Port Strategy July/August 2020

JULY/AUGUST 2020 VOL 1020 ISSUE 6

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Optimising port vehicle traffic | Santos one-to-one | Direct negotiations, plenty of pitfalls

COVID-19: ANY CLEARER YET? VEHICLES: STATIONARY ROLLING INDUSTRY POLAND: PLANNING FRAMEWORK REQUIRED

PORTSTRATEGY INSIGHT FOR PORT EXECUTIVES

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

VIEWPOINT MIKE MUNDY

Wake-up call for national port planning

The case for national port planning is stronger than it has ever been. It is an essential component of good governance and ultimately the delivery of the right port infrastructure to meet real demand and build investor confidence

National port planning is a subject that has to be taken more seriously.

Of course, many parties do take it serious but equally it is apparent that there are many that do not.

There are those countries that have it ‘on the agenda’ but do not address it in a timely way – Poland is one, discussed in this issue. There are those that have a national port plan but leave it too long before updating. And then there are others who develop a national port plan but go about it the wrong way, the most common mistake being to implement engineering led national port planning as opposed to formulating infrastructure and superstructure requirements after comprehensive market studies looking at volume development by commodity, shipping system evolution, interfacing infrastructure requirements and so on.

All these scenarios can prove costly in financial terms and generally as regards meeting stakeholder requirements. Too much capacity too soon or too little too late are two key manifestations of getting it wrong but the negative impact can also extend into other important aspects such as a loss of investor confidence in investing in individual port platforms.

Without an effective national port strategy in place it can, for example, lead to multiple port platforms within the same national borders promoting schemes that are heavily in competition with each other and which ultimately, due to a lack of coordination, lead to a waste of valuable resource and poor returns in one or more of the ports involved.

Certainly, this is a view confirmed in the revealing report from the European Court of Auditors, “Maritime transport in the EU: in troubled waters —much ineffective and unsustainable investment.”

Experience tells us that it is not unusual for individual ports, supported by local and/or regional politicians, to place aspiration above logic when pursuing high cost major expansion schemes. Similarly, there are those that pursue schemes that are the product of incomplete or bad advice – often suffering from the pitfall referenced above of not enough emphasis on market analysis and too much on engineering.

National port planning, properly implemented, provides a rational framework for port development to take place in – one where expansion works are undertaken on a coordinated basis and with controls that minimise risk and as such build investor confidence. The private sector is today a leading participant in port investment, and port planning at a national level is an essential ingredient of the good governance required to consolidate and expand essential private sector investment.

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

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CONTENTS JULY/AUGUST 2020 VOL 1020 ISSUE 6

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NEWS 16 VICT damages

VICT goes to court

16 Cape Town crunch COVID-19 and worker issues

17 Valencia goes big New terminal features

COVID-19: ANY CLEARER YET? VEHICLES: STATIONARY ROLLING INDUSTRY POLAND: PLANNING FRAMEWORK REQUIRED

On the cover The port of Salalah is one of a number of established hubs that is expected to see a lift in transshipment business but pressure on rates will remain and for some financing expansion will be more problematic – page 18

17 Melbourne steps-up Biggest ship calls

10 Malta upgrades Navis & NEMO arrive

10 PSA says long-term Recovery will take years

11 Irish eyes smiling ICL now calling in Cork

11 Taranto rebuilds

Yilports takes advantage of lockdown

12 Autonomous MOL is a proud support of Greenport and GreenPort Congress

Trials underway

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

Sign up at greenport.com

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

Say in touch at greenport.com Join leading port executives www.greenport.com/congress

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

Khalifa Port continues to expand

JULY/AUGUST 2020 FEATURE ARTICLES 18 Any clearer yet?

Are the COVID-19 clouds clearing, what next?

20 A Stationary Rolling Industry

Whole automobile industry impacted to end-user

24 Poland’s Ports National strategy needed

26 Half the Bale

BPA hints at doublewhammy for UK ports

28 Optimising Port Traic Today

HPC explains traic simulation processes

31 Larger Than the Eiel Tower

Itajai scores over Santos

One-to-one: Santos

32 Modernise &

Revolutionise

Exclusive Interview with new Santos CEO

REGULARS 14 Reality or false hope There is still a long way to go

14 Port Banana

Is DPW on a slippery road?

15 “New Normal”

Remote access vital

15 HHLA & Eurogate A turning point in Hamburg?

17 Resilience needed

Is COVID-19 a dummy run for climate risks?

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

34 Digital minds

Port of Roerdam focus on digital world continues

36 Sidelifter Eects

Oering versatility and innovation

39 Supporting pellet power

How best to handle an increasingly important commodity

44 Direct negotiations: pitfalls Concession awards problematic

JULY/AUGUST 2020 | 5

NEWS REVIEW

VICT SEEKS DAMAGES FROM MUA Early July – Melbourne terminal operator Victoria International Container Terminals (VICT) filed in the Victorian Supreme Court a multi-million dollar damages claim against the Maritime Union of Australia (MUA) that has the potential to put the union into bankruptcy.

VICT, a wholly-owned subsidiary of Philippines-based International Container Terminal Services Inc. (ICTSI), is claiming damages on the basis that the union’s 19-day blockade of the terminal in 2017 set back its growth by around two years.

MUA continued with the picket in November and December 2017 despite court orders and at a time which, VICT argues, was a critical period in its growth. Now operating at near full capacity, VICT underlines that it would have reached this target much earlier if not for the damaging effects of the picket.

VICT goes to the Supreme Court having already won a contempt ruling over the picket and will lay out the detail of its damages claim as part of this latest hearing.

This Australian case follows ICTSI’s 2019 successful action against the US-based International Longshore and Warehouse Union (ILWU) which was found to have engaged in unlawful labour practices in 2013 – 2017.

BRIEFS Global Ports confident Global Ports Holding Plc (GPH), the world’s largest independent cruise port operator, has issued a trading update for the period from 1 January to 31 March 2020. The company has specifically stated that it is confident that it can continue to successfully trade even if it has no cruise ships calling until the new year.

GPH operates 21 ports in 13 countries, servicing 14 million passengers.

6 | JULY/AUGUST 2020

CAPE TOWN CONGESTION BATTLE COVID-19 and its negative impact on the workforce at the Cape Town Container Terminal is cited as one of the main problems behind the severe congestion prevalent there recently.

The Western Cape has seen one of the country’s highest COVID-19 infection rates, with a large number of cases reported among Cape Town Container Terminal workers, causing the terminal to reduce the number of gangs serving vessels in turn leading to berthing delays reported to be up to a week in the most severe cases.

Another congestion generator is cited as delays in network traffic between the Cape Town Container Terminal and the centralised Navis

system in Durban – although this problem is now understood to have been resolved following migration to a new, stable, network thereby facilitating the efficient operation of the Navis terminal operating system.

Transnet further reports other measures implemented to tackle the congestion include: opening a night shift for delivery and collections; the operation of an eighth waterside gang at night, the transfer of staff from Durban to work in both Cape Town’s container terminal and multipurpose terminal, and the diversion of suitable vessels to the adjacent multipurpose terminal.

High winds have additionally contributed to congestion

problems and as a countermeasure to these Transnet commenced the testing of anti-sway systems for its rubber-tyred gantries in March of this year.

Signalling the various measures are beginning to have an effect, at the end of June Transnet reported the number of vessels typically waiting at anchor as having fallen from eleven to five. At the same time, however, some respite will have come as a result of shipping line measures such as the withdrawal of mother vessel calls in favour of feeders.

Serbia’s Danube ports

Caspian port growth

DPW takes TIS

The long-term project involving the expansion of Serbian ports of Bogojevo and Prahovo on the Danube river finally started in May, with the signing of contracts for the preparation of technical documentation.

The planned expansion will help the two ports to join facilities located on the EU Rhine-Danube TEN-T Core Network Corridor, confirmed Serbia’s Ministry of Construction.

Contracts have been awarded to two local companies.

Russia’s Transport Ministry has confirmed that total cargo volumes handled by the three Russian ports in the Caspian Sea reached 3.5 million tonnes in the period January to end of May 2020, reflecting a strong increase of 17.3 per cent over the same period in 2019. The three ports currently handle an estimated 10 per cent of total Russian port volumes annually.

8 Cape Town – suffering congestion pressure but implementing measures to bring stability

DP World has acquired a 51 per cent stake in TIS Container Terminal in the port of Yuzhny, following regulatory permission from the Ukraine Government. The deal is DP World’s second partnership with TIS shareholders, following the formation of P&O Maritime Ukraine to provide harbour towage services. DPW plans to link its terminals in Constanza and Yarimca with the 470m quay at TIS using its Unifeeder network.

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

NEWS REVIEW

VALENCIA THINKS BIG AND CLEAN… In a recent speech, Aurelio Martinez, President of the Port Authority of Valencia, highlighted a number of distinctive technical features of the new container terminal under development in the port’s newnorthern expansion scheme.

The new terminal, expected to occupied by Terminal Investments Limited (TIL), the terminal arm of Mediterranean Shipping Company (MSC) which utilises Valencia as a major hub, will particularly have a strong environmentally-friendly profile including the use of shoreside electrical power to power vessels, energy supply from renewable sources and extensive use of electrically-powered cargo handling equipment. The net effect is expected to be the near elimination of terminal generated CO2 emissions.

The terminal is expected to be in operation by 2030 leading to the

BRIEFS APMT Rotterdam order APMT’s Rotterdam container terminal has placed an order for 16, one-overthree diesel-electric Konecranes Noell straddle carriers.

The new units will be delivered by the end of September 2020 and will join the existing fleet of 41 straddle carriers.

PTP targets 66

creation of 44,000 new jobs – direct, indirect and induced – bringing the total number of port related jobs to 80,000.

Breakwater development for the northern expansion has already been implemented at a

8 Valencia is thinking big and clean – its major new container terminal will be in service by 2030 and aims to eliminate CO2 emissions

cost of €204 million. The total project, using public and private financing is €1400 million.

…AND PLANS A NEW PASSENGER TERMINAL The new passenger terminal will be located between Valencia’s Poniente Pier and the Espignon del Turia Pier encompassing an area of approximately 100,000m2 .

It is being offered as a concession, and as such will be developed via a combination of public and private financing, and will serve cruise

traffic and the regular ferry traffic operating to/from the Balearic Islands and Algeria.

The terminal will have four berths – one for cruise vessels with a length of up to 360m, a second cruise berth for vessels of up to 250m and two berths for RoPax vessels (ro-ro and passengers).

Mirroring plans in the container sector, the new cruise/ferry terminal complex will be developed with shoreside power for vessels and electric power generated wholly by renewable energy sources including photovoltaics, wind, renewable hydrogen and biofuel.

In a development that cargo importers and exporters in both Victoria and other Australian states have been waiting to see, the port of Melbourne recently received the CMA CGM Ural which with a capacity of 10,622TEU and a LOA of 299m is by far the biggest container vessel to call at the port.

It represents a major step up in Melbourne’s ability to accommodate higher capacity container vessels with this size of vessel more than double the average 4500TEU capacity vessels that typically call at the port.

The use of this class of vessel, deployed in Asian trade, offers economies of scale to cargo shippers and effectively removes the last barrier to high capacity vessels being deployed more extensively along the east coast of Australia overall.

MELBOURNE STEPS UP

The Port of Tanjung Pelepas (PTP) in Malaysia has received four new ship-to-shore (STS) quay cranes. The new units have a lifting capacity of 59-tonnes, are 55.5m high and are capable of efficiently handling ultra large container vessels.

Four more units are scheduled to be delivered in the third quarter of 2020, to increase the total to 66 STS cranes in operation at PTP.

Houston upgrade With the backing of a federal grant of more than US$79 million, the port of Houston will refurbish 823m of quay line and 34ha of terminal area at its Barbours Cut terminal. This represents a component part of an overall USD198 million upgrade programme being implemented at the terminal.

Grant for Tampa

CMA CGM Ural was worked at the Victoria International Container Terminal (VICT), a fully automated facility and the only one in Melbourne able to accept a vessel of this size.

Commenting at the time of the arrival of the vessel, Tim Vancampen, CEO, VICT, noted: “VICT is well equipped to accommodate this class of vessel ranging from 10,500

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

8 The 10,622TEU capacity CMA CGM Ural at VICT

– 13,000TEU and plans to further invest in the Port of Melbourne to accommodate the next generation of vessel ranging from 15,000 to 18,000TEU.” Now operating at near capacity VICT, an ICTSI subsidiary, is actively preparing to implement a major expansion of terminal capacity.

The Port of Tampa Bay has been awarded US$19.8 million as part of the US Department of Transportation’s INFRA Grant programme. The port is planning to use the funds to help increase container capacity by 60 per cent through completion of its Berth 214 intermodal project that connects cargo from the ship to road/rail as well as construct a new 396m berth and add a 12.1ha container yard.

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NEWS REVIEW

BRIEFS

MALTA UPGRADES WITH NAVIS AND NEMO

NS switches to Seagirt Ports America Chesapeake, terminal operator of the Port of Baltimore’s Seagirt Marine Terminal, has expanded its partnership with Norfolk Southern Corporation to offer on-dock intermodal rail service at Seagirt.

The new on-dock loading means Norfolk Southern is shifting its international intermodal business from the Bay View yard operation to Seagirt Marine Terminal.

The railroad operates 233 miles of track throughout Maryland. In 2019, Baltimore handled 43.6 million tons of international cargo.

Mumbai crane hit

One of the cranes at DP World’s Nhava Sheva International Container Terminal (NSICT) in Mumbai has suffered damage, following the unit being hit by the mv MSC Rosa M. The 14,000 TEU MSC vessel collided with the ship-to-shore crane while attempting to berth in early June.

Damage was caused to the bow of the vessel, plus a buckling to the crane that initially raised concerns over stability.

NSICT is yet to comment regarding the full extent of the damage.

LA’s US$1.5 billion budget The Los Angeles Board of Harbor Commissioners has approved a US$1.5 billion budget for fiscal year 2020/21.

Maximising infrastructure for cargo-handling and implementing systems that enhance security are the primary objectives of the forthcoming spend.

10 | JULY/AUGUST 2020

Malta Freeport Terminals (MFT) has confirmed that Navis has successfully upgraded its Terminal Operating System (TOS) N4 3.7, purely on the basis of remote assistance.

Despite the current challenges associated by the COVID-19 pandemic, MFT confirmed a “determination” to keep to its ongoing business plan.

MFT initiated the upgrade project at the end of 2019, with Navis charged to implement the latest equipment control and RTG optimisation modules as part of helping the terminal move towards semi-automated operations. The full process was completed on May 1, 2020, on schedule.

“Ahead of the remote go-live, our team completed a risk assessment to mitigate any potential issues that could arise,

and along with the Navis team, determined it was the right course of action to move forward,” said Jesmond Baldacchino, Head of IT at MFT. At the same time, MFT has also announced that it has been selected as a port of call on the new weekly NEMO service jointly operated by CMA CGM and MSC, that links the UK with Australia.

