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NOVEMBER 2021 VOL 1021 ISSUE 9

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India Port Reforms – JNPT Concession | Freeports Update | Nigeria Game Changer | Auto Twistlocks

CONCESSION CONUNDRUM Stick or Twist? UK TRUCKING: THE HOT TOPIC BREAKBULK OUTLOOK TSR POTENTIAL BUT...

PORTSTRATEGY INSIGHT FOR PORT EXECUTIVES

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

VIEWPOINT MIKE MUNDY

Market Forces win every time: even during these ‘Force 10’ conditions

The shock to supply chains caused by the pandemic came out of nowhere. It was not on the list of potential negative impacts – trade tensions, trade disputes, extreme weather conditions, cyber-attacks etc. We have had to learn how to deal with it ‘on the job’ and plenty of mistakes have been made along the way. This does not, however, present grounds for government to step in with a web of regulations. Let free market principles reign and our industry will learn and adapt

If you take what some might describe as a cynical position you can interpret the very recent attention paid to supply chain problems by politicians as anxiety about the subject becoming ‘more political’ as we advance towards Christmas. A shortage of turkeys, toys on the shelves and various other Christmas essentials inevitably gets the publics’ attention and translates into ire directed at political leadership. And rightly so in my humble opinion. It is rare that politicians are proactive and head problems oﬀ or scale them down when they first appear. Let’s be honest, it is more often than not a case of “shutting the stable door after the horse has bolted.” There is certainly no evidence in the UK of implementing strategy early-on to minimise supply chain problems – the one notable exception being the roll-out of COVID-19 vaccine which was undertaken very successfully. The general rule, however, is “bluster, bluster, bluster” and little meaningful action. The article on p30 of this issue UK Trucking: The Hot Topic confirms this – in short there is a crisis now because corrective action has not been implemented early on. ‘An accident waiting to happen’ is a phrase that springs to mind! It is certain that this or similar scenarios will have played out in other countries around the globe in the months since the advent of the Pandemic. What do we do to change this? There are those that say regulation is the way to go. But is it? Inviting the heavy hand of government into maritime shipping, port and logistics operations other than for environmental, safety or good governance reasons seems a high-risk strategy. Yes, the sector is struggling at the moment and will continue to struggle for a while yet, but it is still a sector that has performed well for decades based on responding to market forces and not more and more layers of regulation. Indeed, there is a case to be made that even contemplating such an idea in these exceptional times is a naive and wholly unrealistic approach. Consider, for example, the ports sector – the number of countries that have formally endorsed the idea of a Ports Regulator can be counted on one hand. To a significant extent the approach of ‘one size fits all’ is not one that is applicable in the ports and logistics sector other than in the more neutral areas such as safety matters referenced above. It is the industry’s response to market forces that has been proven, time and time again, to be the best approach. Let’s stick with that it is tried and tested – and the sector will learn and adapt, even during these Force 10 conditions.

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

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CONTENTS NOVEMBER 2021 VOL 1021 ISSUE 9

portstrategy.com

India Port Reforms – JNPT Concession | Freeports Update | Nigeria Game Changer | Auto Twistlocks

NEWS

20 Port Concessions

17 Lamu funding

22 Indian legislation

KPA seeks cash

17 German resales

Terminal manoeuvres

UK TRUCKING: THE HOT TOPIC

18 Mongla port

Capacity boost

BREAKBULK OUTLOOK TSR POTENTIAL BUT...

On the cover UK road haulage is short of drivers, short of equipment and short on forward planning at a government level according to the country’s Road Haulage Association. The route to normality looks to be a long drive and has to be supported by better pay and conditions and not the ‘race to the bottom’ that has previously been much in evidence. The case for serious reforms is presented – see p28

11 IPSCA study

Community systems

11 Smart mooring

Roerdam initiative

13 INFORM at NS

Intermodal solutions

13 ION support UK net zero

17 VICT buys More ASCs

17 Drone trials Antwerp tests

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Online portstrategy.com 5 Latest news 5 Comment & analysis 5 Industry database 5 Events Social Media links LinkedIn PortStrategy portstrategy YouTube

FEATURE ARTICLES

17 CMA CGM shares Will Yildirim cash in?

CONCESSION CONUNDRUM Stick or Twist?

NOVEMBER 2021

18 Megamax Maher New crane order

19 Togo adds More RTGs

Renew or retender?

Forward and reverse!

23 JNPT privatisation Bidders line up

25 Advantage India Colombo partners

27 Breakbulk outlook Modernised terminals

28 Trucking: Hot Topic

UK shortages

30 Freeports update Talk, action required

31 Game changer

Onne ‘pay as you go’

32 London shipping week Vibrant discussions

35 Log-in close MSC closes in

36 Hub status targeted

Progressive TCP

REGULARS 14 The New Yorker ‘Derived demand’ the right way

14 The Analyst

China finance spotlight

15 The Economist

Triggered vulnerabilities

15 The Strategist

UNCTAD tells it how it is

39 TSR potential

Prospects but problems

40 Auto twistlocks On a bull-run?

42 Bar roadblock China debt fears

46 Postscript

Do it with nature, the PIANC way

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PORT & TERMINAL NEWS

WILL YILDIRIM CASH IN?

BRIEFS Portland revival

The Port of Portland, Oregon is now serving liner calls from Mediterranean Shipping Company on its China-USWC Santana service operated by 5 x 5000TEU vessels. It represents a boost for the port which has previously been dogged by labour issues which resulted in the departure of Hanjin, Hapag Lloyd and Westwood Shipping. It remains to be seen if this new service becomes a permanent arrangement. The Yildirim Group of Companies has a 24 per cent stake in CMA CGM and once again there are reports circulating of a potential interest in selling. In October 2014, it was widely reported that Yildirim wanted to dispose of this stake. This position was re-iterated again in October 2015. Yet on neither occasion did it happen and by the end of 2017 it was clear that this shareholding in the world’s third-largest container ocean carrier was being retained. However, move forward to October 2021 and the same rumours are circling again across the port and shipping industry that Yildirim may be looking to sell its share.

This 24 per cent stake was gained following an injection of US$500 million in the French shipping line in 2010 and a further US$100 million in 2011. It can be safely assumed that any sale here will be for a figure in excess of the initial purchase value. There is no doubt that if this process does gain traction and the shares became available then they represent a rare opportunity for an investor to gain a stake in a largescale container shipping, port and logistics specialist. Of course, this is assuming that the CMA CGM-controlling Saade family do not acquire the shares directly – which

8 Will Yildirim sell its 24 per cent stake in CMA CGM?

has to be regarded as the more likely option. It should also be noted that Yildirim is a company that also has a well-documented interest in expanding its current portfolio of four terminals in Turkey, seven in Portugal, two in Spain, two in Sweden and one in each of Malta, Norway and Peru. This means the company has a confirmed capacity to handle almost 5.7 million TEU, but this will definitely increase if the Yildirim Group of companies meets its goal for Yilport Holding to “become a top 10 global port operator by 2025.”

KPA LOOKING FOR LAMU FUNDING The Kenya Ports Authority (KPA) has stated that it intends to borrow US157 million to complete the first phase construction of its new Lamu Port. The first phase covers the construction of three berths and associated yard infrastructure now largely complete. The new loan will provide US$29 million for the completion of construction works, US$28 million for marine equipment, US$55 million towards the purchase of yard operating equipment and US$45 million towards general equipment, security systems etc. Since its formal opening in May this year the port has seen only relatively few vessel calls – the

Jeddah revamp

The revamp and expansion of DP World’s South Container Terminal at Jeddah Islamic Port (JIP) is underway, according to the Saudi Ports Authority (Mawani). The US$800 million investment at the facility supports the recently-signed 30-year concession agreement between Mawani and DP World. The four phases are due to be completed by 2024 and will raise JIP’s capacity to 4 million TEU per annum.

Zhongxian open

China has confirmed the opening of a new 10,000t port at Zhongxian, located in the Chongqing Municipality. The port is 100km northeast of the city area and is oﬀering 14 berths and an annual throughput capacity of 25 million tonnes. The new facility is the first port of its size located in the upper part of the Yangtze River.

Green solutions

lack of equipment being cited as one of the main causes of this. This new loan is intended to be used to put the port on a better operational footing. Over time it is expected that

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

8 A new loan for Lamu aims to properly equip the port and put it on a better operational footing

the private sector will undertake future multiple new berth developments.

The European Marine Energy Centre (EMEC) is to work with a range of industry partners, including Eneus Energy, OakTec, Orcades Marine Management Consultants, Orkney Islands Council, Ricardo, RINA, Schneider Electric, ULEMCo, and Urban Foresight, to explore green solutions for ferries.

NOVEMBER 2021 | 7

PORT & TERMINAL NEWS

GERMANY TERMINAL OWNERSHIP MANOEUVRES Hamburger Hafen und Logistik (HHLA) is taking on a minority partner with confirmation that Cosco Shipping Ports Ltd (CSPL) is acquiring a 35 per cent stake in the German Container Terminal Tollerort (CTT). CTT is one of the three HHLA container facilities at the Port of Hamburg and the decision can be understood for HHLA as a way of helping to guarantee Cosco volumes moving forward, but without giving up operational control or ownership Cosco is a long-standing user of the facility, with existing Asia-Europe services and complimentary feeder strings already calling. This deal was first mooted in June 2021. At the same time, Hapag Lloyd has announced it is to obtain an ownership share in JadeWeserPort, Wilhelmshaven. The deal entails the German shipping line taking a 30 per cent share in Container Terminal Wilhelmshaven (CTW) and a 50 per cent interest in Rail Terminal Wilhelmshaven (RTW). The shares being acquired by Hapag Lloyd were previously held by APM Terminals, part of AP Moller Maersk, along with Maersk Line. The remaining shares will be retained by terminal operator Eurogate. No purchase price has been provided, but all approvals are expected to be granted. JadeWeserPort is located

BRIEFS PAG sold

US terminal operator, Ports America Group (PAG), has been sold to Canada Pension Plan Investment Board (CPPIB) by Oaktree Capital Management. PAG operates in 70 locations in 33 ports, handling 13.5 million TEU, 10 million tons of general cargo and 2.5 million vehicles, annually. The transaction is expected to close by the end of 2021 and local reports have indicated a ticket price of over US$4 billion.

8 | NOVEMBER 2021

at Wilhelmshaven on the North Sea coast of Germany. A relatively new port, it remains a key competitor to Hamburg, including for container

transshipment to/from the Baltic region. The transaction marks a change in strategy for Hapag Lloyd which has traditionally used Hamburg Port.

8 Hapag Lloyd has taken a share in JadeWeserPort, as part of recent changes in German port ownership stakes

CAPACITY BOOST FOR MONGLA SEAPORT The port of Mongla, the second largest volume port in Bangladesh, has confirmed it is constructing six additional jetties to cater for increased throughput demand. This announcement comes after the development of the Padma Multipurpose Bridge that has improved the port’s direct connectivity with the capital city, Dhaka. This US$100 million project is being undertaken on a public-

private-partnership (PPP) basis and is targeting June 2022 as the commencement of operations for two of the new jetties. Zahirul Huq, Chief Planning Oﬃcer, Mongla Port Authority, is confirmed in the international press as stating that the six new jetties, when constructed and operational, will add 800,000 TEU of additional capacity. This will raise overall port throughput capacity to one million TEU per annum.

To put this extra capacity into perspective, in its fiscal year 2020-2021 the port handled just under 44,000TEU, albeit when capacity was at 100,000TEU per annum. Recent investment in new equipment has raised the figure to 200,000TEU per annum. Currently, larger container ships unable to call at Mongla make a first stop at Chittagong and discharge to lighten the vessel. Mongla is dredged to oﬀer a draft of 9.5m.

Jakarta merges

Busan feeder

LG expansion

The state-owned terminal operators at the Port of Jakarta, Pelindo I, II, III and IV have been merged into one entity. The new company will be known as Indonesia Port Corporation (IPC) and be branded as IPC. Collectively, the four facilities represent container-handling volumes of around 16.5 million TEU at present. The government in Indonesia explains that the rationale is to help IPC compete globally, as the world’s eighth largest terminal operator.

