Kazakhstan’s coal exports to Ukraine and restricting its grain supplies to global markets.
Kazakhstan, the Central Asian largest country, has doubled monthly exports of its steam coal to the EU, from 200,000 tonnes per month before the Kremlin’s invasion of Ukraine, in late February this year, up to 400,000 tonnes after it, as per Eurostat data. In the first five months of this year, the Asian nation supplied more than 1.6 million tonnes of the fossil fuel to the EU, almost twice the entire 2021 volume.”
Kazakhstan has already been intensively developing its Caspian ports of Aktau and Kuryk. Aktau has seen berth redevelopment along a 550m quay with capacity provided for the handling of bulk goods including grain and general cargoes. Kuryk has so far pitched itself more at multimodal, ferry and liquids traffic but does have large land areas available for new developments.
This situation has pushed Kazakhstan into closer cooperation with the Baltic States’ harbours, which are ready to handle coal, grain and other Central Asian cargoes in growing volumes.
Thus, last autumn, Kazakhstan resumed its coal deliveries to the Latvian ports of Riga, Ventspils and Liepaja after a long pause, during which it used Russian Baltic harbours.
CENTRAL ASIA: COAL EXPORTS
Kazakhstan is looking to consolidate its niche position as an exporter of steam coal to the EU. As Oleksandr Gavrylyuk reports, establishing a secure route to market is key to this
Under the circumstances, Kazakhstan, a Caspian Sea littoral country, has been compelled to look for alternatives. The main option is to focus on developing its export traffic through the Trans-Caspian International Transport Route (TITR). Also known as the Middle Corridor, TITR travels through China, Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, and further to Turkey and Europe, in such a way totally bypassing Russia.
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driven safety goes a long way towards answering that challenge. Terminal operations have begun to do just that. For instance, while using simulators to broaden their recruitment reach, they are also improving processes for evaluation and selection of the best suited operators for advancing their skills, or when introducing new equipment and processes.
Successful operator hiring, therefore, often depends on matching technology to expectations at all stages of the process. In fact, port terminals are already deploying advanced tools, including simulation, augmented reality, and other solutions that are transforming the nature of recruitment and training.
Demonstrating consistent commitment to technology-
The key to resolving conflicting perceptions lies in the ability for training technology to gather relevant, accurate data, and display it transparently. There are new skill sets for incoming operators, and transitional learning is needed for existing, experienced operators, as port terminals transition to remote operations.
The next generation of training solutions will essentially be purpose-built to reward learning, as well as to “show the money,” transparently displaying insights to trainees, relating to the tangible impact of skills acquisition on productivity, safety, and possibly even earnings potential.
Hi-tech solution providers have taken note, and companies such as CM Labs Simulations have developed simulators that integrate with original equipment manufacturer control systems. The company’s Remote Operating Station training solution is designed for STS, RMG, and RTG operations and simulates all crane functions, camera displays, and automated safety functions, as well as the terminal’s container management system.
Anyone born since the turn of this century has grown up immersed in technology that works seamlessly to make information available instantly. In addition, today’s candidates are not likely to be actively applying for work. Instead, they expect to be persuaded — essentially marketed to — before they commit to so much as an interview.
MATCHING TECH’ TO TARGETS
THE ROAD AHEAD
Despite, or maybe as a result of, the growing use of simulation for a variety of port sector applications—from simulation of intermodal hubs, energy consumption, and traffic, the topic has become a hot one. It can be challenging to incorporate new technology into established business practices: recent research published in the Journal of Business Logistics suggests that “incremental innovative solutions produce a polarised port labour market.”
It used to be that the only way of experiencing the highs of equipment operation was from the actual machine cab.
Traditional processes for evaluation are limited, with candidate qualification rates ranging from 10 per cent on complex cranes to 40 per cent on equipment such as straddle carriers. Terminal managers using realistic simulation tools report up to a 99 per cent success rate for candidates passing initial evaluations. Not only is that more efficient, it is an encouraging stroke of confidence for new recruits that you want to keep engaged.
Terminal operations managers, on the other hand, will be able to leverage the insights produced during the same learning stream, to make accurate predictions about machine maintenance and longevity, and accelerate other decisions that directly impact the bottom line.
HI-TECH AND EMPLOYEE SELECTION
8 allvisualisationandaugmentedSimulation,reality,advanceddataaregoingtobekey in the next five to ten years, and as A.I. tools come into their own, the data generated by new training solutions will be as valuable as the skills they develop
As a result, port terminals are fighting the same war for talent as everyone else, but with higher stakes — and the sooner they can solve the recruitment challenge, the better their business outlook will be.
The hi-tech’ pursuit of the next generation of equipment operators offers distinct advantages including, going forward, data generation complementary to wider goals*
HELP WITH BENEFITS
*By David Clark
CM Labs Simulations is the developer of Vortex® training simulators for the port industry. CM Labs clients include the Port of Tilbury, Flinders Adelaide Container Terminal, Indonesian Port Corporation, Napier Port, Ports of Auckland, multiple DP World sites, the Pacific Maritime Association (USA) and over 100 other world-class companies, OEMs, equipment operators, and trades training organisations.
WINNING PROPOSITION
Skilled workforces across all sectors are being hit hard by labour shortages: data from the 38 member countries of the Organisation for Economic Cooperation and Development (OECD) suggests that there were 14 million more people inactive in 2021 than in 2019.
However, safety considerations and limited equipment availability have driven the development of simulation and visualisation tools that provide increasingly life-like operator experiences, ranging from the ability to conduct detailed inspections of operating environments, to the virtual sensation of lifting containers.
These tools are highly portable — even allowing for remote use in some cases — and provide safe hands-on environments that are conducive to effective candidate screening. Still, attracting candidates is only half the battle. The real challenge is keeping them, given their famously high mobility.