The southbound schedule connects North Europe to Australia and Australia with Singapore, Port Kelang, India and Colombo en-route to North Europe on the northbound rotation.

Malta Freeport Terminals CEO, Alex Montebello, notes: “Not only does it enhance the Freeport’s reputation as a strategic hub in the Mediterranean, but it will also boost the local business

8 The New CMA CGM & MSC NEMO service is now calling in Malta

community both on an import and export level.”

Importers can take advantage of an efficient service departing La Spezia on Thursday and Gioia Tauro on Saturday, arriving in Malta on Monday morning, while exporters will benefit from a 10-day transit service to London Gateway, leaving Malta on Sunday and arriving in Gioia Tauro on Monday proceeding to London Gateway after a call in Valencia.

The new service is operated by 14 ships with a carrying capacity of 9500 TEU. In 2018, the MFT handled just over 3.3 million TEU, but this dropped to 2.7 million TEU in 2019 primarily due to Maersk Line and MSC relocating some traffic (primarily to Tanger-Med).

“RECOVERY WILL TAKE YEARS” - PSA In an updated message to employees on the company’s website, PSA International CEO, Tan Chong Meng, has warned that the container port industry should be prepared for a recession and that it “will take years” to fully recover from the COVID-19 pandemic.

He is clear about what the short-term future holds as part of what he terms the “4 R’s” – recession, resilience, regionalisation and reform.

In terms of recession, he concludes, “Bankruptcies will increase, unemployment pressures will rise, and consumption will remain relatively

sluggish in the medium term.

Therefore, our business, which relies on trade volumes, will likely be set back two to three years – depending on how long the world will debilitate under COVID-19.”

For resilience, he anticipates the supply chain will need to be “re-built” because manufacturers, producers and governments will not be able to rely on traditional sources and seek new solutions Regionalisation is where Tan believes greater focus could occur as it enables shorter supply chains to manage inventory differently and ultimately reach markets “more quickly.” As a result, there

could be an acceleration of the move from global factory locations in China to regional manufacturing zones.

Here he believes that the efficiencies between sea, rail, barge, truck and air will be “aided by digital continuity” which is an area that PSA is currently expanding through its own Horizon 2 and Horizon 3 initiatives.

The final area of interest is reform, which Tan believes will mean a race to the “next normal.”

Here, he states that online applications will be more than just an “optional tool” and will enable the industry to transform.

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

NEWS REVIEW Specialist ocean carrier, Independent Container Line (ICL) has added the port of Cork on the South Coast of Ireland to its North Europe US East Coast service.

This new port of call will provide exporters in Ireland with their first deep sea transatlantic connection to the US for some considerable time.

The addition of Cork involves a last call from North Europe on the outbound schedule and joins the existing service rotation of Philadelphia, Wilmington, Antwerp and Southampton.

There are currently four vessels in service, with an average capacity of 2400 TEU, although the first call at Cork was made with the 3000 TEU mv Independent Vision.

John Kirkland, ICL Chief Executive, explains: “Ireland is a market we have been keen to develop for a while and we sincerely hope the Irish trade will support this commitment

by ICL to bring Ireland its first direct weekly service to the US east coast. “We look forward to working with the port of Cork with their exciting expansion plans.”

The ICL ships will call at the port’s Tivoli container terminal.

It has a reported annual capacity of 160,000 TEU per annum, but it is reasonable to assume that these ships, and the other intra-Europe feeder services, will move to the new Cork Container Terminal that is due to become operational in the Ringaskiddy area before the end of 2020. The new facility will open with a 240,000 TEU annual capacity, offering a 360m quay and water

Barcelona traffic down

In the January to April 2020 period, the port of Barcelona handled 19.6 million tons of cargo, down by 11.7 per cet compared to the same period of 2019, due to the COVID-19 pandemic. In particular, automotive and container traffic suffered. Vehicle activity dropped by a substantial 35.3 per cent as manufacturing in Spain was stalled, while container demand fell by 16.2 per cent due to weak consumer demand from the national lockdown.

IRISH EYES SMILING FOR ICL

depth of 13m. A planned second phase will see capacity rise to 330,00TEU per annum.

ICL recently switched its UK port of call from Liverpool to

Southampton, ending a 20-year partnership with the port, citing deteriorating weather conditions in the North Atlantic impacting schedule reliability.

8 mv Independent Vision made the first call in Cork for Independent Container Line

TARANTO REBUILDS IN LOCKDOWN In October 2019, Yilport Holding signed a 49-year concession agreement with the Ionian Sea Port Authority to operate Taranto Container Terminal, then rebranded as Yilport Taranto Terminal. Swiftly following this development, in February 2020 the company commenced operations by recommissioning seven inactive ship-to-shore cranes and 16 rail-mounted gantries.

The company’s plans were immediately thwarted by the COVID-19 pandemic, but while the lockdown in Italy was implemented and port volumes were beginning to falter in many

areas, Yilport Holding used the time to execute both a Phase I investment of US$19 million and Phase II spending, which will see expenditure overall rise to US$75 million.

At the end of Phase II, Yilport Holding will have revamped seven Ship to Shore Crane (STS), 17 rail mounted gantry cranes (RTGs), one mobile harbour crane (MHC), two reach stackers, two empty handlers and a fleet of terminal tractors and trailers.

The refurbishment of all equipment is expected to take around 12 months. As part of the process, the rail infrastructure and national connection will also

be updated to ensure maximum use of the railway connection at the port is available.

CMA CGM has confirmed plans to commence calls in Taranto from the first week of July 2020 with one of its intraMediterranean services – the weekly Turkey - Malta – North Africa TURMED service.

The first call at Taranto will be from the mv Nicola, an 847 TEU feeder vessel. The challenge for the new operator is to secure additional callers, including a deep-sea service.

CMA CGM drops APL

Savannah first

LNG bunkering role

CMA CGM Group has confirmed that from October 1, 2020 it will no longer use the APL brand name in trans-Pacific service.

Instead, the French carrier will become the group’s exclusive commercial branding on the Pacific trades network services.

However, the APL name will remain, exclusively focusing on its role servicing the US Government and leveraging its substantial role in US flag services, along with the current Pacific liner services to/from Guam.

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

According to the Georgia Ports Authority (GPA), the Port of Savannah was responsible for handling a share of 15.9 per cent of total USA agricultural container exports during CY 2019. By comparison, the next largest proportion was 15.3 per cent for Los Angeles, followed by 10.2 per cent leaving via Long Beach. For the fiscal year of July 2019 to May 2020, total loaded container exports for GPA was up by 15,500TEU to 1.3 million TEU.

BRIEFS The Mediterranean port of Marseilles-Fos has confirmed its intention to develop its role as an LNG hub, following a second bunkering operation.

The port, Costa and Shell replicated the first operation in May with a second trial in June.

The port authority is now targeting the ability to offer its shipping line customers an LNG bunkering vessel during 2021, although LNG-fueled cruise vessels have been calling since 2019.

JULY/AUGUST 2020 | 11

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NEWS REVIEW

MOL AND PARTNERS TO TEST AUTONOMOUS SHIPS

A Mitsui OSK Lines (MOL) led consortium is using a short sea vessel to demonstrate the technology necessary for autonomous vessels.

In partnership with the Nippon Foundation, the Japanese shipping line has confirmed that it is planning to undertake testing with two autonomous vessels over the course of 2020-2021.

According to MOL President and CEO, Junichiro Ikeda, the consortium partners of Mitsui

E&S, Furuno Electric Company, Imoto Corporation, Sekido Co. Ltd, MOL Ferry Co. and MOL Marine Co., Ltd, are seeking to fund demonstration voyages aimed at, “testing the technology required to operate autonomous ships.”

Two vessels are to be used, a container ship and a ferry and will operate between Tokyo Bay to Tomakomai, in Sapporo.

“Coastal shipping, the target of the programme, is a key element

8 Autonomous ship to target savings and safety

of Japan’s logistics system, transporting about 40% of the nation’s domestic cargo and about 80% of basic industrial commodities on a per tonne-km basis” elaborates MOL. The Nippon Foundation also confirmed the overall aim is to complete all demonstration tests by the end of 2021, with the ultimate aim of commercialising unmanned vessels by 2025.

FULL STEAM AHEAD FOR ADT Large scale infrastructure expansion by Abu Dhabi Terminals (ADT) is continuing.

The AED1.6 billion (US$440 million) expansion at Abu Dhabi Terminals is part of a total of AED4 billion (US$1.1 billion) of development projects currently underway at Khalifa Port.

This investment includes the AED2.2 billion (US$600 million) development of the South Quay and Khalifa Port Logistics which will increase total port capacity to 9 million TEU per annum over the next five years.

The current stage of the investment involves delivery of the terminal operator’s latest batch of ship-to-shore (STS) cranes.

ADT has confirmed that the five new cranes each offer a 73m outreach, are 52m in height and possess a total lifting capacity of up to 90 tonnes.

These STS units are among the

largest in the world and, according to ADT, will play a key role in supporting the technologically advanced terminal planned for Khalifa Port, the flagship semi-automated deep-water container port owned

by Abu Dhabi Ports Group.

Captain Mohamad Juma Al Shamisi, Group CEO of Abu Dhabi Ports and Chairman of Abu Dhabi Terminals confirmed that the plans to increase capacity at KPCT to 5 million TEU by 2020 are proceeding in a highly efficient manner. “Abu Dhabi Terminals at Khalifa Port is well-positioned to complete its expansion in record time and ahead of schedule,” he says.

The new STS units were purchased from Shanghai Shenhua Heavy Industry Co. Ltd. (ZMPC) in China and follow the recent arrival of automated stacking cranes, taking the total number of cranes at the terminal now to 22.

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

The final phase of ADT expansion will see the terminal linked to the Etihad Rail network providing direct rail connections across the UAE, which will facilitate good access to the wider region.

Abu Dhabi Terminals is the management company and operator of Khalifa Port Container Terminal (KPCT), the region’s first semi-automated terminal.

The large-scale expansion of its container terminal facilities is part of a wider strategy to facilitate growing trade demand within the Gulf region. Abu Dhabi Ports has recently partnered with Bengal Tiger Line to create Safeen Feeders, with the desired objective of introducing a new feeder service through a vessel sharing agreement that links Abu Dhabi to nine ports throughout the UAE, Upper Gulf region and Indian Sub-Continent.

BRIEFS Fee rise in San Pedro

Terminal operators in the San Pedro container port complex are increasing the Traffic Mitigation Fee (TMF) by 4.2 per cent from the beginning of August. The TMF is used to fund night and weekend gates at the terminals in Southern California. The TMF is amended annually in line with the West Coast longshoreman contract. This will rise to US$33.47 TEU and US$66.94 FEU for all nonexempt containers. Exempt units are empties or those using the Alameda Corridor.

Direct sea link

A new direct sailing link between ports of Kolkata (India) and Chittagong (Bangladesh) has been launched. The traditional maritime route is via the Colombo, Sri Lanka hub but entails a total transit time of at least two weeks, compared to the new service duration of 36 hours.

Hong Kong-based Gold Star Line is operating the service.

Currently, US$9 billion of bilateral trade moves between the two countries, but COVID-19 has severely impacted movement of cargo overland.

Tilbury2 adds DynaPORT

Tata Consultancy Services has confirmed it has successfully deployed its TCS DynaPORT terminal operating system at the new Tilbury2 ro-ro facility on a 100 per cent remote basis. TCS DynaPORT is a digital terminal operating solution that streamlines order-to-invoice processes and supports multi-modal (vessel, rail, truck and barge) and multi-purpose (container, break-bulk, liquid bulk, dry bulk and ro-ro) requirements. Tilbury2 ro-ro terminal is a new 500,000-freight unit ferry facility.

JULY/AUGUST 2020 | 13

THEECONOMIST BEN HACKETT

REALITY OR JUST A FALSE SENSE OF HOPE? The maritime industry has been a bastion of hope over many decades even when supply and demand disparity grew, and excessive capacity was built both in the vessel and port terminal sectors. The lack of any reasonable return of investment and lack of profitability also did not defeat the sense of optimism and that things would get better in a year or two.

The competitive adrenalin has flown through the management decision making for the past thirty years or more.

Despite the lacklustre financial performance compared to other service industries, investment has always been at hand and insolvency few and far between thanks to the ownership structure within the industry, reliant as it is, on the state underpinning failing companies. This remains true in the current COVID-19 crisis.

The current recession, likely to match the World Depression of the 1930’s, is bringing about a financial impact that will be hard to survive (without state aid).

Global GDP in 2020 will likely drop to minus 6.1 per cent for

developed economies with an impact of trade according to the IMF Global Outlook. The World Trade Organisation projects that nearly all regions will suffer double-digit declines in trade volumes in 2020, with exports from North America and Asia hit hardest with decreases ranging from 16 to 32 per cent.

Experts are, however, projecting that the crisis is waning, and that recovery is on

the way. There is virtually a blind belief that we are through the worst of the crisis and that surely the recovery will come beginning in the second half of the year and building up to a strong resurgence in growth in 2021.

This collapse in the global economy is not economically or financially driven. There are no models available that can reliably predict what the coronavirus will do. We are not through phase 1

8 Even with green shorts of recovery, there is a long way to go

yet unless you believe President Trump. The U.S., Latin America and Africa regions are still at the plateau with no sign of recovery.

Europe, coming out of the 12 to 14 week lockdowns is experiencing a build-up of infections and deaths. We should be extremely cautious with our optimism, this crisis may well drag on far longer than expected.

THESTRATEGIST MIKE MUNDY

BANANA: OUT OF BALANCE? Dubai Port World’s (DPW) Banana project, aimed at establishing a deep-water container terminal near the mouth of the Congo River, Democratic Republic of the Congo (DRC), continues to prove to be a slippery road.

The original concession contract was negotiated under the rein of former president Joseph Kaliba and his Common Front for Congo (FCC) coalition.

The presidency changed hands in December 2018 with the inauguration of President Felix Tshisekedi and seven months later a new coalition government was announced with 23 members of the executive drawn from Tshiisekedi’s Direction For

14 | JULY/AUGUST 2020

Change party and the remaining 42 from the FCC. Following these changes, the office of President Tshisekedi opened discussions with DPW on key aspects of the Banana concession agreement which it regarded as unfavourable to the DRC. According to local media reports, these included the scope of exclusivity of the concession which extended over a 90km area – and which the presidency wanted to restrict to the area of the container terminal – and the issue of the relocation of a strategic military base at a cost to the DRC of around US$5 million.

The leverage used by Tshisekedi’s office to sit down and

negotiate with DPW was that the original contract with the company was due to expire in March of this year - if no state agent was appointed by this time within the concession company.

These negotiations have, however, effectively been scuppered, according to local media sources, as a result of parallel negotiations conducted between DPW and Prime Minister Sylvestre Ilunga Ilunkamba’s government, through the Transport and Communications Ministry, which has reportedly agreed to postpone the expiry of DP World’s contract by 18 months.

