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MARCH 2022 VOL 1022 ISSUE 2

portstrategy.com

CONCOR PPP Preparations | US East Coast Survey | Tyre R&D Rolls On

UKRAINE: THE FALL OUT BOX TERMINALS TAKE THE HEAT BETTER THE ‘DEVIL’ YOU KNOW TARGETING NET ZERO

PORTSTRATEGY INSIGHT FOR PORT EXECUTIVES

The international magazine for senior port & terminal executives EDITORIAL & CONTENT Editorial Director: Mike Mundy mmundy@portstrategy.com Features Editor: A J Keyes keyesj186@gmail.com Consultant Editor: Andrew Penfold andypenfold@yahoo.com

VIEWPOINT MIKE MUNDY

Hard facts win the war against more and more myths

There is so much spin and smoke and mirrors nowadays that it is hard to separate fact from fiction. There is, however, no mistake about the real facts in key articles in this issue of PS. The myth of Vladamir Putin being willing to reach a diplomatic settlement regarding the Ukraine crisis is well and truly exploded. The fall out is discussed in detail. Equally, the real facts are laid bare with regard to port congestion, concession renewals and other key topics. There is no substitute for discreet analysis drawn from hard facts!

Let’s talk myths. Well one of the biggest myths is now well and truly over – that Vladamir Putin would like to resolve the Ukraine crisis via a negotiated settlement. It is clear that this was never really on the agenda and sadly as PS goes to press we see the USA and Europe’s contention that a false justification for war would be forthcoming proved all too correct. What was it? It doesn’t really matter - it was just ‘speak’. It is self-evident that the attack on Ukraine was pre-meditated. Consequences? At the fundamental levels of loss of life and human suﬀering in some ways too awful to contemplate – but clearly large-scale. Economically? It is unlikely there will be any winners. Our article, Ukraine – The Fall Out, featured on p22, provides insight into this at a macro and micro level with special reference to the maritime sector. The potential curtailment of LNG and other energy fuel supplies to Europe pose problems in their own right but could, at worst, trigger a global energy crisis. Similarly, with the Ukraine unable to function in its role as a major grain exporter this has implications for food security around the world. Alternative sources of supply will be more expensive and it is the poorer countries such as those in Africa that will suﬀer. Whatever the outcome of the war, it is clear that these and other commodity supply lines associated with the Ukraine will undergo fundamental structural changes, especially where linkage to Russia is concerned. Myth number two: that container terminals are the cause of supply chain congestion. There has been quite a bit of finger pointing at container terminals recently as the cause of supply chain woes – not to mention by a certain leading container line – but as the article Box Terminals Take the Heat on p25 discusses they are by no means entirely to blame. To a large extent they manifest the symptoms of problems that lie elsewhere. Plus, as the comparisons drawn between Europe and the USA highlight, the ability of a given region to resolve port-side container congestion is to a large extent dictated by the regulatory climate it operates in and other influential factors such as timely capacity increases and workforce culture. Myth number three: the article, Better The Devil You Know on p32 is a follow-on Q&A-based article to WAPPP’s November 2021 article on the often challenging subject of concession renewals. It includes comment on a mini-survey in this respect – what is the preferred option, extend with the incumbent operator or re-tender on a broad basis? Again authored by WAPPP, the Q&A reflects WAPPP’s stated mantra, namely to “incubate new approaches for public-private-partnerships, to promote best practices, and to debunk myths” (that lead to negative consequences). Overall, you can count on PS not to generate or perpetuate myths – there are plenty of solid, hard facts accompanied by reasoned discussion to digest in the following pages. As always, if you wish to join any of the above or other ‘discussions’ in this issue we welcome your feedback.

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

Regular Correspondents: Felicity Landon; Stevie Knight; John Bensalhia; Ben Hackett; Peter de Langen; Barry Parker; Charles Haine; AJ Keyes; Andrew Penfold; Oleksandr Gavrylyuk Johan-Paul Verschuure; Phoebe Davison Production David Blake, Gary Betteridge production@mercatormedia.com SALES & MARKETING t +44 1329 825335 f +44 1329 550192 Media Sales Manager: Tim Hills thills@portstrategy.com Marketing marketing@mercatormedia.com Chief Executive: Andrew Webster awebster@mercatormedia.com PS magazine is published monthly by Mercator Media Limited, Spinnaker House, Waterside Gardens, Fareham, Hants PO16 8SD UK t +44 1329 825335 f +44 1329 550192 info@mercatormedia.com www.mercatormedia.com

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©Mercator Media Limited 2022. ISSN 2633-4232 (online). Port Strategy is a trade mark of Mercator Media Ltd. All rights reserved. No part of this magazine can be reproduced without the written consent of Mercator Media Ltd. Registered in England Company Number 2427909. Registered oﬃce: c/o Spinnaker House, Waterside Gardens, Fareham, Hampshire, PO16 8SD, UK.

MARCH 2022 | 3

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CONTENTS MARCH 2022 VOL 1022 ISSUE 2

portstrategy.com

CONCOR PPP Preparations | US East Coast Survey | Tyre R&D Rolls On

NEWS

20 Ukraine Crisis

17 L. Chabang Phase 3

23 Terminal Heat

On the starting blocks

10 eBl Standardisation

Digitalising Bills of Lading

BOX TERMINALS TAKE THE HEAT BETTER THE ‘DEVIL’ YOU KNOW TARGETING NET ZERO

On the cover Ukraine citizens rally behind their flag in the port city of Odessa. German terminal operator HHLA has been operating a container terminal in the port since 2001 and following the oﬃcial closure of the port, Angela Titzrath, CEO, of HHLA, made the following poignant statement which reflects the thinking of diverse maritime sector parties: “This is a bitter day for all peace-loving people worldwide. We condemn the invasion of the independent nation Ukraine by Russian troops in the strongest possible terms.”

10 Google Solution

Supply chain solutions

11 Set to Fly

Antwerp drones

11 Single Window Peru’s savings

13 Sagunto’s SELF

Hyperloop test-bed

14 New Package ITS equipment

14 Tema Terminal 3 US$53m crane order

14 Savannah Buy is a proud support of Greenport and GreenPort Congress

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

FEATURE ARTICLES

17 Banana Readies… …but challenges

UKRAINE: THE FALL OUT

MARCH 2022

Nine-order RTGs

15 Clean Oceans Initiative Target raised

The fallout

Congestion accountability

27 Concor Challenges PPP preparations

28 Investment priorities

Digitalisation and sustainability

29 India Port Goals The development Agenda

30 Beer the ‘Devil’ You Know Q&A: Concession renewals

33 US East Coast Drift Building market share

35 Give Me Some Space

Space needed in NYNJ

36 Record Breaker

Savannah’s success

37 Keeping Up With the Joneses USEC port push

GREENPORT Cruise Congress &

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

38 Cruise Conundrum On-o operations

REGULARS 17 The New Yorker Reputation counts

17 The Analyst

Forwarder shrinkage

19 The Economist Statistical spin

19 The Strategist

War miscalculations

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

41 Press Refresh

Dredging developments

44 Tyre R&D Rolls On R&D priorities

46 Targeting Net Zero On-line tool launched

48 Postscript

The largest investment in US ports

MARCH 2022 | 5

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PORT & TERMINAL NEWS

GREEN LIGHT FOR BANANA PORT BUT CHALLENGES REMAIN The end of January saw the formal launch of the DP World (DPW) Banana port project following a renegotiation of the concession arrangements with the Felix Tshisekedi led government. Africa Intelligence has published various details of the revised concession agreement which have been met with surprise in certain circles. The most striking fact is that the new concession eﬀectively provides access to DPW to the Matadi terminal facilities operated by the state-owned company Societe Congolaise des Transports et des Ports (SCTP). The implication is that DPW will become involved in operations here with this justified as part of its eﬀorts to establish a ‘logistics corridor’ to the main market of the capital city of Kinshasa. Africa Intelligence points out this arrangement seems to fly in the face of a 2019 memorandum of understanding with Qatar which had expressed interest in getting involved in port operations in Matadi and other ports in the Democratic Republic of the Congo (DRC). There is already one private sector operator, ICTSI, active in Matadi operating from facilities which opened for business in 2016. ICTSI developed a greenfield terminal adjacent to SCTP and operates there in partnership with

SCTP and SIMOBILE (a local logistic company). To-date it has co-existed comfortably alongside the state-owned port facilities which operate with a large workforce. Interestingly, the revised concession agreement states that the government will rehabilitate the road between Banana and Matadi in accordance with technical specifications provided by DPW. Clearly, this will be an expensive project but it will not be designated as a road subject to tolls by users, the usual method of funding such projects. The plan is for DPW to provide administrative support to the government to obtain a bank loan to support the upgrade of the road which is presently in very poor condition. Some observers nevertheless question the ability of this element of the project to be funded and developed in a complementary timeframe to the new Banana port development in which case it could result in delays to the development of the planned new container terminal facilities but with DPW profiting from establishing a foothold in Matadi. Questions have been raised previously with regard to Banana’s distant location from the main market of Kinshasa. Land transport in the DRC is extremely expensive and while the intention is to develop

terminal facilities in Banana that can service vessels of up to 18,000TEU capacity it is evident that any lower freight rate achieved via the use of highcapacity vessels will not provide an adequate oﬀset to cover the more expensive land transport costs of trucking from Banana to Kinshasa compared to the significantly lower trucking costs involved in using Matadi Port. The plan is to develop the new Banana port – there are currently only limited facilities in place there – in four phases with the first phase envisaging a 350,000TEU facility. Subsequent phases will be demand triggered and will entail capacity additions of 100,000TEU and two 200,000TEU expansion phases – a significant capacity addition to a market which in 2021 reached only around 200,000 TEU. The initial step, however, is for DPW to carry out a feasibility study over 18 months with this aimed at defining the technical, economic and financial conditions underpinning the development. It is not known specifically if these works will include a detailed market analysis but clearly there are challenges in this area given land transportation costs as well as the aspect of coordinating the road development with the port development.

LAEM CHABANG PHASE 3 EXPANSION ON THE STARTING BLOCKS The phase 3 expansion of Thailand’s Laem Chabang port is on the starting blocks. The programme envisages construction of the FI and F2 berths in 2023 and 2027 respectively with operations commencing in 2025 and 2029. When completed in 2029 Laem Chabang will have a container throughput capacity of 18 million TEU/yr. Key stakeholders behind the project are the Port of Thailand Authority (PAT) and the GPC International Terminals consortium. Total project cost for Phase 3 is put at US$927 million.

8 Laem Chabang Phase 3 expansion set to begin

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

BRIEFS UK Shore Power

The UK government is accelerating maritime decarbonisation for ports by switching to emissionsreducing shore power. The decision is part of a dedicated programme to stimulate innovation of new, green technologies in the UK to foster private investment to help create jobs and revitalise coastal communities. The UK has a dedicated Clean Maritime Demonstration Competition, which provided £23 million (US$31 million) in 2021 to fund more than 55 decarbonisation projects. For further insight into innovative carbon emission reduction planning see also the article on p46. It highlights a new on-line decarbonisation tool.

Capacity Boost

Malaysia’s Port of Tanjung Pelepas (PTP) is raising its capacity by more than one million TEU per annum. PTP currently has a capacity of 11.2 million TEU/yr but is targeting an increase to 12.5 million TEU/yr by the middle of 2022. Investment of US$179 million will see additional yard space generated and extra cranes added. APM Terminals retains a 30 per cent stake in the facility, with NMC Group holding the majority 70 per cent share.

ADP Lists

AD Ports Group has listed its shares on the Abu Dhabi Securities Exchange (ADX). The Abu-Dhabi based ports and logistics operator, which is owned by sovereign wealth fund ADQ, raised AED 4 billion (US$1.1 billion) from the primary issuance process. The company has confirmed that the funds raised will be utilised to accelerate local and international expansion. ADQ is retaining 75.44 per cent of shares in the newly-listed entity.

MARCH 2022 | 7

PORT & TERMINAL NEWS PSA Singapore has confirmed that it has signed a research collaboration agreement to develop a new automated solution for container handling at its large-scale Tuas Port project. In a joint-venture with the Agency for Science, Technology and Research (A*STAR) Institute of High Performance Computing (IHPC), a new management system for automated guided vehicles (AGVs) is being developed that will ensure containers are moved with a high degree of eﬃciency and security in the facility. This system is clearly going to be needed, on the basis of Tuas Port ultimately developing handling capacity up to 65 million TEU per annum and being designed to service the largest ships in service of beyond 450m in length. Singapore already utilises AGVs in its automated yard throughout much of the port, but the proposed new technology and system will represent a more environmentally-friendly alternative to the use of diesel power, with carbon emissions expected to be reduced by up to 50 per cent. In the new venture, PSA Singapore is going to provide the simulation platform to carry out the proof of concept, allowing its domain knowledge in the development and operation of the existing AGV fleet management system to provide the foundations of the new approach. This enables A*STAR’s IHPC to

BRIEFS Zanzibar Terminal

A proposed mew multi-terminal port at Unguja’s Mangapwani suburb in Zanaibar has taken a major step forward. The government of Zanzibar and Oman Investment Authority have signed an agreement for construction of the facility, which the state envisages as a port for containerised and general cargo, along with oil and natural gas. The new facility will reduce congestion and the current Malindi harbour redeveloped for tourism.

8 | MARCH 2022

PSA COLLABORATES ON AGV MANAGEMENT SOLUTION

contribute its expertise in advanced high-performance computing technologies and algorithms to provide accelerated solutions for large-scale fleet management of AGVs. PSA Singapore has stated that it will apply the smart solutions to fleet management systems as operations in Tuas Port gradually

scale up. In late 2021, it stated that Phase I reclamation works are complete and the focus is now on preparation for the forthcoming opening of the first two berths. Ong Kim Pong, Regional CEO Southeast Asia, PSA International, explains the anticipated benefits of the new venture: “This

8 PSA Singapore is has signed a collaboration agreement to develop a new management system for automated guided vehicles (AGVs)

collaboration will bring us closer to our vision of developing an intelligent, resilient and sustainable port of the future,” he underlines.

GOVERNMENT URGED TO REJECT RBT II The Vancouver Fraser Port Authority has a long-stated aim to develop new container terminal capacity at Roberts Bank. In 2021, Vancouver’s container terminals handled 3.52 million TEU, leaving little, if any spare capacity to keep pace with demand growth. The project has been embroiled in a myriad of challenges including strong opposition from the environmental lobby. Now a group of eminent scientists in Canada is urging the government’s Minister of Environment to reject the

proposed expansion project, claiming it will threaten the ecosystem. The scientists claim that the project, known as RBT II, will negatively impact Chinook salmon and Southern Resident killer whales. This, they suggest, creates a clear biological rationale for rejecting the project. The release of the information comes at the same time as DP World and the Prince Rupert Port Authority (PRPA) are entering into a two-year agreement to assess the potential for a new container terminal in the Canadian port. The

expansion could bring an additional two million TEU of annual capacity to the Port of Prince Rupert and represents the continuation of PRPA’s container terminal masterplan from 2019, which references an additional facility south of the existing Fairview Terminal. The Canadian Government is due to issue its environmental assessment decision by the end of 2022 for RBT II. Port Strategy will be assessing the supply-demand dynamics in the Canadian Pacific Gateway region in its April 2022 edition.

Svitzer is Out

Conflict Shuts Ports

Koper Expanding

The largest tug operator in Australia, Svitzer, is planning to terminate its agreement with maritime unions in Australia. Svitzer is the towage subsidiary of the Denmark headquartered Maersk Group and has confirmed it has lodged an application with the Fair Work Commission to terminate its deal with the Maritime Union of Australia (MUA), the Australian Institute of Marine and Power Engineers (AIMPE) and the Australian Maritime Oﬃcers (AMOU).

All commercial seaports in Ukraine have been closed. All Russian ports in the Black Sea are, reportedly, still open, although the Sea of Azov in the Crimea was closed to all commercial traﬃc. Ukraine’s government continues to ask Turkey to close the Bosporus to military vessels. Collectively, ports in Ukraine and Russia handle an estimated 30 per cent of global wheat exports and 20 per cent of total worldwide corn exports.

Slovenia’s Port of Koper is expanding capacity at its container yard on Pier No.1. The investment of US$51.5 million was partly funded by the European North Adriatic Ports Association’s NAPA4CORE project. The Adriatic Sea port estimates that this project will raise its annual capacity to around 1.5 million TEU when completed in mid-2022. Two additional Super Post Panamax cranes and three RTGs have been ordered.

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

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DIGITAL NEWS

BRIEFS Navis at MTL

Modern Terminals Ltd has implemented the Navis N4 Terminal Operating System (TOS) at its facilities in Hong Kong and DaChan Bay. The process was successfully undertaken remotely by the Professional Services Team at Navis due to COVID-19 travel restrictions. The two terminals collectively utilise a total of 42 cranes and 146 Rubber-Tyred Gantries (RTGs) handling more than 6.5 million TEU per annum. All round eﬃciency benefits are anticipated as a result of the implementation spanning quay and landside operations.