A new dedicated feeder terminal is expected to be constructed and operational by 2025, according to Busan New Port. The importance of the facility is that it will alleviate the need for most feeder container ships having to sail to the South Korean city’s old port area, which is located near the city centre. Ships of up to 4000TEU in size are expected to be catered for at the yet to be named facility.

DP World has confirmed it is to expand the London Gateway container operation in the UK. A new fourth berth is being added at a cost of US$415 million that will see annual capacity rise by over 30 per cent, according to DP World. A volume of 888,000TEU was recorded for H1 2021, representing a 23 per cent increase over the January to June 2020 period. The expansion will target the new tranche of container ships entering service in 2023/2024.

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

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DIGITAL NEWS

IPSCA STUDIES PORT COMMUNITY SYSTEMS A new, potentially groundbreaking global study supporting the development of Port Community Systems (PCS) on a worldwide basis, is being launched by the International Port Community Systems Association (IPCSA). The aim of the study is to focus on the practical development of the industry’s PCS capabilities, which are neutral electronic exchange platforms designed to enable the smooth, swift and accurate flow of vital information to help port eﬃciency and across the wider supply chain. In the oﬃcial announcement, IPSCA confirmed that the study process will build on previous work the organisation has undertaken, including its 12-point guide to building a PCS, with specific focus on governance, business models, technology, standards, cybersecurity, Customs, and community and stakeholder involvement. Richard Morton, Secretary General, IPSCA explains the rationale for the project. “The

8 Richard Morton welcomes stakeholder input on Port Community Systems

time is right for this in-depth study. A notable impact of the COVID-19 pandemic has been wider recognition that Port Community Systems are a vital trade facilitation tool in ports – and yet there is still a lack of understanding about how the PCS operates and what it does and doesn’t do. In particular, technology and IT are just the enablers. The creation and successful implementation of a Port Community System is a change management project far

more than an IT project. Time needs to be taken to build the community and establish trust.” IPSCA also confirmed that it has already secured help from Tarrogona-based, PCS specialist Anna Navarro with the collating and compiling of the study, with a key focus on creating a ‘living’ document oﬀering relevant and practical support, rather than something, it states would otherwise be ‘filed away and forgotten.’ Morton also extends an invite to the industry to provide input and insight from ports, PCS operators and other interested stakeholders. “If you are a port or PCS operator and would like to contribute, we would be pleased to hear from you,” the oﬃcial release confirms. IPCSA focuses on supporting and facilitating systems and innovations for its members and their users, and promoting the use of international data standards in sea and airports, at border crossings and via Single Window systems around the world.

ROTTERDAM IMPLEMENTS SMART MOORING

BRIEFS Tuxpan IoT Pilot

Mexico’s Port of Tuxpan, operated by SSA Marine since 2016, has commenced a new 5G network pilot programme that could eventually see up to one million IoT connections. Tuxpan is located between Mexico’s ports of Altamira and Veracruz on the country’s Gulf of Mexico coast. SSA Marine wants to raise the current 4G network monitoring of 100,000 sensors in a square kilometre to one million with 5G.

Digital Documents The Global Ports Group has launched a digital document system for both of its Petrolesport (PLP) and First Container Terminal (FCT) operations. This means that legally significant documents and the remote issuance of passes can be exchanged, thereby reducing time costs and reducing paperwork. Also, PLP is teaming up with Rostelecom, a digital service provider in Russia, to implement a new digital infrastructure system that uses high-speed data transfer for all mobile devices.

Ship4wd from Zim

The Port of Rotterdam has confirmed it is implementing a Smart Mooring solution. The new software is able to predict the impact that storms and adverse weather will have on ships that are moored at the port’s terminals. Crucially, this means that the ships in port, and those responsible for them, will gain much-needed additional time to prepare and

seek solutions to avoid a negative impact. The new software combines hydrodynamic calculations and weather forecasts and can cover any type of marine vessel, while it can also be integrated into the port’s own system, if needed. This latest initiative forms part of the Port of Rotterdam’s wider digitalisation strategy, which

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

8 Rotterdam’s new smart mooring solution predicts the impact of adverse weather on moored vessels

includes employing Building Information Management (BIM) Basis Infra, which helps information management processes for key assets, such as quay walls and bollards. The Smart Mooring concept is a joint venture with Royal HaskoningDHV.

Container shipping line, Zim Integrated Shipping Services Ltd (Zim) has launched Ship4wd, a new digital freight forwarding platform. This new self-service, end-to-end, shipping solution targets small and medium-sized businesses in both Canada and the USA that import and export from China, Israel and Vietnam. Zim states that the new platform is going to oﬀer customers the ‘optimal solution,’ meaning either the most economic or the fastest option can be chosen.

NOVEMBER 2021 | 11

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Feasibility Business Case Value Creation & Protection Financial Modelling & Analysis Project Structuring & Packaging Risk Valuation, Allocation, Mitigation

TRANSACTION

FINANCE

Financial Solutions Transaction Strategy Transaction Management Documentation & Contracts Tendering & Negotiated Solutions

Due Diligence Project Financing Financial Structuring Procurement of Finances Investment/Divestment Merger & Acquisition

DIGITAL NEWS INFORM has confirmed that it has been selected by Class 1 railroad operator in the US, Norfolk Southern, to deliver yard management and optimisation solutions at its Rossville and Austell terminals. Crane optimiser is also being provided. In addition to integrating its modules directly into the system operated by Norfolk Southern, INFORM is adding enhanced elements to stacked operations through what is termed as its “Optimization Plus” solution. The software is employing INFORM’s industry proven Syncrotess optimisers by leveraging state-of-the-art Artificial Intelligence and optimisation techniques. Dr. Eva Savelsberg, SVP Logistic Division, INFORM explains: “Expanding our USA footprint with an innovative rail operator like Norfolk Southern shows both our commitment to strengthening and growing our USA operations but as well our commitment to enabling our customers to leverage the best experiences from around the globe to drive their innovation.” The new software solutions are being delivered to Norfolk Southern’s Rossville (TN) and Austell (GA) terminals. Both locations operate unique stacked yard configurations and diﬀerent crane hardware endorsing that one size does not fit all. The Optimization Plus solution will be custom configured for both sites to enable each site to reach their unique operational and optimisation goals. INFORM’s Yard Optimiser provides the TOS with an allocation for each container to be positioned into the stacked yard in

TOS for Segrate

Navis has confirmed that its Master Terminal operating system at Inter Modal Logistic (IML) Milano Segrate Terminal (Ignazio Messina & C SpA), Italy, has gone live. IML is an intermodal container depot handling around 100,000TEU per annum. By operating on the same system as the Genoa facility it ensures that the Milan team can better track operations and improve control of yard and terminal handling moves and storage.

INFORM FOR TWO NORFOLK SOUTHERN TERMINALS

real-time. Working with AI and Operations Research (OR) based algorithms, the configurable add-on module will assist the operational teams in decreasing unproductive container moves during peak operations as well as recommending proactive

housekeeping moves during oﬀ-peak operations. INFORM’s Crane Optimizer provides the TOS with an optimised allocation of transport jobs to each available crane operating within the stacked yard operations via an in-cab hardware device that’s

8 INFORM is to provide yard management and optimisation solutions at two Norfolk Southern intermodal terminals

purpose designed to streamline the crane operator’s workflows and decreases stress, while eﬃcient implementation occurs.

ION SUPPORTING UK NET ZERO PLAN ION Geophysical Corporation’s Edinburgh-based Software group has received a grant to advance port decarbonisation through its climate-smart platform, Marlin SmartPort™. The grant is said to support the UK’s Ten Point Plan to address climate change and help achieve the country’s net-zero emissions target by 2050. The Data-Led Emissions Management (D-LEMA) project is part of the Clean Maritime Demonstration

Competition, funded by the UK Department for Transport and delivered in partnership with Innovate UK. The 6-month pilot study will validate whether vessel fuel usage and carbon dioxide emissions can be reliably estimated in and around ports using the International Maritime Organization (IMO) global standard. The Clean Maritime Demonstration Competition

represents a £20 million investment from government alongside a further £10 million from industry to reduce emissions from the maritime sector. The programme is supporting 55 projects across the UK, including projects in Scotland, Northern Ireland and from the South West to the North East of England.

MSC agreement

Maersk buys HUUB

Digital twin

Mediterranean Shipping Co (MSC), has signed a three-year agreement with the China Waterborne Transport Research Institute to jointly promote sustainable shipping and decarbonisation. The objective is to assess diﬀerent solutions to make the maritime sector more eﬃcient with the framework establishing a collaborative process dedicated to R&D and knowledge sharing. MSC Cruises recently published its 2020 Sustainability Report.

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

Maersk Line is buying HUUB, a non-asset based, e-commerce company formed in 2015. The Portuguese company supports around 100 fashion brands by receiving and storing goods from manufacturers, picking, packing, shipping orders and handling returns. HUUB’s software platform specifically allows fashion brands to manage supplier relations, inventory and ordering and is another step in the shipping company’s digital strategy.

BRIEFS Sinay and 3D CityScapes have joined forces to create hyer realistic digital twins for ports. 3D CityScapes employs advanced technology and AI to create digital twins, hyper realistic representations of the real-world. Together with Sinay, it will create interactive 3D environments for the ports sector. 3D CityScapes states it will oﬀer the digital twin as a hyper realistic component to Sinay’s technology and sensor data information.

NOVEMBER 2021 | 13

THENEWYORKER BARRY PARKER

Supply chain slowdowns, with the dozens of vessels anchored off the LA-LB ports complex, have made it into every major media outlet. The possible linkage of vessels’ anchors dragging an underwater pipeline, with a resultant oil spill, have led to further attention on the industry. All the disruptions have not been lost on legislators in Washington DC who, urged on by cargo interests (and some terminal operators), have pointed their finger at the carriers. This unholy alliance (forged by convenience and frustration with land-based transport issues) has led to efforts to reverse regulation of the carriers that took root in the 1980s and 1990s. Nostalgic readers may remember paper books of tariffs. Shipping and other transport modes have historically been bastions of free market principles in action. Indeed, back in my college days, for “Economics 101” or equivalent, I wrote papers (older readers might remember electric typewriters) on shipping related matters. I am not a fan of economic

LET ‘DERIVED DEMAND’ BE THE DRIVER OF MARKET ADJUSTMENTS

regulation. Transport markets see “derived demand” which comes about from numerous external influences going way deep into supply chains; the events of the past two years have been extreme, and their alignment has been unprecedented- leading to volatility and sharp upward spikes in all the headline rates. While the ‘boﬃns’ will dispute which container rate index is the correct one to use, they are all at substantial multiples of where they were pre-pandemic. During the darkest days of Spring 2020,

8 Markets have a habit of correcting and should be allowed to correct back to equilibrium

the carriers came under fire for “managing capacity”; this is not lost on legislators writing bills, or on cargo folks feeding their observations from the trenches to Capitol Hill. Markets have a habit of correcting, just as cargo flows can shift in response to economic factors. Many critics of the carriers have short memories, the listless market conditions (with headline

rates of US$2,000/box versus the recent US$15,000/box, approximately) pre 2020 have disappeared from the radar. When the widened Panama Canal opened, lowering costs for boxes moving from Asia to the States, cargo did indeed migrate to US Gulf and US East coast destinations. With the backups at Pacific ports, we’ve seen the flows adapt to the new 2021 realities. Savannah’s anchorage has become more crowded. Ports in Florida have recently been imploring cargo shippers to bring their boxes through the Sunshine State. If regulation comes about, it may take a decade, or more, to unwind it. Meanwhile, all the coincidences that have led to our recent surges will settle back to where they were, making adjustments to cargo flows along the way. Then, once all those big mega-ships begin to get delivered, look to further downward pressures on costs that come with the eﬃciencies of larger vessels. So, let market forces do what they do best and correct back to an equilibrium.