Hardly surprisingly, it has been reported that President Tshisekedi

was furious on learning of the dual negotiations – and the outcome.

Technically, this leaves the Banana project – the rationale of which has been questioned by some market analysts – as ‘live.’

But against this background – and still with no state agent appointed – it is reasonable to question just how much life does it have left?

One thing is for sure, it proves the point highlighted in the article on page 44 of this issue that direct negotiations for concessions often prove to be problematic and generally that it is essential in concession negotiations to strike a balance which future proofs them against the impact of changes in political administrations.

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

THENEWYORKER BARRY PARKER

The late and great baseball player/philosopher Yogi Berra once opined, “It’s very difficult to predict what might happen…. especially in the future.”

Ports have always grappled with uncertainties but, like every other aspect of business, the “what if” considerations seem greater now than anytime in recent memory. Not surprisingly, cargo flows are down along all the coasts, and the voyage to recovery will likely occur in fits and starts, rather than being a smooth transition back to normal.

Perversely, times of economic sluggishness work to the benefit of infrastructure projects that were funded and already in progress (or about to start) prior to the onset of shutdowns in mid-March.

Around New York, certainly, transit projects and notably, the rebuilding of La Guardia Airport (also within the remit of the Port Authority) have seen faster timeframes than otherwise.

Where maritime infrastructure is concerned, the wheels turn more slowly but, where possible, planners could consider

POST-PANDEMIC – “NEW NORMAL” OBSERVATIONS

accelerating works that are in progress. A trend already in place before the pandemic, loosely described as “re-shoring”, will likely continue- opportunities around the waterfronts (foreign trade zones come to mind) could continue to play an important role, as patterns re adjust.

Another proverb, this one not from Yogi, says something like “Disruption brings opportunity…”

8 Remote access vital going forward

or something like that. The reduced flows, and the changes in patterns, may also present opportunities to look more closely at digitalisation, where all aspects of operations around the port can be better integrated with exogenous supply chains.

One bigger trend emerging from the pandemic, “work at

home”, does not apply so much to mission critical (indeed “essential” per all levels of government) businesses around ports and terminals.

But “work at home” has been part and parcel of a broader affirmation that digital processes, with all forms of “remote access,” are vital. The “remote” theme also provides opportunities.

Securities analyst Amit Mehrotra, from Deutsche Bank, well known to anyone following listed transport companies, in highlighting post pandemic trends for investor clients, observed, “…the more convinced we are of acceleration in e-commerce trends and the impact it has on global supply chains.”

I will leave the specifics of linking broader cargo movement data with local systems to the experts on such matters, but such observations should not go un-noticed by planners seeking to keep their ports integral to cargo flows.

THEANALYST PETER DE LANGEN

HHLA AND EUROGATE COOPERATION The news from end of May 2020 that HHLA (Hamburger Hafen und Logistik AG) and Eurogate are holding discussions on cooperating in the container segment in northern Germany, may well mark a turning point in the German Hanseatic port development tradition.

HHLA is the market leader in Hamburg, active internationally and in the hinterland and is listed on the stock market, but majority owned by the city state of Hamburg. Eurogate operates terminals in Bremerhaven, JadeWeserPort and Hamburg as well as outside Germany.

Eurogate is jointly owned by BLG, which in turn is majority owned by

the city-state of Bremen and Eurokai, listed on the stock market and privately owned, in majority, by the Ecklemann family.

A serious cooperation initiative would have to include commercial cooperation. It is hard to see a workable model other than a merger of terminal activities in the three North German ports, perhaps with the sale of one of the terminals in view of competition concerns. As ‘hineininterpretieren’ (hard to translate, something like ‘adding meaning without solid basis’) is my favourite German word, I would like to suggest that this initiative needs to be seen in the current global geopolitical context.

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

The Hanseatic model of an entrepreneurial state and strongly embedded companies has brought Northern Germany prosperity. Eurogate, BLG, Eurokai and HHLA have all successfully internationalised. But since the 2009 economic crisis, results (as reflected in the development of the share price) have been modest, and the COVID-19 pandemic has hit companies in global logistics hard. At the same time new global players have emerged often also with state-support. The market capitalization of BLG, Eurokai and HHLA combined is less than 20% of the capitalization of the Shanghai International Port Group

- the largest terminal operator by market capitalisation. Concerns have been raised about the risks of a Chinese buy-out of European companies, especially in critical infrastructures such as ports. In this context, it seems a sensible reflex to sit together and see if joining forces - thereby upending centuries of Hanseatic competition between Bremen and Hamburg - provides a better basis to survive and prosper in these turbulent times.

However, traditions are not without friction and controversy.

The Bremen’s port association’s critical stance, and urge not to leave Bremen worse off, may turn out to be just a starter.

JULY/AUGUST 2020 | 15

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THEENVIRONMENTALIST CHARLES HAINE

RESILIENCE & RECOVERY Maritime facilities have taken essential action and quickly applied their know-how in the face of COVID-19 impacts faster than other sectors.

However, I doubt Emergency Response Plans (ERP), the crisis management discipline and business continuity planning will ever look the same again.

COVID-19 is a dummy run for what we might expect from climate risks, although while the pandemic hit was immediate, physical impacts from heat, rain, fog and water stress will affect us more regularly over one to two decades.

We’ve seen ports react quickly to construct temporary physical structures and modify terminals to cope with the need to increase storage capacity, safely store cargoes and dedicate space for emergency arrivals. In some cases, those were humans, in the form of infected holidaymakers on unscheduled Code Blue cruise ship visits. That was when the ERP was triggered, catalysing emergency service, immigration and medical specialists into action. What value a robust ERP, and those invaluable yard workers, stevedores and supervisors who so often go unseen by the public.

REPURPOSING AND MODIFICATION Ports and terminals are going to become experts at repurposing and modification as they react to spikes in trading, diversify and respond to new markets, including offshore renewable energy.

Those that have taken early action to be more resilient – for instance in response to the threats and hazards posed by extreme weather events such as intense storms – seem to be ahead of the game during lockdown. The pandemic has proved that improving overall adaptive capacity is a necessary component of operations.

Understanding redundancy in equipment and critical infrastructure in the port estate will be key in the face of unpredictable climate perils and

accurate CAPEX/OPEX modelling, especially with the economy in a trough.

Port buildings should be designed for versatility, security and differing utility – who knows exactly what the function of a building with 80-year design life will be in 2045?

“READINESS” CULTURE Just as important is the culture of “readiness” in terms of the ability of management to change corporate policies and modify frameworks and systems.

Did any facility get it 100 per cent right in the face of this public health crisis? Digital-ready ports that have already connected different data systems are likely to be able to deal with sudden changes and uncertain timescales more rapidly.

The ability to make signage, utilise a 3-D printer and have sufficient supplies of all materials and substances in stock is crucial if an organisation is going to be safe, reorganise sites, or rapidly manufacture spare parts on site.

That’s the kind of readiness we help organisations adopt to become truly Future Ready.

In COVID, the communications teams and human resources leaders in ports have found themselves at the forefront of messaging to the workforce, stakeholders, local communities and media. The social media accounts of some went into overdrive to demonstrate that they were open for business when so many organisations ground to a halt. Ports have been on the front foot and showing that in times of need, essential cargoes and freight, including vital medicines and foodstuffs, were still are plentiful supply.

The public benefitted from that assurance, as fights broke out over toilet rolls in supermarkets.

“BUILD BACK BETTER” In recovery, we’ve heard about “build back better” and a focus on green infrastructure themes (British Ports Association). But ports do not seem to attract large chunks of UK Government

It’s no good the UK being the first country in the world to announce a net zero emissions’ target (by 2050) and then sit back without helping the gateway and regional ports which are the key to unlocking supply chains and economic wellbeing

‘‘

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

8 Is the impact of COVID-19 a dummy run for future climate risks?

funding. That’s strange when the Clean Maritime Plan and the goals of Maritime 2050 were so well planned and received.

It’s no good the UK being the first country in the world to announce a net zero emissions’ target (by 2050) and then sit back without helping the gateway and regional ports which are the key to unlocking supply chains and economic wellbeing.

Anchoring some of the millions into schemes that boost interconnectivity, oil the wheels of cargo transfer and support clean ports would seem to be an obvious win. Germany gets it: €9 billion for hydrogen projects – inherently linked to green production and export.

Shoreside power doesn’t stand a chance until the Government supports better air quality with meaningful cash.

PoliticsHome has pointed out the UK Government’s recovery plan is flawed because of an ongoing ‘sea blindness’. Retailers who fund our supply chain will expect to send goods without impacting the oceans, the atmosphere and people.

As only around six per cent of people surveyed want to go back to the life we had in February 2020, now is the time for a change and to put some real money into the maritime sector.

JULY/AUGUST 2020 | 17

SHIPPING STRATEGY: TRANSSHIPMENT

COVID-19: ANY CLEARER YET? COVID-19 is prompting a rethink of supply strategies. Increased transshipment activity is expected but, as Andrew Penfold confirms, margins will be slim and financing new capacity challenging

8 A stimulation of transshipment and feeder demand at a pace faster than previously forecast is on the cards

At the macro level the dust is beginning to settle. The IMF is projecting a global economic contraction of -4.9 per cent for 2020. Even with a relatively strong demand recovery 2021 world output will still be around 6.5 per cent smaller in than was predicted prior to COVID-19. The outlook for the developed economies (still the major driver of container demand) is for a contraction of eight per cent this year. The pace of any recovery will be determined by the risk of a ‘second-wave’ and any renewed lockdowns – this remains opaque.

GDP is the driver of trade, but this contraction will also see structural shifts – even if the recovery proves to be ‘V-shaped’.

Political changes are underway that will dominate beyond the current crisis.

What will be the impact on container shipping and ports?

SHORT-TERM SHOCK EFFECTS The initial container trade hit was focused on lower output in China, but this has partially bounced back. The real impact will be on the level of demand – especially in Europe and North America. Current analysis suggests a drop in demand for 2020 in these markets of around 12-15 per cent.

This means severe over-capacity in the container fleet, with this being focused on the largest fleet sector – where expansion is still underway with massive commitments from

Is this another example of lines ‘fighting the last war’ – are these the ships that will be needed and, if so, how many?

‘‘

18 | JULY/AUGUST 2020

HMM, MSC, Evergreen, OOCL and CMA CGM still to be introduced into the global fleet. Is this another example of lines ‘fighting the last war’ – are these the ships that will be needed and, if so, how many?

Capacity management has allowed freight rates to hold-up fairly well – at the expense of returning chartered-in vessels to their owners – frequently straight into lay-up. Other tonnage absorption moves such as trading via the Cape on the Europe trades have also effectively cut capacity. These are short term reactions; much more fundamental shifts will be required to match capacity with demand – there is only one direction for rates if this fails.

For ports, the emphasis has been on handling a contraction in demand. This has meant cost cutting has come to the fore – expansion programmes are prorogued, at least for now.

STRATEGIC IMPACT ON PORTS It seems certain that China’s position as the primary driver of the container business will change. Political pressures were reaching boiling point, even before the crisis. Reliance on the part of western economies on an increasingly bellicose China cannot be sustained.

One strategy is increased near-sourcing and repatriating of manufacturing. This has received a lot of attention, but the cost arguments counting against this remain difficult to overcome.

More likely will be substitution of other low-cost suppliers (mostly in Asia) in any gap resulting from Chinese contraction.

The shipping arguments for the largest vessels remain sound on these long-haul trades, but the port infrastructure is not fully in-place. The switch to alternate low cost suppliers was already underway due to the declining cost-competitiveness of China

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

SHIPPING STRATEGY: TRANSSHIPMENT This means a stimulation of transshipment and feeder demand at a pace faster than was earlier anticipated

‘‘

and political pressures ahead of the crisis. This trend has been turbocharged and clearly has a long way to go.

A strong upturn in export production in Indonesia, Vietnam, India and elsewhere will drive further port expansion for 24,000TEU-capable terminals and for the associated inland infrastructure. At present, insufficient capacity exists and there remain ship size limitations. It will take several years to rectify this shortfall (and the uncertainties in the market will render bankability problematic in many cases).

WHAT ABOUT TRANSSHIPMENT? The outlook will differ in various regions. In lower cost manufacturing zones in SE Asia and India demand will run ahead of 20,000TEU+ terminal capacity. The solution will be increased reliance on transshipment hubs. Locations such as Port Klang and (of course) Singapore will benefit from increased feedering into large vessels bound for Europe and North America. This will continue until direct capacity is introduced.

This means a stimulation of transshipment and feeder demand at a pace faster than was earlier anticipated. This is an opportunity but will need very careful financing strategies.

Wayport hubs – Algeciras, Port Said, Salalah, etc. – will increasingly suck in feeder volumes as lines strive to increase load factors on the biggest vessels. On the other hand, there will be pressures to deploy these vessels (where possible) into the major Mediterranean gateway ports. Overall, these factors will balance each other out, but port overcapacity will continue to place downward pressures on stevedoring rates.

At the import end in Europe over-capacity in shipping and wide availability of 20,000TEU+ terminal capacity will see lines continue to offer multi-port rotations, even though from a strict fully-costed perspective transshipment would be the optimum approach. This is simply because it will be cheaper to absorb excess capacity than to save money on transshipment. Only the trades into the Baltic seem likely to continue to grow, with much larger feeder vessels.

North America has never been a transshipment market as a result of the restrictions of the Jones’ Act – political pressures are unlikely to see any modification of this in the foreseeable future. Pressure to deploy larger vessels will continue to favour West and East coast ports that have made (or are making) the necessary investments to handle the largest vessels.

Port investment in the developing world will be under severe pressure as demand develops more slowly. Existing ng transshipment hubs will benefit from this with smaller ports ts maintaining their role. However, margins will remain very tight ht on transshipment business and financing expansion will be highly problematic.

5 A requirement for increased terminal investment in these alternative sources of supply – especially in ASEAN markets and India.

5 Continued multi-port rotations in Europe and North America to absorb excess tonnage.

5 Further declines in freight rates and line pressures to reduce stevedoring prices.

5 Financial pressures on shipping lines resulting in further terminal divestments.

5 Terminals increasingly focusing on cost control and very close examination of the viability of large-scale investment projects.

5 Economic difficulties will hit the Developing World very hard – calling into question any marginal port development programmes.

COVID-19 will change every aspect of the business and any further contraction as a result of a second wave of infections could make these difficulties even more acute. These changes mean that the assumptions behind container port and terminal development have changed. Financing will be much more closely examined and required rates of return will increase accordingly.

8 At the import end in Europe, the presence of specialised terminal capacity able to serve 20,000TEU+ vessels will continue to promote multiple port call itineraries

Port investment in the Developing World will be under severe pressure as demand develops more slowly

‘‘

8 And Andrew Penfold

SO, WHAT IS THE OUTLOOK? In summary (and assuming there is no negative second nd wave) we can anticipate the following: 5 Weaker demand further upsetting the supply/demand nd balance in the shipping sector – with this focused on the he largest vessel classes.