Face Recognition

Group 207, an operator at the Port of Ashdod in Israel, has introduced facial recognition technology, developed by Oosto, at its 70,000m2 facility. The company confirms it saw immediate positive results by using the video surveillance process for cargo-handling activities, with savings in man-hours and increased operational transparency. The OnAccess application security screens authentication of cargo and terminal operatives, generating time reductions of 15-20 minutes per driver, on average.

Riga Invests

Investment of around €1 million ($1.13 million) in implementing digital technology is planned for the Freeport of Riga in 2022. Ansis Zeltins, CEO, Freeport of Riga, notes: “Every stevedore working in the Port of Riga and every company operating in the port will have to become more eﬃcient in terms of energy consumption, be able to be greener and to provide investments in green technologies.

10 | MARCH 2022

STANDARDISED ELECTRONIC BILLS OF LADING INITIATIVE

The shipping industry is targeting the standardised use of electronic bills of lading (eBL) by establishing the Future International Trade (FIT) Alliance. The Digital Container Shipping Association (DCSA), which is a non-profit group comprising nine member shipping lines and the International Chamber of Commerce (ICC), have signed a Memorandum of Understanding (MoU) with BIMCO, FIATA and provider of financial messaging services, SWIFT, to collaborate on digitalising international trade. FIT has confirmed that the new MoU plans to raise awareness relating to the importance of common and interoperable data standards and common legislative conditions across international jurisdictions and platforms. More specifically, this group of interested stakeholders is aiming to facilitate the acceptance and adoption of an eBL by regulators, banks and insurers and to unify

communication between these organisations and customers, physical and contractual carriers – in short, bringing together all interested parties directly involved in an international trade transaction. David Loosley, Secretary General and CEO, BIMCO, elaborates: “The digitalisation of documentation for container shipments will add value for international suppliers who rely on shipping across sectors. Aligning these standards with the electronic bill of lading standard for the dry and liquid bulk sectors, which we are developing with assistance from DCSA, will help accelerate the digitalisation of trade globally.” Thomas Bagge, CEO, DCSA, adds: “Container ships carry 90 per cent of the world’s goods. As such, an incredibly diverse set of stakeholders touches the bill of lading transaction, from government regulators, to insurers, to shippers from every

8 Shipping industry stakeholders are targeting the standardised use of electronic bills of lading

industry. To achieve widespread use of eBL, they must all be on board with adopting digital B/L standards. The agreement between DCSA and these diverse industry associations is an exciting milestone in our journey towards standardising all container shipping documentation through our eDocumentation initiative,” he underlines. BIMCO is one of the largest of the international shipping associations representing shipowners and states that its membership represents approximately 60 percent of the world’s merchant shipping tonnage, with members in more than 130 countries. The FIATA International Federation of Freight Forwarders Associations is a non-governmental organisation representing freight forwarders worldwide.

GOOGLE TO PROVIDE SUPPLY CHAIN SOLUTIONS Google is entering the supply chain sector with the aim of oﬀering solutions to the industry. Google Cloud and Dun & Bradstreet, a New York provider of business decisioning data and analysis, have announced a 10-year strategic deal to jointly develop software and services involving supply chain visibility and other associated business matters. The new arrangement will see Dun & Bradstreet become a founding data provider for Google Cloud’s Supply Chain Twin

solution – an initiative fully supported by ‘BigQuery,’ Google Cloud’s serverless, multi-cloud data warehouse, which provides supply chain virtualisation for customers and users. The new initiative will see Dun & Bradstreet’s supply chain data integrated with Google Cloud’s Supply Chain Twin, allowing the two companies to develop new solutions that oﬀer improvements in end-to-end supply chain visibility for customers, while also seeking to uncover hidden risks in global supply chains.

Thomas Kurian, CEO, Google Cloud, highlights the anticipated benefits: “Through this collaboration with Dun & Bradstreet, we are helping companies of all sizes make better decisions through data-driven insights. Dun & Bradstreet’s reputation for business data and delivering innovative capabilities, combined with our leading analytics, artificial intelligence and machine-learning technologies, will bring new opportunities to our mutual customers,” he states.

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

DIGITAL NEWS Belgium’s Port of Antwerp is rolling-out a largescale drone project and has brought the 6th NeTWorK group on-board to help get it off the ground. The 6th NeTWorK was founded at the end of 2020 by specialist technology companies, DroneMatrix, Proximus and SkeyDrone, in order to provide any company or government access to external drone services on a 24 x 7 basis. In order to initiate its own new project, dubbed D-Hive Operation, the Port of Antwerp has confirmed it is enlisting support of 6th NeTWorK to utilise a network of drones that are capable of conducting automated flights from various strategic locations throughout the port. The planned system allows the port to generate flight plans and routes via a remote platform, although this can also operate with manual intervention, where and when required. This means that key port operating factors can be monitored and assessed via drone use, such as detecting oil slicks, floating debris, infrastructure inspections, vessel traffic management, site monitoring, environmental inspections and overall asset and safety coordination. Annick de Ridder, Alderman for the Port of Antwerp summarises the benefits and uniqueness of the initiative: “The D-Hive innovative drone project makes the Port of Antwerp the first port authority in the world to offer operational drone capacity on such a big scale. A network of automatic drones that carry out flights at strategic locations in

Wave Energy Moves

The US National Renewable Energy Laboratory (NREL) has created a wave energy system designed to better withstand the ocean’s power over huge and heavy generators. The Marine Energy team at NREL has developed a variablegeometry, oscillating, surge wave energy converter that opens slats to allow waves to flow through rather than hit the device. It is hoped that the system can now be considered for commercialisation.

ANTWERP’S DRONE PROJECT SET TO FLY

the port oﬀers considerable added value, in terms of security as well as eﬃciency. This demonstrates that we are giving concrete shape today to the smart port of tomorrow.” DroneMatrix is to act as the main project contractor and is supplying the hardware and software for the drone machinery, while also assuming responsibility

8 The Port of Antwerp is collaborating with drone experts, 6th NeTWorK, to launch its new largescale project utilising drone systems

for flight implementation. Frederik Winters, Project Manager, DroneMatrix, notes: “Based on results, we want to inspire the port community to use the Drone-as-a-service (DAAS)

model in the future. This concept takes care of all the concerns of companies and governments that rely on drone services. The technical aspect and permit applications are handled by us as the service provider, with the data and information made available to the user in real-time.” Fellow specialists SkeyDrone and Proximus have equally important roles in the project. SkeyDrone is providing continuous monitoring of the operational ground and air risks to determine the safest and most eﬃcient flight routes, with Proximus hosting the 6th NeTWorK platform to utilise experience in IoT and cloudbased services. The Port of Antwerp notes that deployment of drones is going to help to clear floating debris around the port area. It states that around 50 tonnes of debris is collected from the docks per annum, consisting of plastics, wood, cardboard, organic material, and mooring lines. “The use of drones will allow us to locate floating debris in the vastly expanded port area systematically, intelligently, and eﬃciently from 2023,” explains De Ridder.

PERU SECURES SINGLE WINDOW SAVINGS The Single Window for Foreign Trade (VUCE) system utilised in Peru generated more than US$38 million in savings in 2021. VUCE is an electronic platform that is designed to facilitate foreign trade paperwork and procedures while connecting diﬀerent entities for the exchange of information, with exporters, importers and foreign

trade operators all benefitting, according to the country’s National Foreign Trade Ministry. The benefit of this application is that it standardises data exchange processes, which makes them more compatible. So for a port it can gain more detailed and real-time information on scheduled port calls, or delays and cancellations

from the shipping sector. In 2021, in the port sector in Peru, a total of 21,685 ship reception procedures and 22,510 ship dispatch procedures were recorded using VUCE. VUCE 2.0 is currently under development.

3D Dublin

API from APM

Pompey Digital Twin

A five-year contract for 3D digital mapping of Dublin Port Company, has been secured by GISGRO. The agreement will allow digitalising work and development of tailored port management solutions at Ireland’s largest volume cargo port. The project aims to ensure the port has access to a complete system for managing all GIS and asset management data through the use of cuttingedge technology delivered from one central source.

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

APM Terminals (APMT) is accelerating its use of Application Programming Interfaces (APIs) across its network to help deal with surging container volumes. This software uses an intermediary that allows two applications to “speak” to each other, such as a transport/logistics planning system with data from a TOS. Facilities in Tanger-Med, Gothenburg and Vado Ligure are now included within the wider network oﬀering.

BRIEFS IOTICS is to create a digital twin of Portsmouth International Port with the objective of demonstrating an achievable modular green hydrogen generation system. The Shipping, Hydrogen & Port Ecosystems UK (SHAPE UK) project is part of the Clean Maritime Demonstration Competition funded by the Department of Transport and delivered in conjunction with Innovate UK. The resulting model will be fully scalable.

MARCH 2022 | 11

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Rubber tyre gantry cranes

EQUIPMENT NEWS

HYPERLOOP TEST-BED FOR PORT OF SAGUNTO

BRIEFS Bedeschi Deal

Bedeschi S.p.A. has confirmed the take-over of Berga Golfetto Sangati bulk handling activities from Golfetto Sangati srl, eﬀective January 1, 2022. Both companies specialise in bulk grain handling activities, but as a result of this transaction, Bedeschi has confirmed that the deal will complete its capability to provide turnkey systems for grains & oilseeds highcapacity bulk handling.

ECT Investment

The Port Authority of Valencia (PAV) has approved a concession in the Port of Sagunto to ZELEROS to carry out its pilot project, Sustainable Electric Freight-forwarder (SELF). The SELF system consists of vehicles (or bogies) guided and propelled by the rails where the linear motor is installed. This technology has been developed together with the Centro de Investigaciones Energéticas, Medioambientales y Tecnológicas (CIEMAT) and uses a 100 per cent electric linear motor, fully automated, and replicates intralogistics systems found in logistics warehouses. A reduction in emissions and improving port operation eﬃciencies are the targeted outcomes. This pilot system is serving as a platform to demonstrate

ZELEROS’ linear engine technology to move goods in ports with zero emissions and consists of a 100-metre shuttle where the linear motor will be subjected to several missions to validate the functionality of the system. David Pistoni, Co-Founder and CEO, ZELEROS, confirms his plans for the technology. “Hyperloop technologies are also applicable to other sectors, such as the port sector, and with this pioneering pilot we will demonstrate and optimise the SELF system, accelerating the path towards its commercialisation that will allow its implementation in ports all over the world”. Aurelio Martínez, President, PAV, notes: “The concession of this space to the Valencian start-up ZELEROS reaﬃrms Valenciaport’s commitment to

8 The port of Sagunto will see the implementation of a new hyperloop pilot programme, supporting more sustainable container movements

innovation. Ports are spaces of innovation that host innovative experiences such as Zeleros; this is how progress is made towards increasingly sustainable, eﬃcient and safe operations. And of course, with this project, the Port of Sagunto is sending out a clear message of identifying itself as an industrial and innovative enclave of reference in the Mediterranean for future generations.” ZELEROS, is a Valencia-based technology company, specialising in the development of a hyperloop transport system, with an application aimed at decarbonising and automating container movements between terminals.

ITS LONG BEACH ORDERS NEW EQUIPMENT PACKAGE International Transportation Service (ITS), based at the Port of Long Beach, USA has placed an order for five new Paceco-Mitsui ship-to-shore (STS) gantries and five rubber-tyred-gantries (RTGs). The equipment will be delivered from Japan, by Mitsui E&S Machinery, in two shipments, with all equipment scheduled to be operational in early 2023. With an outreach of more than 70m, the 5 x 65-ton capacity STS

units will be added to the existing 10 cranes already at the terminal, although the operator says that the new additions will be the largest available at the facility. In addition to the new equipment representing a modernisation programme at ITS, which is being undertaken to be able to support ships up to 24,000 TEU in size, the cranes oﬀer increased safety and optimal productivity. Indeed, there will be an operator

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assist system, and laser and camera systems for anti-collision practices. In addition, ITS has also placed an order for five near-zeroemission (NZE) model hybrid transtainer RTGs from Paceco. These RTGs are the latest generation of hybrid units, which specifically reduce the fuel consumption and carbon dioxide (CO2) emissions by approximately 70 per cent compared to conventional RTGs.

Hutchison Ports ECT Rotterdam (ECT) and Sany Europe, part of Sany Heavy Industries of Changsha, China, signed a contract for the construction and delivery of three new quay cranes with an option for four more. The new cranes are part of an extensive investment programme at the ECT Delta terminal, which also includes hybrid automated guided vehicles, hybrid straddle carriers and multi-trailer tractors.

Huge Houston

The Port of Houston’s Bayport Container Terminal has received three new ZPMC-built neo-Panamax ship-toshore gantries featuring an outreach of 22 container rows wide. The new units will be operational in Summer 2022 and increase to a total of 28 the number ship-to-shore (STS) units deployed.

100t addition

Sennebogen telescopic cranes is now expanding its extensive portfolio of units with a new top-of-the-range model. It is a 100-tonne crane that will fill the gap between the existing models oﬀered by this specialist manufacturer. The new SENNEBOGEN 6103E is oﬀering a load capacity of 100-tonne and a maximum boom length of up to 62m.

MARCH 2022 | 13

EQUIPMENT NEWS

TEMA TERMINAL 3 EQUIPMENT ORDERED Meridian Port Services (MPS) has confirmed a new largescale order for its operation in the Port of Tema, Ghana. A US$53.3 million deal has been signed with China’s ZPMC for 15 new gantry cranes,

including three ship-to-shore (STS) and 12 electrified rubbertired gantries (eRTG) to go into service at its Terminal 3. MPS confirms that the requirement for additional and eﬃcient equipment has been

Konecranes has confirmed another order from the Georgia Ports Authority (GPA) for new equipment. The equipment manufacturer booked an order in Q4 2021 for nine electric Konecranes Rubber Tyred Gantries (RTGs) for the fastgrowing Port of Savannah in the US South Atlantic region. The new electric RTGs will be delivered in two batches, commencing in the second half of 2022. This latest order brings the total Konecranes RTG fleet operated by GPA to 210 units and will help support large scale capacity expansion at the Port of Savannah (as confirmed in the article on p38). Each of the nine new Konecranes RTGs ordered are to be supplied with cable reels for electric operation. They are high-performance, 16-wheel RTGs with a lifting capacity of 40 tons, a stacking height of 1-over-6, and a stacking width of 6 plus a truck lane wide. Each unit will benefit from Konecranes’ Active Load Control system, which prevents container sway, while an auto-steering feature that keeps the cranes on a pre-programmed, straight

KONECRANES NINE RTG ORDER FOR SAVANNAH

BRIEFS Solar Mumbai

PSA Mumbai has a new 1-megawatt (MW) solar farm, which is projected to generate 13 per cent of the terminal’s annual power requirements. The project is one of several major initiatives underway at the 1.3ha facility, which include deploying a fleet of all-electric Rubber-Tyred Gantry (RTG) Cranes and other e-vehicle options for its Phase II development. The terminal is targeting a reduction of 50 per cent in carbon emissions.

14 | MARCH 2022

driving path, is also included. The equipment will additionally feature Konecranes’ TRUCONNECT® remote monitoring system. Mario Van den Heuvel, Director

placed to keep pace with current and projected future traﬃc growth. The equipment now deployed at Terminal 3 consists of 11 ship-to-shore gantry cranes, two mobile harbour cranes and 29 eRTG yard units.

RTG, Konecranes Port Solutions, points out: “The GPA was the first customer to order Konecranes’ RTGs back in 1994. We’ve been improving our RTGs steadily over the years, working closely with

MPS is a joint venture between Ghana Ports and Harbours Authority (GPHA) (30 per cent), APM Terminals (35 per cent) and Bolloré Transport and Logistics (35 per cent).

the GPA and all our customers to satisfy demands for ecoeﬃciency and productivity. These new electric RTGs will help the GPA to drive the eco-eﬃciency of its container handling operations.”

NEW CRANES ARRIVE AT YILPORT’S LISCONT TERMINAL

8 Four new ship-to-shore cranes from Paceco have arrived at the Yilport Liscont Container Terminal in Portugal. The new equipment is providing the terminal with the capacity to operate larger container ships, up to 14.000TEU+. The state-of-the-art cranes were manufactured at the Mitsui E&S Machinery Oita (Japan) yard and are capable of reaching across 22 rows of containers on-deck

Pecém Prepares

The APM Terminals Pecém facility will have new equipment in place ahead of the 2022 fruit harvest in Brazil. The global operating company is expecting a ship-to-shore gantry crane and three accompanying rubber-tyred-gantries as part of an investment totalling US$28.5 million. Pecém is one of the main outlets for fruit production in the country, with 10 per cent growth registered in 2021 and 2022 projections expecting further increases.

Congo Investment

Congo Terminal, a subsidiary of Bolloré Ports, has completed extension works at the Port of Pointe-Noire, Congo. The investment of €5 million is to keep pace with projected demand, with over one million TEU per annum currently being handled. Bolloré Ports says it has invested €400 million since 2009 upgrading the equipment and infrastructure at the facility which functions as both a gateway and transshipment terminal.