THEANALYST PETER DE LANGEN

SPOTLIGHT ON CHINA FINANCE RECORD September 2021, AIDDATA, a research entity embedded in a US university, and financed by various sponsors, published the study Banking on the Belt and Road, which contains an analysis of China’s international development finance, with specific attention paid to the financing of Belt and Road (BRI) projects. The study is based on a very detailed dataset of 13,000 Chinese development finance transactions. The report provides empirical evidence that substantiates some widely shared assertions: China has substantially expanded overseas development

14 | NOVEMBER 2021

finance and indeed has become the largest provider of development finance, especially for infrastructure. China’s state-owned banks play a key role and often finance SOE’s or special purpose vehicles, not governments. This leads to an underreporting of ‘oﬃcial’ debt levels. For instance, this is the case in Namibia, Angola, and Laos. Especially in the latter two countries debt levels create high risks and China’s approach to debt relief for distressed countries is less generous than that of G7 countries. In addition, China’s development financing is less attractive (i.e. the grant element

is lower) than that of the OECD countries or the World Bank. Finally, China has been more willing to provide loans to countries where good governance is missing. With regard to ports, China has financed huge amounts in countries such as Sri Lanka, Algeria, Sierra Leone and Angola. The ‘value for society’ of some of the port projects (such as Hambantota in Sri Lanka) is debatable. Thus, there is a compelling logic for the ‘counter initiative’ as announced by the G7 and part of the Build Back Better World (B3W) initiative. The G7 claims their new global infrastructure

financing initiative will be guided by the principles of transparent financing, good governance and adherence to social and environmental standards and is aimed to provide an alternative source of development finance. Overall, we may enter an era with more competition between China and the G7 for the provision of development finance. For developing countries with port expansion challenges this could create an opportunity to finance projects in more attractive ways. This would definitely be a positive development but also raise the importance of capabilities to develop (and select) port projects that truly create value for society.

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

THEECONOMIST BEN HACKETT

Pent up demand with consumers continuing to spend their money on goods, together with oil, coal and gas shortages will ensure on-going pressures on the supply chain well into next year. COVID-19 vaccinations may be reducing the number of people needing hospitalisation and dying but there is no let up yet in the Pandemic triggered pressures being placed on the supply chain and its ability to remain eﬃcient and cohesive. Europe, North America, and parts of Asia are experiencing extreme pressure on delivery of goods for retailers and industry. An estimated 15 to 20 per cent of container shipping capacity is riding at anchor waiting to get into ports or into drydock. Worst impacted are Chinese exports and North American imports. Increasing numbers of large retailers and producers, including Coca Cola, are resorting to chartering vessels to keep their production and sales going. We are also seeing newcomers providing services on the

COVID-19 TRIGGERED VULNERABILITIES SET TO RUN

Transpacific trade as the three alliances are failing to cope with the situation. The impact on shipping is not limited just to the container sector. There is a spill-over to the bulk side as some bulkers are being used to haul formerly containerised goods, partly due to lack of empty boxes and available smaller TEU ships. The doldrum of coal shipments to China

8 15-20 per cent of container shipping capacity is riding at anchor

resulting from the political dispute with Australia has resulted in insuﬃcient coal supplies to provide suﬃcient electricity for industrial plants and homes causing running shutdowns which is impacting exports. China is now allowing bulk coal carriers to discharge in a somewhat embarrassing volte face.

Surging demand for fuel oil and LNG as the global economy recovers has resulted in burgeoning price increases across the world, hitting Europe especially hard as it begins to suﬀer from shortages and inflationary pressures. Oil and gas output is increasing to meet demand putting pressure on shipping capacity in the short term. The net result of these multiple pressures is certainly beneficial to vessel owners and carriers as freight rates are reaching record heights resulting in surging profitability in all shipping sectors. Terminal operators are struggling to keep up with the cargo throughput demands, made worse by the increasing number of larger vessels being employed which puts smaller ships at a disadvantage as they look for available quay space. Looking forward, things are unlikely to improve quickly and the supply chain will continue to struggle well into 2022.

THESTRATEGIST MIKE MUNDY

UNCTAD: TIMID POLICY, OR WORSE BACKSLIDING, COULD PULL DOWN GROWTH The recently released UNCTAD Trade and Development Report 2021 draws some hard-hitting conclusions. In a financial and trade context it notes: “Across the world, but particularly in developing regions, the damage from the COVID-19 crisis has been greater than that from the global financial crisis (GFC), most notably in Africa and South Asia. “Even barring significant setbacks, global output will only resume its 2016-19 trend by 2030. This fact conceals the deeper problem that the pre-COVID-19 income growth trend was itself unsatisfactory; average annual global growth in the decade after the GFC was the slowest since 1945.”

Looking to the immediate future, UNCTAD states that in 2022 global growth will slow to 3.6%, “leaving world income still 3.7% below where its pre-pandemic trend would have put it; an expected cumulative income loss of about $13 trillion in 2020-22. “Timid policy or, even worse, backsliding,” UNCTAD emphasises, “could pull growth down further.” FOUR MAIN LESSONS The Report goes on to highlight, in frank style, four main lessons that are apparent from the experience of the pandemic: 1. “The resolve to rebalance the global economy and reform the international economic architecture is still missing.” And

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

that: “Over the coming years, pressures on external debt sustainability will persist because many developing countries face a wall of upcoming sovereign debt repayments in international bond markets.” 2. “The pandemic has seen an emergent consensus around the need for significant public sector intervention, but there is less agreement on what this will involve beyond countercyclical measures.” 3. “Third, delivering the necessary support to build back better will require much greater policy coordination across systemically important economies; reforms to the international economic architecture that were promised

after the 2008-09 crisis but were quickly abandoned in the face of resistance from the rentier class.” 4. “The reluctance of other advanced economies to follow the US lead on the vaccine waiver is not only a worrying sign of disjointed obduracy in the North; it is a particularly costly one for already financially constrained economies. On one recent estimate, the cumulative cost of delayed vaccination will, by 2025, amount to US$2.3 trillion with the developing world shouldering the bulk of that cost.” Unusually tough words from UNCTAD, providing plenty to reflect on and to factor into future strategy.

NOVEMBER 2021 | 15

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EQUIPMENT NEWS

VICT REPEATS ASC ORDER Victoria International Container Terminal (VICT), located at the Port of Melbourne, has awarded Kalmar with a repeat order for six Automatic Stacking Cranes (ASC). The order was booked during Q3 2021 by Kalmar owner, Cargotec, with a planned delivery date of Q2 2023. These six new units are part of VICT’s current expansion programme, as addressed in the October 2021 edition of Port Strategy, and will supplement the existing fleet of 20 Kalmar ASC units in use. Kalmar will also be responsible for the maintenance and support of the automated container handling software in use at VICT, along with related technical requirements, following the signing of a three-year Kalmar Parts Care agreement in 2020. Kalmar’s One Automation System, a complete end-to-end operation that successfully combines Kalmar automated equipment and a pre-integrated and tested software solution, will continue to support VICT. Jon Wheeler, Chief Operating Oﬃcer, VICT, explains the advantages that the machines will bring to the terminal operation: “The yard capacity expansion and The Port of Antwerp has confirmed it is to conduct trials of fixed-wing drones fitted with cameras to assess the potential of the technology to enhance real-time, on-site security activities. The port is partnering with aerospace specialist company, Sabca, to undertake the process. The unmanned drones are able to remain in the air for more than eight hours and can take high-quality images from heights of up to 280m. This allows a wide-range of tasks to be undertaken throughout the port estates, including inspecting infrastructure, monitoring and surveillance, incident management and better detection of floating waste or even oil spillages. Thibauld Jongen, CEO, Sabca explains the value of the technology. “Drones will be indispensable

BRIEFS Sea-Kit testing

the new Automatic Stacking Cranes will allow us to increase the productivity of our operations to meet the growing customer demand on both quay and landside. The additional storage blocks will also add resiliency, allowing for improved planned maintenance, minimising disruption to our stakeholders,” he notes. During 2021, VICT has already ordered six Kalmar AutoShuttles and these are planned for delivery before the start of 2022. This takes the total fleet to 17 units. Established in 2017, VICT is

8 VICT is adding to its automated equipment fleet, again

Australia’s first fully automated container terminal with an operating capacity of over 1 million TEU and an extent of 350,000m², located in the Port of Melbourne. Its current yard operating system provides eﬃcient truck turn times of under 35 minutes per delivery. The company is part of the global portfolio operated by Philippines-headquartered International Container Terminal Services, Inc (ICTSI).

ANTWERP DRONE TRIALS

8 Port of Antwerp is trialling drones, ahead of plans for a network of units being introduced in 2022

in the near future when performing high-risk tasks. By carrying out these demonstrations in collaboration with the Port of Antwerp, we are able to show that we can make various operations safer and more eﬃcient by using unmanned aircraft for inspections, transporting goods and surveillance.” The tests are also covering

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

realistic emergency scenarios that could occur in the port, such as a container fire, rescue of an individual overboard from a vessel and a drowning person in the dock. Bob Spanoghe, Innovation Platform Manager, Port of Antwerp, notes: “Given the huge surface area of the port, drones provide us with leverage when it comes to carrying out our core tasks as a port authority. Our goal is to put in place an operational network of drones by 2022 in order to provide a ‘live feed’ of the various port activities. As a tool, this will enhance the work carried out by the entire port community. That will enable us to have a more accurate sense of what is going on within the port and as we work towards a safe, eﬃcient, and smart port – the port of the future.”

UK-based unmanned vessel startup, Sea-Kit, is testing an innovative printed circuit boardbased hydrogen fuel cell on its prototype unmanned surface vessel (USV) Maxlimer, allowing the vessel to operate with zero onboard emissions. The application of a hydrogen fuel source in a USV is believed to be a world first. Data gathered from bench testing and sea trials will be used for the design and construction of similar USVs, as well as for larger uncrewed vessel projects.

New Kuenz deal

Austrian crane innovation specialist, Kuenz, has signed an exclusive agreement with PortxGroup Australia for exclusive representation of its container handling cranes. Kuenz states that the arrangement will ensure cost-eﬀective access to the best innovative solutions to deliver equipment parts and projects throughout the Australia, New Zealand and Asia Pacific regions, especially for container terminals and rail yard operations.

Hamburg first

Jan De Nul Group has confirmed it is using solely second-generation biofuel for maintenance dredging works in the Port of Hamburg, representing a first in Germany. This fuel actually contains no petroleum but instead processed vegetable waste oil as a raw material. The dredging works commenced in June 2021, using two suction hopper dredgers, with the project slated for completion in December 2021. This biofuel has already been used in the Benelux region too.

NOVEMBER 2021 | 17

EQUIPMENT NEWS

NEW MEGAMAX CRANES FOR MAHER

BRIEFS TVH Sinoboom

Parts specialist, TVH, has signed a partnership agreement with Sinoboom BV, the European subsidiary of the Chinabased manufacturer of mobile elevating work platform (MEWP) solutions, Sinoboom. TVH is planning to commence distributing Sinoboom spare parts and accessories for lift trucks, industrial vehicles, construction and other machinery from early 2022.

Collaboration

APM Terminals has confirmed in a recent announcement it is collaborating with Siemens Limited India with the aim of reducing emissions by 30-40 per cent at Gateway Terminals India (GTI) in the port of Mumbai.

Maher Terminals LLC (Maher) located at the port of New York/ New Jersey has awarded a contract for three new container ship-to-shore gantry cranes to Liebherr. The terminal already has eight units from this manufacturer, with its first order fulfilled back in 2012. The new cranes feature a span of 30.5m, an outreach of 69.5m and a lift height of 53.3m, with a design capability to handle the largest container vessels in service. These new Liebherr cranes also provide additional environmental benefits, as they support Maher’s target objective of becoming a net zero emissions facility by 2040. They are manufactured using high tensile steel and with a lattice main beam and boom, meaning that the resulting lightweight unit requires less energy to operate. In addition, the drivetrains in each crane utilise an active front

THE ! / . / -

end, which returns electricity to the supply grid, supported by the Liebherr Liduro drive system which optimises energy requirements and power management. Plus, the use of ultra-high eﬃciency LED flood lights reduce energy consumption by more than 70 per cent, compared to traditional fixtures. As a result there is reduced glare and light pollution while ensuring better light quality to support working longshoremen. Gerry Bunyan, Managing

8 Liebherr is to supply three new megamax container cranes to Maher Terminals in New York/New Jersey

Director-Sales, Liebherr explains the anticipated benefits to Maher. “With these latest technically advanced machines working alongside the other Liebherr STS cranes, we are confident Maher Terminals will be able to oﬀer improved services and faster turnarounds to their customers.” Maher is the largest container terminal at the port of New York/ New Jersey, with over 3000m of quay and covering 450-acres.