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 35
The port industry has not been spared. The consequences range from delays in cargo processing to a more volatile climate in labour relations. The impact is further compounded by complexities that have long germinated around sector volatility and pressures on throughput levels.
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Ricardo Sanchez, the senior Economic Affairs director at UN body ECLAC (Economic Commission for Latin American and Caribbean), adds: “From a political point of view Peru has not been so stable in recent years but Ecuador is small and also unstable, Chile is important for shipping but so far away from everywhere, and Pacific Colombia, which effectively means Buenaventura is a very problematic port and region so this means Chancay/Callao will be the logical hubs for the future.”
“It also doesn’t help,” he elaborates, “that much-needed investments in port infrastructure in Chile, to keep it competitive, are being delayed for a variety of reasons: mostly environmental as we have strong environmental lobby groups.”
A veteran stalwart of Chilean shipping, Mackenzie, tells Port Strategy that the lack of infrastructure investment in Chile in recent years could accelerate the process of the development of the deep-water port of Chancay. Further, with a 16m depth, the port could become the hub port for WCSA with carriers such as Cosco starting to tranship from Peru to Chile.
PERU: HUB PORT DEVELOPMENT
“We have not seen the hoped-for investment in San Antonio and Valparaiso that had been promised so this could speed up Chancay’s future role as hub for the region,” he says. He points to the aborted tender process at Valparaiso, currently Chile’s second-largest port for containers, which has led to a short-term, stop-gap, three-year contract for the Agunsa stevedoring group. Similarly, MacKenzie highlights delayed port infrastructure improvements in San Antonio, Chile’s leading port with 1.84 million TEU handled last year. These, he notes, are being held up owing to a “Wetlands and Birds environmental issue”. Two other sources additionally offered the view that Chilean port operators themselves were dragging their heels somewhat, for fear of Chancay and Callao becoming the main relay port for all WCSA, and that spending too much now on improvements, and capital dredging, might be a waste if the big ships don’t come anyway.
8 Chancay has the potential to trigger new approaches by liner operators to serving WCSA
Peruvian and Chinese politicians flag up the idea that Chancay will complement the port of Callao – where DP World and APM Terminals operate – and not take too much cargo away from Peru’s traditional gateway, excepting, of course, services operated by Cosco. But the fact is that once the two ports are fully functioning with investment plans completed, the two combined ports could dissuade carriers from bothering to head south to Chile with their larger vessels.
The new hub port of Chancay could open the door to substantial changes on how liner operators serve WCSA. Rob Ward unveils the thinking
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 37
At present Peru’s box trade with China lags well behind Chile, with the latter unloading 643,958TEU in 2021 and loading 331,047TEU for China, and Peru shipping out 133,239TEU and unloading 397,046TEU but that could all change if neighbouring countries start transhipping from Peru.
CHILE CATALYSTS
COMPLEMENTARY CLAIM
MacKenzie suggests: “Once Chancay is up and running carriers can utilise their 18,000TEU vessels and save four to six days sailing time down to Chile, so the cost-savings for shipping lines by turning around in Peru will start building and be difficult to ignore.”
With one million TEU of extra capacity due to come on stream in central Peru over the next 18 months to two years, shippers and logistics providers are now seriously considering their options.
Indeed, the fall-out from the opening of the Chancay mega-port will not only affect logistics activities and liner calls in Callao – Peru’s leading port with around 2.5 million TEU handled in 2021 – and Peru in a wider sense, but also the rest of West Coast South America (WCSA), and especially to the south in Chile as well as near neighbours Ecuador and Colombia, and even land-locked Bolivia.
HUB TO FUEL SERVICE CHANGES?
“Callao has suffered from congestion for several years and although progress is being made to improve affairs there, Chancay will provide a much better and more efficient alternative for Peruvian shippers and could also, in the future, become the major hub port for the entire West Coast of South America,” says Simon MacKenzie, President of the Chilean Shipagents Association. “This,” he explains, “is a regular conversation among the shipping community in Chile who fear it might see a curtailment in direct services to our key ports.
Peru is one of the few countries in the world – regional giant Brazil is another – which actually has a trade surplus with Beijing. Key exports include copper, which initially won’t be exiting via Chancay, fish, fertilisers and various fruit and vegetables (including avocados, grapes and blueberries).
“Peru’s ‘most favoured partner in South America’ status with China will certainly pay off for both sides once Chancay is completed and Cosco start expanding their services,” underlines one optimistic shipping agent based in Callao.
Congestion in the key port of Callao, just 55 km to the south, is one of the driving forces of the Chancay project which at full build-out will comprise 11 container berths, to serve up to Triple E size ships, and four more berths for other cargo. Also identified as a main development catalyst is the desire of the Chinese government to crack on with its Silk Road initiative in Latin America, and especially in Peru, which is one of Beijing’s principal trade partners in the region.
After a tortuous tender process, China Communications Construction (CCCC) company and China Railway Group won the right to put Chinese state-owned conglomerates, along with Volcan (a Peruvian mining group, owned by Swiss trading group Glencore, with a 40 per cent share, after selling the rest to the Chinese for $225million) at the front of the race to develop South American transport infrastructure. Together, the bid winners appointed China Harbour Engineering Company – CHEC (which also owns TCP in Paranagua, Brazil) to build the huge 141-ha complex.
Although Cosco operates in 35 ports worldwide, Chancay will be the state-owned company’s first foray into South America, and one shipping agent believes the first service it will switch away from Callao will be the WCSA to Far East service, including CMA CGM, Evergreen, OOCL and PIL; possibly as early as the winter months of 2023.