Jaxport Upgrades

As part of a 20-year, US$60 million agreement, the former TraPac Jacksonville container terminal, at Jaxport, is being modernised following a new lease signed with Ceres Terminals. The company commenced operations at the Dames Point facility, in the Florida-based port on March 1, 2022. The process will see US$15 million employed for terminal upgrades and improved systems.

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

ENVIRONMENTAL NEWS At the recent One Ocean Summit held in Brest, France, in February, the Agence Française de Développement (AFD), the European Investment Bank (EIB) and KfW acting on behalf of the German Federal Government committed to double the target of the Clean Oceans Initiative, together with Cassa Depositi e Prestiti (CDP) the Italian National Promotional Institution and Financial Institution for Development Cooperation, and ICO, the Spanish Promotional Bank. They also welcomed the European Bank for Reconstruction and Development (EBRD) as a new member. Given the threats faced by the world’s oceans and the urgency to protect this natural resource, the Clean Oceans Initiative (COI) decided to raise its target to provide €4 billion of financing by the end of 2025, instead of the €2 billion initially expected to be reached by 2023. The Clean Oceans Initiative is the largest common initiative dedicated to funding projects aimed at reducing plastic pollution at sea. In three years, the Initiative has already achieved 80 per cent of its target by providing €1.6 billion long-term financing for public and private sector projects that reduce discharge of plastics, micro-plastics and other litter to the oceans through improved management of solid waste, wastewater and storm water. Projects signed so far under the initiative will benefit more than 20 million people living in Africa, Asia, Latin America and Europe. Examples include improved wastewater treatment in Sri Lanka, China, Egypt and South Africa, solid waste management in Togo and Senegal and stormwater management and flood protection in Benin, Morocco and Ecuador.

CLEAN OCEAN INITIATIVE RAMPS UP € GOAL

THE SCALE OF THE PROBLEM An estimated more than 8 million tonnes of plastic waste enters the oceans every year. This pollution threatens estuaries, coral reefs, fish and millions of families that rely on the oceans. Most of the plastics in the oceans come from waste thrown on the ground or washed into rivers. Better wastewater treatment and stormwater management in many developing countries would stop some of the 1.5 million tonnes of micro-plastics that end up in the oceans every year. Fast population growth in many cities around the world is increasing plastic pollution. The oceans provide countless benefits to the planet and people, such as food, medicines, renewable energy and natural resources. The oceans provide billions of people with an income and a healthy diet. Oceans are also important for the climate. They absorb about 30 per cent of the planet’s carbon dioxide, buﬀering the impact of global warming. The Clean Oceans Initiative identifies projects that decrease the release of plastic waste in rivers, seas and on land globally, with

Development Banks confirm support for the Clean Oceans Initiative

(1) The Clean Oceans Initiative is the largest common initiative dedicated to funding projects aimed at reducing plastic pollution at sea

The Clean Oceans Initiative(1) ups its target and aims to provide €4 billion by 2025 to protect the Oceans and welcomes EBRD as a new member constructive partnerships and looks forward to join forces with its Clean Oceans Initiative partners and is delighted to welcome EBRD as an important partner.”

8 If positive action is not taken by 2050 there will be more plastic than fish in the sea

a particular focus on riverine and coastal areas in the most polluting countries located mainly in Asia, Africa and Latin America. A significant amount of plastic waste enters the oceans from the ten major river systems located in these continents, which lack access to regular waste collection and controlled waste disposal systems, as well as adequate wastewater and stormwater management systems.

8 Rémy Rioux, CEO, AFD “I am proud that AFD Group is contributing, alongside five prominent public development banks (PDBs), to the strengthening of the Clean Oceans Initiative, which has committed to doubling its financing to reach four billion euros by 2025. This commitment, which was announced at the One Ocean Summit in Brest, demonstrates that PDBs work closely with coastal and river stakeholders to reduce plastic pollution in the oceans resulting largely from land-based activities. I am also delighted that EBRD has joined this initiative, thereby reinforcing Team Europe in its fight to preserve the oceans.” 8 Dario Scannapieco, CEO, CDP “Preserving the environment and natural resources is a major goal for CDP and is one of the priorities of the new 2022-2024 Strategic Plan. In times when we re-build our economies, our commitments for the achievement of the 2030 Agenda must not falter. CDP stands ready to play an active role by promoting

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8 Odile Renaud-Basso, President, EBRD “We are delighted to join this important initiative for the future of our oceans and the planet. The EBRD’s robust commitment to green investments and track-record in fighting environmental degradation in marine ecosystems, such as the Baltic, Black Sea, Mediterranean and Red Seas, make us ideal partners to push this agenda forward. Our operations in greener municipal infrastructure, maritime transport, as well as property and tourism will make a real difference in reducing ocean waste and, in particular, plastics.” 8 Dr Werner Hoyer, President, EIB “Clean oceans are essential for a sustainable planet. I am proud of the success of the Clean Oceans Initiative and warmly welcome the EBRD as our new partner in the pursuit of our ambition. This kind of cooperation is crucial to tackling global challenges and a great example of the value that EIB Global, our dedicated arm for global partnerships, can bring.” 8 José Carlos García de Quevedo, Chairman, ICO: “Preserving the health of our oceans is a priority to consolidate the model of sustainable growth and development. With this goal in mind, as national promotional bank, ICO reaffirms its commitment to the Clean Ocean Initiative. We are proud to join together with other NPBs, our efforts to the founders of this initiative (AFD, KFW and EIB) to achieve the new target set for 2025.” 8 Stefan Wintels, CEO, KfW “The oceans are under severe pressure: they are polluted, littered, overfished, their species richness is massively compromised. Being one of the initiative’s founders, KfW is therefore very much welcoming the new commitment to double the overall target by 2025. In addition, we are delighted that EBRD has joined the Clean Oceans Initiative. As a common European response to a key global challenge, this step strengthens our joint efforts against plastic waste.”

‘‘

Projects signed so far under the initiative will benefit more than 20 million people MARCH 2022 | 15

THENEWYORKER BARRY PARKER

Who can planners believe- when they are looking beyond the short-term issues (and we have more than a few of those swirling around “On The Waterfront” locally)? There is a school of thought that supply chains will move back towards “normal”, if the World Trade Organisation is to be believed. However, this view (predicated on the idea of fewer “goods” moving around as Covid-weary consumers go with “services”) flies in the face of that of logistics digitizer Flexport, which suggests that 2022 will still be a year of continued disruptions (noting that the real problems are way beyond the weekly counts of anchored vessels – extending deep into technology, trucking and employment issues more generally). One trend that has caught my eye, and I’ve written about here and elsewhere, concerns Environment, Social, and Governance (ESG). Ports, responsible to taxpayers and citizenry generally, are not strangers to the ESG concept- it’s been around for a while, and has certainly driven funding of projects. What is notable on the

CARGO SHIPPERS’ PORT SELECTION: CHOICES AND CORRIDORS

8 Green Transport Corridors are on the rise – as promoted by the EU

commercial side, are recent consultancy suggestions that “reputational issues” are soon going to be right up there with profits in evaluating corporate performance- which drives investor capital inbound. What could evolve in this respect, if one agrees with this train of reasoning, is that ports’ ESG postures may analogously drive cargo routings. This analogy may seem tenuous- arguably. But then, I listened in to a recent briefing by the World Shipping Council (WSC)- which included remarks by the top executive in a leading

liner consortium. In his discussion, centred around “decarbonisation” (the centerpiece of that “E” in ESG), the liner manager envisioned a future where cargo shippers would be able to choose between “faster” and “cleaner” routings (I am paraphrasing) - in other words, supply lines could be varied. Guess which choice the name-brand cargo interests

(with their own reputations publicly broadcast) will make? The ”choices” future won’t happen instantly, but ideas like this ought to be on the radar of port planners in their discussions with carriers. As I’ve said here (and readers have no doubt seen elsewhere), “reputation matters.” A diﬀerent sort of future that was brought up in the same WSC presentation, is the idea of “Green Corridors”- built on a concept which emerged at last year’s climate meetings in Glasgow. These corridors, set to emerge in the next few years, will be origin/ destination pathways for early-stage implementation of decarbonised supply chains. By definition, ports are integral here. So, while there is still considerable uncertainty about 2022’s disruptions, the longerterm green path, with choices and corridors, is gaining increasing traction.

‘‘

… a future where cargo shippers would be able to choose between “faster” and “cleaner” routings

THEANALYST PETER DE LANGEN

Maersk Line confirmed at the presentation of its 2021 annual results that it is focused on building long-term relationships with shippers. In these relationships, Maersk provides integrated logistics services including long-term agreements on freight rates. The best indicator for the success of this strategy is the share of freight covered by short-term contracts. In 2017, this was 52 per cent, compared to 35 per cent in 2021. The goal for 2022 is to reduce this share even further to 25 to 30 per cent. Maersk has the wind at its back for implementing this strategy:

THE DIMINISHING ROLE OF FORWARDERS IN PORT SELECTION given tight capacity, shippers are eager to secure their shipments. Thus, Maersk can aﬀord to upset the forwarders, as it has reportedly done in various countries through to the end of 2021, even though these entities can bring in large volumes. Forwarders can use the ‘open for all’ spot booking platform, but that implies their rates will be unfavorable compared to rates directly negotiated with Maersk as part of long-term agreements. On top of this, forwarders face competition from some large digital freight forwarders, like

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Flexport, recently valued at US$8 billion and with fresh cash to spend (that certainly is a lot in the fragmented forwarding industry - but suddenly looks like small money when compared with Maersk’s 2021 free cash flow of US$ 16.5 billion). Overall, the diminished attention of Maersk (and other lines) paid to forwarders, as well as digitalisation of forwarding, driven by new entrants implies forwarders become less important players in ‘port selection’. Even when forwarders decide how freight flows are

handled, that will generally be done based on algorithms instead of by commercially savvy forwarders looking for the best deal. While all of this has been coming for years, the capacity crunch in liner shipping is accelerating the process. An open question is whether there will be an impact on ports. Rotterdam traditionally was known as a ‘shipping line port’ and Antwerp as a ‘forwarders port’ (in part because of the comparatively low terminal handling charges). Perhaps both of them will have to get used to being an ‘algorithm port’.

MARCH 2022 | 17

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THEECONOMIST BEN HACKETT

WHAT WE CAN LEARN FROM STATISTICS Are politicians misleading us as to how strong economic recovery has been in 2021 or should we trust them? Lies, lies and more lies refers to the misuse of statistical data to put across a viewpoint that could be inaccurate or perhaps less than truthful. According to Investopia.com “statistics is the study and manipulation of data, including ways to gather, review, analyze, and draw conclusions from data”. Assessing comments currently being made about the 2021 economic growth rates as defined by Gross Domestic Product (GDP) we are bombarded by claims and counter claims as to how well the global economies, particularly China, the EU, the UK and the U.S. are performing. Much depends on what is being compared. Be it year on year, quarterly, monthly or prepandemic as the base against which growth or decline is measured. Currently, the best results of defining growth is to look

at 2021 vs 2020 in order to highlight how well economies are doing now that COVID-19 is being swept aside. This brings us face to face with data manipulation as 2020 was at the depth of economic decline for the first six months due to the pandemic. 2021, from the second quarter on, with intermediate growth, statistically was a great year, the best in 30 years or more for most of the major economies other than China. The UK reported year on year growth of 7.5 per cent. Last

years’ decline was the worst since 1921 which means that any growth in 2021 would look spectacular. The U.S. and the EU are similarly boasting about high growth over five per cent, but when we look at the details on a quarterly basis, the best vs worst quarters have very high growth rates. However, when comparing the Quarter 4 data we see a diﬀerent story as recovery had started by mid-2020, the growth rate in the UK was only one per cent vs 1.7 in the U.S. The reality

is that the statistics allow us to choose whichever scenario we wish to present. Politically, now is the time for the less than accurate year on year comparisons. Perhaps 2021 should be compared with 2019, the year before the pandemic to give a better estimate of recovery. This leads us to projecting 2022 GDP growth. It will most likely be very much more subdued than last year and adding inflation into the basket there are storm clouds on the horizon.

THESTRATEGIST MIKE MUNDY

“WAR IS THE UNFOLDING OF MISCALCULATIONS(1)” There is only one place to go in this column this month – Ukraine. To witness an unprovoked attack on Ukraine by Russia, or perhaps more accurately Vladamir Putin, is hard to countenance. Hard to see the human suﬀering that is unfolding as a result and very hard to understand, in 21st Century terms, what the end game is here? Can it really be about resetting history after the end of the Cold War, about reversing time and winning back the old Soviet sphere of influence? Is it about legacy, does Putin see himself as the last Russian leader who is willing to try and enlarge Russia’s influence in an era when it has been steadily diminishing? Such ideas seem more than a little beyond the bounds of reality but maybe that is easy for me to Barbara Tuchman. 1912 - American historian

(1)

say sitting in London watching events from afar. The illegal annexation of Crimea by Russia in 2014 stands as a major pointer to Putin’s ambition and self-evidently this is a man that is willing to use force to secure his goals. There is more than a little ‘might is right’ about the Putin style of leadership. We have seen this in Chechnya, Georgia and more recently Syria. But like all campaigns, Putin’s order to invade Ukraine is based on a calculation and at this stage it remains to be seen if it is a well thought out calculation, a winning one. It is hard to fathom exactly but there is clear evidence to suggest that the Russian population is not entirely convinced about the merits of a war with Ukraine. There have been demonstrations across Russia, many Russian citizens have been reaching out to western media stating that they

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are opposed to the war, especially younger people. A poll released by the independent Levada Centre determined that only 45 per cent of Russians were in favour of Putin’s recognition move that preceded the invasion. Underpinning this there is steadily growing disquiet among elements of Russia’s population about the increasing repression being felt under Putin’s dictatorial regime. It is unlikely that these seeds of discontent will be allayed with ‘the man in the street’ feeling the financial pressures resulting from the war – at one point the Rouble had lost up to 30 per cent of its value with the subsequent part restoration of its value only achieved by the Central Bank of the Russian Federation more than doubling interest rates from 9.5 per cent to 20 per cent. The queues at ATMs in Russia are a testament to the financial

nervousness manifesting itself in the population. Russian businesses too, even in the early days of the application of sanctions, are feeling the pain. One example: in just three days Global Ports, the Russian port operator, suﬀered a huge fall in market cap from USD1 billion to USD250 million. The unparalleled unity in the western world behind the objective of making Vladamir Putin pay for his actions will only lead to more severe consequences for the Russian people and increasingly for business as Russia takes on the mantle of a pariah state. So, the big question is, has Putin got it right or, like so many dictators before him, has he over-played his hand into a serious miscalculation? Ultimately, while there is a road to run yet, will it end for him as it did for so many of his ilk before him?

MARCH 2022 | 19

UKRAINE CONFLICT: THE REPERCUSSIONS

UKRAINE CRISIS – THE FALLOUT Maritime sector fallout from the Ukraine crisis promises to be multi-faceted and large scale. Andrew Penfold analyses the situation

8 If LNG flows from Russia to the EU, transiting via the Ukraine, were to stop – and similar disruptions felt in the oil sector – then a global energy crisis will result

At the time of writing (mid-February) the outcome of the geopolitical stand-oﬀ between Russia and the Ukraine was not clear. Whether Vladimir Putin would activate his force on the border and invade the country or stand down with some form of compromise was unknown. However, what is clear is that the global attitude to the Ukraine and inward investment may well have been permanently compromised. What does all this mean for the port sector? IIMMEDIATE IMPACTS Attention has been focused on the LNG situation. Threats to curtail Russian LNG flows through the country’s transit pipelines to the EU present a major problem for the EU economy (and thus to global energy prices). If these flows were to stop – and similar disruptions felt in the oil sector – then a global energy crisis would be the immediate result. At present, Russia provides around 45 per cent of natural gas imports into Europe and 25 per cent of oil imports. In addition, Russia is the largest coal supplier into Europe. Curtailment of these shipments could not be easily substituted in the short term. The impact of a disruption goes way beyond Europe, however, with Russia supplying around 7.8m barrels per day of crude and products to the world market and accounting for 10 per cent of seaborne trade tonnages and tonne-mileage. At least 65 per cent is destined for Europe. Although China could readily absorb these commodities, it is far from clear how these could be redirected without a restructuring of the entire export infrastructure. It is, however, not just about energy, the position is much more complex.