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

EQUIPMENT NEWS Lomé Container Terminal (LCT) S.A. in Togo, West Africa, has confirmed it has ordered five more Konecranes Rubber-Tyred Gantry (RTG) cranes. The order was booked in June 2021 and the new units are scheduled for delivery in the second half of 2022. The order placed replicates identical RTGs already in operation at Lomé. The 16-wheel machines lift containers on a ‘1-over-6’ basis and are seven containers wide (plus a truck lane). Each unit is a fully electric ecolifting machine, powered by busbars and equipped with the smart features of Auto-steering and Stack Collision Prevention. Auto-steering keeps the RTG on a pre-programmed, straight drive path, while Stack Collision Prevention helps the crane operator to prevent container collisions when a container is moved in the bay direction. There is also a container anti-sway system called Dynapilot. Antoine Bosquet, VP Regional

MORE RTGs IN TOGO

BRIEFS Battery bunkers

Sales EMEA, Konecranes Port Solutions, explains: “LCT is a customer of long standing. When these new cranes are delivered and commissioned, LCT will operate a fleet of 32 Konecranes’ RTGs. Today, there are over 200 Konecranes RTGs at

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

8 More RTGs for LCT

work across West Africa.” Lomé Container Terminal is part of Terminal Investment Limited (TiL), the terminal arm of Mediterranean Shipping Company (MSC).

V-Bunkers has ordered two electric-hybrid bunker tankers to support harbour operations in Singapore. Due for delivery from the second half of 2022, the bunkers will be constructed using ElectricHybrid notation with state-of-the-art Energy Storage Systems (ESS) technology comprising Lithium ion batteries for energy storage and a highly automated Power Management System (PMS) to eﬃciently manage power consumption, leading to reduce GHG emissions.

V Fenders

ShibataFenderTeam has supplied 30 sets of V Fenders to Vale, for a tugboat jetty terminal in Seri Manjung, Perak, Malaysian peninsular.

NOVEMBER 2021 | 19

PORT CONCESSIONS

RENEWAL OR RETENDER? Stick with it or press the restart button? Which way to go with port concessions? Neil Davidson and Erik Wehl* examine the pros and cons of both propositions

8 The bandwagon of concession renewals is rolling…. what to do, stick or twist?

Port and terminal concessions typically have a life of 2030 years and the large wave of agreements signed in the 1990s-2000s are nearing the end of their initial term. The ball is rolling in this respect and the industry is reaching a stage where this is becoming a bigger feature of the market. Going forwards, renewals/re-tenders can be expected to be more prevalent than new concessions. What happens at expiry is usually specified in detail and while options for limited extension of the period by mutual agreement may exist, the big question is always: Should the port authority or government renew with the incumbent operator, or re-tender competitively? The process is a complex, risky and demanding one. RENEWAL WITH THE INCUMBENT OPERATOR As Figure 1 shows, choosing to stick with the existing operator avoids uncertainty, the cost of a competitive tender process and the potential disruption of moving to a new operator. It also means that the port authority and concessionaire both negotiate with a known counter-party - “better the devil you know”. However, it does mean that the port authority has a weaker negotiating position and the process may be seen as insuﬃciently competitive. In theory, the original concession agreement should clearly spell out the conditions under which the concession can be renewed, but often this isn’t the case – or the rules don’t reflect today’s needs. There is also the challenge of how to measure the performance of the incumbent concessionaire, a key aspect *This article draws upon a lively webinar held by the WAPPP Port Chapter earlier this year, of which Neil and Erik 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)

20 | NOVEMBER 2021

being the need for a formalised process built into the concession agreement, which may or may not be the case. Various methods exist such as direct observation, interrogation of clients and user-feedback mechanisms, but these all have flaws. For example, often a port user feedback mechanism is established in ports by port authorities, which then can be used as a key input in the evaluation of performance and whether an extension/renewal is appropriate. The port authority receives input from the port user community (shipping lines, cargo owners, freight forwarders, local community etc.) in a structured way. However, the process may be clouded by vested interests, conflicts of interest and parties with an “axe to grind”. In some cases, automatic renewal of a concession is possible, provided that the concessionaire has complied with terms originally agreed. This occurred in Panama

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

PORT CONCESSIONS recently for example, where the Panama Maritime Authority (AMP) authorised the automatic renewal of a 25-year concession to Hutchison-owned Panama Ports Company (PPC), operator of terminals in Balboa and Cristobal. A key downside with the renewal option is that there may be a temptation to “kick the can down the road” and simply extend the concession for a few more years without changes. RE-TENDER COMPETITIVELY Going instead for a competitive re-tendering process provides an opportunity to “wipe the slate clean” and may give the port authority a stronger negotiating position. It should certainly be a more competitive and transparent process. However, as Figure 2 shows, there are downsides. Re-tendering carries both cost and risk, and bidding interest may be limited (due to an assumption that the incumbent will win anyway). A new operator is an “unknown quantity” while a well-performing incumbent might lose out. IT’S ALWAYS A RENEGOTIATION The reality is that whichever option is chosen, it’s always a renegotiation as the ending of the original concession is an opportunity to restructure and re-negotiate the agreement to reflect latest needs. Many factors will have likely changed significantly since the concession first came into being (e.g. vessel sizes, market conditions, trade flows, customer demands, consolidation etc). For the port authority there will have been changes too, for example in strategic aims but also with issues such as sustainable development, environmental, social and corporate governance requirements. The goalposts will have moved. Plus, there are now many new aspects to consider such as technology developments (digitization, smart ports etc.). Crucially, the renewal/re-tender will almost certainly need be tied into a need for new investment in facilities and equipment. For example, the concession for the TIL (MSC)owned OPSCA terminal in Las Palmas has recently been renewed for 30 years, tied to a commitment to invest in new cranes and a larger terminal area, as well as an increase to the guaranteed minimum throughput. Sometimes a concessionaire will make early moves to ensure renewal/extension takes place. In 2021, Brasil Terminal Portuário (BTP), the 50/50 joint venture between TIL and APM Terminals, requested a 20-year extension (to 2047) of its terminal leasing contract in the Port of Santos, despite the existing agreement being scheduled to run to 2027. The carrot for the port authority is the oﬀer of investment in a berth extension, four additional STS cranes, 27 RTGs and 46 terminal trucks. Significantly, the option for a 20-year extension was built into the original deal. RISK AND RETURN HAS TO BE RIGHT Ultimately the revised concession has to allow a sensible return on investment that works for the operator, but that also balances the risk appropriately for both port authority and concessionaire. At the same time, it is important to avoid the concessionaire earning excessive windfall profits. Bear in mind that expectations on what is an acceptable level of returns may well have changed over time. An interesting case in point is DP World’s decision in 2017 not to renew its operating contract for PT Terminal Petikemas Surabaya (TPS) in Indonesia at the end of the agreement in 2019. The company stated that the operating contract renewal terms oﬀered by the Indonesian authorities did not meet its threshold for continued investment and has since pursued a private greenfield development in nearby Gresik. Other potential complications to be considered here

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include the fact that changes to the regulatory and legislative framework in the country in question may impact operations and profitability over time. For example, India has in the past imposed major port regulations that aﬀected potential returns. Interestingly, a revised “investor friendly” Model Concession Agreement (MCA) has recently been put in place, aimed at bringing transparency and uniformity to BOT projects. Whilst the aim is laudable, there are questions marks over what may be a “one size fits all” approach. A key consideration is that agreed investments should be demand driven as opposed to time scheduled as the latter can lead to wasted resource. Wise operators will happily make comprehensive investments upfront in say the takeover of an existing terminal to get the best returns possible but should not be pressured into investments not supported by market and customer demand. Equally port authorities should not be seduced by promises of over-investment. The biggest, shiniest terminal is not necessarily the best! Ultimately the concession should be an obligation of results rather than an obligation of means and an element of flexibility is key. KEY REQUIREMENTS REGARDLESS OF CHOSEN OPTION At the outset, there needs to be a clear mechanism to ensure a proper assessment is made to decide whether to renew or re-tender. The port authority must focus on its own strategic aims and take a broad view on what is best for the port and its stakeholders. It is important for it to work out what it is trying to achieve in the short and longer term. When it understands its aims, choosing the right way forward for renewal/retender becomes clearer. The port authority must also have a means of benchmarking the new deal to make sure it is the best obtainable. With a competitive re-tender, this should happen automatically. With a renewal, it is more challenging. At some stage the process will involve facing the challenge of deciding when it is appropriate to introduce internal competition in the port (i.e. moving from one container terminal concession to two). Concession expiry may provide an opportunity for this, if the conditions are appropriate. Or indeed the opposite may be done, as was the case in Dammam, Saudi Arabia recently, where the decision was taken to move from two container terminal operators to just one (PSA), in order to facilitate a unified approach and focus on inter-port rather than intra-port competition. There will be both subjective and objective aspects to consider, and politics will almost inevitably be involved. For this reason, transparency is always paramount.

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

NOVEMBER 2021 | 21

INDIA PORTS: LEGISLATIVE REFORMS

ONE STEP FORWARD, ONE BACK? Two new Bills herald major reforms to the Indian ports sector but when looked at overall does it amount to “one step forward and one step back?” AJ Keyes takes a detailed look The Central Government of India has recently delivered one new ports bill - the Major Port Authorities Bill 2021 – and has a second in the pipeline, the Draft Indian Ports Bill, 2021 which covers the country’s so-called minor ports. Ports in India are classified as either major ports or minor ports. While the major ports fall under the jurisdiction of the central government, the minor ports are owned and managed by state governments. The major ports in the country are in Chennai, Cochin, Mumbai (Jawaharlal Nehru Port), Kandla, Kochi, Kolkata, Mumbai, New Mangalore, Mormugao, Paradip, Tuticorin and Visakhapatnam. Each major port is governed by a board of trustees, appointed by the government, but operating through policy directives and executive orders from the Indian government of India. Crucially, the tariffs for all major ports are fixed by the Tariff Authority for Major Ports (TAMP). The Ministry of Ports, Shipping, and Waterways confirms that there are around 200 minor ports in the country. All are managed at the state level, by the state government or State Maritime Boards. The changes implemented and proposed have more than a little irony associated with them WHAT IS THE MAJOR PORT AUTHORITIES BILL 2021? The Major Port Authorities Bill 2021 was approved by the Parliament in India in February 2021. It has a very simple aim of wanting to amend the management model of these major ports in the country, which, it can be argued, is to support further privatisation. The Bill has a clear and defined objective of decentralising power by allowing for the creation of a “Board of Major Port Authority” for each of these major ports – and in doing so, the existing government-appointed port trusts will be removed. Moreover, the board for each major port will have to include representatives from the state government, such as the Ministry of Railways, Ministry of Defence, Ministry of Customs, and the Department of Revenue as members. There will also be one member nominated by the government, plus a representative of the employees. According to the Ministry of Ports, Shipping and Waterways, the Major Ports Trust Act of 1963 was deemed to be restrictive and the country’s major ports are, “finding it difficult to operate in a highly competitive environment and be able to respond to market challenges”. The newly passed Major Port Authorities Act 2021 provides all major ports with an increased level of autonomy. Crucially, the boards of each port will gain the power to establish rates and charges in accordance with underlying market conditions – and compete directly with private competitors. This includes a major dilution of the role of the much criticised Tariff Authority for Major Ports (TAMP). WHAT IS THE DRAFT INDIAN PORTS BILL 2021? The second legislative change to the port industry is the Draft Indian Ports Bill, 2021. It proposes to alter the existing management system for minor ports away from current jurisdiction of state governments or state maritime boards. The Bill also seeks to provide increased opportunities for

22 | NOVEMBER 2021

public and private investments in the Indian maritime and ports sector. A further objective is to enable the central advisory body, the Maritime States Development Council (MSDC), authority to plan, develop, and control minor ports, plus cover all administrative and financial functions. These are all powers that are currently undertaken by state governments. In a Government statement, the following was confirmed: “The up-to-date provisions of the proposed Bill would ensure safety, security, pollution control, performance standards and sustainability of ports.” Clearly, this will enable the MSDC to develop a national plan to develop and benefit the maritime sector.