“We urgently need the capacity at Chancay, which will have 16m depth and be able to handle the next generation of box-ships coming to WCSA such as the Triple-E type ships, but I fear that our very messy politics might yet delay matters,” states one Lima-based shipping agent who spoke under
Various eye-witnesses report that several of the Chancay infrastructure projects have been completed and others are progressing well – including an 1.8km tunnel to bypass the town of Chancay - and it seems now that the only factor that might slow down an opening up for business, by early 2024 or even late 2023 according to some parties, is Peru’s “very complicated politics”.
condition of anonymity. He was, of course, referring to the fact that Peru’s leftist president, Pedro Castillo, is being investigated for corruption having survived two impeachment calls. He has already gone through dozens of ministers in his short, one year, tenure so far, and he himself is the fifth president in five years!
Rob Ward runs the rule over progress with the mammoth China-backed Chancay port project and the competitive implications
So, why China and why now?
38 | OCTOBER 2022 For the latest news and analysis go to www.portstrategy.com
CHINA INC.
Phase one alone of Chancay project will add one million TEU and six million tons of general and bulk annual cargo capacity to the Peruvian port network.
CAPACITY AND COMPLEXITY
A small semi-portable village has been set up outside the town of Chancay to house the thousands of workers who are already breaking up rock and re-arranging the landscape for new roads to be built, including a 1.8km “ultra-high” tunnel that is being gouged out of the Andes foothills. It will be used exclusively for trucks and other port traffic.
8 Artist’s impression of the new Chancay deepwater port – set to open for business soon
PERU: PORT DEVELOPMENT
CHANCAY TAKES SHAPE
Since Peru and China signed a Free Trade Agreement back in 2010, overall trade has doubled and it is nine times more than 2005 when China first started focusing on increasing ties with Peru. In 2014 China overtook the US as Peru’s top trading partner, both for imports and exports.
Peru’s ‘most favoured partner in South America’ status with China will certainly pay off for both sides once Chancay is completed and Cosco start expanding their services ‘‘
Other voices – including IntelligenceOnline.com (IO), a Paris-based research company - believe that the opposite is true: that the political turmoil is allowing China to use its close ties with the Peruvian military, which hasn’t seen such changes in personnel, to keep the Chancay project rolling forward, albeit a little behind schedule. IO points to the fact Gonzalo Rios and Carlos Tejada, former Peruvian Navy commanders, and Jason Guillen, ex head of logistics for the Peruvian Navy, are working for Cosco on the Chancay project, and smoothing the path regarding environmental and operating licenses.
Well, China has been steadily building its relationship with Latin American countries and none more so than Peru. Trade between the two countries totalled close to US$40 billion in 2021, of which 66 per cent was Peruvian exports to China.
After years of huffing and puffing, and competitors asking, “Will they or won’t they?”, the Chinese state-owned conglomerate Cosco Shipping Holdings is finally building –almost from scratch – a US$3billion deep-water port which aims to become THE hub port for all West Coast South America.
Fruits and vegetables such as asparagus, artichokes, avocados, grapes, peppers, quinoa, organic coffee and blueberries have all thrived with the improved irrigation into northern Peru and this has been a major boon for the port of Paita.Paita
TPE-Paita is a consortium made up of 50 per cent Cosmos Agencia Maritima (part of DP World) and 50 per cent Tertir –Terminais de Portugal SA (owned by Yilport Holding, the Turkey-based terminal operator). Between them they have a gentleman’s agreement that one company has the overall control for one year and then the other company the next.
8 February this year saw TPE-Paita receive two vessels from Ecuador,Guayaquil,marking the first dual vessel arrival on its newly extended quay (from 300m to 360m)
And Hapag-Lloyd has certainly shown its full commitment to the north Peruvian port, launching a new Mediterranean to WCSA service (via Caribbean and Central America), called the MSW, in May of this year. This calls only at Posorja and Paita in Peru and adds only Buenaventura (Colombia) in terms of WCSA.
TPE currently deploys two Super Post Panamax Ship to Shore Gantry cranes (65 mt capacity each), two Mobile Harbour Cranes, four RTGs, and three Reach Stackers. In view of its concentration on frozen and chilled exports, the Paita operator also has 1900 reefer plugs.
“We operate a boutique, very fast service to north Europe, last call Paita, then Dover followed by Vlissingen, mostly fruit and this is a growing business for sure,” he told Port Strategy.
Until a few decades ago the main claims to fame for the north Peruvian town of Paita were that it was the birthplace of both John Wayne’s wife, Pilar, and Manuela Saenz, the lover of Peruvian national hero Simon Bolivar.
In the future, Paita is lined up to benefit from a Bi-Oceanic corridor that will connect Brazil and Bolivia with northern Peru (probably via the port of Ilo). This will benefit Paita too because extra vessels will be calling in the region to tranship cargoes to Asia and West Coast North America (WCNA) where markets such as Los Angeles and San Francisco are keen on Peruvian fruit.
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 39
handled 332,554TEU (all containers) in 2021, slightly down from 335,000TEU in 2020, but up from 2019 (the last ‘normal’ year) when it handled 303,278TEU, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC acronym in English, or CEPAL in Spanish).
Among the carriers currently calling at Paita for its fruit cargoes, apart from Seatrade, are: Hapag Lloyd, Maersk, MSC, Sealand, CMA CGM, Yang Ming, ONE, Cosco, Hamburg Sud, BBC Chartering and Delmonte.
During the 30-year concession, TPE has committed to invest a total of US$432 million to modernise its infrastructure. Part of the concession agreement stipulates that TPE should
The northern Peruvian port of Paita is making its mark in the agri-products export business and there are expectations of even better things to come. Rob Ward reports
Oscar Galvez is a director with the B&M shipping agency which represents Seatrade, a Dutch company that deploys reefer vessels with space for 5000 pallets (equivalent to 250FEU) in the hold and another 150 containers (FEU) on deck, and he is a big fan of Paita.