20 | MARCH 2022

The Ukraine is a major exporter of corn, barley, and rye, but it’s the country’s wheat exports that will have the greatest impact on food security around the world. The development of wheat production in the Ukraine has been a major success story of the past twenty years as the natural advantages of the fertile black earth resources have shaken-off years of collectivised inefficiencies. In 2020, the country exported around 18 million metric tons of wheat out of a total harvest of 24 million metric tons. It should also be noted that a large part of the country’s most productive regions are in the east – exactly those parts most vulnerable to a potential Russian attack or disruption. Increasing production and exports have drawn in major investments in the past ten years, or so. There are numerous ports offering different capabilities with export elevators, but attention has focused on the so-called Tier I ports (those offering effective relatively deepwater export capabilities). These comprise Odessa, Ilichevsk, Yuzhny and Nikolayev, which offer a combined export capacity of around 23m tonnes per annum. The real problem here has been vessel size, with only Yuzhny able to load vessels significantly above 70,000dwt capacity. These limitations have effectively restricted the reach of Ukraine’s grain exports to medium haul markets. Great efforts and assessments have been directed towards improving export capacity but – always – uncertainties at the political level have stymied developments. There are grain elevator/grain terminal expansion plans in the Ukraine, but funding looks risky and whatever the shortterm outcome this can only slow development of the Ukraine as a grain exporter.

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UKRAINE CONFLICT: THE REPERCUSSIONS The broader fall-out from the crisis for the Black Sea as a whole is already being noted. In February the level of vessels loading in the Black Sea was reported (by Drewry) to be down 44 per cent. These diﬃculties will only be exacerbated by any prolongation of the situation and if there is an actual war it can be anticipated that shipping volumes will collapse further. The search for alternative supplies will accelerate. LONGER TERM CONFIDENCE When Russia annexed the Crimea in 2014 there was an immediate hit to the Ukraine’s economic development. The direct result was an overall contraction of around 19 per cent over two years as investment fled from the country. Recovery was actually rapid, with a sustained period of expansion noted prior to the Covid downturn of 2020. Indeed, these years saw a relatively benign investment climate in the Ukraine with this being reflected in increased consumption and infrastructure investment. Any renewal of conflict will undoubtedly be manifested in more contraction. This can only undermine further scope for the investments necessary to lift the country into the middle income category where it belongs. Even a stabilisation in the situation will damage confidence in the stability of the Ukraine and this can only reduce FDI and development in general. IMPACTS BY SECTOR Natural gas demand will be fundamentally shifted, whatever the outcome. EU importers will lose faith in reliance on Russian gas either via the Ukraine or via the Nordstream project. This can only mean a search for alternate supplies and a rebalancing of the market. LNG is obviously the main beneficiary. We can certainly anticipate increased investment in LNG import terminals and increased storage capacity. Sourcing of these supplies will focus attention on the Middle East (especially Qatar) and the US. These are the sources with the scope to boost production – especially under a high price environment. Grain trade seems certain to be disrupted. Eﬀective partial removal of Ukrainian grains from the world market can only result in increased prices and the search for alternative supplies. Once again, this will place increased demand on the North American exporters – only these players have the scope to lift shipments in the short term. Prices will increase and it will be the poorer importers such as those in Africa that will feel the major pain from this. These developments will

slow the pace of export terminal investments in the Ukraine and also undermine the scale of Russian exports. The removal of Ukraine’s coal exports – at least in the short term – will further imbalance the European energy market. The central role of these (and Russian) supplies in Europe will also result in the search for alternative sources. This means increased shipments of coal from the Atlantic basin – Colombia and the US – and improved viability for distant suppliers such as Australia. Import terminals are not optimised for the larger vessels involved and this will see further CIF price increases. It could also have the effect of accelerating European trends towards ‘net-zero’. Away from the bulk sector, economic contraction will be manifested in a reduction in consumption with an estimated hit of around 15 per cent for containerised goods flows even if actual war is avoided. There will be little scope for sustained inward investment in this sector. PORT IMPLICATIONS The Ukraine has been the target of considerable terminal investment in the dry bulk and container sectors in recent years. The problematic political nature of many of these projects has held back the pace of investment, however. Pushing investment projects to a level of bankability has always been difficult here, but the current political upheavals are of a different order. It is unlikely that significant investment will proceed until some stability is resumed. At present, investors will only give the country a very wide berth. 8 With or without a war grain trade will be disrupted with a rebalancing of supply sources and increased cost across the board

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MARCH 2022 | 21

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SUPPLY CHAIN PERFORMANCE

BOX TERMINALS TAKE THE HEAT... …BUT THE SOURCE OF THE PROBLEMS LIE ELSWHERE Dig beneath the surface and you will see that container terminals are unjustly identified as the cause of congestion problems. Johan-Paul Verschuure diagnoses the real situation

8 It is simply wrong to lay the blame of poor supply chain performance at the door of ports – they have actually done a good job in very diﬃcult circumstances

Container terminals are the only place where congestion is obvious. Pictures of full stacks lead to scapegoating of terminal operators. However, the problems are actually focused on other parts of the supply chain and even institutional. Shipping networks have rapidly adjusted to the conditions leading to dropped calls, longer port stays and rerouted volumes. In normal times these indicators suggest something is off. However, in current conditions it is showing how logistic players respond to changing conditions and how terminals support this process. CONTRASTING DYNAMICS Kuehne+Nagel launched its widely cited disruption indicator in late January 2022 indicating that roughly 80 per cent of global port disruption is in the US. Out of this at least 80 per cent is focused on San Pedro (Los Angeles and Long Beach). The remainder of global congestion is taking place in just a few ports. Overall the majority of ports are very busy, operating near capacity with occasional congestion, but nevetheless managing the inflow of containers relatively well. North American TEU volumes rose by just over 13.2 per cent in 2021 in comparison to pre-Covid 2019. This is the same growth rate as was recorded by North American ports between 2016 and 2018, albeit that the growth back then was spread more gradually over both years. Demand growth is mostly isolated to North America. In contrast, the Hamburg-Le Havre range recorded a volume growth of a more normal 5.4 per cent over the 2019-2021 period. This growth is healthy but has been accommodated by capacity developments already in place. This confirms that it’s not just available terminal capacity causing the problems. To really diagnose potential demand problems we have to drill deeper into port activity and the core theme of ‘cause and effect. A remarkable difference between the North American market and the Northwest European port sector has been the great variation between ports. On the West Coast only Los Angeles/Long Beach had a CAGR exceeding five per

cent per year. Prince Rupert saw a decline over the pandemic and Oakland – relatively near to the San Pedro Bay ports had stable volumes. Growth on the East Coast was much higher, mostly with CAGR in the range of 7-10 per cent over the pandemic period. In Europe growth was spread much more evenly and at lower levels. Available capacity in Zeebrugge, Le Havre and Wilhelmshafen enabled these ports to jump to the rescue of other ports with operational problems. These demand growth rates would not normally cause problems. Other issues were at play. Frankly, however, supply chains in Northwest Europe adjusted more rapidly to different operational conditions and lockdowns ensuring continuing operations in an efficient way. TRANSSHIPMENT AS A CURE The transshipment structure in place in Northwest Europe actually diluted congestion across the major ports. Deepsea calls to the UK were partially temporarily replaced by feeder services from other European hubs when hinterland logistics were struggling to keep up. Feeder services being more flexible to berth were better able to find a slot. Services were shuffled to ports with available capacity in Zeebrugge and Le Havre, with these ports also benefiting from a shift from Ro-Ro to Lo-Lo. Rather than direct mainline calls, feeders were used to fill up smaller pockets of capacity. Although the last minute changes in scheduled vessel calls caused major problems for the terminals, it did result in the optimal use of European port capacity. Examples of this in Europe include reports of feeder services calling at nearby breakbulk terminals and at shortsea terminals. Also, global operators having multiple terminals in the range worked together by actively rerouting volumes to partner terminals and thereby using all available capacity. This ad-hoc and temporary reshuffling of networks resulted in a massive shift away from published schedules. Alphaliner reported, for example, a large number of dropped calls between Asia and North Europe. However, rather than

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MARCH 2022 | 23

SUPPLY CHAIN PERFORMANCE networks to reduce the number of port calls per loop. Volumes to ports were consolidated on fewer vessels. As a consequence, terminals were dealing with much larger call sizes. In addition, in hub ports, increased transshipment to deal with operational challenges served to increase call sizes further. The data for Antwerp and Rotterdam points in this direction, with this being exacerbated by the rapid introduction of much larger Megamax vessels. In 2021 the number of container vessels calling at the port of Rotterdam and Antwerp, for example, both declined in comparison to 2019, while over the same period container throughput increased. The resulting increase in call sizes is BIGGER PARCELS: LONGER PORT STAYS estimated to cause roughly 70 per cent A second indicator which acquires a different of the longer than average port stays. meaning in the North American context This suggests that quay productivity compared to Europe is the time a container remained at relatively normal levels in vessel spends in port. Normally, the average European ports. Other causes like last time in port would be a proxy for productivity. minute schedule changes, cargo owners Increased dwell times, in particular for empty not picking up their cargo or using containers, led to fuller stacks and in turn terminals as storage areas were also this resulted in lower productivity. Add to this absences of operational staff and vessels 8 Kuhne+Nagel/SeaexplorerUS ports significant contributary factors but outside the control of terminal operators. were alongside for much longer. However, this was not the case in LA/LB where the number With the reliability of operations being negatively impacted of calls grew in line with the container volumes. Therefore, for the last two years, liners in Northwest Europe adjusted their this being an indicator of the port congestion, it merely showed the logistic sector working out solutions to effectively route cargo and use pockets of available capacity. Due to legislation in North America preventing foreign flagged vessels transporting cargo between US ports, there is no effective transshipment structure in place. With only point-to-point services, the shipping network was not able to adjust in a similar way to the prevailing challenges. Canadian ports actually saw disappointing transit volumes to the US, given the problems at the US ports.. Dropped calls in this market therefore have a different meaning than in Northwest Europe.

24 | MARCH 2022

8 Kuhne+Nagel’s Disruption Indicator highlights the recent situation at US ports

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

SUPPLY CHAIN PERFORMANCE only a small part of the increase in port stay durations can be explained by increasing call sizes. The trend of reducing the number of ports in a loop has recently developed further with Hapag Lloyd announcing a point-to-point service between South China and Hamburg with only one call at each end. With multiple ports having increasing diﬃculties handling 20,000+TEU vessels and operational challenges likely to persist throughout this year, more liners will likely move towards fewer calls per loop in Northwest Europe and more point-to-point services to absorb growth. This means terminals will need to brace themselves for larger call sizes and peaks. TRUCKER INCENTIVES REQUIRED Truck driver shortage is also quoted as a reason for supply chain woes. However, from the statistics it is apparent that it is more about a shortage of incentives to become a trucker. Industry bodies such as the ATA in the US quoted a shortage of 80,000 drivers in the US, the RHA in the UK quoted a shortage of 100,000 and in the total EU the shortage is estimated to be 400,000 drivers. The situation in China is not much better with a reported shortage of 1 million drivers. In comparison to total numbers the UK has the highest shortage, but overall all are relatively low in comparison to the number of active drivers. What is more interesting is that (in particular in the US) the number of registered truckers is even higher than the shortage. On top of this, all these shortages were reported prior to the pandemic and seem more institutional than pandemic related. It seems that in many places it is more about creating

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Fewer calls per liner service loop and more point-topoint services can be expected attractive working conditions rather than a shortage of truck drivers. The grim outlook for the profession caused by the imminent introduction of autonomous driving trucks will only add to this. The way to solve this is having market forces adjust the balance. This, however, raises the prospect of paying quite a bit extra for trucked containers for the foreseeable future. LESSONS LEARNT? Ports are undeservedly often quoted as key choking points in the supply chain. Demand growth has been very healthy, but not in itself impossible to deal with by the sector. In fact, productivity at the quay in many places was at normal levels and only in a few places added to congestion. Forces in other parts of the supply chain are concentrated and visible inside ports. Although a natural reaction to the stellar freight rates has been to suggest intervention in these markets, examples from less regulated and controlled markets show that logistic players can optimise networks and routings if they are oﬀered the flexibility to do so. The market will find a new equilibrium which should make supply chains as eﬃcient as possible. It may very well be, though, that the new price levels are not to many people’s liking.

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MARCH 2022 | 25

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PUBLIC PRIVATE PARTNERSHIP

CONCOR PPP PREPARATIONS There are still some obstacles to overcome before launching the Container Corporation of India (CONCOR) PPP. Felicity Landon tracks the project There has been no shortage of interest in the upcoming privatisation of the government-owned Container Corporation of India – companies such as Adani, DP World, PSA International, Vendanta Group, Gateway Distriparks and Allcargo Logistics are known to be keen to get their hands on a stake in the logistics operation, and there is also said to be strong interest from various investment bodies. The Government of India has been trying to privatise the company, whose activities encompass rail, terminal and warehouse operations, since 2019, when the Cabinet approved divestment of a 30.8 per cent shareholding, along with the transfer of management control. The government’s current stake is just under 55 per cent. So, what’s the hold-up? The answer lies in the deliberations over a new land licensing fee policy for Indian railways, a situation which has eﬀectively been blocking Concor’s privatisation as the contentious policy has moved between railway and finance ministries. The policy includes moving away from a fee previously based on the number of TEU to a fee based on a percentage of the land’s market value, with the value to be increased by seven per cent annually. This has raised costs considerably for Concor where it uses railway land for its warehousing and terminal operations, and that in turn could make Concor less attractive to investors. It has been reported that Concor was expecting an additional bill of Rs 460 crore due to the higher fees but in fact received a bill for Rs 1,276 crore from the railways ministry.

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Land leasing policy is the main obstacle to overcome

Concor operates a network of more than 60 terminals, including inland container depots (ICDs), export-import container depots and domestic container depots. Most are rail linked, with rail being the main carrier for freight but first and last-mile transport by road also provided. It has been reported that 26 of Concor’s container terminals are on railway land. Investors have noted that any potential bid would depend on the land licensing charge. At Concor’s earnings conference call for Q3, fiscal year 2022, held at the end of January, V. Kalyana Rama, Chairman and Managing Director, was asked if there was any update on the land lease policy to be approved by the ministry. “As of now there is no update,” he replied. “Still the work is in progress. Earlier we have given our workings and now it is the ministry and the government, there are other ministries involved so they are working on this.” This is clearly a tortuous process – as far back as March 2021, Piyush Goyal, Railways Minister said his ministry had cleared the new policy. Meanwhile, there was positive news from Concor at its January conference call. Kalyana Rama said: “We had another very good quarter in Q3. The overall top line is one of the best ever for Q3. Only just little short of Q4 last year when we got the highest ever top line.

“This quarter we ended with 1919 Crores and there are good margins maintained even though there are issues about container availability and the import/export trends.” There had been four per cent growth in volumes compared to the same period the year before, he said. The combination of international and domestic growth was “encouraging”. He predicted that Concor would handle four million TEU this year (2022) for the first time. Kalyana Rama also predicted a significant increase in bulk commodity movements in containers. “We did a little bit of movement, about 4 lakh (400,000) tons of food grains last year, but we were doing a lot of experiments with the movement of cement in bulk in containers that we completed outright. We are now going for commercial exploitation of this. We are expecting a good market in this,” he said. “Next year this will be a reality, the movement of cement in bulk in containers. The market available in the first year will be anywhere between 5 million and 10 million tons.” Concor was preparing the containers and equipment required, he said, “so that when the demand comes, we would like to pick up the entire demand without losing any market demand there.” Concor started operations in 1989 with just seven ICDs. Its operations today include warehousing, container storage and repair, packing and unpacking, coastal shipping, air cargo, Customs bonded depots, and a ‘hub and spoke’ distribution service for domestic customers. All of its operations are backed by a digitalised Single Window facility which coordinates with Customs, sea ports, railways, hauliers, consolidators, forwarders and shipping lines. The Indian government reportedly received Rs 67 crore in dividends from Concor for Q3 (ending December) of fiscal year 2021-22.