8 Major ports in India, like Chennai, are gaining the power to establish rates and charges in accordance with underlying market conditions

REGISTERING DISSENT The Draft Indian Ports Bill, 2021, has met widespread opposition from the coastal states of Gujarat, Andhra Pradesh, Tamil Nadu, and Odisha, protesting about the proposed dilution of their authority over the minor ports, which drive the states’ economies. M. K. Stalin, Chief Minister of Tamil Nadu, produced a letter in June that urged the chief ministers of nine coastal states to “register their dissent” against the draft Bill because many powers currently exercised by state governments would be lost. “This move of the Central government to bring a new Bill will have long-term adverse implications on the management of minor ports, since the State Governments will not have any major role anymore, if the Bill is passed.” Change looks evident at both major and minor ports in India, although the government looks to have a fight on its hands to convince all parties concerned that the new legislation will be the best outcome especially with the Draft Indian Ports Bill, 2021. The point is made how the major ports’ share of cargo moved has fallen from 92 per cent in 1993-94 to 54 per cent in 2020-21, but the non-major ports’ share has gone up from 8 per cent to 46 per cent over the same period. Under the current regime, non-major ports are expected to overtake major ports in the immediate future. Anyone familiar with the Indian port scene might be forgiven for thinking this represents ‘one step forward and one step back’. Freedom for major ports to set tariﬀs is a real step forward and will boost investment prospects, but placing minor ports under central control will increase bureaucracy and move investments further away from local needs. This is all the more surprising with the significant progress achieved under the decentralised model.

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

INDIA: JNPT PRIVATISATION

BATTLE LINES FORMING Jawaharlal Nehru Port Trust (JNPT) has one public terminal left for privatisation and it is gaining a lot of interest. AJ Keyes looks at the potential implications The pending privatisation of the last remaining public terminal at JNPT brings with it a range of potential implications involving a number of terminal operators in this location and throughout India. There are currently five container terminals at the port namely, Jawaharlal Nehru Port Container Terminal (JNPT), Nhava Sheva International Container Terminal (NSICT), Gateway Terminals India Pvt Ltd (GTIPL), Nhava Sheva International Gateway Terminal (NSIGT) and the newly commissioned Bharat Mumbai Container Terminals Private Ltd (BMCT). The latest tender from the port authority to privatise JNPT is going to bring strong interest from a wide-range of potential operators, not the least of which is existing operator at the port, DP World. In addition, there are other companies looking to establish an operation at the country’s busiest import-export container gateway.

DISASTROUS FOR DP WORLD An obvious candidate is DP World, already operating NSICT and NSIGT. If it wins the tender process it will gain another 680m of berthing to offer a linear quay of 1610m, plus be able to merge its terminal storage yards to provide better scale economies. Yet there is a downside for this company here too. Its current operating contracts end in 2028 and, at present, there are no guarantees that these arrangements will be extended, unless there is an automatic extension clause in place (which is not known). Moreover, if these facilities are also put out to tender in 2028, DP World will find itself back in another competitive process. To add to concerns for DP World, if Terminal Investment Ltd (TIL) successfully wins the current process, then the MSC traffic, reported to be in the region of 50,000TEU to 60,000 TEU per month, will divert to the TIL facility. This traffic is generated by four weekly services calling to NSIGT, one at NSICT and one at Bharat Mumbai Container Terminals (BMCTPL-the terminal run by PSA International Pte Ltd). Steve Wray, Technical Director, WSP Maritime Advisory explains the likely outcome. “If TIL wins this deal, then NSIGT will become virtually empty. MSC will shift all services to its own terminals. This will be disastrous for DP World.”

There are other anticipated bidders, APM Terminals (APMT) (already in a joint-venture with Container Corporation of India at GTIPL), International Cargo Terminals and Infrastructure Pvt Ltd (part of Mumbai-based JM Baxi Group), JSW Infrastructure Ltd and the fast-growing, cash rich operators from the MidEast, QTerminals of Qatar and Abu Dhabi Terminals.

8 The publicsector operated JNPT container terminal is up for privatisation. Despite a growing imbalance between capacity and demand, interest seems strong

WHERE IS MORE VOLUME COMING FROM? It does raise one obvious question. Where is the required extra volume coming from to fill the new capacity, especially as BMCTPL is contractually obligated to construct another 1000m of berthing before 2024, doubling the length of quay? At full build out of BMCT, the overall port will then oﬀer 8.7 million TEU per annum, and with current volumes struggling to get past 5.0 million TEU. One crucial point from the new JNPT tender is that the successful bidder does not have to take all existing employees and the private entity can hire its own workforce. Currently, there are more than 800 employees directly/ indirectly working at the container terminal, with most aged 52-55 years. A government-backed special voluntary retirement scheme (SVRS) for employees remaining open for six months from September 1, 2021 will reduce this number to help make the tender process more appealing. While it is too early to speculate who will win the new tender for JNP it is the focus of strong interest from diverse potential bidders and behind this is pressure to bring new traﬃc.

8 Figure 1: Container Throughout at Port of Jawaharlal Nehru Port 2010-2020, in ‘000 TEU

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

Source: Dataand.com

FREEDOM TO SET RATES This process will privatise the only state-owned container terminal at the port, with the successful bidder gaining a 30-year deal including the freedom to set rates based on market forces. The current terminals at the port collectively handle around five million TEU per annum, although as Figure 1 shows, only nominal growth (of 0.9 per cent per annum) occurred between 2010 and 2020. Indeed, 2020 was a tough year for the port as containers handled for the financial year ending March 2021 recorded a drop of seven per cent. Yet with the current port capacity at 6.3 million TEU and volumes just under 5.0 million TEU in 2020, spare capacity exists. Therein lies part of the issue facing the port. There will not be any major increase in business, even with the privatisation process, with volumes still driven by market demand. Yet there is no lack of interest in the outstanding tender.

NOVEMBER 2021 | 23

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Growth strategies driving maritime players within the region Forthcoming challenges in relation to strong demand in global containerisation Current state of infrastructure and investor sentiments for ports and shipping development Improving and expanding regional port infrastructures in Bahrain as part of a broader economic development strategy A regional perspective in shaping an integrated supply chain model

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The strengths and weaknesses of current port operations Insights on improving port operations and ensuring a balanced economic growth throughout the EMEA region Insights on new port technologies in maximizing port operation efficiencies Facilitating economic growth through port reliability and performance Improving and creating regional business opportunities in shipping and transhipment activities within the supply chain cycle

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SRI LANKA: CONTAINER TERMINAL DEVELOPMENT

ADVANTAGE INDIA India’s Adani Group is planning to develop a new box terminal in Colombo. The project will see the company going head-to-head with China’s existing interests in Sri Lanka’s Colombo port In a move that could start to combat the influence of China in Sri Lanka, Adani Ports of India has confirmed a US$700 million deal to develop a new largescale container terminal in the major port city of Colombo. Adani Ports currently has an existing portfolio of 13 ports and terminals throughout India, but the announcement made at the end of September 2021 confirms the company is to expand its operations into Sri Lanka. STRONG POLITICAL CONSEQUENCES Yet this news is more than just the development of new container capacity, it is a move that some argue has strong political consequences. Adani Ports is entering into a partnership with a local conglomerate, John Keells Holdings PLC (JKH) and the Sri Lanka Port Authority (SLPA), with the latter taking a minority share. JKH will have a 34 per cent share, with Adani Ports taking a 51 per cent holding. The new Colombo Port West Container Terminal (WCT) is going to oﬀer around 1385m of quay and 20m of water depth. Construction is due to commence in 2022, with the first phase operational within an estimated 24 months. Annual capacity of 3.2 million TEU per annum is planned.

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The Adani Ports deal is more than just the development of new container capacity, it is a move that has strong political consequences As Table 1 confirms, this new infrastructure is going to pose a strong competitive challenge to the existing Colombo International Container Terminal (CICT), which is operated by China Merchants Ports Holdings Co Ltd. Yet comparable container terminal infrastructure is only part of the wider picture. The deal can easily be regarded as a solution to a political stand-oﬀ, although the new terminal must also be commercially viable. GOVERNMENT FRICTION There is no doubt that there has been friction between the current government of Sri Lanka and counterparts in India. In 2019, the government of Sri Lanka awarded the East Container Terminal (ECT) project to a combination of India and Japan. It was a “government-to-government” arrangement but subsequently came under very strong criticism and protests from a combination of trade unions, Buddhist clergies

and various national interests who remain opposed to national assets being sold to foreign investors, resulting in the arrangement being cancelled. Ironically though, despite revoking the deal for ECT, the SLPA has not subsequently finalised the project, instead announcing it would, when developed, fall under the remit of SLPA itself. The relationship between India and Sri Lanka was already sour after the awarding of the Hambantota port project to Chinese interests, thereby increasing China’s focus on Sri Lanka as a key element of the strategic Belt and Road Initiative. China has invested a reported US$8 billion in infrastructure projects in the country, but then in December 2017, unable to repay a large Chinese loan, the Government in Sri Lanka gave permission for China Merchants Port Holdings to take control of Hambantota port in the south of the country.

8 India’s Adani Ports has signed a new deal in Colombo and could be on course for putting pressure on Chinese terminal interests

CHINA’S “DEBT TRAPS” The deal involved granting the Chinese company a 99-year lease but ultimately raised a number of concerns about how China is using “debt traps” to gain control and influence over infrastructure projects. There are similar concerns currently being raised in various locations in Africa in conjunction with port and railroad projects, amongst others. India has not been alone in raising concerns, with the US government also pointing out how granting access to Hambantota is giving Beijing a potential military advantage in the Indian Ocean. Yet India may have a trade advantage. In Colombo, transshipment is the major activity with major links to India, where Adani Ports has its network of terminals. The deal signed by Adani ports on September 30 is at very least a start on reducing China’s influence and simultaneously building stronger links with neighbouring India.

Adani Ports

China Merchants Ports

Terminal

New West Container Terminal

Colombo International Container Terminal (CICT)

Quay Length (m)

1385m

1200m

Water Depth (m)

20m

18m

Quay Cranes

TBC

Design Capacity (million TEU)

3.2 / 3.5 million*

2.4 million

8 Table 1: Comparison of Adani Ports New West Container Terminal vs. Existing China Merchants’ CICT Facility

Note: Exact capacity to be confirmed. Source: dataand.com, China Merchants

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NOVEMBER 2021 | 25

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BREAKBULK OPERATIONS

BREAKBULK – THE OUTLOOK? Modernisation and global restructuring post-Covid presents real opportunities in the breakbulk sector. Andrew Penfold considers how should port developers react? The breakbulk sector is dominated by heavy semimanufactures and project cargoes. The days when residual non-containerised cargoes and elderly vessels dominated this sector is long past. The development of specialist handling systems and heavy lift capabilities have been key to these changes. Difficulties stemming from the Covid period (and more importantly) the recovery phase are, however, placing pressures on the sector. HOW HAS THE BREAKBULK MARKET DEVELOPED? The market has changed radically as a result of the Covid fallout: 5 The first half of 2020 saw consumer demand shift from services to goods with random lockdowns placing pressure on cargo handling. Large investments and construction activity were put on hold causing uncertainties for project cargo demand. 5 By mid-2020 the first signs of container cargo logistics difficulties began to emerge with this manifest in the breakbulk sector as well. 5 The first quarter of this year saw breakbulk and project cargo face increasing difficulties – partly flowing from capacities being absorbed by container handling. Although demand in the sector almost returned to pre-covid levels, globally, supply challenges resulted from different market dynamics. 5 Current position: iron ore demand and prices have begun to fall as production output is lowered, Chinese production in August being more than 15 per cent lower than earlier in the year. Recent problems on the supply side of global energy markets have seen gas prices surge, elevated oil prices with restricted oil supply as well as coal output being boosted following China’s energy problems and accompanying a gradual reopening of the economy. Congestion in containers has also worsened, with this placing renewed pressures on the breakbulk markets. WHAT IS THE OUTLOOK? The outlook will be determined by the pace of macro-economic development (especially in China) and the level of resulting project demand and the degree to which the container market can return to some degree of equilibrium. The former remains highly uncertain, with a real danger of economic slowdown forcing steel demand lower and weaker growth further delaying project cargo demand at the global level. With regard to containers, the level of new vessel ordering will surely see some improvement of the supply/demand balance, but this seems unlikely before 2023. Until then noncellular markets (especially breakbulk) will continue to see demand from this sector. There are also some significant specific factors that will impact on the sector: 5 As logistics issues broadly improve some return to market equilibrium should be anticipated in the next two years. 5 A partial return to nearshoring should see increased project and construction material demand in Europe and North America – stimulating project/breakbulk demand temporarily. 5 The energy transition process, increased electrification and the so-called ‘circular’ economy will stimulate project cargo demand for new and innovative plant.