5 Increased pressure to diversify away from China as the he st primary source of imported goods – with other lower-cost sources rapidly substituted.

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

JULY/AUGUST 2020 | 19

EUROPEAN VEHICLE TRADE

A STATIONARY ROLLING INDUSTRY The auto industry has been severely impacted in Europe and the UK. AJ Keyes assesses how the whole supply chain, from origin to end-user, has been impacted

8 The whole automobile supply chain has been impacted, from source of production through to end-user

Car sales can be an important indicator of economic health.

With the large decline in demand for vehicles in almost every country since the start of the COVID-19 pandemic, it is no surprise that ports, auto carriers and consumers have all been negatively impacted.

According to the European Automobile Manufacturers Association (ACEA), as of June 1st, 2020 total EU and UK production losses due to factory shutdowns caused by COVID-19 had reach almost 2.45 million motor vehicles (covering passenger cars, trucks, vans, buses and coaches), with the average shutdown duration being 30 working days.

Table 1 shows that the leading seven countries collectively generated 81 per cent of the lost manufacturing, with Germany the largest single loser with a share of 25 per cent, followed by Spain with 18 per cent and France and the UK at 11 per cent each.

Table 1: Loss of Vehicle Manufacturing Across Europe Country

Production Lost

Share

Working Days Downtime

Germany

616,591

25%

30

Spain

452,155

18%

34

France

278,425

11%

34

UK

262,715

11%

41

Czech Rep.

155,060

6%

29

Slovakia

114,632

5%

24

Poland

101,957

4%

36

Top 7

1,981,535

81%

33

Total EU & UK

2,446,344

100%

30

While this loss of production includes vehicles that would have been due for home markets and moving outside the EU and UK, it is indicative of the amount of activity lost for the car carrying business in Europe.

TIME LOST The impact of the time lost in manufacturing can be seen when looking at some of the car-carrying activity involving some of these largest vehicle manufacturing locations.

VesselsValue Ltd, a specialist provider of vessel and shipping fleet data that tracks S&P deals and vessel movements worldwide, confirms the impact of the current manufacturing and demand trends. For example, in terms of fleet CEU (Car Equivalent Units) activity out of Germany is down by around 40 percent in the period to end of May 2020 compared to the January to May 2019 time period, while UK demand for the same 2020 versus 2019 five months was down by 15 per cent.

TROUBLING STATISTICS FOR END-USERS These are troubling statistics that have a knock-on impact for both ports, but also the end-users, as Richard Cowan, General Manager for Quest Motors Ltd in Maldon, Essex (UK) confirmed.

“We sell Citroen, Suzuki and Vauxhall cars and vans, sourced from the Czech Republic, France, Poland and Spain, all of which require shipping to ports in the UK, primarily Sheerness. Factories in Europe suspended production at the end of March and we are still seeing little new car activity, despite some facilities now re-opening.”

Indeed, Cowan is able to provide further insight into the problem the industry is currently facing. “On average, preCOVID-19 our normal lead times were around 6-8 weeks and once a car would arrive at Sheerness it is normally on-site in under nine days. However, at the moment we cannot give such exact timescales, we have to take each specific case on an individual basis.”

Source: ACEA

20 | JULY/AUGUST 2020

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

EUROPEAN VEHICLE TRADE The car carrying industry endorses these comments.

Emanuele Grimaldi, one of the co-owners of the Grimaldi Group SpA, of Italy, recently stated that his company was “Waiting for the world to re-start.”

This operator currently has a fleet of 50 vessels specifically built for the shipment of vehicles, including Fiat Chrysler Automobiles NV, Ford Motor Company, Volvo AB and General Motors Co. so is directly impacted by the lack of demand for its ships.

Grimaldi explains further: “We had literally zero car production, especially in Europe. The production and sales disruption in Europe was bigger than in China.”

FLEET IDLED LIKE NEVER BEFORE Unsurprisingly, the car carriers have had to idle their fleet like never before. Grimaldi estimates that as much as 30 per cent of the industry’s 750 vessels has been idled at some point this year, with his company having up to half of its fleet out of service.

By comparison, Wallenius Wilhelmsen reported a net loss in Q1 2020 of US$285 million and had removed 14 of its ships. During the company’s Q1 earnings presentation in May the company reported that “things remain very difficult to predict going forward, with consumer demand the key unknown variable.”

It is also clear it is not just the larger auto shippers feeling the pressure. UECC operates a fleet of 17 pure car and truck carriers (PCTC) and is jointly-owned by Nippon Kabushiki Kaisha (NYK) and Wallenius Lines (both major car carrying companies).

UECC operates independently from its parent-owners and primarily in the European short sea market, with a more limited number of vessels, but has stated throughout April and May 2020 that it was “unable to provide the same sailing frequency and transit times” as was offered pre-COVID-19.

The company also offered a stark warning. “The financial damage so far this year is severe, and we believe that months to come, if not years, will be very challenging for our industry.”

However, it is not perhaps all bad news and the impact of COVID-19 could help car carriers, manufacturers and ports.

Public aversion to public transport in the post-COVID-19 period could help boost sales of some vehicles. This position is summed up very succinctly by Jasienki in his Q1 results announcement. “What remains a huge question is, how much does that drive a push on demand as we move in the remaining quarters of this year?”

So, there have been fewer vehicles produced and auto carriers have had to lay-up tonnage, ultimately meaning less sales for the car dealers. The missing part of the supply chain here is the port industry, so how has it been impacted, especially in the UK and North Europe?

IMPACT ON PORTS The Port of Zeebrugge is one of the leading volume ports in North Europe handling new vehicles, with this ro-ro activity generating 36 per cent of total port tonnage in 2019.

The port states that an estimated 8 million new cars are manufactured in its hinterland and this is clearly a major contributor to the 1.49 million cars it exported in 2019 – though it also imported 1.46 million units.

However, the impact of COVID-19 has been felt in Q1 2020.

The port confirmed that a total of 660,134 new cars were handled, a drop of 15.6 per cent on the comparable Q1 period of 2019. “This decrease is partly due to the COVID-19 crises, as many car manufacturers ceased production in March 2020. Garages and dealers closed their doors, as a result of which the demand for new cars came to a standstill.”

This is a view endorsed in the UK at the consumer level, by Cowan at Quest Motors Ltd. “We were forced to shut our premises for the lockdown in the UK, but now we need to sell new vehicles to generate part-exchanges,” he confirmed, adding, “But leasing companies are not buying in new vehicles, so we have no used stock either. It means used prices are firming-up, but we need new stock to start flowing.”

Cowan makes an interesting point relating to the flow of new vehicles arriving in the UK. It will take some time for the production to ramp-up again in Europe for imports in the UK market. There is already some pent-up supply, if the position at the Port of Sheerness is typical, where pictures have emerged where there are thousands of cars are parked (although these include, of course, exports too).

LACK OF PRODUCT SUPPLY Moving forward, vehicles currently in storage in the UK will help, but overall supply will also be lacking, if projections from the Society of Motor Manufacturers and Traders are considered.

Figures released by SMMT showed only 4,321 new cars were registered in May, some 156,743 fewer than in April 2019 – and to put that figure into perspective, car sales are currently at their lowest level since the end of World War II when rationing was still in place in the UK. Moreover, SMMT is forecasting that for the UK around 1.68 million new cars will be registered during the whole of 2020, which would represent a 27% decline on last year.

While some of these may be manufactured in the UK, a large share will come from abroad, but it nevertheless indicates a sizable drop overall – and this means a challenging time in the short-term for the whole supply chain, from manufacturers, through to auto o shippers, ports of origin and destination and, ultimately, the end consumer.

8 New car sales in the UK at the lowest level since 1945

8 Richard Cow Cowan, General Manag Manager, Quest Motors Ltd L

We need to sell new vehicles to generate part-exchanges… we need new stock to start flowing…

‘‘

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

JULY/AUGUST 2020 | 21

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PROFILE: CARGO SHIPPER

THE ZESPRI WAY Iain MacIntyre discusses the Zespri kiwifruit marketing cooperative supply strategy for delivering over five billion pieces of kiwifruit in 2019-20 and progress made this year in spite of COVID-19 Close relationships with selected ports, securing availability of tailored wharfside infrastructure and carefully balancing use of conventional reefer vessel charters and container line services are pivotal to the ongoing trade success of Zespri International.

Headquartered in Mount Maunganui (New Zealand), the world’s largest marketer of kiwifruit works with about 2800 local and 1500 international growers and post-harvest firms to distribute kiwifruit to over 50 countries around the world.

Mike Knowles, Shipping Manager, Zespri, underlines the brand has become established as, “The world’s leading provider of premium kiwifruit.”

“This season,” he explains, “We are expecting a crop of around 155 million trays (or around 600,000 tonnes) and we’ll again be supplying more Zespri SunGold than Zespri Green Kiwifruit.”.

Exporting about 90 per cent of the total premium kiwifruit grown in New Zealand, Zespri’s main markets are greater China, Japan, Spain, Portugal, Germany and Korea Knowles says maintaining strong working relationships with the Port of Tauranga and other ports around the world is a key factor in global supply chain efficiency. Such partnerships ensure Zespri has ready access to essential wharfside infrastructure.

“As our kiwifruit is a perishable product, we require cool stores to at the ports in which we discharge our fruit. The Port of Tauranga, where around 80 per cent of our kiwifruit is shipped from, has a dedicated cool store for the kiwifruit industry, as well as the Port of Zeebrugge. There are also cool store facilities at our terminals in Japan, Spain and Italy.

In recognition of the trade’s importance to its business, the Port of Tauranga opened its NZ$11 million purpose-built cool store at Mount Maunganui to replace a 48-year-old facility in November 2017. Developed in close liaison with the sector, it has been leased for 15 years to Tauranga Kiwifruit Logistics which handles kiwifruit to the point of export. It covers 4200 square metres, can accommodate about 5200 pallets of kiwifruit and features advanced energy saving characteristics.

“At the Port of Tauranga,” says Knowles, “We hire the cool store for 12 months of the year, although we do rent it out to other users when New Zealand moves to the resource of the global supply of kiwifruit.”

“Our Northern Hemisphere growers,” ers, he elaborates further.

“Supply fruit to consumers in our global markets at the end of the New Zealand season (for the e three months when New Zealand-grown fruit is unavailable). lable). In other ports around the world, due to the seasonal easonal nature of supplying perishable products, facilities acilities like cool stores are hired short term and are shared with other goods for the remainder of the year.r.”

60: 40 CONTAINER/REEFER SPLIT Influenced by such factors as geographic destination, seasonality and relative cost, Zespri splits its New Zealand exports about 60/40 in favour of regular container line services over chartered reefer ts supply vessels, in another key element of its chain strategy.

“Our goal is to get our fruit to the market and safely delivered to customers and consumers as quickly as possible. There are a number of advantages in having our own services going direct to the markets, including faster transit times and we can better control the conditioning of our fruit onboard,” says Knowles.

Commenting on recent performance, Knowles emphasises that New Zealand’s kiwifruit industry has worked “incredibly hard” in the face of the challenges posed by COVID-19 to safely pick, pack and ship fruit to market. “The supply chain adapted and collaborated to make sure growers and postharvest operators had the support they required to pick and pack kiwifruit under the stricter hygiene and additional safety protocols put in place.”

As of late June, 30 of the 50 charter vessels scheduled for the season as well as over 16,000 containers had been loaded for Zespri.

Interestingly, Knowles notes that Zespri had previously developed, and “more importantly, practiced” a business recovery plan for events such as the global pandemic.

“Control and certainty over shipping,” he underlines, “is an important strategic asset, and we were able to achieve this through the relations relationships we have with our shipping partners. W We increased our charter programme and bypassed by congested ports to discharge fruit fruit.”

And he notes notes: “Our carriers all comply with the new IMO 2020 regulations requiring the use of low-sulphur fuels and it is important impor to us that we play our part in sustai sustainability and looking after our environment. environ The long-term financial impa impacts have been factored into our bud budgets and support our sustainability obj objectives.”

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

8 Turning over NZ$3.36 billion and achieving a net profit of NZ$200.8 million in the financial year to end March 2020, Zespri shipped 500 billion pieces of kiwifruit - a wellrehearsed Business Recovery Plan has played a major part in maintaining supply chain efficiency in the face of COVID-19

8 Mike Knowles, Shipping Manager, Zespri

JULY/AUGUST 2020 | 23

NATIONAL PORT STRATEGY: POLAND

POLAND: EFFECTIVE PLANNING FRAMEWORK REQUIRED Poland lacks a robust national port masterplan with the capacity to filter essential port plans from those based more on aspiration. There is also a bigger role to play for such a national framework in building investor confidence

8 Gdynia has big ambitions with its new external port area project but is it sending the right message to private sector investors?

Each of Poland’s major ports has large scale expansion plans but looked at collectively do these plans make sense?

In mid-2019 the Polish Parliament adopted a special act on investments related to the country’s three main ports – Gdynia, Gdansk and Szczecin-Swinoujscie – which aims to accelerate the procedures relating to implementing port expansion and encourage associated investment. Together the three ports account for 95 per cent of the revenue received from the sector by the State Treasury.

The plans on the drawing board are large scale – Table 1 - but while the Polish Parliament has seemingly opened the gate on unrestrained port expansion a question mark hangs over the fundamentally important point of how rational port expansion will be achieved on a national basis? The instrument that plays a large part in achieving this – a National Ports Masterplan – is notable by its absence in Poland which may well prove to be a costly mistake.

National port masterplans have a core role to play in providing a guiding light for rational port development, not least in avoiding the big mistake of too much capacity too soon. Equally important, a national port masterplan is an important component in promoting private sector confidence – i.e. in putting in place a framework for development that encourages demand led investment that offers sensible returns to investors.

The problems associated with individual ports pushing large scale development plans without any real coordination between them are well documented based on global experience to-date.

It is not unusual for individual ports, often supported by regional or local politicians, to enthusiastically promote their own schemes – and ultimately to come up with a logic that

24 | JULY/AUGUST 2020

justifies them proceeding, especially when doing so not fully taking into account the macro (national) alongside the micro (local) context. Big ports in the same coastal range are invariably in competition with each other – Gdynia and Gdansk for example are located just nine nautical miles apart – and it is not unusual for the competitive climate that exists between such ports to favourably colour thinking on proceeding with expansion plans.

There may well be a case for both these ports to proceed with their respective plans but add to these plans those of Szczecin-Swinoujscie, which to date has fulfilled a relatively minor role compared to its peers, then this could well prove to be a step too far. Especially when the bush telegraph beats that the latter port has implemented independent market studies that did not find a case for large scale expansion but irrespective of this the port sill intends to proceed.