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

8 The Government of India plans to divest a 30.8 per cent stake in CONCOR

MARCH 2022 | 27

PORT DEVELOPMENT: INDIA

INVESTMENT PRIORITIES Comprehensive PPP, digitalisation and sustainability initiatives are high on the agenda in India’s advancing port sector. Felicity Landon reports Public-private partnership (PPP) led synergies can transform and accelerate India’s maritime sector, the government’s ports, shipping and waterways minister said recently. Speaking during a visit to Jawaharlal Nehru Port Trust (JNPT), the minister, Sarbananda Sonowal, highlighted the role of India’s ports as critical gateway infrastructure connecting entire regions, along with road, rail and inland waterway networks, to the international market. “Public-private partnership at JNPT will help developing the strong, well-functioning, maritime transport infrastructure that is a key element of economic growth for the country,” he said. “This initiative will become a means to manage port operations more effectively, as well as to develop new port infrastructure, traditionally both exclusively government functions.” Ports infrastructure investment and reforms in India are going ahead in tandem with major investment in inland terminals and transport. Recent months have seen a stream of new announcements from both the private and public sector as India strives to increase and improve the efficiency of trade. The topics are no different to anywhere else – sustainability, digitalisation, technology, reducing cost and improving efficiency. “The Indian government has been focusing heavily on ports infrastructure and reforms for the past ten years,” says Vineet Malhotra, Co-Founder and Director at the Mumbaibased IT specialist Kale Logistics Solutions. “Programmes like ‘Sagarmala’, which was approved in 2015, focus on port modernisation, port connectivity, port-led industrialisation and coastal community development.” Meanwhile the Maritime India Vision 2030 sets out aggressive targets to be achieved by the sector, he says. More recently, the PM Gati Shakti National Masterplan for Multimodal Connectivity was announced, essentially a digital platform to bring together 16 ministries, including railways and roads, for integrated planning and coordinated implementation of infrastructure connectivity projects. “The multimodal connectivity will provide integrated and seamless connectivity for movement of people, goods and services from one mode of transport to another. It will facilitate the last mile connectivity of infrastructure and also reduce travel time for people,” the government has stated. As part of its fiscal year 2022-23 budget proposals recently presented, Nirmala Sitharaman, Indian Finance Minister, said 100 new cargo terminals would be developed in the country over the next three years. The Gati Shakti masterplan is a “transformative approach for economic growth and sustainable development,” says Malhotra, taking in road, rail, airports, sea ports, mass transport, waterways and logistics infrastructure. PCS ROLL OUT PROGRESSES “Kale’s objectives to transform and elevate this sector is in alignment with the government’s vision. Our Port Community System, CODEX, is one of the most comprehensive PCSs, built to speed up import/export processes, reduce bottlenecks, increase security and improve the nation’s ‘Ease of Doing Business’ performance throughout the supply chain,” underlines Malhotra. With systems and platforms like PCSs, the government

28 | MARCH 2022

can achieve the dual objective of reducing logistics costs and attaining sustainability goals by making operations completely paperless, says Malhotra. “The maritime industry is infested with paperwork, documentation and manual operations. A single shipment could have as many as 40 documents, more than 100 appendices, and 120 signatures. This is coupled by complex processes, truck congestion as long as 15 to 20 hours just to get inside the port gates, and no visibility for all stakeholders. To top it all, India has a major cost disadvantage, with logistics costs estimated at around 14 per cent of GDP, compared to 8-10 per cent in the case of developing countries.”

8 Maritime India Vision 2030 sets out aggressive targets to be achieved by the sector

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The maritime industry is infested with paperwork, documentation and manual operations Kale rolled out CODEX, India’s first PCS, at Tuticorin Port in 2016. A scalable platform, it provides functions ranging from a maritime single window and harbour marine control to container scanning, truck appointments, e-DO, VGM, e-Customs, track & track, e-payments, auctions & disposal and e-FAL. There has been 100 per cent adoption at Tuticorin, says Malhotra, with the reduction in truck waiting times almost halving the vehicles’ fuel consumption and enabling the port to reduce carbon emissions by 75 per cent. CODEX has since been introduced at Kolkata Port, where Kale has developed an uncleared/unclaimed system to assist container freight stations (CFS) customers and Customs in handling unclaimed cargo, to stop the problem of abandoned freight. “The times could not have been more appropriate for Indian ports to open up to digitalisation,” he says. “The Indian Ports Association has been at the forefront of augmenting the digital set-up across several state-controlled ports. Initiatives on a state-of-the-art Port Operation System and National Logistics Portal – Marine are under implementation.”

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

PORT DEVELOPMENT: INDIA

8 Record breaker - the 17,292TEU capacity APL Raﬄes calling Mundra in January

JNPT, Adani Mundra Port and APSEZ have seen substantial volume increases, expect further growth and have expansion plans underway together with strong commitments to achieving green goals. JNPT: Records and Ambitions JNPT has reported a strong increase in volumes for last year, with total container traﬃc increasing from 4.47 million TEU in 2020 to 5.63 million TEU in 2021. Both container throughput and total cargo of 76.14m tonnes were the highest ever handled at JNPT, and this was the highest export/import container volume handled by any port in India. NSIGT (DP World’s Nhava Sheva International Gateway Terminal) and BMCT (PSA’s Bharat Mumbai Container Terminals) each handled 1.17m TEU, both terminals crossing the one million TEU mark for the first time. Trial operations started at JNPT’s new coastal berth, under the Sagarmala programme’s goal to boost coastal cargo movements. Digitalisation has also progressed, and there has been investment in rail facilities. JNPT has put in place initiatives to acquire ‘green port status’ within the time period of the Maritime India Vision 2030. An action plan includes sourcing 60 per cent of its energy from renewables and also includes onshore power supply for tugs and other vessels, the installation of solar panels, electric RTGs, LNG bunkering, energy eﬃcient smart lighting, water conservation and green belt cover. Phase 1 of BMCT (PSA Mumbai), providing 1000 metres of quay with the deepest berths in JNPT, began operations in January 2018. The

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JNPT has put in place initiatives to acquire ‘green port status’

GROWTH, GREEN GOALS & CAPACITY UPLIFT terminal is equipped with double stack train infrastructure to support India’s Dedicated Freight Corridor for trains carrying more and higher loads at higher speed. Phase 2, when completed, will bring total berth length to 2000 metres and capacity to 4.8 million TEU. In February, PSA Mumbai commissioned a 1MW solar farm; the 1.3-hectare facility, featuring rooftop solar panels, is expected to generate 13 per cent of the terminal’s power requirements and reduce CO2 emissions by more than 1200 tonnes per year. PSA Mumbai is targeting a 50 per cent reduction in carbon emissions by 2030, compared to 2019. It will deploy a fleet of all-electric RTGs and other electric vehicle options in its Phase 2 development. Also at JNPT, APM Terminals Mumbai (Gateway Terminals India, GTI) is embarking on a $115 million development to increase its container handling capacity by 10 per cent to 2.18 million TEU. GTI is a joint venture between APMT and Concor. Adani Mundra Port: Big Ship Ready The 17,292 TEU APL Raﬄes became the largest container vessel to call in India, when it berthed at the joint venture Adani CMA Mundra Terminal in January. This was a milestone for Mundra Port, which has claimed first place among container ports in India in 2021. The port handled 4.9 million TEU in the first three quarters of fiscal year 2022. “The call of APL Raﬄes not only endorses the capabilities of the port to handle large container vessels, but also reiterates the role of ACMTPL in boosting trade between India and its key trading partners,” said Adani.

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

The port has 26 berths and two single-point moorings, and annual capacity for 249 million tonnes of cargo including dry bulk, breakbulk, project cargo, containers, vehicles liquid bulk, and crude oil. Adani East Coast Growth Story Adani Ports and Special Economic Zone (APSEZ), which operates terminals at a dozen locations in India, reported a 22 per cent growth in cargo volumes for the first nine months of fiscal year 2022, from 174m tonnes to 212m tonnes. Containers grew by 25 per cent to 6.2m TEU, while dry cargo up by 21 per cent, & liquids (including crude) by 22 per cent. APSEZ said growth was driven by the east coast, where volumes were up by 58 per cent compared to 10 per cent on the west coast. “APSEZ had shown tremendous resilience all through the pandemic period,” said Karan Adani, CEO: “Our learnings in 2020 helped us weather the storm and our operational expertise allowed us to continue our expansion. The addition of two ports in 2021 – Krishnapatnam and Gangavaram in Andhra Pradesh on the east coast – to the ones on the west coast continued to tighten our pan-India presence. Our under-construction port of Vizhinjam in Kerala, along with our new terminal in Colombo, Sri Lanka, will act as a new transshipment hub in southeast Asia.” APSEZ’s carbon oﬀsetting, mangrove aﬀorestation and terrestrial plantation, as well its focus on the use of renewable energy, have put it “well on the road to achieving carbon neutrality by 2025 and becoming the world’s most sustainable ports company,” he added.

MARCH 2022 | 29

CONCESSION RENEWAL: Q&A

BETTER THE ‘DEVIL’ YOU KNOW WAPPP(1) engages in a Q&A addressing key areas of challenge in the concession renewal process. Six key questions are addressed

8 It is important for port authorities to have clear visibility regarding their goals when approaching the concession renewal task

The November 2021 issue of PS featured an article from Geneva-based WAPPP(1) that reflected on the often challenging subject of concession renewals. The article prompted significant discussion and feedback to the extent that together with WAPPP PS came up with the idea of a follow-up Q&A-based discussion responding to key questions that flowed from the original article. These questions with responses from WAPPP, led by Erik Wehl and Neil Davidson, are featured below. In formulating responses to what are identified as six key questions relating to concession renewal the authors drew upon a sample of 20+ European terminals – mainly container terminals – that had recently approached concession renewal. By far the lion’s share of this sample saw renewal with the incumbent operator, 14 were renewed on average five years before concession expiry and the average concession period was just under 19 years. Further, the renewed concession arrangements typically included requirements for additional investments seen as necessary over the extended lifetime of the concession, e.g. to accommodate past and anticipated market, regulatory, and other structural changes, per example to accommodate bigger vessels etc. According to PS’s understanding, this situation is reflected around the world – i.e. with concession award favouring renewal at the end of the initial term as opposed to running an entirely new public tender. Indeed, the latter is seen to be more the exception than the rule. The following six key questions and answers are intended WAPPP is a global non-governmental organisation. It sets as key objectives helping its members to achieve their professional goals and the promotion of best practices in Public Private Partnerships (PPP).

30 | MARCH 2022

to promote positive dialogue and learning between host port authorities, other government agencies and private sector organisations involved with concession renewal. Ultimately the goal is best practice in PPP arrangements – the stated aim of WAPPP which includes incubating new approaches and debunking myths. CONCESSION RENEWAL – SIX KEY QUESTIONS 1. Does it always have to be a renegotiation rather than a straight renewal? For any concession of significant length (10 years plus) it is almost inevitable that circumstances will have changed in some material way as it nears its end, be that micro level factors such as the nature of the traﬃc being handled, technological developments and operational requirements or more macro level factors such as market demand and government policy. These factors usually aﬀect both the port authority and terminal operator sides of the equation. In addition, the concession award process is increasingly seeking to achieve a broader environmental compliance for port activities and the sustainable development of the port. A well-designed concession (especially one reflecting the development of best practices over time) may be able to cope with these issues and simply be renewed as is, but much more likely the changes (and the rate of change) are such that both parties find it in their interest to reset the goalposts. This is particularly the case given that if it is a renewal rather than a short extension of the concession, the stage needs to be set for the next 15-25 years. Significant investment will be involved and hence renegotiation immediately comes onto the table, especially as factors such as volume commitments and incorporation of new regulations go hand in hand with this.

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

CONCESSION RENEWAL: Q&A 2. How long before the end of a concession should the issue of renewal be addressed? Clearly the actual renewal process is likely to require some time for both parties to assess their respective positions and go through the discussion, negotiation and agreement steps. The World Bank recommends two years as a minimum requirement. Allowing a longer period of time for this may reduce the pressure, but if the period is too long, the incentive to act immediately may be less (kick the can down the road). However, the issues raised by renewal may become apparent well before the end of a concession, particularly in terms of equipment. The concessionaire will not wish to replace ageing equipment when there is less than five years to run, and with major items such as gantry cranes having useful lives of up to 20-25 years, the question is even more moot. Most concessions will have a provision to purchase such items from the concessionaire at market value, or another method, if the concession is not renewed, but it is better to have the concessionaire behave and invest as if he’s there for the long term. In this respect, it’s not uncommon for renewal discussions to be opened up well before the end of the concession if the parties recognise a need to make substantial changes to the agreement. For example, if throughput has grown much faster than expected, and major expenditure in the form of new berths is required, then renewal or extension discussions need to be undertaken straightaway. In this context, the port authority should also take into consideration ongoing external developments facing it, including its own key strategic requirements and the benefits towards the local community which the port serves. 3. Do port concession agreements adequately set the rules for concession renewal? The picture here is a mixed one. Most concession agreements have provision for one or more extension periods by mutual consent, but this is usually only for the short term (say five years). Plus of course this is just prolonging the status quo. It is unusual to have provision built in for a complete renewal for say 20-25 years. This is mainly because, as discussed earlier, a complete renegotiation is usually the order of the day and it is impossible to predict all the alterations that will be needed. However, this does not preclude building into the original concession the inclusion of a provision and mechanism to at least facilitate the renewal/renegotiation process, even if it does not spell out a whole set of rules. This is particularly important if the existing concession contract either is lacking or is poorly designed regarding this aspect. 4. How is it possible to objectively determine whether an incumbent operator has performed to a satisfactory level? This is a challenging task because satisfactory performance means different things to different parties, plus there are multiple facets to it. For the port authority, satisfactory performance means that the concessionaire has paid all bills on time, run the terminal in an efficient and responsible way and made the necessary and promised investments. But the port authority also has to take into account the views of the customers of the terminal, and they may have a different experience (believing tariffs are too high or service levels too low for example), plus some may have an axe to grind. Port user feedback mechanisms are commonly used but are not necessarily straightforward tools. There are a number of objective operational performance figures that can be used though, such as berth moves per hour (adjusted according to ship size and type etc) and truck

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The issues raised by renewal may become apparent well before the end of a concession waiting times, although even then, extenuating circumstances must be borne in mind. It is also important to be wary of expecting too much from the operator. Gaining volume through offering high service levels is one thing, but many factors are beyond his control such as the cost and quality of inland transport links. Plus, the market itself simply may not perform that well and the operator should not be punished for this. 5. How can port authorities overcome their weakened negotiating position if renewing with an incumbent operator? The answer here for a port authority is to keep its options open. Sure, you can agree to discuss renewal with the incumbent, but you can also reserve the right to go to some form of tender if you are unable to reach a satisfactory agreement. Or you can invite a Swiss challenge by publishing the offer from the incumbent and inviting outsiders to better it. In addition, port authorities can strengthen their position by benchmarking their concessions against others, and by utilising knowledge from external consultants. 6. What methodology should govern a proposed change in renewed terminal concession fees to deliver a fair result? From the port authority point of view, it first needs to be clear about its fundamental policy and aims. Is it simply seeking to minimise risk and cover long term costs, or is it a profit maximizer and willing to live with the risks that go with this? The attitude (and indeed ownership) of the port authority may have changed markedly since the concession was originally put in place. It also needs to consider whether its costs have changed significantly, e.g. infrastructure maintenance and ongoing capital expenditure. The role and aims of port authorities varies considerably according to the nature of their ownership (fully state owned, corporatized, privatised etc) and the degree to which they are involved in cargo handling activities (from pure landlord to shareholder in terminals). From the terminal operator’s point of view, the overall returns from the renewed concession will need to be modelled and assessed, to see if they are acceptable. Again, the ultimate ownership and financial targets of the concessionaire may have changed over say, a 25-year period (the target rate of return may well have changed for example). Also, market conditions will have altered – what is the prevailing cargo handling tariff now? How harsh is the competitive environment? What has happened to the customer base? Have there been changes that affect operating costs? Ultimately it will be about investment requirements and acceptable risks and returns for each party – the same dance as was originally had at the very beginning of the concession. * The original article draws upon a lively webinar held by the WAPPP Port Chapter in June 2021, of which Erik Wehl and Neil Davidson are pro bono committee members. WAPPP (the World Association of PPP Units & PPP Professionals) brings together public-private partnership professionals from PPP units, infrastructure agencies, investors and PPP consultants to network and pursue best practices. WAPPP is registered as an NGO in Switzerland and has its seat in International Geneva (https://wappp.org).

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

MARCH 2022 | 31

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US: EAST COAST MARKET SHARE

EAST COAST DRIFT The US East Coast is building market share in the container sector. AJ Keyes identifies the drivers of this trend and considers the potential for long-term cargo capture

BIGGER TRAFFIC TOTALS So, how have the major container ports on the US East Coast benefitted? Well, there is no doubt that port volumes have increased for the five largest container ports (excluding Florida), with a noticeable rise commencing after 2016 when the enlarged Panama Canal was seeing fully revised services with larger tonnage. For example, New York/New Jersey (NYNJ) handled 6.25 million TEU in 2016, which hit 7.18 million TEU by the end of 2018. Likewise, Savannah’s 2016 throughput of 3.65 million TEU increased to more than 4.35 million TEU over the same three-year period and Charleston recorded a rise from over 1.99 million TEU to 2.32 million during these years. Virginia also saw an increase, from 2.66 million TEU to 2.94 million TEU. So market share was increasing but the COVID-19 congestion added another layer of demand. The key question is will this endure? So, what does the future hold for USEC ports? Well, the continued increase in ship sizes able to access the Panama Canal has been a help in allowing larger vessels to use the All-Water trade routing, but there are other factors. During 2021, congestion at USWC ports, most notably the San Pedro complex, helped to divert cargo to the eastern seaboard. This is a continuing trend, as Figure 1 shows. Since 2000, there has been, in overall terms, a shift from

Source: Ports, dataand.com

Container ports on the US East Coast have been benefitting from larger ships calling via the enlarged Panama Canal and a desire to use the All-Water routing in recent years, although the expansion of the waterway has seen larger ships than originally envisaged. The improved Panama alternative was already seeing increased market share before recent congestion emerged. With labour contract uncertainty on the West Coast mounting, the US East Coast seems set to benefit further. In 2016 when the Panama Canal expansion was finally completed, it represented a true step-change for the US port industry on the eastern seaboard. Since the announcement of the expansion of the waterway some years previously, almost all ports invested to be “big-ship” ready through a combination of dredging and improved infrastructure. There was a definite need to be in the race to attract larger ships. In simplistic terms, the enlarged Panama Canal eﬀectively raised sizes of ships able to transit from around 5000 TEU up to around 14,000TEU. In early 2022, redesign of these larger vessels has increased eﬀective capacity to almost 16,000 TEU, following ongoing work by the waterway authority. Since mid-2021, the maximum length overall for commercial and non-commercial vessels acceptable for regular transits of the locks has increased by just over three metres (370.3m versus 367.3m). As a result, almost 97 per cent of the world’s fleet of containerships can transit the waterway, the Panama Canal states. In addition, the Panama Canal also increased the maximum draught permitted to the highest level allowed in the access route, by adding an additional foot of depth. It means the maximum vessel draught improved to 50ft compared to the previous maintained level of 49ft (subject to rainfall levels and water management by the authority).