PERU: PAITA PORT
PAITA’S AGRI-PRODUCT PLAY
But now Paita is developing a more long-lasting claim to fame; it is rapidly becoming one of the main South American export ports for fruit and veg.
pay for an extra US$130m of improvements once it passed the 300,000 TEU per annum barrier which it did in 2020: this includes dredging down to 14m and more reefer plugs.
Hamburg Sud (part of Maersk Group) also has direct connections to north Europe with Chile as well as Peru.
Of those 161,060TEU were (full) exports in 2021, up from 141,000TEU in 2020 and on the full imports front, it was 16,887TEU in 2021, down from 23,951TEU the previous year. Over the past 10 years volumes have grown almost threefold.
Terminales Portuarios Euroandinos – Paita SA (or TPE-Paita) runs the container terminal in Paita, under a 30-year concession that commenced in 2009.
Ever since a number of rivers were diverted to run away from the Amazon Basin towards Peru’s Pacific coast, agricultural exports out of the South American country have been rising.
TPE-PAITA INVESTMENT
“This current season for blueberries there has been a Tsunami of the fruit which starts exporting in September.
“And yet 10 years ago most of Northern Peru was desert, but then a reservoir and dam were built to re-direct fresh water to the region and now it is abundant with fruit for export.”
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APMT says it will invest up to Reais2.6billion (US$503.04 million) in the new terminal and will create 338 direct and 1300 indirect jobs in the process. It will open by the end of 2025, with a capacity for 400,000 TEU per annum, delivering a 55 per cent capacity uplift to the port as a whole.
BRAZIL: TERMINAL DEVELOPMENT
Feedback from those close to APMT suggests that operating a terminal out of Suape will allow the multinational operator to develop a regional hub and give some options for liner services – both from Europe and, possibly, the Far East – to turn some vessels in Suape and relay cargo via smaller feeder ships. Its sister company Maersk Line owns the rapidly growing Brazilian flag operator, Alianca Navegacao e Logistica, which has regular services to the south of Brazil and the River Plate.
Writing about Brazilian ports and shipping means it’s easy to be accustomed to big surprises and shock news, but the announcement in late July that APM Terminals (APMT) will be taking over 30 per cent of the land currently occupied by Estaleiro Atlantico Sul (EAS), the failed shipyard in Suape, did come as a massive surprise to many Brazilian port and shipping aficionados.
EAS has been going through a painful “restructuring” process brought on by out-of-control corruption highlighted by the Lava Jato (Car Wash) political imbroglio that led to the demise of Sergio Machado, the president of Transpetro (the logistics and shipping arm of Petrobras, the state-controlled oil company) and various politicians in the PT left-wing government of Lula and Dilma Rousseff.
8 APMT has secured access to 30 per cent of land of the failed shipyard, EAS, in Suape, but a legal challenge is underway
Against this background the liquidators, along with the Suape Industrial Port Complex (port authority for the port), adopted a dual strategy of selling off part of EAS (UPI-B) and creating competition for Tecon Suape, which is majority owned by International Container Services Inc (ICTSI) of the Philippines.
ICTSI also bid for the EAS site but its offer, of Reais450million, was just Reais5m less than that offered by APMT and, ICTSI says, it was not allowed to bid any higher and has since launched an appeal.
TIGHT-LIPPED
For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 41
PAINFUL RESTRUCTURING
for EAS’s judicial recovery process. APM Terminals sees great potential in the region.”
EAS opened in 2009 and was originally built for the construction of 48 Suezmax oil tankers for Petrobras, but only two were ever built and the first one, the 157,055 dwt Joao Candido, that was launched had “weak welding problems” so was not certified until a year later. Only four tankers were ever built by EAS and by 2019 administrators were called in to “restructure” operations and find “other users” for the area known as Isolated Production Unit B (UPI-B).
News that APM Terminals is taking over 30 per cent of a failed shipyard in Suape came as a big surprise. Rob Ward looks at the implications
….developing business out of Suape and Pernambuco in the northeast of Brazil needs to be done very carefully to not disturb Pecem profitability… ‘‘
LEVEL PLAYING FIELD ISSUE
“It is the extortionate port fees paid to the federal and state governments that ratchet up the overall costs, and as a TUP [Private port terminal], the APMT terminal on the EAS site will not have to pay these fees,” he said. Further, that this, “To me seems to be grossly unfair, and I think Tecon Suape has good reason to challenge this arrangement with the justices. Perhaps a re-assessment of the existing port fees for Tecon would be a solution.”
The opening of the new APMT operated terminal is expected to herald a more competitive environment and in particular exert downward pressure on terminal pricing. Todate the ‘only game in town’ has been Tecon Suape, which serves the city of Recife (40km away and a metropolitan population of four million) and the state of Pernambuco, an important one for fruit exports (especially melons, mangoes, grapes and lemons).
“APM Terminals has made the higher offer to acquire part of the area of EAS in the Port of Suape, with the intention of establishing and operating a container terminal.
“APM Terminals made an offer to EAS in the acquisition of an Isolated Productive Unit (“UPI-B Cais Sul”), which comprises part of the area of EAS shipyard, including its southern quay wall. APM Terminals has been declared the bid winner by the bankruptcy estate and is currently waiting for such decision to be confirmed by the judge responsible
APMT TAKES A SLICE OF EAS
Another port consultant, based in Recife, commenting on accusations of current robust pricing in Suape, told Port Strategy that it “was unfair to blame high box costs purely on Tecon Suape”.