CONSTRUCTIVE ROLE A national ports masterplan, properly implemented with input on market analysis from independent advisors, can play a very constructive role in the sanctioning of and approval for financial support of individual port projects. It is a major component of good risk management offering safeguards against what can often be seen as the over enthusiastic ambitions of certain ports – a description which some suggest applies to the Szczecin-Swinoujscie project.

There is also no reason why national port masterplans need to be static once developed – they can, and many say should, incorporate mechanisms such as a role for an independent auditor of “ideas,” managed typically by a central ministry such as the Ministry of Finance. Such an entity should possess the power to initiate its own

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

NATIONAL PORT STRATEGY: POLAND National port planning is in effect good risk management offering safeguards against the over enthusiastic ambitions of certain ports

‘‘

independent studies into new proposals thereby effectively providing a check and balance mechanism to test the project justifications set out by individual ports.

Another useful dimension to such oversight is the remit to promote an investor-friendly climate. Not just in terms of making sure there is a real need for and logic underpinning proposed expansion schemes but also as regards the rules of engagement with both existing and potential new investors. One example of this is in Gdynia where the port authority has announced to more than one existing concession holder that when their respective concessions expire they will not be extended irrespective of the fact that this will be some way in advance of new port capacity being brought on-stream. With the parties concerned known to be leading contributors to the port’s earnings there seems to be a distinct lack of enlightened thinking here in terms of keeping proven major investors onside.

A more logical step would be to allow such parties to continue to operate their respective terminals until such a time as new terminal capacity is ready in the expansion area?

Such a step would be collaborative with blue chip investors as opposed to the current policy which is confrontational in profile. And if it is the port’s intention to offer new concessions at these facilities then this appears to be flawed – who will bid for them with superior, deeper draught, new capacity coming on-stream in the near term? Equally, extending the existing concessions may well prove to be the only safe route to guaranteeing no loss of cargo volume between the end of the concessions and delivery of new terminal capacity.

It has to be said the Gdynia approach is highly unusual and does not send out a good signal to the investor community.

EU TACIT AGREEMENT The 2016 report from the European Court of Auditors, “Maritime transport in the EU: in troubled waters —much ineffective and unsustainable investment,“ confirms the need for more emphasis on national port planning.

The report assessed the Commission’s and Member EU States’ EU Maritime freight transport strategies and the value for money delivered by EU-funded investments in ports. It

looked at 37 new projects and five reassessed projects and key findings included: 5 “The long-term development strategies put in place by Member States and the Commission did not provide a robust and coherent basis for planning the capacity needed in EU ports…., and 5 “Funding in similar port infrastructures and superstructures in neighbouring ports has led to ineffective and unsustainable investments: based on 30 of the 37 projects already completed…..one in every three euros (corresponding to 194 million euros for 12 projects) has been spent ineffectively…”

And the report goes on to emphasise….” Member States should put in place a robust and coherent long term strategy for developing their ports,” and further suggests that: “For investments in ports to be supported using EU funding during the 2014-2020 period, there is even a legal obligation to make these investments part of a wider, more general strategic port development plan.”

Poland and its shortcomings in national port planning is also specifically referenced in the report. It states: “Poland had adopted a national strategy with many elements able to serve as a basis for making good port investments, but this strategy had neither been accompanied by an implementation plan nor properly monitored. As a result, the projects selected had not always been of the highest priority or sufficiently well developed. Moreover, in some cases, non maritime projects (e.g. typical city roads, quays with tourist attractions) had been financed from the allocation dedicated to maritime transport.”

The case for the informed development and implementation of a National Port Masterplan in Poland is very clear and with the various port expansion plans in the pipeline there is no doubt that this should happen sooner rather than later.

8 National Port Masterplans represent a valuable component of port expansion risk management with the benefits of effective and timely decision-making flowing to all involved parties

Table 1: Port Expansion Plans at Poland’s Three Major Ports – Gdynia, Gdansk and Szczecin-Swinoujscie Port

Project

Investment

Scope

Gdynia

New external port Area

€1.8bn rising to 3.28bn

Creation of a new, deep draught, external port area as well as the extensive upgrade of the existing port and interfacing transport connections

Gdansk

Development of Central Port Area

€3.1b

Construction of 19km of new quay, 8.5km of breakwaters, nine terminals, four turning areas and three approach fairways

SzczecinSwinoujscie

Multiple projects

NK but high

A new high capacity, deepwater container terminal is a major ambition of the port – estimated cost €500 million – involving new breakwater and terminal development. Other projects include the major expansion of the port’s LNG terminal for completion by 2023

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

JULY/AUGUST 2020 | 25

BPA: UK TRADE CASE STUDY

HALF THE BATTLE

Credit: Port of Dover

The British Ports Association (BPA) considers the downstream impact of COVID-19 on trade flows and its member ports, and underlines the need for Government action

As we gradually move towards successive countries coming out the lockdown, it would be a sizable understatement to say that the Coronavirus pandemic will be an economic game-changer for everyone, with a major impact on trade and ports. Given the losses of loved ones and jobs, it might seem inappropriate to be talking about the trade impacts of COVID-19, however it is very clear that the health challenges of this pandemic will only be half the battle.

The pace at which COVID-19 spread illustrates how disruptions can rapidly permeate global trade and consequently port traffic flows. The coronavirus pandemic cut global trade values by 3 per cent in the first quarter of this year, according to the latest UNCTAD data and the downturn is expected to accelerate in the second quarter, with global trade projected to record a quarter-on-quarter decline of 27 per cent. As a result, supply chains have been severely disrupted with havoc also reaped in maritime passenger markets.

While the shipping of food and critical supplies has been essential in the UK’s lockdown, this is not enough to sustain Europe’s second largest ports industry. The potential depth of a global recession in 2020 does not bode well on so many fronts, including for UK ports. Since the last recession which stemmed from the financial crisis in 2008, the volume of trade in goods handled since 2007 has reduced by 17 per cent at the UK’s largest ports and by 24 per cent at smaller ports. In 2009 itself UK ports’ cargo declined by 10.7 per cent (in tonnes) and container traffic (in TEU) by 15.4 per cent.

However, global, regional and national trade flows via UK ports comprise a multitude of products from North Sea oil to organic chemicals, from iron ore to motor vehicles, from grain to whisky and from sand to cement. The impact of COVID-19 in its most simple terms is the reduction of market demand across this wide range of commodities and their supply

26 | JULY/AUGUST 2020

8 The British Ports Association hints at a ‘double whammy’ as a result of the impact of COVID-19 and Brexit

chains. Indeed, the Bank of England has warned of a significant recession and decline in the economic performance of the UK in 2020 and this is being replicated elsewhere.

EVOLVING STORY The full story continues to evolve but for UK ports and terminals largely engaged in handling bulk raw materials including agri-bulks, iron ore, aggregates and crude oil, and also break bulks including steel products and paper reels, the picture will vary depending on the key market drivers. For example, government policies to invest in major infrastructure construction projects and offshore renewable energy systems are potentially of major benefit for ports servicing these markets. However, the picture for crude oil exports and refined oil products (which together account for nearly 40 per cent of all UK export tonnage) is more complex and further complicated by the recent substantial plunge in oil prices.

For imported industrial components and consumer products, their market arket demand drivers will determine short term trends - demand emand for paper and paper products which has been in long term decline e (attributable to a switch away from printed to digital media) but temporarily, porarily, at least, improved because e of the COVID-19 related demand for toilet paper and tissues. However, owever, waning consumer demand and has been apparent across non-food retail sectors in 2020 and this has been reflected in even ven lower es of shipping volumes containers from Asian

8 Richard Ballantyne, Chief Executive, British Ports Association

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

BPA: UK TRADE CASE STUDY

8 The need for positive Government action in the wake of the damage caused by COVID-19 is underlined by the British Ports Association – large and small ports alike are negatively impacted

to European ports, a trend that started in 2018. Commentators point to the slow recovery rate in China as a potential indicator of the delay before retail and manufacturing markets re-establish their positions.

The UK automotive industry has been instrumental recently in developing international trade by optimising cross-border supply chains for components required for manufacture, but also for growing exports of manufactured cars as now 81 per cent of UK car output is exported. However, as Coronavirus dampens global and UK demand, port traffic in trade cars has weakened even further (the volume of vehicle exports declined by 14.7 per cent in 2019).

NEW THINKING Supply chain disruptions, such as Coronavirus, can drive new thinking about future supply chain designs. For example, lead times of 6/8 weeks on ocean shipping routes from Asia to UK require higher levels of UK inventory, higher working capital and greater physical warehouse space. This was evident during the Brexit deadline sagas in 2019.

For some products alternative solutions include a move away from sole-country sourcing and/or to “near-shoring”, which involves using geographically closer manufacturing locations, for example in Eastern Europe where production costs may be higher compared to sourcing from Asian markets, but the lead times are significantly shorter, enabling faster stock replenishment and lower buffer stocks at UK plants and distribution centres. These solutions will not meet every supply chains’ needs and do require a wider commercial review than simply selecting the lowest unit cost of supply, but the potential impact for UK ports could see switches from deep sea shipping to the growth of regional short sea shipping.

The Coronavirus pandemic is a game-changer in so many ways and can be expected to accelerate the pace of change, for example to near-shoring supply chain solutions.

Passenger traffic on ferries operating to mainland Europe declined by 6.3 per cent in 2019. The immediate challenge of government and passenger attitudes to international travel and enforcement of border restrictions and quarantine will hit non-essential travel.

Long term trends to reduce environmental impact via airline travel together with the reintroduction of post Brexit duty free travel may eventually help to reinvigorate the passenger ferry sector but the short-term impact of COVID-19 on leisure travel to mainland Europe can be expected to lead to further decline in ferry passenger numbers in 2020 and a period of limited or no activity in cruise and marine leisure activities.

The wide-ranging personal, economic and business disruptions caused by the Coronavirus pandemic are still not fully understood but it seems likely that the UK economy and traffic at UK ports will be far from immune. This throws a question mark over potential growth areas such as offshore renewables and over the commitments that the UK Government has given in relation to transport infrastructure investments, offshore wind and new initiatives such as freeports.

GOVERNMENT MUST ACT The bottom line, however, is Government will need to act to help ports drive the recovery and in the spirt of this the BPA has recently launched proposals to help improve the forward position. Indeed, in a recent survey of UK ports the BPA found that 64 per cent are not confident about imminent economic prospects and this takes no account of the impact of Brexit.

8 British ports are far from immune from the full effects of COVID-19… but can drive new thinking about supply-chain design

PASSENGER PICTURE UK ports engaged in providing ferry passenger services have experienced declining market share arising from cheaper low-cost airline tickets and Channel Tunnel competition. This competitive landscape is dynamic as illustrated by the recent wide-ranging flight cancellations, together with the demise of the airline Flybe.

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

JULY/AUGUST 2020 | 27

TRUCK MOVEMENT ANALYSIS

OPTIMISING PORT VEHICLE TRAFFIC Writing exclusively for Port Strategy, Dr. Nils Kemme of Hamburg Port Consulting (HPC) discusses proven solutions to keeping port vehicle traffic moving and the role of simulation in this

8 HPC has developed successful solutions for keeping port truck traffic moving facilitating greater port efficiency overall

In Europe, about 75 per cent of all cargo transports are still performed by trucks (www.statista.com, 2020). As a consequence, roads and highways are filled with truck queues. In particular, around ports, trucks with container loads are a dominant picture, often leading to reduced traffic flow and congestion.

This is especially true in so-called port cities, where the ports have grown over many years and are now located in a city centre location surrounded by residential and commercial areas - truck traffic is one of the biggest problems.

TRUCK TRAFFIC FLOW DETERMINING PORT PERFORMANCE AND ATTRACTIVENESS Even though, most ports and terminals do not directly make any money with truck traffic, it is of crucial importance for the success of ports and a region’s supply chain performance as a whole to keep traffic moving. The more trucks are stuck in congestion, the less transports can be performed per day, and the more expensive are truck transports, reducing the competitiveness of ports and a region’s attractiveness for industries and commercial activities. Ultimately, bad hinterland connectivity with truck congestion problems will reduce handling volumes and impair a port’s commercial success.

Additionally, trucks are one of the main sources for emissions in ports, causing 20% to 60% of all emissions in ports depending on environmental standards (OECD, 2014).

By means of a powerful road network, a port’s carbon footprint as well as harmful emissions such as NOx and particulate matter can be significantly reduced. Furthermore, the traffic flow quality is a main driver for the appreciation and acceptance of the port industry by the city community.

The more often commuters and residents are stuck in congested roads around the port, the less they are willing to accept further volume and traffic growth.

Against this background the ports and terminal operators

28 | JULY/AUGUST 2020

are looking for answers to burning questions about traffic optimisation: 5 How to reduce truck traffic and emissions, and how to mitigate its impact?

5 How can the traffic flow be optimised?

5 Will more traffic deteriorate rate the traffic quality and lead to congestion?

5 Where is the bottleneck k in the road network?

5 What is the root cause of congestion?

5 Is it necessary to extend the road infrastructure or are smarter options available? ailable?

UNLOCKING THE FULL POTENTIAL OTENTIAL OF ROAD INFRASTRUCTURE In our projects around the he globe, I have seen many ports responding nding to traffic problems by extending g the road infrastructure. I am convinced vinced to first evaluate the existing infrastructure rastructure to unlock potential by leveraging raging smart traffic planning and optimisation. isation.

In Hamburg, we introduced uced a vehicle booking system for the he container terminals, which led to a more evenly distributed truck traffic, reducing educing gate queues and improving traffic affic flow in the entire port.

There are various options ns that can help to optimise port traffic, c, including amongst others as shown wn by the HPC Traffic Simulation on Map organizational measures and minor infrastructure changes such ch as: 8 Dr. Nils Kemme, PhD

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

TRUCK MOVEMENT ANALYSIS 5 Optimise traffic light patterns to reduce queuing times at junctions 5 Implement adaptive truck routing systems to dynamically bypass congested areas 5 Extend port opening times and/or implement vehicle booking systems to smoothen peak traffic volumes 5 Install/extend turning lanes to minimize traffic tailback at junctions 5 Replace a junction by a roundabout to improve traffic flow 5 Add another driving or turning lane to increase road capacity 5 Build a flyover to relieve critical junctions MAKING FULLY INFORMED DECISIONS The challenge, though, is to take the right measures, as there is no sure formula. Road networks are complex systems which differ notably between ports, which makes it hardly possible to assess the potential of such traffic planning and improvement measures upfront based on experience and/ or simple calculations. Therefore, in order to avoid costly mistakes and to ultimately make the most out of the road infrastructure, we have been using traffic simulation tools in multiple port development projects.

By means of detailed simulation, that accurately models port-specific infrastructure and traffic flow, the effects of alternative traffic planning measures can be precisely quantified before being built. For the future expansion of the Port of Bangkok, HPC’s simulation analysis revealed that an originally planned central roundabout would not be able to cope with peak traffic hours but requires an additional flyover for through traffic.

In this way, the port can be saved from long traffic jams and costly mis-investments in insufficient road infrastructure.