West Coast to East Coast, with the gap between the two port ranges diminishing. For 2021, the West Coast ports contributed an estimated 48.2 per cent, with eastern ports an estimated 44.4 per cent (with the diﬀerence attributable to the role of US Gulf ports in the total). However, in 2015 when the Panama Canal expansion was being finalised, the totals were 50.1 per cent (West Coast) and 43.6 per cent (East Coast). So it has had some impact, but on further analysis, there are other key years where a change has occurred. In the years following 2002, 2006, 2010, 2014 and 2018 there was a gain in estimated container port share retained by the eastern seaboard facilities, also partly supported by the continued drift of manufacturing away from China to South-East Asia and India. The relevance of the diﬀerent years listed is that each one highlights when the International Longshore & Warehouse Union (workforce) and Pacific Maritime Association (employers) contract negotiations were ongoing or due to be finalised at USWC ports. As a result, beneficial cargo owners and shipping lines looked to identify alternate gateway options for key North American hinterlands, most notably the US Midwest. So while the increase in ship sizes able to access the Panama Canal has helped to support demand growth potential for USEC ports, there are other factors playing an equally, if not more important role in driving liner strategies and container port demand – most notably the employerworkforce contract processes. With the current round of discussions about to commence, East Coast ports will feel confident that the gains achieved in 2021 can be retained and even built on in 2022.

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

8 Figure 1: Share of Total Container Traﬃc by Coast in North America, 2000-2021

8 Savannah is a major player on the East Coast gaining market share from the West Coast

MARCH 2022 | 33

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NYNJ: CONTAINER OPERATIONS

GIVE ME SOME SPACE The Port of New York/New Jersey has long-been a “must-call” container gateway on the US East Coast. AJ Keyes investigates the space and other challenges this status is bringing in 2022

EMPTY STICKING PLASTER The impact of the strong increase in empties has caused issues for NYNJ. The port authority has confirmed in the international press that it entered 2022 in a position in which empty stacks were “10-high” when the norm should be “eight-high.” There is additional empty container storage opening-up outside of the port, but it is still a 20-mile dray away for some sites, incurring both time and cost and including the potential need to have to use congested roads, such as the I-95. It also means that quick retrieval of a container is not possible at all times. Some good news will be the 38 acres of land at an old Ivory Soap plant on Staten Island being converted for empty storage, although it is currently subject to a review from New York’s environmental regulatory agency and could take some time yet for the process to be completed. To try to assist the process, both Hapag-Lloyd and Yang Ming Marine Transport Corp. agreed to waive some fees relating to containers heading back to NYNJ terminals during December 2021 and January 2022. However, this is not a solution, merely a sticking plaster to keep container logistics intact CAPACITY BUFFER CHALLENGED The existing terminals are of a large scale, based on North American East Coast benchmarks and comprise a mix of carrier-controlled (APM Terminals), specialist terminal operator (Ports America Group at PNCT) and financial interests, Macquarie at Maher Terminals and Ontario Teacher’s Pension Fund for GCT Bayonne and, GCT NYCT. All of them commenced 2022 on the back of a highlypositive year in 2021 from a volumes handled, perspective. Equally, though, they faced the significant challenge of providing congestion free terminals and no vessel queues. During January 2022 there were as many as 12 ships waiting at anchor for berths – this is higher than the comparable January 2021 figure of five vessels. Sam Ruda, Port Director, PANYNJ, accepts that this number is up. “The anchorage numbers are higher than what we’ve had historically. It’s a little more activity, but not an oﬀthe-charts increase,” he recently stated. In addition, Ruda contends the port’s “capacity buﬀer” across all terminals, even the smaller facilities, has helped

cope with recent congestion issues and thereby avoids the congestion issues experienced at other ports. This may be true to an extent, but it is also clear that volumes during the first half of 2022, at least, are going to remain strong. Continued inventory replenishment and ongoing consumer spending IS driving up imports, but at the same time causing issues. “Strong loaded imports continuing is expected for the first few months of 2022 and probably beyond,” explains Dean Davison, Technical Director Maritime Advisory, WSP, adding, “This in-turn means that there will then be a higher number of empties to go back and the need for empty storage, even oﬀ-dock, will again be a regular feature in 2022. It could be a challenging time for the port’s terminals and place stress on logistics transport partners, especially the trucking industry.”

8 Figure 1: Port of New York/New Jersey Throughput Activity 2020 vs 2021, in ‘000 TEU

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NYNJ: We have had five years of growth within the last 18 months NYNJ is aware of this potential challenge and will doubtless be hoping that all areas of the supply chain can keep pace with the anticipated growth. Ruda reflecting on recent performance highlights the scale of the challenge: “We had five years of growth within the last 18 months,” he notes. “Current NYNJ volumes are probably several years ahead of master plan estimates,” elaborates Davison, adding, “There is a need to develop more space because demand via NYNJ for the local and discretionary markets in the US Midwest is going to continue.” The new Greenville Yard brings intermodal rail access to the GCT Bayonne facility and complements the existing ExpressRail option as well as reflects an endorsement of PANYNJ’s desire to further increase its share of the large discretionary markets mentioned by Davison. NYNJ will clearly remain a ‘must-call’ port on the eastern seaboard but its success also brings challenges. The port and all stakeholders will need to be at the top of their game in 2022 to meet the prevailing and future needs of cargo owners and shipping lines.

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

MARCH 2022 | 35

Port Authority of New York/New Jersey data

The Port of New York/New Jersey (NYNJ) had an extremely strong 2021 in terms of container volumes handled, but it means that the port enters 2022 facing key challenges, not the least of which is having to find additional space and solving the empty box challenge. Full year 2021 container throughput for the port of NYNJ increased across all aspects of activity, as shown in Figure 1, and can be confirmed as: 5 Total volumes of 8.98 million TEU – an increase of 18.1 per cent over 2020 5 Loaded imports of 4.59 million TEU – a 16.7 per cent rise year-on-year 5 Loaded exports of 1.36 million TEU – up 3.4 per cent compared to 2020 5 Empties reached almost almost 3.01 million TEU – a significant uplift over 2020 performance

US EAST COAST: CONTAINER OPERATIONS

SAVANNAH: RECORD BREAKER For almost 20 years, the Port of Savannah has outperformed all other ports along the eastern seaboard and throughout the whole of North America. AJ Keyes looks at what makes this port so successful The Port of Savannah handled over 5.62 million TEU in 2021. Less than 20 years ago, it was handling around 1.07 million TEU and had an East Coast share of 8.5 per cent. A combination of a dynamic strategy, a seamless management process and the ability to determine the direction of the port industry has delivered. The long-term growth of container traﬃc through the port is clear, but what has driven the increases and how wellpositioned is the port to continue its successful journey? There are several important factors in play here. Notably, a combination of continued investment in terminal infrastructure to support shipping, development of intermodal rail capacity and the sustained expansion of good-quality warehousing and distribution facilities at or very close to the port.

36 | MARCH 2022

8 Coordinated and timely investment – in terminal, rail and warehousing distribution infrastructure – is key to Savannah’s success

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

Source: GPA

INTERMODAL RAIL CAPACITY The notable expansion of intermodal rail infrastructure at Savannah is via the Mega-Rail project. The US$127 million investment means the port can rapidly increase service to an arc of key inland markets, from Atlanta to Memphis, St. Louis, Chicago and the Ohio Valley. Savannah is targeting the shift of more cargo from trucks to rail, reducing highway traﬃc congestion, while Mega-Rail also benefits from being served by both Norfolk Southern and CSX Transportation, who gain 100 per cent on-dock connectivity. In addition, both railroads can serve Chicago, St Louis, and Cincinnati, with up to 24 hours of time savings gained.

WAREHOUSING & DISTRIBUTION Development of warehousing and distribution facilities at or close to the Port of Savannah has been underway for the past 20 years and to a large extent GPA has helped maximise the concept. This tactic enables cargo to be distributed quicker on arrival, especially via rail. Overall, GPA has confirmed that there is currently 80 million ft2 of warehouse space within a 30-mile radius of the Garden City Terminal, with a known 50 million ft2 to be constructed. To help support the activities further, a cross-docking warehouse, dubbed the “One-Stop Dock Warehouse” is planned on 90 acres of land close to Garden City Terminal. It will possess a supporting yard with nine RTGs and an annual capacity of 400,000TEU. This expansion will also improve the availability of chassis and empty containers at Garden City Terminal. The figure below, provided by GPA, oﬀers confirmation of the direct link between industrial warehousing occupancy and container TEU growth. Of course, GPAs has to maintain the ability to receive everlarger ships and ensure that onward inland transport is possible. Yet by continuing to add these component parts, while being led by a focussed management team (that changes in personnel but not in philosophy), the strategy that has worked for the past 20 years looks set to continue to work for the foreseeable future.

TERMINAL INFRASTRUCTURE Over the past 10 years, capital investment from Georgia Ports Authority (GPA) has been US$1.2 billion, but for the next 12 years spending will be US$4.5 billion, with US$485 million approved for 2022. The Garden City Terminal has been developed to currently oﬀer 9693ft of contiguous berth, supported by 1345 acres of terminal area. There are 30 ship-to-shore container cranes, with eight more eco-eﬃcient units due for delivery in 2023, along with 20 additional diesel-electric rubber tyred gantries (RTGs), to take the total to 178. There are other confirmed capacity enhancement initiatives, including the Peak Capacity project adding 650,000TEU of annual capacity by Spring 2022, with the Garden City West Expansion project generating 750,000TEU per annum of box space. GPA confirms it is under design and permits have been submitted, with construction commencing in Spring 2022. In April 2021, GPA began construction to straighten a bend at Berth 1 at Garden City Terminal. Once complete, this realignment will allow the facility to serve four 16,000-TEU vessels and three other ships, simultaneously. Expected completion is June 2023, with capacity rising by one million TEU per annum, according to GPA. In addition, GCT West Expansion, a new supporting yard area, will deliver an additional 750,000TEU per annum after 2023, while expenditure has been approved for acquisition of 22 acres of land, adjacent to GPA’s West Expansion property, plus a further 18 acres next to GPA’s Peak Capacity project. In total, the investments will add more than 230 acres of container handling space.

With space for six 10,000ft trains, rail-lift capacity is being doubled to two million containers per annum.

US EAST COAST: CONTAINERPORT DEVELOPMENT

KEEPING UP WITH THE JONESES There are a range of ports on the USEC competing for container traffic. Each faces individual challenges and has its own game plan. AJ Keyes assesses developments Larger ships entering New York/New Jersey (NYNJ) and a strong desire to also call Savannah in the South Atlantic region means other US East Coast (USEC) ports have the potential to see demand increases. Baltimore, Virginia and Charleston continue to invest to target additional container traffic as gateways in their own right. So, what are these three ports doing to increase competitiveness against the current backdrop? BALTIMORE GOES UP AND DOWN Baltimore is ready for the addition of larger vessels calls at Seagirt Marine Terminal. Four new all-electric neo-Panamax cranes are scheduled to be operational before the end of Q1 2022 and are joining the existing four units. This means two 16,000TEU vessels can be worked simultaneously across the two berths There are further expansion plans too. “A third berth will be built and open in early 2025, and a fourth berth is also in the long-term plan,” explains William Doyle, Executive Director, Maryland Port Administration. One major issue that has long impacted Baltimore’s ability to compete more effectively for US Midwest markets has been its intermodal connectivity. This is because CSX Transportation and Norfolk Southern Railway have not been able to offer double-stack trains. However, after around 10 years of delays due to funding issues, CSX Transportation has finally initiated a project to reconstruct the Howard Street Tunnel, the key obstacle to offering double-stack services. The US$466 million project, which also includes improvements at 22 other locations out of Baltimore, is slated for completion in late 2024 or early 2025. Once finished, it will finally overcome one of the biggest weaknesses to Baltimore’s competitiveness in the region. NIMBLE VIRGINIA STILL INVESTING For all of 2021, the Port of Virginia did not suffer with vessel congestion like other ports on the US East Coast. This was due to its ability to be “nimble” when receiving/shifting delayed ships at its two terminals, Norfolk International Terminals (NIT) and Virginia International Gateway (VIG), which are linked by barge services and utilise semiautomated cranes in the container yards. Indeed, despite growth in 2021 of 25.2 per cent, the port maintains that it never once had waiting ships in double-digit numbers. That said, the process was definitely tested at the end of January 2022 when snowstorms resulted in “a loss of around 44 per cent of capacity,” according to Stephen Edwards, Executive Director, Virginia Port Authority (VPA). To overcome these sudden vessel queues and backlog, VPA is bringing into play its “NIT North” area of the terminal. Although limited to ships up to 8000TEU in size, the rarely used berth (VPA said it only handled “two or three ships” in 2021) will help ease the pressure on NIT and VIG. “We are going to open NIT North up for more cargo in April……that brings about another 200,000-container [per year] lift capacity on top of what we had,” Edwards states. VPA is coming to the end of a substantial five-year investment programme. Starting in Q2 2022, the US Army Corps of Engineers (USACE) is deepening and widening

Norfolk Harbour to 55-ft to facilitate two-way vessel traﬃc as part of a US$350 million inner harbor dredging project, with completion due in 2024. In addition, VPA is taking possession of the final two shipto-shore cranes needed to allow NIT South to handle three vessels of up to 20,000TEU simultaneously, to match the 12 similar units at VIG. Importantly, a new railyard at NIT, capable of building 10,000-ft trains on-dock, is commencing before the end of Q1 2022. The new yard will double annual rail capacity of NIT to 630,000 containers and replicate the operation at VIG. With VPA reporting that 33 per cent of containers through the port use rail, investment in new intermodal capacity will support growth, with dredging allowing a two-way shipping flow helping Virginia retain its flexible and nimble approach moving forward.

8 VPA is coming to the end of a significant investment programme and remains wellplaced to target future growth

SHORT-TERM CAPACITY CRUNCH FOR CHARLESTON In March 2021, South Carolina Port Authority (SC Ports) finally opened its new Hugh K. Leatherman Terminal (HLT), oﬀering an initial 700,000TEU per annum. This largescale project is expected to be fully built-out by 2033 and will add 2.4 million TEU per annum to Charleston’s overall container capacity, representing the long-term expansion plan to keep pace with future demand. HLT has an excellent location and deep water, with a sailing time of just two hours from open water. However, there is no current on-dock intermodal rail option, with a short one-mile dray still required to access rail trackage. Yet at the time of writing (mid-February 2022), up to 20 ships were queuing to access the port and in excess of 7000 containers had been on the terminal for more than 15 days, severely hampering the ability of SC Ports to clear the backlog. The need to maximise the new HLT facility to overcome this issue remains the clear goal for SC Ports, but an ongoing dispute with the unionised workforce is hindering this aim. Current estimates of mid-March, earliest, to clear the backlog represents a frustrating outcome for SC Ports, especially after the time and investment spent developing HLT to oﬀer deep water and new capacity.