Sources close to APMT are staying tight-lipped, but the company did issue the following statement:
However, one port consultant, who did not wish to be named, proffers the view that developing business out of Suape and Pernambuco in the northeast of Brazil “needs to be done very carefully, so as not to disturb the company’s efficient and profitable business out of Pecem,” located on the Brazilian North coast.
“The condition of the crane structure, handling capacity, and the cost comparison of replacing the old cranes with new ones are the key criteria to determine if the crane upgrade/refurbishment is worth it,” observes Collard. “In today’s market, the cost of materials and shipping has soared to new levels, making crane modification more attractive to terminals and pushing out investment in new equipment to when inflationary pressures may have subsided.”
GAINING A LIFE EXTENSION
possibilitiesSource:
Experience in the arena of STS crane upgrade/refurbishment has come on leaps and bounds. John Bensalhia charts the progress and expanding range of
The importance of a crane refurbishment/upgrade for STS units and for cranes generally has recently been acknowledged by crane supplier Liebherr which has launched a major new initiative in this sector of activity.
As an example of this, O’Donoghue notes: “With our patented STS lift height extension system, we can increase the lift height of a crane in 4-6 weeks. Our system has minimal operational impact and does not require larger auxiliary equipment. We have a quality management system in place,” he elaborates, “to ensure components meet the design requirements and that there are no technical issues when it comes to installation.
Paceco’s Troy Collard says that there are many procedures that can be followed to achieve smooth refurbishment:
Extending the life of a ship-to-shore (STS) container crane through upgrade and/or refurbishment is a development option open to ports and terminals that is progressively being taken. It is both a path to “getting even more out of what you have got” and frequently the most cost-efficient option. This applies across the board with STS cranes remaining in their original workplace or being redeployed or sold-on for use elsewhere.
For a port to qualify for an STS crane refurbishment project, Martinez underlines that the business case must make sense. Effective payback is a pre-requisite. Also, considering the proposed upgrade/refurbishment in the context of the long-term marine plans of vessel operators with special reference to phased increases in vessel size including the impact of vessel cascading.
By lifting or “giraffing” an STS or extending its boom, Martinez explains that the crane’s worth immediately
“Finally, we encourage customers to think about “the whole yard”,” comments Martinez. “If they are planning yard automation in the future, then it would make sense to look at expanding the scope of the STS refurbishment to also accommodate our “Path to Automation” approach.
OPTIONS AND EXPERIENCE
STS CRANE REFURBISHMENT/UPGRADE 42 | OCTOBER 2022 For the latest news and analysis go to www.portstrategy.com
Konecranes
“Once the project moves into the manufacturing stage, we ensure as many components are built in-house as possible and avoid delivering separate components to the customer’s site. This limits the impact of the project on our customers’ day-to-day operations.”
8 Rigorous planning is a pre-requisite to making crane modifications –giraffing, boom
FOLLOWING PROCEDURES
“Ensure the equipment, components, and labour are ready before commencing the work. Constant communication with
Konecranes–automationprovisionextensions,foretcemphasises
“Liebherr Transform is a new crane upgrade, modification and overhaul service for Liebherr Maritme Cranes,” explains Trevor O’Donoghue, Marketing Manager, Liebherr Container Cranes Ltd. “It is a range of ingenious upgrades, clever retrofits, machine overhauls and service modifications to breathe new life into customers’ existing machines. Our customers,” he elaborates, “already own some of the best container handling equipment and Liebherr Transform, through a series of hardware and software upgrades, using the latest available technologies, will unleash the full potential of the cranes. A team of dedicated engineers and technicians are on hand to custom design and implement the solutions.”
Before crane upgrade takes place, Konecranes undertakes a rigorous inspection of the complete structure. “Our experts take note of weak points of wear and tear, which can then be reinforced during modernisation,” says Martinez. “This already adds one to two million moves to the lifetime of the crane,” he suggests.
the terminal is very important – for instance, about their vessel schedule and traffic that might affect the work progress. It is also important to co-ordinate with the owner and the subcontractors well. Plus, consider night shifts, and provide a buffer and critical path when planning the schedule.”
“Continuous communication with all stakeholders ensures the smooth running of the project and a clear understanding of roles and Konecranesresponsibilities.”takesaturn-key approach across all modernisations. Jose Antonio Martinez, Product Manager, explains: “We conduct a rigorous inspection of the crane and quay, followed by stability calculations, and then we produce a functioning 3D model of the entire set-up.
For Liebherr’s refurbishment contracts a project management structure is in place to ensure site work is planned and resourced correctly, with detailed method statements available in advance. Liebherr’s OEM design expert knowledge aims to ensure the upgrade and/or refurbishment project can be implemented as efficiently as possible on site.
There are three main catalysts driving crane upgrades/ refurbishments.
Overall, there is a fairly wide range of options customers can select from when pursuing crane upgrade or refurbishment.
LiebherrSource:
Responding to larger vessel deployments also continues to be important, although there has been considerable work already undertaken in this area. As O’Donoghue notes: “With ships becoming larger the ability to increase the size of serving STS cranes - height/outreach etc – is critical for ports to maintain their competitive advantages.”
Liebherr’s recent projects include increasing the lift height and outreach of an STS crane at Patrick Terminals, Brisbane facility. It has also extended the outreach of Liebherr STS cranes in the ports of Southampton and Helsinki. At Luka Koper, Slovenia, Liebherr will fit additional checkers cabins, platforms and lift landings to its cranes.
THREE KEY CATALYSTS
O’Donoghue says that these depend on the values/ benefits the customer wants from the crane post upgrade. Typical options include: reduction in energy consumption; ability to handle larger vessels, increased automation features or the adoption of modern supportive HMI/CMS systems. “With Liebherr Transform, our customers benefit from making their cranes faster, smarter, stronger, greener and ultimately better,” he says.