5 Post- Covid stimulus packages are certain to include major infrastructure projects and increased demand at the global level, with this generating greater interest in more capacity redundancy and greenfield projects. Shipping lines’ newfound financial stability will also drive additional investment in supply chains, with this focused on containers – thus relieving some of the pressure on the breakbulk sector.

8 Modern breakbulk facilities require a greater heavy lift cargo handling capability

WHAT ARE THE DRIVING FORCES? Against this broad background the following specifics need to be watched: 5 The EU seems set continue with its systems of quotas and tariﬀs on steel imports to protect domestic production. This will adversely impact breakbulk demand for steel products. 5 Similar factors are at work in the USA, with the 25 per cent levy imposed by the Trump Administration on steel imports (and similar penalties on aluminium) still in place. 5 The EU has announced plans for a tax on imports of carbonintensive steel, aluminium, cement, and fertilisers to be phased in from 2026. Despite these emerging constraints there are real opportunities: 5 There will be many more renewable energy developments which will generate specific project cargo demand. 5 This energy diversification will see increased gas transportation infrastructure and greater demand for storage capacity. 5 Transport will increasingly require new fuels – all of which will lift energy and gas demand and generate demand for new plant. 5 Although there will be a reduction in raw material shipments this is likely to stimulate shipment of intermediates – metal products – and project cargo equipment. 5 The development of the hydrogen economy will generate demand for new industrial facilities and more complex chemical recycling project. IMPLICATIONS FOR PORTS All this has clear implications for port investment. There promises to be a healthy requirement for well connected – road, rail, waterway - modern breakbulk/project cargo facilities with heavy lift capabilities and good storage capacity..

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

NOVEMBER 2021 | 27

COASTLINK CONFERENCE REVIEW

UK TRUCKING: THE HOT TOPIC With the September Coastlink online conference coinciding with the UK petrol delivery crisis the shortage of truck drivers was the hot topic. Felicity Landon reports

8 The UK lags behind Continental Europe in the care and treatment of its hauliers

As petrol stations were running dry in many areas of the UK and drivers queued anxiously wherever fuel was available, the timing of Coastlink’s focus on Short Sea Feeder Shipping: Navigation through road freight supply chain challenges could not have been more significant. And one of the speakers, John Lucy, Head of International Transport, Road Haulage Association, certainly did not hold back with his comments. Asked about terms and conditions for truck drivers, he said: “I think we are reaping now what the industry has sown for three decades. There has been a chase to the bottom in terms of price and service which has been aided and abetted by lower cost eastern European haulage operators. A continual influx of low-cost labour into the market has kept rates at an artificial and unsustainable rate.” This was a bubble that had been waiting to burst, he said, and it was going to take time for the market to adjust. Adding to the shortage of drivers, he noted that a lack of hardware was another challenge. “Trucks and trailers can take 12 months to supply because there are problems with steel and a manufacturing backlog. It is a whole perfect storm.” Lucy also noted that congestion and capacity issues in some ports meant drivers collecting or delivering freight were sometimes being delayed at ports for hours, exacerbating the problem of the shortage of drivers. We are seeing “probably the most disruptive time in supply chains that most of us will have experienced in our careers”, he said.

28 | NOVEMBER 2021

“These are just unprecedented times. The World Bank has estimated that this disruptive period is going to last for 18 months at least before some new normal trading conditions settle down.” The combination of drivers retiring, European drivers leaving the UK because of Brexit and the impact on haulage companies of updated IR35 rules (on employment) had driven the shortage in the UK, he said. However, he emphasised that the UK was not the only country suﬀering. “Driver shortages started in the US last year and have spread throughout the world. Every European country is experiencing some level of driver shortage.” Returning to the UK perspective, he said: “We basically outsourced the majority of our logistics jobs to European Union drivers, because as it [the EU] expanded further east, it allowed more drivers to come into the market. Before 1992, when the UK last had Customs and permits on vehicles going into Europe, over 90 per cent of those crossing the straits had a GB sticker. Now it is four or five per cent.” Pre Brexit, EU hauliers used to spend ‘a lot of time tramping around the UK doing domestic jobs’, which also kept down UK domestic rates, he noted. BETTER TIMES AHEAD? Lucy continued that there is some optimism that the UK haulage sector, despite the current problems, seems to be going from strength to strength. “We are now seeing a

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

COASTLINK CONFERENCE REVIEW

‘‘

…more shortsea runs as supply chains near-shore and even onshore in the UK renaissance of UK international hauliers – this will take time, it will take a good 12 to 18 months,” he said. “We are seeing figures for salaries never seen before in this market. If the money is there, there is always someone wanting to do it. Yes, there is a reluctance to put up with the conditions, but these are not because of the job itself – it is a UK issue.” The treatment of drivers in the UK is considerably diﬀerent to that on the continent, he said, where drivers are “fed and watered, with proper professional rest stops throughout Europe”. In the UK, he said, “There is the crazy situation that they are to be tolerated, but not served for. Imagine in the pandemic last year when motorway services closed and drivers who were literally keeping the country going were not allowed to use any toilets and the only food was drivethrough.” He said there were instances of drivers parking up their trucks and walking across to the drive-through to get something to eat, where they were told ‘we can’t serve you because you are not in a car’. “That is how we treat our staﬀ in this country. A shift is needed.” The conference heard that upheavals post-Brexit and/or due to Covid included unprecedented demand at regional ports, a shift from accompanied to unaccompanied trailers, a situation where shortsea containers could now compete against trailers on both time and price, and a 30 per cent increase in direct ro-ro services between Ireland and mainland Europe, as the old land bridge route via Holyhead and Dover has fallen out of favour thanks to post-Brexit Customs and border processes. However, as Lucy pointed out, shifting cargo from the land bridge route to direct shortsea shipping aligns with greener

credentials. “Longer miles by sea, less by road, reducing the carbon footprint of transport – it is beginning, and it is not going to go away.” He also described a deceleration in ‘out-shoring’ production and an increase in near-shoring and on-shoring. “Manufacturers have seen how vulnerable they are. A supply chain is only as strong as its weakest link – and the weakest link has come to the fore in the last 18 months.”

8 Current market forces are opening up the short-sea shipping alternative with the added benefit of this being an eco-friendly approach

GOOD NEWS This is good news for the shortsea shipping sector, as it would bring more work and traﬃc flows into regions where shortsea shipping is strongest, he said. “We will possibly see some movement in the next 12 months away from the Far East flows into the UK and more shortsea runs as supply chains near-shore and potentially even onshore into the UK.” Port connectivity is going to be vital now, he said, and in this context he also highlighted the Freeports announced as part of the ‘levelling up’ agenda. “They are starting to evolve from the end of this year into next year, and the whole essence of Freeports is wrapped around multimodal infrastructure, smarter ports, low carbon initiatives, etc.”

Coastal shipping can play its part Coastal shipping can play its part in helping the industry with the challenges it is facing, said Richard Newton, Commercial Director Logistics, Port of Tyne, UK. He noted the increasing pressure and need to reduce environmental impact; rocketing shipping rates; associated costs with delays including quay rent and detention; port capacity constraints; lack of vessel space; increasing and unpredictable volumes; warehouse capacity; customer expectations and schedule reliability of deep-sea services “the worst it has ever been”. Comparing scenarios where a container is delivered from Felixstowe to Durham by road, or moved via coastal shipping into the Tyne with a short road journey to Durham, he said that the coastal shipping route showed “from the same physical resource how much more you can get done”, while also reducing cost, being green, and enabling drivers to go home at night instead of being away overnight. Also, one feeder movement could take 300 trucks oﬀ the road.

“Coastal shipping doesn’t have all the answers but can certainly be part of the solution,” he said. “It is green, cost-eﬀective, flexible, fast, and helps to mitigate the challenges around drivers.” While the numbers have already stacked up for coastal shipping, Newton said: “It has needed a bit of a catalyst for people to change. The mindset is that this is the way we have always done it but when the capacity isn’t there, it forces people to look at things diﬀerently.” Deepsea ports are also part of the equation, he said, as they need to be instrumental in getting containers on to coastal shipping. If there is anything good to come out of the driver shortage, he said, it was recognition of what a crucial job drivers do and what an important thing it is to keep goods moving throughout the country. “If people switch to other ports as a result, that is one benefit that might come out of it.” David Cook, group logistics manager for

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

Tata Consumer Products, explained Tata’s port-centric solution for Tetley tea at the Port of Tyne, with raw materials and finished products moved to/from South Shields via feeder links with Antwerp, Felixstowe and Rotterdam. “We have honed a highly cost-eﬃcient and environmentally friendly warehouse and distribution strategy centred around the Port of Tyne,” he said. “We are not suﬀering from the shortage of container trucking in the UK. We have calculated that the use of feeder vessels to transport our products means 730,000 less road miles per annum.” Tata/Tetley has ‘never regretted’ going down this route, he said. “I am surprised more companies have not followed suit, especially with the mega vessels coming in and land transport tight. Because we transfer to feeder vessels, we are not hindered by trying to get containers out of Felixstowe. I do think the situation will feed growth to feeder vessels into regional ports.”

NOVEMBER 2021 | 29

FREEPORTS

UK FREEPORTS – AN UPDATE One of the identified benefits flowing from Brexit is the ability for the UK to establish Freeports. So far there has been a lot of talk, but what is actually happening? Andrew Penfold examines the state of play The announcement in the Spring Budget that the UK will establish a series of Freeports is a significant part of postBrexit policy. The seaports announced include zones around (and including) Felixstowe/Harwich, the Humber ports, Liverpool, Plymouth, Southampton, and Teesside – with East Midlands airport also benefiting from the policy. The situation in Scotland remains unclear, with a row developing between the UK and devolved Scottish governments. What is certain, however, is that this policy is firmly in place and will accelerate in the medium term. POSITIVES AND NEGATIVES Freeports as a concept remain controversial and it is worth briefly looking at their impact. The primary motive is the boosting of economic development in – often – backward areas. In the UK benefits include: 5 Lower tax rates on buildings and renovations 5 Capital tax allowances of 100 per cent 5 Full stamp duty (transaction) tax relief 5 Business tax relief for existing and new businesses locating in the zone. These are all designed to stimulate economic activity and this – at least in theory – should pass through into increased trade volumes at a designated port.

‘‘

Freeports as a concept remain controversial . . . there are pros and cons On the other hand, critics have underlined some adverse issues. The main risk is that the zones will not act as a catalyst in overall economic growth but rather redirect existing businesses to these locations, with the government seeing a resulting net revenue reduction as more operators seek to benefit from lower taxes. Also, it is not clear that the desired highly skilled jobs will result. Most of these issues seem like ‘special pleading’ from existing interest groups and economic theory – and experience – tend to confirm net overall benefits. This is the UK government’s belief. The ‘zero sum’ arguments are clearly out of favour. WHAT IS THE LIKELY POSITION? It seems certain that the eﬀective reduction in production costs that will flow from operating in a Free Zone will be significant. The combined impact has been estimated at an overall cost reduction of around 5-7 per cent. This can only increase the competitive position of UK manufacturing – and product processing. On the other hand, an investor looking to develop a new plant may well seek to locate in a Zone rather than elsewhere in the UK. This downside should be outweighed by an improved overall UK competitive position versus other locations. The impact on the UK economy is seen as positive not just as an improvement versus other UK locations but also

30 | NOVEMBER 2021

against competition from – mainly – EU operators. The Freeport idea will clearly lift FDI in the UK, which is a highly important post-Brexit argument. Recent issues in global supply chains also point to the advantages of Freeports. The move away from Just-in-Time strategies to a more prudent inventory policy will clearly favour Freeports and improve security of supply considerations.