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

MARCH 2022 | 37

CRUISE OPERATIONS: BRAZIL

BRAZIL: CRUISE CONUNDRUM Stop start cruise operations in Brazil bring not only financial problems for industry participants but also for local communities highlighting the interdependence of the two elements. Rob Ward investigates

8 Santos and Rio de Janeiro cruise terminal facilities have been hit hard by repeated COVID-19 outbreaks

Brazilian port communities and cruise terminal operators are reeling over the on-oﬀ saga that has marked the southern hemisphere cruise season since it started back on November 5, after a year’s hiatus due to COVID-19, when the MSC Preziosa berthed at the port of Santos. The 2021-22 season was picking up a head of steam but several outbreaks of COVID-19 between Christmas and New Year led to a temporary suspension from early January to February 18, when operations were scheduled to resume. According to Clia Brasil (the local branch of the Cruise Lines International Association, which is headquartered in Washington DC), the last Brazilian cruise season (November 2020 to March 2021) hosted 469,577 passengers and injected around Reais2.241billion (US$427.9 million), up from just over Reais2bn the season before, into the Brazilian economy, especially local port communities, and generated 32,000 jobs. That was the third year of solid growth, and a booster especially for the key ports of Santos and Rio de Janeiro, and it followed seven years of consecutive falls in passenger numbers. The current season was targeted to attract more than 360,000 passengers, with an impact of Reais1.7bn, in addition to generating 24,000 jobs. With, however, only two months completed it has achieved less than half of those figures and the cruise terminal operators are seething. The two key ports for cruise operations in the South American country are Santos and Rio de Janeiro, where Concais Passenger Terminal and Pier Maua are, respectively, the two cruise terminal operators. Concais only renewed its concession in 2019, for another 20 years up to 2039, and already its US$42m investment plans, including equipment

38 | MARCH 2022

upgrades and new terminal buildings, are being hit for six by shortfalls in passenger numbers due to COVID-19 restrictions. It can currently handle six vessels simultaneously. Pier Maua has also invested heavily in recent years (the company would not say exactly how much). It serves Rio de Janeiro, the Cidade Maravilhosa (Marvellous City), famous for the annual Carnival, partying and New Year’s Eve fireworks extravaganzas off the beach at Copacabana; plus the famous sights of the Sugar Loaf Mountain and Corcovado (the famous Statue of Christ that towers over the whole of Rio). Pier Maua has been completely renovated over the past 10 years, coinciding with Brazil hosting firstly the World Cup (2014) and then the Olympics (2016), and can accommodate up to 35,000 passengers per day, and up to 10 vessels simultaneously. Pier Maua hosted 357,000 passengers during the 2019-20 season, which completed just before COVID-19 hit Brazil, and was expecting a more modest 165,000 for 2021-22 but then came the suspensions, so that target won’t be reached unless the season is extended significantly. Santos’s offerings are more modest than Rio’s, with just the Museum of Pele (arguably the world’s best-ever footballer, who played his entire career with Santos), a coffee Museum and the world’s longest beach front garden (3.4 miles long), and some decent beaches. However, a major plus for the cruise lines is that Santos services Sao Paulo, Brazil’s industrial and financial engine, with a metropolitan area of more than 20 million, and some of the richest denizens in all South America: a large pool of potential and actual cruise goers. Now the two cruise terminals will need divine intervention from Corcovado’s famous resident to turn a decent operating profit this year and overcome the obstacles put in their way.

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

CRUISE OPERATIONS: BRAZIL “TOUGH YEAR FOR EVERYONE” Times are also tough for the two cruise lines that still operate in Brazil: MSC Cruises with three vessels (MSC Splendida, MSC Preziosa and MSC Seaside; with, respectively, passenger capacities of 3900, 4345 and 5119) and Costa Cruises with two vessels (the Costa Diadema and Costa Fascinosa, with 4900 and 3780 passenger capacities). One source said that only one cruise had sailed with the maximum 75 per cent capacity and most had been operating at around 45-50 per cent. Clia said that cruises were averaging around 60 per cent. The five vessels have been waiting in the lanes outside the port of Santos, berthing at Concais once a week for provisions. “It’s been a tough year for everyone,” said Marco Ferraz, President, Clia Brasil, “After last year’s cruise season was completely wiped out, we had hoped to get back on track this season, but several outbreaks of COVID-19 over the Christmas and New Year periods meant we had to temporarily suspend all cruise operations. We are talking regularly with the authorities to find a way to resume our activities.” Many Brazilians take their holidays in January when children are on their school holidays but this year cruise terminals in Rio and Santos were deserted after cruise lines temporarily suspended all operations from January 4, initially to February 4 and then extended to February 18, when they were due to re-commence. Although Brazil is starting to get outbreaks of COVID-19 under control, and the milder Omicron variant is now dominant in the South American country, there seems to be a clash between the shipping lines and Anvisa, the National Agency for Sanitary Inspection, especially international transit. The government of maverick President Jair Bolsonaro and the Ministry of Tourism, however, are keen to get the cruise terminals open again as they bring in much needed revenue to Santos and Rio, and to federal and local government coﬀers, vis a vis taxes. After reports of passengers and crew going down with COVID-19 during the Christmas period cruises Anvisa stepped in and called for an end to the cruise season. Cruise lines said all restrictions and Anvisa rules (such as 75 per cent maximum capacity, regular testing and provision for hospital and hotel spaces in case of outbreaks) had been adhered to and that the operations should be allowed to continue once the voluntary suspension has been completed and Anvisa and Clia have aligned their protocols. BETTER PROSPECTS? However, some light might be visible at the end of the tunnel and there is a strong possibility that the season may be extended from its original early April finish and run until the

end of May, and even into June, to make up for lost cruises and business. Now, for the first time ever, there will be two Carnivals! The first one is the usual holiday that Brazilians take five days prior to the start of Lent which is when the Samba Schools usually hold their spectacular competition/show in Rio, which is from February 28 this year. However, with COVID-19 delaying the samba parades, a “second Carnival” will now be held from April 21 to 23 with parades across three days. One Santos based shipping agent who works in the cruise sector said that If an agreement can be made between the cruise lines and the authorities they will extend their season at least beyond “second Carnival” week, but he can’t see it going much beyond that as Autumn starts to fall in Brazil. “The culture for taking a cruise in Brazil is November to April,” said the shipping agent, who did not wish to be identified. “That’s when Brazilians book their vacations and children are on holiday and that is the hottest period, especially in the cooler south of the country. I think some of the vessels, especially the Costa duo, will want to return to the Mediterranean before May, but I hope I am wrong.” As ever in the world of Brazilian ports and shipping, politics is involved in the malaise. Our shipping agent source told Port Strategy that local politicians were making life difficult for Bolsonaro with one eye on this October’s Presidential election. “I think that local politicians in the city don’t want SPA to be sold off to private concerns, which is Bolsonaro’s plan, and Joao Doria, Governor of Sao Paulo, is standing against Bolsonaro in October, so he is making life difficult for the President on the cruise and several other fronts,” he said.

8 Light at the end of the tunnel? There is a possibility the season may be extended

The history of the Brazilian cruise shipping market Cruise shipping in Brazil took oﬀ at the end of the 20th century and expanded every year during the early 2000s, when the Brazilian economy was booming on the back of newly discovered oil reserves and the Brazilian currency, the Real, was strong compared to the US dollar. It was trading at 1.6 to reais to the greenback whereas today it is just 5.25, giving Brazilians less purchasing power. From 1996 the Brazilian cruise industry grew steadily from a base of about 200,000

passengers per annum before peaking during the 2011-12 season when 805,189 in 19 vessels took a cruise along the South American country’s 7500 km coastline, making it the third biggest cruise market in the world, behind only the Caribbean and the Mediterranean. Back then cruise terminals, government bodies and cruise lines were aiming for one million passengers per year and extending the season from four months (December to end of March) to all year round (at least

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

for a few vessels), adding vessels every year. Seven years of falling passenger numbers saw the 2016-17 season total just 358,024 passengers but an improving economy saw the 2017-18 season bounce back with 418,504 passengers and seven vessels, and 2019-20 was the third consecutive year of growth and did well to bag 469,000 passengers as COVID-19 started to loom on the horizon, but 2020-21 saw no ships and zero passengers due to the pandemic.

MARCH 2022 | 39

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DREDGING OPERATIONS

PRESS THE REFRESH BUTTON Dredging contractors continue to broaden their approach to securing new contracts alongside the sector introducing dredger designs that match the latest requirements. AJ Keyes reviews the premier developments

8 The new longterm concession for dredging the Parana River system is up for grabs

The international market for dredging projects remains active, although highly competitive, with some interesting projects. Further, the dredging services supply sector continues to be inventive in how to secure these projects. One major project up for grabs, with award by the Argentina General Port Administration Agency (AGP), is the dredging of the Parana River which encompasses 86 ports and is the ‘highway’ via which around 80 per cent of Argentina’s agricultural exports are moved. Eﬃcient dredging in this waterway has become even more critical than usual in recent times due to the presence of historically low water levels in the river. The Parana River has traditionally been dredged by a specialist dredging contractor, operating under the auspices of a long-term concession, with the contractor paid via means of tolls applied to transiting vessels. The length of the new concession envisaged is 15-years with this preceded by a tender for a 180-day operation, required while the details of the longer concession are worked out. Local reports suggest that the 180-day contract will be awarded this month – March 2022 – and that parties expressing strong interest in the multi-year concession include: Jan de Nul; Boskalis, Dredging International in joint venture with CCCC Shanghai Dredging and Rhode Nielsen-Emepa. There is, however, some doubt as to whether Emepa, who formerly worked with Jan de Nul, will be allowed to qualify for the project. Jan de Nul and Emepa, in joint venture in the company Hidrovia, originally held the Parana River concession from 1995 onwards. Along the way, with Emepa, an Argentine company, accused of corruption, the two organisations parted company and via various extensions Jan de Nul has continued with the dredging remit for the Parana River and River Plate. This arrangement will expire with the award first of the shortterm contract and second the long-term concession. Industry participants express some doubt, however, that the longer concession will be awarded this year with some suggesting the award may end up taking place in 2023.

The project is large-scale and it will be very interesting to see how the long-term concession award pans out. It is definitely a major opportunity that will be pursued vigorously by the interested parties and as such one that is definitely ‘watch this space’ material. Another noteworthy development in the market is the recently announced alliance between The Dredging Corporation of India Ltd. (DCI) AND Abu Dhabi’s National Marine Dredging Company (NMDC). The two companies have announced that they will bid jointly for projects using each other’s resources, equipment and know-how in the Indian sub-continent, Africa, Middle East and Far East regions. Interestingly, the nature of this alliance is broad-based, accommodating dredging projects but also extending into project development with build-operate-transfer (BOT) schemes, operation of ports, PPP-based dredging works, port development and multi-modal transportation activities. Project execution, the two companies report, will be either through a joint venture or as a consortium on a project-toproject basis. DCI, India’s biggest dredging contractor, is owned by four government-owned major ports – Deendayal Port, Jawaharlal Nehru Port, Visakhapatnam Port and Paradip Port. NMDC is supported by the Government of Abu Dhabi. In terms of dredger fleets, the two companies complement each other with NMDC strong on cutter suction dredgers and DCI possessing a large fleet of trailing suction hopper dredgers. The alliance represents a strong push to secure overseas projects with a broad-based remit in terms of project types. This latter reality may prove particularly interesting in the Indian market with the Indian Government in mid-2021 approving new norms for the award of dredging works at State-run-ports which include – for the first time – the idea of awarding major dredging works based on a PPP arrangement. Equally, it enables the four shareholder ports controlling DCI to finalise their respective dredging contracts with the company without the requirement for a public tender.

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MARCH 2022 | 41

DREDGING OPERATIONS The two market-related developments discussed above highlight the diversification taking place in the dredging contractor sector – a growing commitment to implementing new approaches to secure not only dredging work but aﬃliated opportunities including taking an equity stake where appropriate to do so. In parallel with this trend, as the following coverage discusses, the contractor sector continues to bring forward new dredger and dredger component designs that build on traditional goals such as raising the bar in terms of production and general performance as well as meet new generation development goals. DESIGN INNOVATION – I AM SPARTACUS The pursuit of greater eﬃciency in dredger design and dredger components continues apace with this focused on performance but also the increasingly important aspect of eco-friendly operations. One example involves the wonderfully-named giant new cutter suction dredger, “Spartacus” that DEME has received from Dutch shipyard, Royal IHC. Spartacus is the world’s largest and most powerful self-propelled cutter suction dredge and also the first able to run on liquefied natural gas (LNG). With a total installed power of 44,180kW The four main engines can run on Low Sulphur Heavy Fuel Oil, Marine Diesel Oil, as well as LNG, and the two auxiliary engines have dual-fuel technology. The heavy cutter ladder, able to be controlled and operated from the bridge by a single person, can operate up to a dredging depth of 45m and the vessel is already on its way to its first project in Egypt.

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Argentina is in the final stages of awarding the new dredging concession for the Parana River Also notable as another new generation eco-friendly dredger design is Damen Shipyards Electric Cutter Suction Dredger, the ECSD 650. This equipment uses electric motors connected to shore power to drive the dredging system, thereby making zero emissions at the point of operations, making it especially good for activities in urban and environmentally-sensitive settings. If shore power is not readily accessible, Damen works with local contractors to install and integrate strategically positioned connection points with local power distribution networks. The company explains that its range of hopper capacities range from 2000m3 to 5000m³ and operations can take place down to a depth of 30m, enabling maintenance works in larger ports and channels, as well as capital dredging. It also utilises a new generation of electrical submersible dredge pumps (EDOP) that are both clean and quiet, using compact electric motors and frequency converters. TARGETTING HYDROGEN C-Job Naval Architects has confirmed the launch of a new range of customisable trailing suction hopper dredgers (TSHDs), which it expects to fill the gap between standard designs and fully tailored vessels.

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DREDGING OPERATIONS The other interesting factor is that this design process is specifically being customised so that power can be provided by hydrogen-fuelled propulsion systems in future – a clear indication relating to the future likely direction of the power systems expected. Each design across the new range will be dedicated to a specific type of dredging activity, so including maintenance, multi-functional, and capital dredging activities. The other benefit, according to C-Job is that each design is modular and can be used in the standard format, or can be adapted to better suit its planned use or other customer requirements. SIZE IS NOT IMPORTANT There are other dredger design developments and eco-friendly components arriving to support the industry. Jan De Nul Group has launched its new water injection dredger, Pancho. Jan Van de Velde, Head of the Newbuilding Department, Jan De Nul Group, highlights the rationale and key factors behind this new vessel: “The experience with our existing fleet of water injection dredgers taught us that there was a need for a more compact vessel to reach the smaller corners in ports and rivers. However, despite her compact character, the Pancho has a depth range of more than 20m.” The vessel entered service in March 2022 and is mainly to be deployed in the Argentine market. Lutra Marine has patented new environmentally friendly dredging technology and has confirmed investment from the British Design Fund, an early stage fund that specifically invests in, and provides support for purpose-led, UK product design and manufacturing companies.

8 Spartacus, the world’s largest and most powerful self-propelled cutter suction dredge and the first able to run on liquefied natural gas

This investment is being provided to enable Lutra Marine to solve a major issue for the dredging sector, namely, how to maintain harbours and ports without causing damage to the local habitats. The answer is to use high-precision cutter heads to reduce sediment being stirred up. Instead, the dredged material is captured within the cutter head unit and is pumped safely to a disposal location.

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MARCH 2022 | 43

CARGO HANDLING: TYRE DESIGN

TYRE R&D ROLLS ON Tyre designs for cargo handling plant continue to be improved, with new emphasis on eco-friendly aspects and supporting smart tyre management systems. John Bensalhia reports

8 Continental oﬀers V.ply tyres with high stability properties said to be essential when stacking containers three or four high

Heavy loads and large volumes of cargo can put cargo handling plant and vehicle tyres under considerable strain. The constant flow of cargo traffic means that tyres are subject to pressure, resulting in possible damage and ultimately slower operations. Julian Alexander, Product Line Manager, Port Operations Continental Commercial Specialty Tyres, says that frequent stop-start, acceleration and braking under heavy loads and shocks, when containers are loaded and unloaded, characterise port applications. As a consequence, tyres have to have a very high load capacity, with strong durability as well as puncture resistance against damage caused by foreign object debris such as discarded twist-locks and other scattered metal or wooden fragments typically found in a terminal operating environment. For load and carry applications, Alexander suggests that radial tyres are the perfect solution as they offer low heat generation and a flat tread contour, ensuring a high level of endurance and mileage over long distances. “These tyres are perfectly suited to various vehicle types when utilised in load and carry applications, such as heavy forklift trucks, empty container handlers, reach stackers, straddle carriers and terminal tractors,” he says. When loading and unloading containers around the container stack, mobile vehicles such as reach stackers, empty container handlers and RTG cranes, typically drive short distances at low speed. “We call these pick and stack applications,” says Alexander and states, “Continental offers V.ply tyres with their high stability properties - essential when

44 | MARCH 2022

stacking 3-4 containers high – with these the right choice for this type of application.” The design utilises a compound which reduces cracks and abrasion, two primary causes of tyre wear, which in turn contributes to extended tyre life, he further notes. MAINTENANCE – FITTING - SELECTION Paul Bould, OTR Sales Manager UK and Ireland and Dave Goddard, OTR Specialist, UK and Ireland, Goodyear, commenting on tyre performance note that tyre pressure can diminish over time and under-inflation can cause tyre damage, inefficient vehicle handling (including during traction and braking), increased fuel consumption, and raised tyre temperature, all of which will contribute towards the premature ageing of tyres.” Bould and Goddard further contend that the correct selection, fitting, and ongoing maintenance of tyres for various port vehicles and equipment are the most important factors in optimising the extended lifetime and resistance to damage during port use. “Tyres specifically designed for port handling provide tailor-made solutions for equipment such as reach stackers, straddle carriers and other plant, all of which require tyres that are built to meet the demands of each task in hand.” Bould and Goddard explain that Goodyear’s selection of radial and bias tyres is designed to enhance the efficiency of industrial handling applications in and around ports. “These tyres offer outstanding strength, resistance to cuts and snags, and long tread life, as well as helping to reduce