BelgiumZPMC/PSASource:
Twenty one cranes at Panama’s Manzanillo International Terminal will be augmented with ABB’s Optical Character Recognition Systems to enable automated container information handling. Vital container data can reach a Terminal Operating System in close to real time. The system includes software that can identify container numbers, with a camera system detecting door direction, bolt seals, and hazardous material labels.
As cranes become more technically complex, the modernisation and upgrading of computer components will become more common... ‘‘
Toscana has installed Orbita technology in six of its cranes as a means of using the latest AI technology to enhance operational processes. Orbita’s CraneCCR system was installed as a means of controlling the crane and to constantly monitor the spreader and identify the crane’s various movements. CraneCCR has been specially adapted to optimise the conditions of image captures, offering detailed visuals of important aspects of container handling, including ID numbers and ISO codes.
Paceco has undertaken some notable STS crane refurbishments. These include work on three MGM Cranes at the Matson Terminal, Sand Island, Hawaii. The work included converting the existing 2.4 kV bus bar system to a new 11.5 kV cable reel system to power the cranes; replacing all 2.4 kV electrical components with 11.5 kV elements and integrating a new VFD and cable reel system into the existing ABB control system.
increases, as it will be able to service higher and/or wider vessels, adding value to the terminal’s operations and facilitating a strong return on investment (ROI).
The sustainable use of resources is a big factor. “It is a very attractive option for terminals looking to do more with what they have and make a positive impact on both their carbon footprint and their bottom line,” says Martinez. Similarly, O’Donoghue notes: “We see a big drive towards greener cranes and the ability to reduce port carbon emissions.
At the ITS Terminal Long Beach, USA, Paceco undertook ‘giraffing’ and boom extension work on three MES-M cranes. Height was raised by 25 ft 4in and crane outreach increased by 2ft 6 inches with this accomplished by solutions like the installation of a jacking tower with a jacking system applied to the crane and new leg extensions fitted.
8 With its patented STS lift
4-6heightcanLiebherrextensionheightsystem,statesitincreasetheliftofacraneinweeks STS CRANE REFURBISHMENT/UPGRADE For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 43
“As cranes become more technically complex, the modernisation and upgrading of computer components will become more common. This will become a built-in replacement cycle that ensures the crane, while retaining its existing steel structures and mechanical components, remains as connected and “smart” as any rolling off the factory floor,” says“TheMartinez.world has also become digital with data-based decisions becoming the norm,” concludes O’Donoghue. “Retrofitting a modern PLC, HMI, or CMS to older cranes allows ports to use data to make informed, operational decisions.”
8 Four cranes at PSA Belgium have been given extra height by ZPMC – a common response to vesselsservingfacilitatinglarger
As an example, crane builder ZPMC increased the height of three STS cranes at Hutchison Ports’ Barcelona Europe South Terminal (BEST) by five metres. The process was completed in just five weeks, causing minimum disruption to operations. Likewise, four cranes at PSA Belgium were raised in height, with work also carried out in accordance with a tightAdvancesschedule.in digital and data technology are also encouraging crane refurbishments. Italian Terminal Darsena
marine planning through weather forecasts and real-time monitoring and 3D situational awareness. Other elements include environmental surveillance, predictions of vessel routes, plus clear communication between control rooms, vessels and offshore workers.
VTMS: BREAKING NEW GROUND
The new system includes subsea infrastructure monitoring,
8
Vessel Traffic Management Systems are employing ground-breaking new generation technologies help ports better manage vessel traffic. John Bensalhia investigates
“We are currently engaged in new VTS project delivery and plan to continue in VTMS for rivers, ports and coastal applications,” he adds.
Efficiency is driven by managing congestion at sea, with fishing, wind farms and commercial shipping often competing for the same space. VTMS is essential to regulate this and with a similar level of challenge the approach to port facilities.
Activity at an industry level supports this view.
active in the VTMS sector for over 30 years, Saab handles different types of contracts, with its systems in use in both large and smaller ports.
“We have been awarded several contracts in the last couple of years,” says van Roosmalen. “Recent ones that stand out are the Port of Tallinn, Estonia, Port of Shanghai, China, Port of Dampier, Australia, Port of Suva, Fiji and Port of Victoria. The contracts in Australia and Fiji have been won together with AMS Group with whom we have partnered.
HavingR&D.”been
REMOTE WORKING
Similarly, to enhance VTMS’ core surveillance and management features, Horizonte AS has made the use of VTMS intuitive with simplified functionality. “This is really important,” the company underlines and underlines, “It is about not offering too much functionality but instead the right functionality.”
Founded in 2013, Horizonte AS has been active in the VTMS market from its early days. “The most important delivery we’ve had is the River Information System (RIS) for the Danube section in Hungary, considered to be one of the largest RIS in Europe, with over 100 sensors including AIS, radar, VHF, water level meters, visibility and meteorological sensors” explains Roberto Gonzalez, Founder & Managing Director, Horizonte AS.
ControloperationsimplicityonhasHorizonteworkedmaximisingofintheCentre
“Other big market drivers,” notes Roosmalen, “are decarbonisation, Just In Time (JIT) operations, the need for better predictability in port operations and working around the lack of space that some ports experience. This forces them to efficiently use the space available; the quays, yard areas and of course access channels some of which are tide restricted. Autonomous shipping is also a market driver in terms of
The report claims that increasing numbers of ports are using VTMS as a means of boosting efficiency and reliability, thus driving growth.
One of the “world’s most advanced ocean space surveillance and VTMS systems,” as described by Håvard Odden, Vissim’s Senior Vice President for Maritime Awareness, has recently been developed. International energy company, Equinor contracted Norwegian tech company Vissim to produce a surveillance and marine co-ordination system that manages operational requirements and efficiency aims in the offshore energy field.