8 The nominated Freeports but there are others who feel they have a strong case, for example, Bristol

TROUBLE AHEAD? Overall, a positive impact on the UK economy seems certain to flow from the policy and it fits very well with the UK government’s aims to boost economic prospects in the more ‘left behind’ parts of the UK. The benefits have already been seen in the high valuations oﬀered for the sale of PD Teesport – which will clearly be a direct beneficiary of the new policy. The EU has been opposed to Freeports. Although the EU has numerous ‘free zones’ their State Aid law is designed to limit ‘beggar-thy-neighbour’ policy frameworks. Outside the EU, the UK will not be subject to this and could use Freeports to attract business from the EU and to play a role as a distribution hub for EU markets. This is bound to run into opposition and lead to contract bidding opportunities being closed oﬀ (although this may well be the least of the EU’s problems in coming years). This aspect will need close examination for Freeport investors. PORT IMPLICATIONS From the current perspective the Freeport policy seems certain to benefit the major ports, with increased investment in the identified zones and, ultimately, higher volumes. They may well also serve to improve the currently chronically imbalanced nature of UK container port flows. While clearly not a panacea, only limited – if any – downsides are noted for the ports, although the jury is still out regarding the broader economic impact on the UK as a whole. What is clear, however, is that all significant ports want to be in the game including some such as Bristol which were not nominated by the UK government.

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

NIGERIA: OFFSHORE SUPPLY OPERATIONS

GAME CHANGER Based at the Onne Multipurpose Terminal, P&O Maritime logistics has launched an innovative ‘pay as you go’ oﬀshore supply service

8 P&O Maritime Logistics has launched its ‘pay as you go’ FlexDELIVERY™ oﬀshore supply service in Nigeria utilising the Onne Multipurpose Terminal as its base

In Nigeria, an innovative experiment is underway to try to reduce the supply chain costs in its notoriously expensive offshore oil sector. It is a sign that the Nigerian oil industry is maturing and making efforts to reduce its historically very high supply base costs. The experiments are spearheaded by the supply vessel operator P&O Maritime Logistics (operating out of Onne Multipurpose Terminal in Onne Port) and independent Nigerian oil companies looking for a competitive edge. The traditional model for supplying offshore oil facilities (with cargo ranging from drinking water to hi-tech and extremely expensive drilling components) has been for an oil company to go for long-term chartering of supply vessels dedicated exclusively to supplying that oil company’s installations. This has the benefit of allowing the oil company complete control of the “when” and “how” of its supply decisions. However, it has the obvious downside that it is costly to charter supply vessels unless one can fully utilize them. For it to make sense to charter, an oil company must require deliveries: (i) of large amounts of materials and (ii) at high frequencies. In many cases, (depending on factors such as company size or oil field production phase) any single oil company does not have such requirements and chartering becomes sub-optimal. DEMAND BASED PAYMENTS The new generation solution is to only pay the supply vessel operator for the actual space and voyages needed. Similar to the container business, where customers only pay for the space occupied by containers onboard a vessel. This approach makes perfect sense for the independent Nigerian-owned oil companies who do not have the financial clout of the oil majors. They can adopt a more realistic view of such overhead costs. These smaller companies must be nimbler and more cost disciplined to compete against the likes of Total, Shell and ExxonMobil. P&O Maritime Logistics has dubbed this approach

FlexDELIVERY™ and has recently launched it for the first time in Africa. Central to it, is providing the Nigerian oil sector with an easier and cheaper option for “last mile” delivery of its cargo. The company has initiated operations in Onne, Nigeria based on a weekly service (which will be ramped up as needed) via which oil companies can book the space they need. P&O Maritime then delivers to their respective offshore facilities. Thus, oil companies can move away from expensive and inflexible longterm chartering when connecting to their offshore facilities. The new offering, which began service on the 4th of September 2021, is an expansion of P&O Maritime Logistics’ disruptive innovative ‘Supply on Demand’ to integrate shore base and quayside operations strategy designed to deliver a comprehensive logistics solution globally. The company estimates that FlexDELIVERY™ reduces costs by 20-30 per cent per unit of goods transported. VALUE ADDED A value-added benefit of FlexDELIVERY™ is its environmentally friendly credentials. It is estimated that FlexDELIVERY™ reduces distance travelled by 40-50 per cent and reduces fuel consumption by 20-30 per cent. Carbon emissions efficient! At the launch of the service, Martin Helweg, CEO at P&O Maritime Logistics said: “Following the success of our Supply on Demand service, we saw a gap in the Nigerian market, spotting that the country’s offshore supply market was ripe for the revolutionary FlexDELIVERY™ system that brings efficiency and value to our customers.” Robert Uljan, Head of General Cargo Operations, Onne Multipurpose Terminal, responding to this ground-breaking initiative, congratulated P&O Maritime Logistics on its innovative new service and notes: “Onne Multipurpose Terminal is proud to have been chosen as the supply base for this ground-breaking new product for Nigeria’s oil-sector which promises to reduce our customers’ cost-base while also being a step towards a greener energy sector.”

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

NOVEMBER 2021 | 31

LONDON SHIPPING WEEK

VIBRANT SHIPPING DISCUSSIONS London International Shipping Week, in September, featured about 250 in-person and virtual events. Felicity Landon reports on some of the highlights

8 Toft: some “normalisation and cooldown” in the next 12 months

There were physical events, online events and ‘hybrid’ events throughout the week and throughout the city. COVID-19, social distancing, vaccinations and testing were never far from the conversation. However, the dominant feeling was one of delight to be back, with colleagues from across the maritime sector finally able to gather, discuss, debate and network throughout the week. Inevitably, many discussions during London International Shipping Week were focused on the ongoing huge demand for shipping, rocketing freight rates, port congestion and supply chain delays, alongside the urgency of decarbonisation, the debate around future fuels and digitalisation. LISW21 CONFERENCE HIGHLIGHTS Global trade seems to be unstoppable and that is despite the stresses on the supply chain, said Soren Toft, CEO of Mediterranean Shipping Company (MSC), at the headline LISW21 conference, “Driving Growth in a Disrupted World”. “On the one hand we see raging demand for trade in physical goods and shippers jostling for capacity, and indeed we are not the creators of the demand – we are the servers of the demand,” said Toft in his keynote speech. “On the other hand, there is a growing knot of disrupted, tangled supply chains.” A recent study showed about two-thirds of companies surveyed had supply chains in their conversations – this must be a world record in that the industry is suddenly getting so much attention, said Toft.

32 | NOVEMBER 2021

However, he said, there are still many people unaware of the role that transport, shipping and logistics play in making the world economy function. “We find ourselves having to remind a wider audience of the essential role we play in keeping trade flowing and our role in keeping the global economy functioning.” Shippers were suﬀering ‘a lot of agony’ not only because of high freight rates but “perhaps more importantly service levels are poorer”, said Toft, noting that the problems started in 2020 “when we tried to ship 12 months-worth of goods in about eight months”.

‘‘

. . . there is a growing knot of disrupted, tangled supply chains The first seven months of 2021 saw a 33 per cent growth of imports from Asia into the US, and even compared to preCOVID 2019, it was a 22 per cent growth, he said. “Even though the supply chains are vast, they are not built for such massive changes, partly because capacity is not readily available, container terminals and land infrastructure don’t just expand like that but also because for years our industry has been marred by mediocre returns and that meant we have had to run our capacity at 90-95 per cent

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

LONDON SHIPPING WEEK

‘‘

happens in the terminals, trucks, warehousing and rail, “and there it will only abate the moment the global demand somewhat abates”, he said. Toft expected to see some ‘normalisation and cooldown’ in the industry in the next 12 months.

utilisation, meaning there was no buffer capacity when things really went off the rails.” He described massive congestion in most major ports around the world, where “we easily have waiting time between three and five days”. Normally MSC would run a service between China and the US West Coast utilising five or six ships, he said. “Today we utilise nine, ten, and even then we struggle to provide a good service. We have many more billions of dollars tied up in ships and containers and frankly we are unable to offer the service that our customers demand.” MSC and its competitors are ‘very preoccupied’ in trying to improve the service to customers but are impacted significantly by congested ports, lack of infrastructure, lack of truck drivers and lack of rail capacity, said Toft. “We have done our utmost to ease the operational stress. We have added a lot of capacity, trying to introduce new services and solutions, but it isn’t enough.” Congested supply chains are very much impacted by what

DECARBONISATION: NO DECOUPLING Turning to decarbonisation, he said meeting global trade demand must not be decoupled from the urgency to eliminate emissions. “In order to decarbonise the shipping industry, we must develop new technologies, new fuels, new infrastructure, at a pace never previously seen. Frankly, the real bottleneck is carbon-neutral fuels at scale. It is crucial that significant money is set aside for industrywide research and development.” MSC supports a global market-based measures incorporating global carbon pricing that could help the industry decarbonise by reducing the gap between fossil fuels and zero carbon fuels, said Toft. “We need to decarbonise shipping. The ships can be built, I know the engines will be ready, and what we need are scalable fuels. Let’s put significant money into research and development for the right global solutions.”

. . . there was no buﬀer capacity when things really went oﬀ the rails

Maritime UK: Spotlight on Human Resoures The UK’s coastal communities are set to lose at least 49 per cent of their young people, with the majority of 18 to 24-yearolds already planning to move away, according to research by Maritime UK and the Local Government Association Coastal Special Interest Group (SIG). However, 70 per cent of those interviewed said they would be more likely to stay if the right career opportunities were made available. Launching their Coastal Powerhouse Manifesto during LISW, Maritime UK and the Coastal SIG urged the Government to come up with a clear strategy to “stem the brain drain”. The document sets out proposals to boost connectivity to the rest of the country, extend Freeports benefits to all coastal areas, install a shore power network across the coast to charge tomorrow’s “Teslas of the seas” and develop new skills in coastal communities, including digital skills. Speaking at the launch event, Tim Morris, Chief Executive of the UK Major Ports Group, said that while the sea is by far the UK’s largest gateway for trade with the world, the maritime story is not just about trade. Established industries such as tourism and fishing still have important roles to play and the coastal regions are also still ideal for manufacturing industries, technology innovations and service providers, he said. “The coast is a wonderful and vital source of natural capital for the UK. Almost scandalously for an island nation, our coastal regions and communities within them can suﬀer very significant economic challenges. This is not the case everywhere, but coastal areas on average perform notably worse in

UK averages on indicators such as multiple deprivation, unemployment and wages. “It doesn’t have to be this way. It is not inevitable that the coast has to suﬀer some of these issues. There is a real job to do in levelling up the coast as a region in its own right and huge opportunities to do so as well.”

alone; it depends on partnership, a coalition of the willing. We need to make sure we develop a skilled workforce to meet demands and secure the infrastructure developments we need.”

PLA Cites Era of Innovation

BPA: Focus on Smarter and Cleaner

There have been few periods when what happens on the Thames has been more important for the country, said Christopher Rodrigues, Chairman, at the PLA’s reception onboard the Silver Sturgeon. The river’s role in the Great Plague and the Fire of London were well documented by Pepys, he said, and its role in the conflicts of the 20th century were a source of pride. The Port of London kept supplies of food, fuel and medical supplies flowing during the pandemic. “Like all ports during the pandemic, London delivered – and it continues to deliver today.” The future success of the Thames depends on innovation, said Rodrigues, who highlighted the latest investments at DP World London Gateway, the opening of Forth Ports’ Tilbury2 expansion, DHL’s initiative to move light parcels along the river, and the trials by CEVA Logistics and Livett’s Group of a riverboat delivery service to Guy’s Hospital, central London. Recognising that there would be unprecedented change driven by decarbonisation, new technology, changing patterns of consumption, new trading links and port cities changing their shape and role, the PLA is ‘refreshing’ the Thames Vision, its framework for the river, and this will set out emerging possibilities, said Rodrigues. “The future can’t be delivered by the PLA

The British Ports Association (BPA) and the UK Chamber of Shipping hosted an event to screen two new programmes showcasing the maritime industry’s transition to a smarter future. The BPA programme, Gateways to Growth, reveals the people, communities and organisations behind Britain’s ports, highlighting ports’ vital contribution to society and the innovations shaping their pathway to net zero. The Chamber’s programme, Making Waves: The Future of Shipping, highlights eﬀorts underway and calls for continued ambitious action to decarbonise. Although not technically part of LISW, the following week the BPA hosted its annual lunch at the Drapers’ Hall. BPA chairman Neil Glendinning noted that when much of the country was ‘closing and putting up the shutters’ during the COVID-19 lockdowns, ports carried on and food, fuel and medical supplies were all readily available. Thanks to COVID-19, and also the drama of the Ever Given in the Suez Canal, “now more than since the Second World War, the public has become aware just how finely balanced supply chains are, and the importance of ports”, he said. “Let’s not lose this opportunity of our newfound fame. We need to be able to recruit and retain talent and exploit all the opportunities that come our way.”