With another simulation analysis, for a new chemical plant in Germany we confirmed that the expected increase in truck volumes will not affect the traffic quality on the connecting streets up to the highway, thus mitigating major concerns of politics and local residents.

8 Dr. Nils Kemme, PhD, is Partner and port operations consultant at HPC Hamburg Port Consulting GmbHl leading HPC’s simulation team. Over the past eight years he has planned and optimised port design and operations in more than 35 simulation projects on six continents.

Strategy port sector reform business strategy development masterplan public-private partnerships institutional & regulatory analysis

unlocking value in the maritime & transport industry

Financing

feasibility study business case analysis economic cost benefit analysis risk analysis

Transactions transaction process strategy

project finance

tender document & contract

finance procurement

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

Valuation financial modelling & analysis

financial structuring private placements

www.mtbs.nl

8 Simulation Map – different scenarios are able to be looked at and outcomes mapped

commercial & financial due diligence

bid valuation & negotiation bid strategy & preparation training & courses

JULY/AUGUST 2020 | 29

CONTAINER TERMINALS: Paths to Profitability

By Remco Stenvert and Andrew Penfold

Container Terminals: Paths to Profitability

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

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

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

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

Price of a PDF version of the study is £575 (UK), €680 (Europe) or US$780 (Rest of the World) per copy. https://www.portstrategy.com/reports

PORT FOCUS: LATIN AMERICA

LARGER THAN THE EIFFEL TOWER Container managers in Brazil expected the CMA CGM extra-loader, APL Paris to call in Santos, but instead it went to Itajaí. Rob Ward explains

8 IPA safely carried out a “crazy” backwards manoeuvre for 1.2km

The extra loader from CMA CGM to re-position thousands of empty units (and reefers) and support booming export demand did not go to Santos, as expected, but instead a call to Itajai was made.

The APL Paris is the largest ever vessel to call to the East Coast of South America (347.4m LOA and 10,698TEU capacity, larger than the Eiffel Tower), but only called to the Port of Itajai.

The Itajaí Port Complex (which includes APMoeller Terminal Itajaí on the right bank and Portonave, owned by MSC, on the left bank) has spent millions of dollars on capital and maintenance dredging and also on a major expansion of its Turning Basin, which previously allowed only ships with a maximum length of 303m but can now go to 350m.

“Incredibly, Santos was not deemed ready to receive this ‘Gigante dos Mares’ [Giant Of the Seas, as everyone is calling it in Brazil], because of over-strict interpretations of what is and what isn’t allowed,” exclaimed one port consultant who works closely with box terminals in Santos, adding, “The Itajaí Port Authority (IPA) worked in unison with pilots, terminals and maritime authorities and they carried out a crazy backwards manoeuvre for 1.2 km to accommodate this vessel. They had the will and they succeeded.

“Here in Santos we have had some minor problems with the narrowness of part of the entrance channel into the port but if the various responsible authorities got together we could have handled this vessel. The Santos port community is fed-up with the port being used as a political football and with the Port Captain’s department not willing to compromise.

We have seen these cargoes usurped by Itajaí.” The executive added, wishing to remain anonymous “It’s not about the pilots, it is not about tugs, it’s not about the terminals, as they are all prepared to receive these Gigantes. No, it is all about political will and bureaucracy and it needs to change,” he concluded.

Marcelo Salles, the president of the IPA, said that it was the co-ordinated efforts of the “entire port community of Itajai” that meant his port now held coveted achievement of having handled the largest box ship ever to call ECSA. “It is without doubt a dream come true,” enthused Salles.

CMA CGM sent an extra loader to Brazil laden with 1000s of empties so that chicken, pork and beef exporters had enough reefer containers meet rising exports, especially to China, which has seen its domestic pork production plummet owing to African Swine Flu outbreak that started back in mid-

2018. With imports reducing owing to a weak Real in Brazil and increased blank sailings it has been increasingly difficult for Brazilian shippers to get sufficient containers back to their plants for re-stuffing.

Salles added that the arrival of the APL Paris was the sixth manoeuvre with ships over 306m LOA since the new turning basin was inaugurated earlier this year.

“It is a milestone for us, because many difficulties had to be overcome and even with so many adversities the region of Itajaí and Navegantes has demonstrated that when this community comes together and seeks what no one believes, the dream here becomes reality,” he concluded.

Robert Grantham, a former commercial director for IPA and now director of Solve Shipping consultancy, laid praise to the current port administration and the entire Itajaí/ Navegantes port community.

“It is amazing. I also hear there have been major postmortem inquiries going on in Santos. I think the big problem there is that the port – and its revenue – is so important politically so the terminal managers are just very afraid of speaking out for fear there will be consequences.”

The Itajai Port Complex is Brazil’s second largest for boxes and handled 1.3 million TEU last year.

APL Paris The APL Paris, operated by CMA CGM, made the journey from Ningbo (departing April 25) in China to Brazil, via the Panama Canal, calling at Shanghai, Qingdao, Busan (South Korea), Manzanillo (Contecon), Balboa, Cartagena (Contecar in Colombia), Jamaica, and then Caucedo (DP World in Domenica Republic), before a 15 day voyage to Navegantes, bypassing Santos.

After departing Navegantes on June 17 she is now heading directly for Singapore via the Cape of Good Hope, thereby completing a Round the World voyage.

The vessel is 347.4 meters long with a 45.27 meters beam. Itajai Port Authority says: “in terms of comparisons, it is larger than the Eiffel Tower, 300 meters high and its length represents the same length as 3.5 football fields”.

APL Paris is Singapore flagged and was built in 2012 and has a 12.3 meter draft when fully laden.

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

JULY/AUGUST 2020 | 31

ONE TO ONE: SANTOS

MODERNISE & REVOLUTIONISE New Santos Port Authority President, Fernando Henrique Passos Biral, has a clear picture of what needs to be done to propel the port forward, he talks exclusively to Rob Ward Santos is South America’s largest port for containers and one of the largest for all cargoes. It has a Reais10 billion (US$1.84 billion) expansion plan to increase overall capacity by 50 per cent from 160 million metric tons up to 240 million per annum by the year 2040, with box capacity rising by 60 per cent, from today’s 5.3 million TEU to 8.7 million TEU per annum by the year 2030.

In a lengthy and detailed interview with Port Strategy, Fernando Henrique Passos Biral, the new president of the Santos Port Authority (SPA), said a revitalized Zoning and Development Plan (PDZ), will “modernize and revolutionize” the port and will create nearly 60,000 new jobs.

While most of the new jobs will be in the construction of new infrastructure (road, rail and port), Biral expects 2,400 new direct jobs in the port sector, taking the overall port workforce up to 18,500, while a major increase in automation is also carried out.

As of early July 2020, Brazil’s minister for Infrastructure, Tarcisio Gomes de Freitas, has promised to approve the Santos PDZ plan, to the delight of Biral and his team at the SPA, which is likely to be privatised over the next year or so.

“Our Santos Port PDZ is a programme that we are very enthusiastic about because finally we are addressing many issues we have been suffering from in the port of Santos,” Biral told Port Strategy in a rare interview to foreign media.

“Unlike many other mega ports, such as the likes of Rotterdam and Antwerp, we have limited space. We have only 10 million m2 available, whereas Rotterdam has around 120 million m2 so we must be super-efficient and utilise our space very intelligently.”

Biral then explained that the “special logistics” of the port of Santos includes the geography of the port, plus the road and rail links that have to climb more than 800 meters through the Atlantic Rain Forest up to the plateau that hosts the city of Sao Paulo, South America’s most populous with a conurbation of nearly 20 million inhabitants. With more than 45 million residents the state of Sao Paulo is the industrial engine room (and financial epicentre) of Brazil and its biggest consumer market.

For several years, bottlenecks have occurred at the foot of the escarpment where the 12 lanes of highways (on two separate road networks) descend down to the entrance of the port of Santos. Ongoing road infrastructure projects are aimed at fixing this issue.

“Santos has delivered a lot to the Brazilian economy over the last century but our geography here is not so good, making logistics difficult, so we must plan very well to take the cargo up to and down from the plateau,” explained Biral.

“That’s why we have been having dozens of meetings and consultations with port entities.”

Not everyone agrees that the “consultations” have gone far enough, however, and local dockers and port worker unions such as Settaport (which represents workers in the sea transport and port areas), and some trade associations, plus the owners of Marimex (the Santos based warehousing company which stands to lose out with re-organization of the port parameters included in the new PDZ) have been asking why there has been a “lack of transparency in drafting the PDZ” and no “official public hearing”. They also claim the port will lose jobs after the new PDZ is implemented.

32 | JULY/AUGUST 2020

“But at least Biral is listening more than his predecessor did,” said one Santos port terminal manager, who did not wish to be identified.

Biral counters the criticisms full on and says that, if anything, there has been more than usual transparency as around 30 meetings were held with 50 port entities, from all sectors.

“In fact, it was a much more transparent process than if a few public hearings had been held, which are not mandatory in any case. We opted for more technical and segmented debates with people and bodies actually working in the port,” he added. “Also we will be creating thousands of new jobs, both during the five to 10 year construction phase and permanently in the port itself.”

SPA also wants the new PDZ to encourage further rail penetration into more port terminals and also to help with the development of “clusters” of terminals specialising in the same cargoes, rather than the rather hotchpotch spread of facilities that exists today.

“The survey shows that this PDZ will be for the current generation living in the Santos conurbation, one of the most important engines, for the creation of thousands of jobs,” said Biral, adding that a 100 per cent increase in port capacity

8 “We are addressing many issues we have been suffering from in the port of Santos,” Biral told Port Strategy in a rare interview to foreign media

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

ONE TO ONE: SANTOS

8 A revitalised Zoning and Development Plan (PDZ), will“modernize and revolutionise” the port and will create nearly 60,000 new jobs

would be twinned with a job increase of only around 15 per cent due to a “massive parallel increase in automation”.

Biral told Port Strategy that “despite COVID-19” the port’s cargo throughput, especially containers, was growing and when things get back to normal “a lot more capacity will be needed over the next few years”.

“We have seen cargo increase about 10 per cent over the first four months of this year, with agribusiness exports and fertiliser imports doing very well, despite COVID-19,” he explained, adding, “Growth is sustainable in the agribusiness – soya, chicken, beef, coffee, etc – as there are new areas being developed for crops and productivity is increasing.

He is also excited about new port concessions coming up, starting with a new cellulose and pulp paper terminal for the area once occupied by Libra Terminais (Terminals 35 to 37).

“This tender will go ahead on August 28, as scheduled, and we have had a lot of interest shown by major cellulose operators, including Eldorado, Bracel and Klabin,” enthused Biral, adding that he is also very keen to push through a tender for the present day Petrobras liquid bulk terminal, located adjacent to the Usiminas terminal near the entrance to the port.

He explained that the port authority had been renewing the expired lease on the site every six months for five years and “this was not good practice”.

What Biral plans to do next – if Infrastructure Minister Tarcisio Gomes de Freitas approves – is symptomatic of the way forward for Santos and Brazil in terms of privatisation and creating more competition. “We have had many discussions about increasing competition, so want to split the facility into two terminals to provide competitors into the sector. This policy is aligned with the Ministry of Economy and also Infrastructure and it is heavily pro market, with an aim of breaking up monopolies and oligopolies...[even if it is Petrobras). The current government is trying to introduce this line of development into every sector of the economy.”

Standing up to the state controlled oil, gas and transport conglomerate Petrobras – which for decades has been seen

as a “state within a state” – is a very brave (some might say foolish) thing for Brasilia and the SPA to do.

Biral added that both of the two winners in this tender would be obliged to build a new berth each to add liquid bulk capacity to Santos.

In addition, SPA will also feed off a commissioned report by the Brazilian National Development Bank (BNDES), and several international field trips – Biral visited ports in the UK and Europe while Gomes de Freitas, an engineer with a military background, visited Australia – to work out the best way forward for a new container terminal, a new “revolutionary and innovative dredging concession” and for a new privatised SPA. These will all be evaluated over the coming months, Biral (whose first two names echo Brazil’s best President of the past 50 years, Fernando Henrique Cardoso) told Port Strategy.

When asked how his regime as SPA president might differ from Tercio Carvalho, his predecessor, who received a lot of flak during his one-year reign, Biral was clear.

“We have the same priorities but very different management styles. Tercio is a visionary and he has a very good understanding of the export sector in the Brazilian port system. “I bring people from the financial industry into play and work with re-structuring management systems. We certainly have different personalities and my focus has been to create teams and make them perform well... about giving a lot of attention to the strategic plans I also believe in flexibility.”

Biral also said a close relationship with Brasilia and, especially, the Infrastructure minister was essential for SPA to achieve its goals. The new SPA CEO said he and the other directors in the port have frequent, “weekly at least” contact with De Freitas.

“He contacts me and the other directors.... many interactions. He knows very well what is going on here...He has a military background and is a born leader,” concluded Biral. “He’s very technical and he is not especially political [Santos port users prefer technicos over politicos] and together, I am sure, we will deliver what the country needs.”

Impact of the US$2 Billion Package The near US$ 2 billion package is divided between investments in terminals with ongoing contract extension commitments (US$ 500 million), in eight new concessions or added area incorporations starting 2021 (US$ 1.1 billion), and road-railway access renovations (US$ 400 million).

The 60,400 new jobs, promised by SPA,

equates to 21 per cent of the current population of the three cities around the Port of Santos Santos (204,200), Guarujá (54,600) and Cubatão (28,900), according to 2017 data from the Brazilian Institute of Statistic Geography (IBGE).

For construction work SPA foresees the creation of 58,000 jobs over the next five years, of which 19,300 will be direct, 9,000

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

indirect and 29,700 via a boost to local economy from increased logistics. These numbers were from the Brazilian National Development Bank (BNDES) methodology, adapted by the government’s Planning and Logistics Company (EPL), the values of which represent the total jobs generated for the whole period of the project’s execution.

JULY/AUGUST 2020 | 33

DIGITALISATION

FOCUSING DIGITAL MINDS The COVID-19 pandemic is focusing minds on the digital world.

Felicity Landon reports

8 The Port of Rotterdam has recognised that getting the right information and communicating updates to many different stakeholders is more challenging when not using offices

In the grip of COVID-19, there’s plenty of talk about a ‘new normal’. For the maritime sector, that new normal will inevitably be based on a renewed push towards digitalisation.

There are plenty of reasons for that – not least the need to reduce costs and bottlenecks and to increase efficiency. But in practical terms, the pandemic is also reinforcing the case for going paperless because COVID-19 has been shown to stay on paper for up to four days.

In June, a ‘Call to Action’ communiqué entitled Accelerating Digitalisation of Maritime Trade and Logistics was launched by a group of organisations, including the International Association of Ports and Harbors (IAPH), BIMCO, the International Cargo Handling Coordination Association (ICHCA), the International Chamber of Shipping (ICS), the International Harbour Masters’ Association (IHMA), the International Maritime Pilots Association (IMPA), the International Port Community Systems Association (IPCSA), the International Ship Suppliers’ Association (ISSA), the Federation of National Associations of Ship Brokers and Agents (FONASBA) and the PROTECT Group.