Installation of remote sensor sites has been beneficial to reduce costs, as well as usage of COTS, low energy consumption sensors, implementation of solar panels and other innovative ways to keep energy consumption low.
“The awareness is increasing that to ensure safe waters, you need more than binoculars and a radio,” says Huub van Roosmalen, Director Business Development, Saab Maritime Traffic Management. “With congestion in ports,” he elaborates, “the problem is not necessarily the ships themselves, but the containers on shore. Often, they are in the wrong place in the world, taking up space that is needed for other containers and impacting the planning of port calls.”
Saab is implementing VTS within a Software-as-a-Service (SaaS) model, a cloud-based solution. “This,” the company points out, “has important implications for the cost model for the customer. It facilitates shifting from capital expenditure (CAPEX), i.e: large, one-time investments, to operational expenditure (OPEX) with a pay-as-you-go model. It reduces the hurdle of financing system investments, making VTS systems available to a larger market. Also, web-based user interfaces make deployment much faster and easier.”
VESSEL TRAFFIC MANAGEMENT SYSTEMS 44 | OCTOBER 2022 For the latest news and analysis go to www.portstrategy.com
The vessel traffic management market is burgeoning. A report from ResearchAndMarkets.com says that the Global Vessel Traffic Management Market will grow from US$ 5.8 billion in 2022 to US$ 8.7 billion in 2027, at a CAGR of 8.4 per cent.
HorizonteCredit:
“There is a wide variety of sensors and options available to reduce prices, but civil works and maintenance works and requests for 24 x 7 support, keep prices up” says Gonzalez. “Additionally, the scarcity of software developers and the man hours that are required to keep the implementation of new functionalities, continue research and development or to maintain systems have increased over time,” he elaborates.
“We have worked a lot on our software Aquacore, and a Graphical Use Interface (GUI) that is easy to use and operate, and which requires less time to train operators and
It also alerts for unauthorised access to restricted areas. Additionally, customers have the possibility to mark ships as suspect or hostile.
dispatchers. Also, the modular design of the software allows for the implementation of functionalities that are required for a particular project or client and conversely provides the ability to leave out what is not needed.”
“I do perceive,” he continues, “a blossom in utilisation of IoT based sensors and many other types of sensors that can be integrated into a VTMS, so do perceive that the broad use of VTMS can be beneficial not only for security and surveillance, but also for supply chain purposes.”
VESSEL TRAFFIC MANAGEMENT SYSTEMS For the latest news and analysis go to www.portstrategy.com OCTOBER 2022 | 45
The awareness is increasing that to ensure safe waters, you need more than binoculars and a radio...new generation VTMS systems are on-hand ‘‘
NEW TECHNOLOGY
Because there are no one-size-fits-all requirements for ports, Kongsberg’s C-Scope can customise the operating environment. The operator can use the system to tailor requirements to the port’s specific needs. C-Scope also features decision support tools that provide configurable and pinpointed alert areas for safety and security.
The ResearchAndMarkets.com report says that the Maritime and Port Authority of Singapore is engaged in extensive collaborations in conjunction with the introduction of new, top-of-the-range VTMS systems. Together with the Authority, Fujitsu Limited, Singapore Management University, and A*STAR’s Institute of High-Performance Computing are developing predictive technologies that use AI and big data analytics to deal with port trade and traffic. Real-world data can boost congestion predictions and eliminate the risk of potential sea accidents by detecting any possible risks at sea.
However, van Roosmalen stresses that VTS systems are more than technology alone:
The problem is, however, that interoperability can potentially result in cyber-attacks. To prevent this, systems like Kongsberg’s C-Scope are designed to the relevant quality assurance standards.
When asked what makes a Horizonte VTMS system superior, Gonzalez explains that it is the response time on the system and easy to use GUI. “Also, the intuitive modular design of the software, and its wide possibilities of use for any applications such as in ports, rivers or in coastal surveillance.”
Saab’s target tracking is the result of 30 years of development and significant time in operation under a wide range of circumstances. Van Roosmalen says that good tracker performance is essential for the reliability of alerts and situational awareness.
The biggest benefit of new generation technology is the use of AI and machine learning. This leads to a quality improvement in the traffic image and thus, traffic safety.
“Another security feature is the possibility to link with a Port Management Information System. This allows the VTS operator to look up information such as vessel ownership, history of violations, blacklisting and the nature of the cargo.”
“Our knowledge of implementation and system design give our customers the ‘most bang for the buck,’ he says. “Our expertise ranges from the selection of optimal sensor sites to ensuring uninterrupted operations during system replacements.”
gives
SAABCredit:
8 IoT a much more picturecompleteofwhat is going on in the port, says Saab
“IoT creates a more complete picture of what is going on in a port,” says van Roosmalen. “Various ports are pioneering the development of digital twins, for example, to predict energy consumption on the quay. Based on this data, ports can make better decision on infrastructure investments.”
SECURITY FEATURES
Technology upgrading is a common trend. Lerwick Harbour selected Wärtsilä to upgrade its existing technology to deal with the high volume of traffic at the crossroads of the North Sea and North East Atlantic.
Modern systems are required to interact with other satellite systems that cover the likes of finance and management.
Gonzalez says that VTMS can embrace new sensors technology (such as the IoT and predictive technologies) and take advantage of it. “I think it does have a good impact on the overall sensor information available for better situational awareness.”WhileGonzalez says that it is hard to predict the future of VTMS, surveillance in his view, is here to stay. “The evidence is that disruptions in the supply chain require more efficient ways to monitor not only vessels at ports, but expected arrival times.