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CARGO HANDLING: TYRE DESIGN downtime and assist in lowering the overall costs of port operations. Depending on the vehicle’s type of journey different type of compounds can be recommended for bias construction, for example, short cycles vs moderate cycles will generate different demands with regard to heat and abrasion resistance of the tyre.” Regular inspections and appropriate tyre maintenance play a crucial part in optimising the lifetime of port tyres. “To ensure maximum lifetime during port use, it is important to check the tyres regularly and maintain the correct operating pressures,” underlines Alexander. “Tyres running with too low an operating pressure can lead to excessive wear rates and high heat build-up which can, in some cases, lead to premature failure and less efficiency regarding fuel economy. For a permanent monitoring of inflation pressure and tyre temperature, Alexander points out that Continental Commercial offers tyre pressure monitoring systems for individual vehicles and ContiConnect for fleets; both of which are designed to enhance the safety and efficiency of terminal operations.” Bould and Goddard note in a maintenance context that while walkaround inspections should ideally be performed regularly, these can be time consuming. An alternative option is to deploy a smart monitoring solution such as Goodyear’s Tyre Pressure Monitoring System (TPMS) for heavy duty vehicles. “This technology,” they explain, “combines tyreattached sensors that monitor tyre pressure and temperature at each wheel position.” A similar but more advanced Goodyear offering is its EMTrack tyre performance management tool. Trained tyre technicians check tyres on vehicles and collect data about tyre inflation, tread depth and other key metrics. This information is then automatically, immediately uploaded into a special EMTrack app, where it is housed in a passwordprotected environment. Over time, the accumulation of data monitors and charts performance indicators such as costper-hour and cost-per-tonne. SUSTAINABLE TYRE DESIGN The eco-friendly aspect of tyre design is also gaining ground. In 2020, Goodyear set a goal to create a tyre made from 100 per cent sustainable materials by 2030. Bould and Goddard report that exceptional progress has been made and in January 2022, the development of a 70 per cent sustainable-material demonstration tyre was achieved. The 70 per cent sustainable-material demonstration tyre includes 13 featured ingredients across nine different tyre components, incorporating the development of three different carbon black products, the use of soybean oil and silica as well as the recycling of plastic waste. “The efficient use of tyres can help to reduce emissions,” adds Alexander to the eco-friendly debate. “Wrong tyre air pressure leads to higher fuel consumption which means higher running costs for the terminal and less efficiency. With today’s tyres, a tyre pressure monitoring system,” he suggests, “can help to monitor tyre pressure automatically and remotely generate alerts when the pressure is too low. This provides a safe and easy way to manage pressure and thus contribute to more sustainability.” OLD AND NEW GOALS It is clear that to a significant extent tyre design for the demanding environment of marine terminal or general port applications is on the one hand pursuing traditional goals – extended life, resistance to damage etc – but on the other is also embracing sustainability and the support offered by smart monitoring systems.

Also generally notable is the specialist edge to design – tailormade solutions for specific applications even to the extent that a given application can be discussed and compounds applied in manufacture which are seen as particularly suitable for this type of application. Nokian, headquartered in Finland, is another manufacturer to provide examples of specialist oﬀ-the-shelf tyre products. In the case of its RTG tyre, for example, its structure and tread pattern are specially optimised for this kind of application. It is designed to achieve a low build-up of heat that manages to slow down the level of wear and tear and its tread pattern is configured to enable the wheels of an RTG to turn more easily. A further example is Nokian’s HTS Tugger: specially designed for terminal tractors. This features a strong, multilayer structure that allows for heavy loads and precise moves. This specialist edge is further reflected in work with tyre compounds. MAXAM Tires, for example, reports its new proprietary compound, EcoPoint 3, is to be fully integrated into its solid tyre range. The compound is designed to boost resistance to rolling, skidding and wear and tear, resulting in a stronger, safer, more energy-eﬃcient tyre. Troy Kline, President, MAXAM Tire North America, notes that in comparison to carbon black compounds and conventional dry-mixed silica compounds, the EcoPoint3 process provides superior distribution of ingredients during mixing. “This innovative process allows for MAXAM’s compounds to contain less inert filler, accommodate higher ratios of stress at elongation and achieves minimal proportions of impurities, resulting in next generation products,” he says.

8 Remote monitoring of tyres – for pressures etc – oﬀers a new avenue via which to enhance tyre performance – a Goodyear solution is pictured here

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In January 2022, the development of a 70 per cent sustainable-material tyre was achieved Continental V.ply tyres with Port Plus Compound aim to achieve less wear which ensures a longer lasting tyre and, at the end, a more sustainable use of resources. “We have been running tests at our customers over the last year and have seen cases where the tyre life is significantly improved,” says Alexander. Goodyear’s EV-4S GEN II/EV-5S GEN II and EV-D encompass new tyre design features and reportedly incorporate a package of new technologies including advanced construction and tread features. Notably, a new cavity shape is employed to reduce wear and in turn lower cost of use. The construction of the tyres also includes an oversized high strength bead bundle to enhance stability when carrying high loads. This bead area oﬀers increased protection to reduce chafing.

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MARCH 2022 | 45

DECARBONISATION TOOL

TARGETING NET ZERO National Grid Electricity Transmission (NGET) has partnered with Siemens to create a free online tool to help UK ports meet their net zero targets. AJ Keyes looks at how it can help “The problem is not a lack of will, it is just that the challenge is so great, explained Dr Sean Jones, Consultant, Power Technologies International, adding, “It is not a simple matter of moving away from fossil fuels but being able to engineer systems that enable low-carbon alternatives that is needed.” In order to help this process, NGET and Siemens, with support and guidance from the British Ports Association (BPA), have developed a “decarbonisation tool” that can help ports directly forecast the future infrastructure required to meet the foreseen increased electrical capacity based on zero emission port operations. The UK government’s Department for Transport states that the maritime sector in the UK is currently responsible for five per cent of total UK transport emissions, with diesel fuel the dominant power source. However, current estimates state that by 2050 annual electricity throughout the port industry is expected to reach 250 Gigawatt hours (GWh) under the base case, ‘business as usual’ scenario – and substantially higher under potential (ambitious) emission reduction scenarios. The reduction of harmful emissions in the environment, with key net zero targets for 2050 being set, is highly topical with strong interest from diverse sectors of the port industry in the UK. TWO TOOL VERSIONS While there is a clear demand for cleaner energy, how realistic are these targets and, of even greater importance, how might they be reached? Jones offers a very frank response: “There is a long way to go,” he emphasises, explaining that the process will be “challenging but critically important.” This new Decarbonisation Tool represents a positive step forward. It is offered in two versions. One form of it makes assessments based on the asset information input, while the second version is customisable, thereby allowing the port to change the assumptions, as appropriate. The flexibility helps ensure that the tool is simple to use, and, crucially, gives ports preliminary guidance to allow for a more detailed insight to meet their requirements. Then, once a port has downloaded and worked through the Decarbonisation Tool, it can contact National Grid with the preliminary findings, for a more in-depth conversation, if required. Lynsey Jeffers, Siemens’ Smart Infrastructure Sector Lead for UK Ports, offers further insight: “This tool will help ports get a better idea of what their options are when it comes to electrification. Ports are used to planning for the long term. Port infrastructure, plant and machinery lasts for decades and a lot of the thinking, planning and investment in lowering emissions from ships and ports needs to happen sooner rather than later.”

an estimate of the connection required to the local distribution network and the national transmission system, the decarbonisation tool can help accelerate the transition,” Jones underlines. It does this by asking questions about the assets a port has on site – from the number of berths, and types of cranes, to the number of car parking spaces – matching it with estimates of the peak power demand for the site. Jones highlights the Port of Tyne as one port that is currently working with Siemens to create a blueprint for the decarbonisation of UK ports through the Clean Maritime Demonstration Competition, which supports initiatives to reduce emissions from the maritime sector . The project has funding from the Department of Transport and the Clean Tyne project will run until the end Q1 2022, with plans to demonstrate and disseminate the learnings and outputs with all ports in the UK. Mark Simmonds, Director of Policy & External Aﬀairs, British Ports Association, notes: “With the support of the Decarbonisation Tool, UK ports can begin to plan their transition to alternative fuels using energy from low or zero emission sources, as well as the integration of ports into the decarbonised energy network.”

8 A new Decarbonisation Tool has been launched to help UK ports transition to alternative fuels and better integrate into the decarbonised energy network

8 The Port of Tyne, is a test bed for a new decarbonisation tool developed by the UK’s National Grid Electricity Transmission in collaboration with Siemens

ACCELERATE THE TRANSITION Jones confirms that ports in the UK have already begun to decarbonise, with government modelling showing they can achieve net zero through a transition to alternative fuel and the integration of ports into the decarbonised energy network. This is where the new tool is especially supportive. “By modelling future peak demand for electricity and giving

46 | MARCH 2022

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Telestack are a leading global manufacturer of equipment for the bulk material handling industry including Ship Loaders/Unloaders, Hopper Feeders, Truck Unloaders, Bulk Reception Feeders, Stockpiling Conveyors, Link Conveyors and Telescopic Stackers.

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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

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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.

VAHLE PORT TECHNOLOGY 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

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PRODUCTS & SERVICES DIRECTORY

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Künz GmbH

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SANY Europe GmbH offers a broad spectrum of high-performance mobile port machines such as Reach Stacker, Empty Container Handler, Heavy Duty Forklift Trucks and Material Handler

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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

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

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Tel: +46 470 77 22 00 info@fogmaker.com www.fogmaker.com

Fogmaker Directory.indd 1

I T PORT AUTOMATION

F IRE SUPPRESSION SYSTEMS

Fogmaker develops, manufactures, and markets ﬁre suppression systems for engine compartments with high pressure water mist. Fogmaker is a market leader for automated ﬁre suppression systems with 200,000 installations in more than 50 countries since 1995.

Conductix-Wampfler The world specialist in Power and Data Transfer Systems, Mobile Electrification, and Crane Electrification Solutions. We Keep Your Vital Business Moving! Rheinstrasse 27 + 33 Weil am Rhein 79576 Germany Tel: +49 (0) 7621 662 0 Fax: +49 (0) 7621 662 144 info.de@conductix.com www.conductix.com

Hammar Maskin AB Hammar Maskin AB is developing, manufacturing and marketing Sideloaders, also known as Sidelifters, Swinglifters or Self loading trailers, under the brand name HAMMAR™. Buagärde 36, Olsfors 517 95 Sweden Tel: +46-33 29 00 00 Fax: +46-33 29 00 01 info@hammar.eu www.hammar.eu

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

PRODUCTS & SERVICES DIRECTORY

Solvo’s software solutions such as TOS or WMS help container and general cargo terminals take full care of their cargo handling processes and make sure the clients expectations are exceeded. Prinses Margrietplantsoen 33, 2595AM, The Hague, The Netherlands Tel: +31 (0) 702-051-709 Email: sales@solvosys.com www.sovosys.com

TGI Maritime Software is a Terminal Operating System editor and integrator specialized in the support of Small to Medium Terminals. Its expertise is built on 34 years of experience within the maritime sector. TGI provides comprehensive services to its customers all along their projects. OSCAR TOS and CARROL TOS have already been successfully handled by 40 container and RoRo terminals worldwide. Tel : +33 (0)3 28 65 81 91 contact@tgims.com www.tgims.com

T RACTORS

Navis understands that as ships get larger and operational processes become more complex - efficiency, collaboration and productivity are essential. As a trusted technology partner, Navis offers the tools and personnel necessary to meet the requirements of a new, and ever-evolving, global supply chain. World Headquarters 55 Harrison Street Suite 600 Oakland CA 94607 United States Tel: +1 510 267 5000 Fax:+1 510 267 5100 Web: www.navis.com

Solvo Europe B.V.

T ERMINAL OPERATIONS SYSTEMS

The Brain of Logistics With more than 30 years experience in IT Solutions and Business Operation Consultancy DSP offers a large portfolio of professional services and products to support terminal operations processes and system. DSP Data and System Planning SA Via Cantonale 38 6928 Manno, Switzerland Tel: +41 91 230 27 20 Fax: +41 91 230 27 31 info@dspservices.ch www.dspservices.ch

T ERMINAL OPERATIONS SYSTEMS

S PREADERS

ELME Spreader AB ELME Spreader, world’s leading independent spreader manufacturer supports companies worldwide with container handling solutions that makes work easier and more profitable. Over 21,000 spreaders have been attached to lift trucks, reach stackers, straddle carriers and cranes. Stalgatan 6 , PO Box 174 SE 343 22, Almhult, Sweden Tel: +46 47655800 Fax: +46 476 55899 sales@elme.com www.elme.com

MAFI Transport-Systeme GmbH 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

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

POSTSCRIPT BIDEN GRANTS WELCOME BUT… So-called ‘Biden grants’ aim to raise the performance of US supply chains. They are a positive step but is there linked up thinking involved and when will their impact be felt? The US Transportation Department has confirmed it is awarding US$450 million in grants to support the country’s ports as they seek to boost capacity and improve freight movements to ease supply chain congestion. This will be welcome news to the beneficial cargo owners, who have seen their cargo wait on ships, stall in the terminals and then often have to wait for a truck to deliver to a warehouse that may have insuﬃcient staﬀ to unload it. OK, so perhaps this is a worst-case scenario, but it is clear that the US transportation logistics network has been struggling over the past year or so, with US consumers spending strongly throughout the COVID-19 pandemic. So, what is the Biden Administration doing to fix this problem?

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The largest ever federal investment in modernising the country’s ports

50 | MARCH 2022

EFFICIENCY AND COST GOALS Pete Buttigieg, US Transportation Secretary, explains: “This funding will help ports improve their infrastructure, to get goods moving more efficiently and help keep costs under control for American families. This is the largest ever federal investment in modernising the country’s ports and improving our supply chains.” It certainly is a claim that hits the right note and identifies what needs to be done. Yet there is also a process which needs to be adhered to, and approved, before any funds are released. It is understood that any applicant for a funding grant has to be able to prove how the project will improve the movement of goods, while at the same time having to support the Biden administration goals – which include issues such as climate change, racial and gender equality and policies relating to buying domestically. This, rightly, sounds challenging. US ports help to facilitate the movement of international trade, so buying domestically could work for export initiatives, but as an economy that sources a lot of goods from Asia, then it is hard to see this box being ticked. There is no doubt that investment to support climate change is extremely important, and for ports the ability to be able to spend to obtain more efficient equipment is essential. The opportunity to be given Federal financial support in this context will be warmly welcomed, for sure. However, the timescales for the proposed grants have to be considered. Ordering new equipment takes time – invariably an extended process - and so for the short-term, at least, this offers no immediate solution to ongoing congestion at ports and throughout the logistics supply chain.

8 Grants are being made available to help US ports combat congestion but when will their impact be felt?

With grant applications due to be submitted by mid-May 2022 and subsequent awards to be announced in the Fall/Autumn, any interested port will have to move quickly – albeit that the ongoing congestion that the grants are targeted to fix, will continue. BIGGER SLICE, BIGGER PORTS The US Transportation Department has confirmed that while major ports in the country - such as the San Pedro complex in Southern California and Savannah and New York/New Jersey on the eastern seaboard - can apply for the grants, a total of 25 per cent is being specifically allocated to smaller ports. US ports have been suﬀering congestion for much of 2021 and the position has continued into 2022. Both Los Angeles and Long Beach have seen vessels regularly queuing for berths, not helped by a lack of truck driving capacity and warehouse workers. Ports on the eastern seaboard have also seen a vessel backlog appear as cargo shippers and ocean carriers have sought alternate gateway options. Consumer spending throughout the COVID-19 period has seen high demand remain for goods, especially imports from Asia. This latest confirmation of planned spending from the White House will be welcomed by the port industry, but the time it will take to see any tangible benefits by the industry means that this is not an immediate fix. Plus, while improving eﬃciencies at ports is definitely a positive step forward, the danger is that the can is just kicked down the road. Clearly, the Biden Administration would be well advised to take a holistic view of the supply chain while at the same time factoring in the realities of timing and grant distribution regarding the results that can be achieved.

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

CONTAINER TERMINALS: Paths to Profitability By Remco Stenvert and Andrew Penfold

Container Terminals: Paths to Profitability

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

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

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

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

21 JUNE Southampton 232022 United Kingdom TO

Marine Civils is open for business all year Marine Civils is Europe’s leading event dedicated to showcasing the latest equipment and solutions for marine, coastal and other challenging civil engineering projects with unique landscape features.

Reach a larger audience than ever before Marine Civils is held in association with Seawork, Europe’s leading commercial marine and workboat exhibition. Marine Civils gives exhibitors the opportunity to showcase the latest innovations in equipment and solutions for marine, coastal and other challenging civil engineering projects. Reserve now for 2022 and make the most of marketing support from Marine Civils, Seawork and our leading commercial marine magazines, in print, online, eNews and via social media.

For more information visit: marinecivils.com contact: +44 1329 825335 or email: info@marinecivils.com #MarineCivils2022

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PORTSTRATEGY INSIGHT FOR PORT EXECUTIVES