With the focus on exiting from lockdowns, said the communiqué, “There is an urgent need for inter-governmental organisations, governments and industry stakeholders concerned with maritime trade and logistics to come together and accelerate the pace of digitalisation so that port communities across the world can at least offer a basic package of electronic commerce and data exchange, in compliance with all relevant contractual and regulatory obligations.”

Tor Svanes, managing director of e-navigation specialist NAVTOR, says: “All the maritime news reports say that digitalisation in in maritime has been speeded up due to

34 | JULY/AUGUST 2020

COVID-19. So, if that is what we can expect, it is good to see.”

Among the changes in attitude, one is highlighted by Oliver Schwarz, business development director at ChartWorld: “An important development is that our customers now understand that sending out paper products to vessels is a thing of the past. We don’t need to send paper books; we can learn to appreciate benefits of e-books. Covid-19 pushed this forward and customers had to respond,” he says.

The Port of Rotterdam Authority’s PortXchange, a port call optimisation platform, has responded to the COVID-19 crisis in a joint initiative with Inchcape World of Ports.

Launched in 2019, PortXchange is designed to improve the efficiency of port calls and help ships to reduce their emissions, both in port and between ports – the application can be used by shipping companies, agents, terminals and other service providers to ‘optimally plan, execute and monitor all activities during a port call’, including pilotage, terminal use and bunker services.

PortXchange and Inchcape announced that during the COVID-19 crisis, initially up to August 2020, agencies and terminals would get free-of-charge access to part of the PortXchange software to schedule port calls and share them directly with their port community, now based on master data supplied by Inchcape to cover almost 4,500 ports around the world.

The crisis has created challenging times for the industry involved in scheduling port calls remotely, the partners pointed out: “Getting the right information and communicating updates to many different stakeholders and colleagues may become more challenging when not at the office.”

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

DIGITALISATION Dita Bruijn, director of operations at PortXchange, says: “Port call optimisation covers the whole scope from the previous port to the next new port, including arriving, cargo operations and leaving again. Typically, a lot of ships approach a port at too high a speed, then have to anchor and wait until the terminal is ready to receive them.”

When working on the PortXchange programme, Rotterdam had noted that more than 50 per cent of ships approaching port had to wait. “Then you also have all the unnecessary emissions – higher because they approached too fast and then higher while they are waiting, generating emissions that are damaging for the local environment. Our platform was designed to improve communication between port and shipping line so the vessel can slow down and still arrive at the optimum speed and time.”

PortXchange connects all the information automatically on a digital platform – sending out notification from the terminal so that the shipping line knows if the vessel needs to reduce speed, says Ms Bruijn. “It has multiple layers: the physical information and a digital map of the anchorage area, pilot area and infrastructure; on top of that the AIS information so we can see where the ships are all the time; we place the planning information on top of that and the actual information from all the parties involved in the port call – port authority, shipping line, terminal, agent, service providers. We combine all the information together and the system flags up differences in information – for example, if the terminal is expecting the vessel to arrive at 2am and the port authority is expecting 5am.”

A warning is generated where there is a mismatch, so that this can be resolved. “It sounds super straightforward and you would expect all that to be already there but what you usually see is a very manual process in which a lot of people have to call each other and send emails back and forth to check and figure out the status of the port call.”

A stumbling block to a digital solution like this is standards: “You can only digitalise a process if you standardise,” says Ms Bruijn. “You need to have the same events you are talking about – another thing you would think is straightforward. But if you talk about the arrival of a vessel, is everyone talking about the same thing? No, the terminal is talking about the berth, the agent something else. We are working with the IMO group on the push for standards.”

An interesting spin-off from PortXchange is transparency, she also notes. “Before PortXchange, some parties were benefiting from information such as berth availability before others. But as a terminal or agent, you are part of an ecosystem and managing a joint process. When you go to the port, it is in the interests of all parties to look at the bigger picture and work on something that is best for all stakeholders. Everyone wants to optimise their own terminal and productivity. The port wants to optimise throughput. And the shipping line has its own KPIs. “If you bring those KPIs together and work together to improve the process, you can achieve so much more. What use is it if the terminal focuses on productivity and then, when the cargo operations are done, you have to wait for another two hours?”

It’s all about working together, she says. Imagine, for example, that every party involved in a port call had built in a buffer of 15 or 30 minutes without telling anyone ne else. “You can’t just focus on your own part of the process.”

8 “You can only digitalise if you standardise,” underlines Dita Bruijn, Director Operations, PortXchange

8 Richard Brough

Paper transactions are very much in use at ports, due to protecting jobs and vested interests

‘‘

The need for harmonisation The need for harmonised data standards was heavily emphasised by the industry’s ‘Call to Action’; those signing also want to see enforcement of the already mandatory requirements defined in the IMO’s FAL Convention.

The COVID-19 crisis has ‘painfully demonstrated’ the differences between ports worldwide. “While some port communities seized the opportunities of the fourth industrial revolution and developed into full-fledged ‘smart’ ports, many others have barely grasped the essentials of digitalisation and continue to struggle with larger reliance on personal interaction and paper-based transactions as the norms for shipboard, ship-port interface and port-hinterland based exchanges.”

As an illustration, says the Call to Action, only 49 of the 174 member states of the IMO have functioning Port Community Systems,

‘systems which are considered the cornerstone of any port in the current digitalised business landscape’.

Richard Brough, head of ICHCA, says that while Port Community Systems and digital solutions are commonplace for large ports and global port operators, smaller ports struggle to implement them. “That is for several reasons; they are not as awake to the opportunities as larger operations are, the industry is generally risk-averse and slow to change, and the industry has been slow to catch up with others.

“It is easy when you talk about container terminals – the box comes from a slot on the ship to a slot on land and then to the conveyance to its destination. It is relatively simple to digitalise containerised and unitised processes. Breakbulk and bulks are harder – although this is happening.”

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

He says there are several reasons why paper transactions remain very much in use at many ports. “Vested interest is one factor.

‘This is the way we have always done it’ is another factor. Protecting jobs is another. But digitalisation makes a port more efficient and more attractive.”

He describes the global port operators as disruptors in this respect – when they take on a new concession, they are obviously looking to introduce new, more efficient ways of working than those in place.

There can be local opposition but the drive towards Port Community Systems, Single Windows and other digital solutions must move forward, he says. “Otherwise we risk ending up with a two-tier world – one automated and efficient, the other left behind.

And it is likely to be the developing economies that don’t catch up.”

JULY/AUGUST 2020 | 35

CONTAINER HANDLING: SIDELIFTERS

SIDELIFTER EFFECTS John Bensalhia investigates the latest developments and innovations in the sidelifter sector

8 Hammar sees a niche role for sidelifters in conjunction with port activities with the system’s inherent flexibility proving attractive

Built to withstand different kinds of terrain and to handle challenging kinds of cargo (such as hazardous, fragile and valuable materials), the sidelifter system provides a versatile approach to supporting daily container movements.

The two major sidelifter manufacturers, Hammar of Sweden and Steel Bros of New Zealand, have different views on the approach to use for this equipment at terminals.

NOT COMMON Samuel Gottfridsson, Marketing, Hammar, says that sidelifters are a niche product for internal port logistics. “It’s not common to see port companies themselves invest in a sidelifter. When they do, it’s usually for a small-sized port or to use the sidelifter outside the main port where the overall volume being transported in/out is lower.”

Gottfridsson adds that most sidelifters are bought by freight forwarders and logistics companies and how they are used can vary.

“In some places, sidelifters are allowed to use their cranes to both pick up and leave containers at a port. At others, they are loaded with reachstackers/straddle carriers, etc, just like a regular container chassis. Other ports do not allow them inside the port at all,” he explains.

For Steelbro, it’s been a different story. According to Peter Dobbs, General Manager, Steelbro has experienced strong growth over the last two years.

However, he explains that demand in the second quarter of 2020 has been impacted by the COVID-19 pandemic “Customers have been cautious about committing to capital expenditure in the uncertain economic environment.

However, we are already seeing a rebound in demand in key markets such as NZ, Australia and Malaysia.”

PORT & TERMINAL SUCCESS Dobbs adds that Steelbro sidelifters have been successful in the port/terminal environment.

“There are significant benefits to shippers, when packing containers safely at ground level, as well as huge benefits for the container terminal operator who often needs to switch from one mode of transport to another economically,” he states, before explaining further.

“A sidelifter is a purpose-built semi-trailer on which, a

36 | JULY/AUGUST 2020

specially designed set of cranes are mounted, to lift and transport ISO shipping containers of various types, sizes and weights, up to 45 tonnes. Sidelifter cranes can also be mounted on a truck deck for handling 20’ containers.”

Dobbs adds that the equipment can be used in a port environment to support a number of different operations, with shipping containers rapidly transferred from one terminal to another, using a truck and sidelifter.

“The sidelifter allows for efficient interaction between haulage company and port operations. The sidelifter is an important tool in ensuring there is a fast vehicle turnaround time: avoiding queues and time waiting to be serviced by a straddle carrier or reach stacker.”

PRICE AND VERSATILITY For internal port logistics, price and versatility are important benefits. Gottfridsson says that a sidelifter is considerably more economic than most dedicated port equipment in terms of first-time investment and maintenance costs.

“While it can’t match the loading/unloading speed of most dedicated lifting equipment (a full handling cycle for a sidelifter is about 2-4 minutes depending on model/extra equipment), it can do much of the same work: lifting containers from/to the ground, transferring containers from/to other container chassis or rail wagons, or stack containers two-high.

Unlike most lifting equipment, it can also efficiently transport containers over longer distances and be used on public roads.

These features in combination means that in a best case scenario, a single Sidelifter + truck can replace two dedicated lifting units and a container trailer + truck.”

By allowing the sidelifters to pick up and/or leave containers themselves, ports get a more flexible time schedule. “Unlike with a container chassis, there is no need to time their arrival with your own lifting equipment,” says Gottfridsson. “This way, you get potentially shorter queues into the port during peak hours. You will also completely remove the risk of damaging third party property as the port’s lifting equipment will not have to come near the sidelifter.”

GREATER EFFICIENCY, BETTER SAFETY The development of the sidelifter has resulted in new products that can offer ports various benefits, including greater efficiency,

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

CONTAINER HANDLING: SIDELIFTERS faster lifting rates and improved safety levels. The most recent innovation released by Steelbro is the SB363 sidelifter with a 36-tonne lifting capacity. The design is focused on delivering a reduction in tare weight and fast deployment of stabilisers, while ensuring that safety in operation and quality of materials and components is maintained.

According to Steelbro, the SB363 is the company’s lightest model with a tare weight of just 9.6 tonnes: “This gives operators significant payload advantages, without sacrificing strength or durability.”

In developing the SB363, Steelbro introduced a number of other improvements, including better lift speeds. “A higher flow rate hydraulic system has meant there has been a 30 per cent increase in the speed it takes to deploy and stow stabilisers, saving valuable operator time,” says Dobbs.

He adds that the SB363 has fewer components than previous models and includes simplified electrical and hydraulic fault diagnostics. “Plus, for ease of use, the SB363 is more operator friendly with its upgraded proportional control giving smoother operation, a more responsive joystick and improved crane synchronisation.”

The SB363 also maintains key features that all Steelbro sidelifters provide, such as a superior outreach of 4.05m, which also facilitates easy handling of misaligned containers.

Dobbs explains that this means there is flexibility to handle different container requirements, i.e. it has been optimised for 20’, 40’ and 2 x 20’ containers.

The SB363 is currently available with two chassis options: Steelbro’s rigid chassis and an extendable chassis. The SB363 Extendable Sidelifter features a hydraulically extendable

Sidelifters mean greater efficiency, faster lifting rates and improved safety levels

‘‘

chassis for loading and unloading of 45ft containers. The Steelbro SB362 Sidelifter has recently been introduced to Malaysia, having been adapted for Malaysian conditions and providing transport operators with an alternative sidelifter technology.

“Operators wishing to transport and deliver lighter loads, more economically, may find this new model becomes their first choice,” says Dobbs, before adding, “The SB362 has been successfully used in New Zealand and Australia for several years where the product has a strong presence in the commercial road transport market.”

Steelbro designers gave the customised SB362 unit a heavy-duty chassis to cater to the Malaysian environment and conditions. “The design uses similar running gear to the already popular Steelbro model (SB450) for seamless integration with other units in the fleet. The SB362 has double stacking capability.”

Dobbs explains that the SB362 and the SB450 are complementary products. “Operators who include both models in their fleet will benefit from similar running gear on the chassis for ease of maintenance and spare parts. In addition, both the SB362 and the SB450 utilise the same controller, cable and remote which means that no additional operator training is required.”

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CONTAINER HANDLING: SIDELIFTERS The latest model from Hammar is the Hammar 110, a lightweight sidelifter that transfers containers to other chassis and rail wagons. “What separates the Hammar 110 and similar models is the low tare weight and its unique “Sledgemode” which allows for faster ground-to-ground handling,” says Gottfridsson.

He further explains the importance of less weight. “Our new light-weight programme features a reduced tare weight of 0.5-1.5 tonnes on our most popular models (the Hammar 195, 160 and 180). This results in lower emissions from trucks, a better fuel economy, less wear and allows a higher payload to be transported on roads.”

DEDICATED WORKSHOP SUPPORT Steelbro has expanded its presence in the New Zealand market by launching its own dedicated workshop that services and supports Steelbro sidelifters in Christchurch.

“This complements the services provided by the distributor network,” says Dobbs.

He adds, “In the current market, Steelbro has seen an increased focus from customers on the care of existing fleets to ensure capital returns are maximised. Steelbro sidelifters are known for their reliable designs and longevity. It is not unusual for a Steelbro sidelifter to be going strong after 25 years.”

Steelbro has also created parts kits for servicing and maintaining older fleets. Examples of kits include a service kit that provides customers with the items needed to meet the regular sidelifter servicing requirements and an electrical kit (analogue) that provides customers with the necessary components to replace the electrical system on a sidelifter.

An area where Hammar is growing in general is the use of sidelifters for handling of non-containerised goods. “We believe this might be an area where sidelifters can find a place in more ports,” says Gottfridsson. “For example, we have a specialised sidelifter dedicated to handling large cable drums. Cable drums have a considerably lower handling volume and much of the traditional port equipment can’t be used to handle them.

Here, a sidelifter can not only be more flexible and cost-efficient but might also be more efficient time-wise.”

Looking ahead, Dobbs concludes, “Steelbro expect sidelifters to continue to play a key role in the transportation and delivery of containers to/ from and around the port.”