Saab’s VTMS system also plays an important role in a general security context. For example, the system alerts when an unidentified or blacklisted ship enters a port.
Facilities include CCTV, weather and tide sensors, positioned around the surrounding area allowing operators to track vessels and obtain data. Approaches to the port are covered by a double transmitter Jotron VHF system, providing VHF communication. A further system upgrade replaced Lerwick’s IT infrastructure with version 4.6, plus a radar processor upgrade using RPU5 interfaces.
Saab says that it is strongly committed to AI to generate more operationally useful information from accumulated data. “We lead the way in VHF Data Exchange System (VDES), the next generation of AIS, for which we were the first supplier to have a commercial base station available,” highlights van Roosmalen. “With the added bandwidth and satellite communications, VDES enables new applications. An example of this is Sea Traffic Management (STM) for end-toend management of vessel voyages,” he points out.
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For the latest news and analysis go to www.portstrategy.com/news DECEMBER 2019 | 53
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Three vessels will be able to be handled simultaneously supported by a landside area of 55ha.
Bidding for terminal concessions is invariably a tough business. For DP World with this particular process the stakes look to be even higher!
The future thus looks most uncertain for DP World’s two Jawaharlal Nehru Port concessions beyond 2028.
concessioncontainertheconjunctionthebidconcessions.existingAbigisexpectedfromcompanyinwithnewDeendayalterminalasa means of “getting back
Deendayal Port Authority manages the country’s largest state-owned port by cargo volume at Kandla in Gujarat and Tuna-Tekra is a satellite facility located some 15 kilometres away.
Against this background, it is hardly surprising that a strong bid is expected from DP World to secure the concession for a mega container terminal to be established at Deendayal Port* in Kandla. The facility, when fully built out, will offer an annual capacity of 2.19 million TEU. Initial bids were submitted at the end of August with DP World joined in the pursuit of this prize by local operator Adani Ports and Qatarbased QTerminals
8 A high stakes game looks to be in play for DP World in the bidding for the new Tuna-Tekra container terminal
The recent letting of a concession for the Jawaharlal Nehru Port Container Terminal (JNPCT) represented an opportunity for DP World to confirm its presence in Jawaharlal Nehru Port via another route – winning the bid process for JNPCT. It was not, however, successful at achieving this – the bidding was extremely robust with the winner, a consortium of J M Baxi Ports and Logistics, and CMA Terminals, pitching a high bid off the back of the strategic value of the terminal in conjunction with the affiliated shipping line operations of CMA CGM.
POSTSCRIPT with the of in the game”
It can additionally be seen that the recent JNPCT bid process and the high return it has delivered to the port management body provides an incentive to it not to extend the existing concessions. A bid process is seen as the proven method via which concession fees can be maximised.
expiry
but nothing is certain ‘‘
The new terminal will have the ability to handle the largest container vessels in service today. Initially the terminal will work with a depth of 14.5m without tidal restrictions. Subsequently, the plan is to increase depth to 18.5m.
There was a suggestion that Adani would be unable to qualify due to the company’s potential disqualification arising out of the termination of a concession contract at Visakhapatnam Port – indeed this was the case in conjunction with JNCPT. This ruling will, however, not apply to the new Deendayal Port container terminal. A recent Supreme Court decision states that the firm’s disqualification arising from termination of a contract at Visakhapatnam Port “shall not bar or act as disqualification for the petitioner (APSEZ) for future tenders floated by public
DP footprintWorld’sin India may slide
50 | OCTOBER 2022 For the latest news and analysis go to www.portstrategy.com
It gets worse – DP World’s terminal concession at Mundra port will end in February 2031. The prospect is ‘hanging there’ of DP World’s strong presence on India’s Western Seaboard slipping away.
HIGH STAKES ‘GAME’ IN PLAY
Significant geographical advantage is claimed for the new terminal. Deendayal Port is the closest port to the northern hinterland including NCR Delhi, UP, Punjab and Haryana. Additionally, Tuna-Tekra offers a shorter distance to the inland container depots in Northern India plus a significant overall rail advantage – distance to the main market areas is shorter and thus overland costs will be competitive.
The successful bidder will be free to set rates based on market conditions, a positive change of direction from the rate regulation which took place in the past.
The question of extension or renewal of the existing concessions doesn’t appear to be on the agenda. Indeed, were it to be a possibility then at this stage, six years out from the end of the concession terms, it is usual to see some sort of activity. It makes sense to conclude a concession renewal early so as to maintain investment flow and thereby keep terminal performance at the optimum level.
Overall,bodies”.theresponse to the Deendayal container terminal offer did not match expectations. Even so, the process looks set to be a highly competitive one with Adani back in the game and always a strong competitor, and QTerminals making strenuous efforts to expand its international operations.
*The Union Ministry of Shipping has renamed Kandla Port Trust as Deendayal Port Trust
It is interesting to speculate what will happen when DP World’s two terminal contracts at Jawaharlal Nehru Port – India’s second biggest container gateway in volume terms – come to the end of their concession lifetimes in 2028.
TERMINAL SCOPE
Arrate Landera, Brand Manager t: (+44) 1329 825 335 e:www.portstrategy.comsales@portstrategy.com Contact us today PORTSTRATEGY INSIGHT FOR PORT EXECUTIVES RECIPIENTSMAGAZINE DECISIONMAKERS PERPAGEVIEWSMONTH 19,000 72% 42,700 Reach industry professionals with Port Strategy Promote your business to the right audience in the right place at the right time. Engage with our international audience of decision makers and buyers. The Port Strategy multi-media platforms offer our commercial partners a wide range of opportunities for campaign delivery. We provide bespoke marketing packages with quantifiable ROI. Port Strategy’s valued content is dedicated to the international ports and terminals business and is delivered through multiple channels.
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