8 The versatility of the sidelifter design continues to be extended

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BULK HANDLING: BIOMASS

SUPPORTING PELLET POWER Malin Pekberg of Bruks Siwertell outlines the potential of waste wood and how best to handle this increasingly important commodity

8 Each link in the transport chain must take the utmost care to use material handling equipment for the lowest spoilage rates, to maximise the value of the end product

Increasing global energy requirements, coupled with sustainable development goals to reduce greenhouse gas (GHG) emissions, are propelling the demand for renewable alternatives to fossil fuels. Biomass is showing considerable promise as a sustainable energy source and decarbonisation tool.

Derived from animal or plant material, biomass can be purely grown in the form of an energy crop, or is often generated from waste, either from wood or forest residues, food crops or food processing.

It is this waste where the most value lies. While millions of metric tons used to head to landfill as an untapped resource, it is now being compressed into pellets, or used in a raw form by specialist boilers for heat and energy generation.

BIOMASS CONTINUES TO BOOM Of the huge quantities of second-generation biofuel sources, refined wood pellets – commonly produced as a waste product from sawmills or end of life timber – are a major contributor.

According to global data analysis company, Statista, global wood pellet production has steadily increased from about two million metric tons in 2000 to around 28.5 million metric tons in 2016 and in Western Europe alone, it is predicted to reach 13 million metric tons by 2020.

Statista notes that in 2018, biomass power plants in the US had the largest capacity in the world at 16.7 gigawatts and in the same year it consumed approximately 5.13 quadrillion British thermal units of energy derived from biomass. In 2018, the global capacity of biomass power plants totalled 130 gigawatts.

Burning biomass is not without its complexities, and often material needs pre-treatment prior to combustion. Its use, however, is providing significant benefits, ameliorating investment costs and extending the lifetime of existing power stations, and their expensive infrastructure, originally constructed to burn coal.

The importance and the growth of the wood pellet industry in North America and Europe is well-recognized, and their mature markets are setting a benchmark for the rest of the world.

ENSURING THE BEST END-PRODUCT Compressed pellets have their moisture squeezed out so that they burn consistently, which ensures the best results for power producers. However, these pellets are delicate and therefore unstable. While they are resistant to some impact, grinding or crushing movements can cause them to decompress and split, shedding dust and reducing their combustion efficiency.

The more numerous the modes of handling, the more likely it is that some of the cargo will have degraded, and be unusable at its destination boilers. It is therefore essential that the managers of each link in this chain take the utmost care to use material handling equipment that provides the lowest possible spoilage rates, to maximize the value of the end product for their customers.

Following the merger last year of Bruks and Siwertell, the combined capabilities of the Bruks Siwertell Group now comprises a portfolio of products that reflects all phases of this value chain, making it able to offer end-to-end solutions for customers.

“Siwertell unloaders have long-served the biomass industry, with high capacity unloading installations securing pellet fuel supplies to power-generation facilities globally, including biomass for Ørsted’s Avedøre power station in Denmark and the Drax power station in the UK,” says Ken Upchurch, Vice President Sales and Marketing, Bruks Siwertell Americas.

COMBINING PRODUCTS Effective pre-processing solutions such as managing moisture content, limiting contamination and ensuring a

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

JULY/AUGUST 2020 | 39

BULK HANDLING: BIOMASS consistent particle size for energy production systems can help give value to biomass resources. Bruks wood chippers, milling machines and waste wood-processing hammer hogs were well-established in the global timber market before the merger, and remain at the forefront today.

The size and the volume of the required wood particles dictates which machines are suitable; Bruks Siwertell’s range can chip wood from the forest through to complex highcapacity wood-processing arrangements using multiple machine types.

A flexible and efficient way to transport the huge volumes of processed wood chips or other free-flowing materials such as bark, sawdust, shavings, peanut hulls for onward use is via bulk trucks. When they arrive at a facility full of biomass, a range of Bruks truck dumper systems could be there to meet them, including back-on or drive-over truck dumpers; these consist of a tipping platform, outfitted for different bulk truck trailer types, as well as a variety of receiving hoppers.

The trucks are unloaded as the tipping platform pivots up to tip the contents of the truck into a receiving hopper.

Hoppers are typically designed to store at least two truckloads of material and can have articulating or static covers, specially designed to prevent any dust escaping into the surrounding environment. They might also have dust collectors, which can reclaim and collect material to form more biomass pellets. Key to the dust collection process is keeping the environment dry, as introduction of moisture at this stage could compromise pellet production later.

‘‘

Ship loaders are specified to suit the operation

Bruks Siwertell has a comprehensive range of conveyors on the market. This includes the new, ‘The Belt ConveyorTM’, which is an air-supported system that eliminates idlers – the rollers underneath a traditional conveyor belt. The belt conveyor delivers highly efficient, low-friction material transfer with dramatically reduced maintenance and operating costs. Biomass production facilities almost always employ a screening system, which sorts the larger pieces from the usable material and removes debris that can damage downstream processing equipment.

“The screening process is a vital step,” Upchurch explains.

“We’ve seen many odd materials turn up in a pile of woodchips – boards, large slivers; even machine parts and hard hats” After screening, material could be elevated into a fullyenclosed storage silo. This can be accomplished with high angle drag chain conveyors or bucket elevators, both of which have been employed successfully. Storage silos can range in size, typically around 1,400m3 (50,000ft3) and are equipped with a reclaim mechanism similar to a circular screw. This allows the operator to monitor the material as it returns back into the system when needed.

THE JOURNEY VIA PORTS If the pellets are destined for export, they can be carried by rail or road to a port’s receiving facility and from there loaded onto a bulk carrier. Ship loaders are specified to suit the operation, including those for handling biomass. These systems feature an angled chute, which reduces the velocity of the cargo, to mitigate the impact and crushing forces that might otherwise cause it to break up as it reaches the hold.

When the vessel arrives at its destination, a Siwertell screw-type ship unloader is waiting. Using a counter-rotating inlet feeder, the biomass pellets are taken up into the machine, ensuring high-capacity, gentle material handling

40 | JULY/AUGUST 2020

that delivers market-leading performance. Siwertell unloaders, installed at many terminals around the world, have been selected precisely for their ability to handle delicate cargoes such as grains, alumina, and biomass without causing degradation, and maintaining material quality for the end user.

8 Every import and export dry bulk terminal has a unique equipment footprint

GIVING EFFICIENCY THE RESPECT IT DESERVES Every import and export dry bulk terminal has a unique equipment footprint, ranging from relatively simple to complex configurations. These differences are determined by multiple factors such as geography, socio-political economics, regulations, capacity requirements, volumes and types of materials and vessels handled, and existing infrastructures.

Terminal equipment is therefore matched to these needs and has natural equipment pairings to deliver the best results. For example, rail-mounted ship loaders coupled with jetty conveyors and tripper discharge arrangements. These trippers travel with the loader along the berth, ensuring a smooth material feed and the fastest possible hold feed times. They can also be covered to prevent dust emissions and protect cargo from the weather, especially materials such as grain.

Ship unloaders have perfectly paired equipment arrangements as well. They can include auxiliary machinery such as conveyor belt lifters and tensioners, and movable transfer trolleys, which act as junctions between the unloader and conveyor. Conveyors are also site specific, and different system choices impact operational efficiency. Relatively new to the Bruks Siwertell portfolio is ‘The Belt ConveyorTM’, which employs pioneering air-cushion technology to dramatically reduce maintenance and operating costs.

FUTURE OPPORTUNITIES Bruks Siwertell is in a good position to offer insight on the biomass trade and to deliver the best combination of handling products the market has to offer, now, and in the future.

“Our range of equipment ensures an end-to-end supply chain, producing the best possible results in the processing, manufacture, transportation and eventual burning of biomass cargoes,” says Mr Upchurch. “We provide both pellet producers and end users with the means to maintain lower material costs and maximise efficiency.

“With chipping technology in the forest, truck dumper systems at receiving facilities, new technology such as the belt conveyor, and existing and new ship loaders and unloaders, Bruks Siwertell is in a prime position to share in the opportunities presented by this growing market,” he adds.

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

PRODUCTS & SERVICES DIRECTORY

YOU CAN DEPEND ON BIG RED! 3690 N Church Avenue Louisville, MS 39339 USA +1 662 773 3421 contactus@taylorbigred.com www.taylorbigred.com

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

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

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

To advertise in the

G-SERIES

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

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

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

7EB DELLNERDAMPERS SE

D REDGING

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

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

+44 1329 825335 www.portstrategy.com

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

E LECTRIFICATION SOLUTIONS

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

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

Contact Tim Hills or Hannah Bolland

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

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

Port Strategy Directory

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

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

D REDGING EQUIPMENT

NEUERO Industrietechnik GmbH

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

To advertise in the

LASE Industrielle Lasertechnik GmbH

14/07/2020 10:56

When experience really does matter!

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

C RANE COMPONENTS

C OMPONENTS

Cimbria Directory.indd 1

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

D REDGING

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

Taylor Machine Works, Inc.

C ONSULTING ENGINEERS

C ARGO HANDLING SYSTEMS

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

C ARGO HANDLING EQUIPMENT

B ULK HANDLING

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

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

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

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

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

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

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

Westicker Str. 52, 59174 Kamen, Germany

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

JULY/AUGUST 2020 | 41

PRODUCTS & SERVICES DIRECTORY

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

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

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

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

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

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

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

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

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

Port Strategy Directory

SANY offers reliable quality container handling trucks.

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

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

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

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

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

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

Check out our Mobile OCR!

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

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

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

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

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

S HIP UPLOADERS

To advertise in the

Sany Europe GmbH

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

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

Contact Tim Hills or Hannah Bolland

I T PORT AUTOMATION

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

Port Strategy Directory

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

Liebherr-MCCtec Rostock GmbH

Verstegen Grijpers BV

To advertise in the

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

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

M ARINE FENDERS

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

I T PORT AUTOMATION

BLOK Container Systems Ltd

I NSURANCE

H ANDLING EQUIPMENT

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

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

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

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

We Keep Your Vital Business Moving!

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

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

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

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

42 | JULY/AUGUST 2020

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

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

PRODUCTS & SERVICES DIRECTORY

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

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

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

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

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

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

Port Strategy Directory

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

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

To advertise in the

Providing complete solutions for your container cranes

To advertise in the

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

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

T ERMINAL OPERATIONS SUPPORT

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

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

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

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

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

T ERMINAL OPERATIONS SYSTEMS

S PREADERS

Bromma Conquip

T ERMINAL OPERATIONS SYSTEMS

S PARE PARTS

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

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

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

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

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

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

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Email subscriptions@greenport.com or call +44 1329 825 335 • Comprehensive online directory • Instant access to industry news • eNewsletter • Magazine subscription • Expert opinion

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

JULY/AUGUST 2020 | 43

POSTSCRIPT DIRECT NEGOTIATIONS, PLENTY OF PITFALLS

Side-stepping an open tender process, conducted drawing on proven best practice, may seem like a good idea but there are plenty of potential pitfalls associated with the alternative direct negotiation route for port concessions

‘‘

If you choose not to offer a tender for a port concession and to engage in direct negotiations with a specific party instead are you doing the right thing?

It may be hard to resist if the entity you are being approached by has arrived at your door as the result of one government’s overtures to another and/or if the suitor is recognised as financially powerful and possessing considerable influence.

At the port level, there may be recognition that someone higher up in government ‘wants this to happen’ and as a result the suitor has to be taken seriously.

Or it may just be that the ‘pitch’ put to senior port officials sounds too tempting not to take the opportunity seriously – and at first sight it may have the added benefit of short circuiting the considerable body of work involved in preparing and running a bid process.

What may at the outset seem a simpler course of action does not, however, necessarily prove to be the case. There is plenty of experience to suggest that negotiating for a concession on a one to one basis, as opposed to taking the tried and tested public tender route utilising the best practices of public procurement, is a short-sighted strategy. The current port Nouakchott project certainly seems to confirm this.

At the port of Nouakchott, Mauritania the FrancoSingaporean joint venture Arise is developing the port’s new container terminal but since the beginning of the year has experienced a rapidly deteriorating relationship with management at the Port Autonome de Nouakchott. It has been expelled from its temporary offices by port management and project works are reported to be experiencing delays.

Specifically, this has come about since the January appointment of Sid’ Ahmed Ould Raiss as General Manager of the port which followed on from a change of the country’s President in late 2019.

Regime change is in fact a common cause of problems with negotiated deals – the ‘new guard’ often taking issue with deals struck by their predecessors.

Where it ends in Nouakchott remains to be seen with the port Nouakchott concession one of a number of deals facing investigation by a committee, set up by the Economic Affairs Committee in Mauritania’s Parliament, to investigate files and deals concluded under the reign of former President Mohammed Ould Abdel Aziz that are suspected of being corrupt.

LOSING OUT It is not just the parties awarded the concession for the container terminal in port Nouakchott that are losing out - Arise Mauritania and Meridiam the French Investment fund (with AP Moller Capital having recently acquired a 43 per cent stake in Arise Ports & Logistics, ARISE P&L, the holding structure for ARISE’s ports and logistics operations across Africa) – but also the economy and country of Mauritania as a whole as development work slows in the face of the ongoing controversy.

Indeed, while every port project is important it is possible to contend that the more important the project – in Mauritania’s case the establishment of the

44 | JULY/AUGUST 2020

8 Bangladesh’s new Bay Terminal with a 12m draught will not be tidal like the existing 9.5m draught Chittagong terminal – but is Bangladesh taking the right route to concession this terminal?

first deep-water container facility – the more important it is that such critical projects are offered to the private sector via a comprehensive and transparent public tender process which draws on the expertise of advisors who can guide government to achieve the best result for the host country overall, without problems arising from warring political interests, corruption and so on.

Port project delays invariably have a negative impact that extend into the wider economy and which are generally injurious to efficient international trade.

THE DEVIL IS IN THE DETAIL In a wider context, it also has to be said that while concession contracts have many standard features the idea of government officials sitting down for the first time and negotiating such a contract with an experienced port developer/operator is almost frightening!

Developers, many of whom have built up experience over decades, know all the paths via which to maximise their influence in a concession agreement and given the opportunity it is only natural that they will seek to gain advantage in critical areas such as exclusivity, tariffs, concession fees and so on. The combined effect of this detailed knowledge on the one hand and lack of knowledge on the other can quite easily lead to what can politely be called an unbalanced concession agreement – favouring one party more than the other.

It is possible, therefore, to view situations such as the current one in Bangladesh with some concern.

Here two parties – PSA and Red Sea Gateway Terminals (RSGT) – are reported, via direct negotiations, to be frontrunners in seeking to secure the development and operation of the Bay Terminal, a planned 12-metre draught facility near Chittagong port. Equally, the same applies to Bangladesh’s Patenga Container Terminal project, now under construction, in conjunction with which RSGT and DP World are understood to be in talks with government.

History tells us that the most successful route for the award of port concessions is via an open public tender process drawing on best practices in public procurement.

The advantage of hindsight is great and it can be costly in more ways than one to ignore the lessons of history!

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

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