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

NOVEMBER 2021 | 33

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

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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

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BRAZIL: CONTAINER SHIPPING

MSC CLOSES IN ON LOG-IN Rob Ward looks at MSC’s play to take control of Log-in Logistica and its Villa Velha container terminal in Vitoria, south east Brazil In the 1826 American novel The Last of the Mohicans (also a 1992 film starring Daniel Day-Lewis as Hawkeye), Chingachook, a friend of Hawkeye, embodied the title role just as the Last of the Brazilian Container Ship Operators is currently being played out by Log-In Logistica. For one month ago MSC Line – which already works closely with the Rio de Janeiro headquartered outfit, operator of six vessels, and owner of the TVV container terminal in Vitoria – made a bid on the Sao Paulo bourse (Bovespa) to buy a large percentage of the coastal carrier’s shares. While Log-In shares were trading that day on Bovespa at Reais15.50 (US$2.80), MSC bid Reais25 per share, a mark-up of more than 62 per cent, which many experts think will be diﬃcult to turn down, especially for Sao Paulo based Alaska Investimentos Ltda, the biggest current shareholder with 67 per cent of the company’s shares. The bid is now in front of CADE, the Brazilian monopolies watchdog, but is expected to be given the Green Light before Christmas, according to several local experts. “I think the exchange rate is favourable for MSC, which has been looking to buy into Brazilian flag operations for several years now,” says one shipping industry consultant based in Sao Paulo. The Real is currently at 5.5 to the greenback - it was 4 just before the pandemic hit, and was as low as 3.1 in March 2018. MSC, along with Maersk and CMA CGM made “serious inquiries” about purchasing Log-In in early 2015 but the Brazilian carrier felt the price being discussed did not reflect its value at the time. The exchange rate to the USD was just 2.6 then. SYNERGIES/COMPETITIVE RESPONSE “I also think there are various synergies between the two outfits,” the analyst adds. “And on top of that, MSC doesn’t want its main rivals CMA CGM and Maersk Line [who already have Brazilian flag operations] to have a massive advantage in East Coast of South America trades. I think it will be a very sad day that there are no more Brazilian carriers but that is the way of logistics in the world these days: with the Big Fish always eating the smaller Fish.”

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MSC bid Reais25 per share, a mark-up of more than 62 per cent Back in the day – namely the 1990s – Brazilian box ship operators were proliferating under the 40:40:20 system and Companhia Libra de Navegacao, Paulista Line, Frota Amazonica, Transroll, Lloyd Brasileiro and Neptunia, among others, all had their years in the sun ferrying boxes to the four corners of the globe. Now all that’s left under Brazilian ownership are the four services from Log-In: two linking Manaus, in the Amazonas jungle region, with Santos, Paranagua and Itajai, one connecting with the River Plate and another shuttle service, dominated by MSC, connecting TVV in Vitoria to Santos and Rio de Janeiro.

“Regarding MSC buying control of Log In Logistica, although it’s an unusual move from MSC I can’t say I am totally surprised as there are a lot synergies. On top of that Log-In is already a strong local partner and feeder provider for MSC,” says Leandro Carelli Barreto, a Director of Solve Shipping Consultancy.” He and another consultant, Armando Freigedo Rodrigues, of the Aquapar Consultancy, based in Rio de Janeiro, both express the view that the delays to the BR do Mar legislation – which will make it easier for international carriers to charter in foreign flag tonnage onto the Brazilian alternative register (REB) – has probably been a contributary factor to MSC’s move with MSC doubtless experiencing some frustration in this respect. Log-In bought a seventh container vessel, of 2500TEU capacity, earlier this year but chartered it out to a third party while waiting for BR Do Mar. Of the six vessels operated by Log-In today, five are of 2800TEU capacity and one is of 1700TEU, and, of these, two are fully owned by the Rio de Janeiro based carrier while one was imported (the Polaris from a Chinese shipyard) and three are on a bareboat charter.

8 Terminal Villa Velha has registered a near 20 per cent increase in container volume in the first half of this year up to 90,800TEU

PLUS TERMINAL VILLA VELHA The deal will also include the Terminal Villa Velha (TVV) box terminal operation in Vitoria, which handled 177,500TEU in 2020, up 1.7 per cent compared to 2019. This year both it and Log-In have performed exceptionally well, with TVV, after six months, posting 90,800TEU, up 19.6 per cent, and Log-In moving 730,000TEU, up 15.7 per cent. With Maersk Line having its own Mercosur coastal and Brazilian cabotage operator in Alianca Navegacao, and CMA CGM likewise with Mercosul Line, MSC has been the biggest client of Log-In for several years, especially out of Vitoria. Out of TVV Log-In operates two regular feeder services to Santos and to Rio de Janeiro, and MSC is the main user.

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

NOVEMBER 2021 | 35

BRAZIL: TERMINAL DEVELOPMENT

TCP: GOING FOR HUB STATUS Terminal Conteineres de Paranagua (TCP) is progressively building container volume via innovatively consolidating and expanding its market reach. Rob Ward investigates

8 TCP ranks among the leading container terminals in Brazil for reefer cargo with this playing a prominent part in its expected volume of over one million TEU this year – chicken accounts for around 80 per cent of the 200,000TEU of reefer cargo

Majority owned by China Merchants Port Holdings (CM Port) since September 2017, Terminal Conteineres de Paranagua (TCP) in the southern state of Parana, Brazil, has been growing its container handling year by year, posting a throughput of 983,000TEU during 2020, up 5.3 per cent over 2019. Against this background of positive growth, it has embarked on an ambitious expansion programme which, it says, will increase annual capacity from today’s 2.5mTEU up to 3.5mTEU, and as part of this expansion achieve hub port status. This year so far TCP has handled 740,186TEU during the first eight months which is up around 15 per cent on the 646,630TEU handled during the same period last year. The Parana state terminal now expects to comfortably drive through the 1mTEU per annum barrier for the first time by the end of this year. In fact, the latest forecast, made in midOctober, is that it will smash through the barrier towards the end of November, and end up with 1.1mTEU for 2021. “Last year TCP’s growth in container handling was a 5.3 per cent increase over 2019, and that was three times the increase of most terminals,” says Thomas Lima, Commercial and Institutional Director for the company. And this year the end of year forecast is set at more than 14 per cent, while GDP is expected to rise to just under 5 per cent. Ironically, by the end of September TCP had slipped from third biggest terminal in Brazil (behind Santos Brasil and BTP in Santos) to fourth biggest as Portonave (part of the Itajai

36 | NOVEMBER 2021

Port Complex (IPC) and a southern states’ rival for TCP) just edged ahead as a result of its owner, MSC Line, increasing transshipment activity there. CHICKEN EXPORT CAPITAL The main driver of TCP’s success this year has been poultry exports and its almost perennial role as “Chicken Export Capital of the World”, which it occasionally loses to Itajai. Some 185,192TEU of reefer boxes were handled in 2020, of which around 80 per cent is chicken, with pork and beef making up an equal 10 per cent each share of the rest. This year reefers look set to break 200,000TEU for the first time. Another reason for this year’s throughput increase – TCP broke overall monthly records three times by end of September and also for reefer cargoes – has been increased boxes for/from Paraguay and also beef exports from the interior of Sao Paulo and Mato Grosso do Sul. Lima says that additional Paraguay boxes and a good percentage of cargo currently shipped to/from Santos – which is in Sao Paulo – could come to Paranagua and 88 per cent of the 1.4m TEU shipped via the Santa Catarina ports. He cites the example of Minerva Foods, which specialises in beef production. “Minerva are mostly operating out of Sao Paulo state and until we put our latest multi modal logistics package together they were exporting 100 per cent out of the port of Santos,”

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

BRAZIL: TERMINAL DEVELOPMENT explains Lima. “But now out of the 800 containers per month that they export we are handling 25 per cent, or 200, which is a considerable achievement.” TCP notes that Minerva is now trucking some of its produce to the Cambé rail head, some 450km from Paranagua by road and only 100km from the Sao Paulo state border, and from Cambé it is transported down to the TCP terminal. From the interior of the state of Santa Catarina TCP also ‘poaches’ boxes from the SC terminals, the two in IPC as well as Porto Itapoa (controlled by Maersk Line). Forest products (wood and, especially, pulp and paper) fill many of these on the export front and materials and spare parts for the automobile industry as well as electronic goods on the import side. Also strong are imports of fertilisers which totalled a record 33,809TEU in 2020, 28,43 per cent higher than the previous record of 2018. Lima tells Port Strategy that under its concession rules TCP has to provide up to 10 days free storage to shippers, much more than its rivals and this is a benefit to customers complemented by superior logistics and add-on services,. “The benefits are manifest and so we are becoming first option for shippers and shipping lines, sometimes even those that have their own terminals,” he adds, MOST IMPORTANT PROJECT Lima also reports that a multi-million dollar logistics project (called KBT) involving Klabin, a major cellulose producer, railroad logistics outfit Brado and TCP, launched this year in September when the first train hauled 100s of containers of Klabin forest products 400km down to Paranagua.

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Klabin exports 150,000TEU per annum but that will increase to 120,000TEU per month with 80 per cent of this moving via TCP “This is the single most important project for us to attract cargo,” says Lima adding that today Klabin exports 150,000TEU per annum but that this will increase to 120,000TEU per month once its new $1bn Puma II Project at Ortigueira gets fully up to speed in two years’ time, and 80 per cent of that exits through TCP. Mateus Jose Campagnaro, Marketing and Logistics Manager, TCP, notes that the recent expansions by Klabin will catapult it into prime position in Brazil for the export of dry boxes. “Presently Klabin is ranked about fourth or fifth in terms of the number of dry containers exported out of Brazil, but once this extension is fully up-and-running they will be the Number One,” states Campagnaro. With 3,624 reefer plugs Lima claims TCP has the highest number of sockets in South America, although SPRC in Cartagena, Colombia might dispute that. But, in common with Cartagena, Paranagua has also been attracting shippers because capacity has been tight in many Brazilian terminals this year and the gap between throughput (about 1mTEU) and capacity (2.5mTEU) at TCP means no capacity shortage whatsoever, although empties have provided some headaches. TCP further notes additional plugs will take it to 4000 early next year. In terms of Paraguay, which usually exports/imports containerised cargo via barge from its capital Asuncion, and then transships onto liner services from Buenos Aires or

Montevideo, a return to Paranagua, after a 15-year hiatus with regard to soya shipments, has been gaining momentum all year. A severe drought this year has mostly impeded and often stopped the barge services along the River Parana, and so Paranagua has been used as an alternative and it might not be just short term as TCP is planning to try and persuade Paraguayan shippers to stay for the long haul.

8 The 12,726TEU capacity Yang Ming Tip Top is the largest vessel to call at TCP to-date – 332.2m long, 48.2m beam and oﬀering a 1000 reefer slots

HIGHER STILL But both Lima and Campagnaro, believe that volumes could have been higher if not for carriers prioritising their own terminals over White Flag [neutral] players like TCP. “We have gone to another level since China Merchants took over,” says Lima, “And now we are working hard towards realising our Big Project to increase our operating area by more than 50 per cent with a new logistics park.” He explains that Plan A is for 300,000 more sq m and Plan B is for 200,000 extra sq m and discussions are ongoing with the authorities. Lima says that he and his team are especially proud of their eﬀorts in recent years to bring more and more cargoes in/out of TCP via the railroad at Cambé. From January to the end of July this year, TCP handled 84,760TEU by rail, up 15 per cent from the 75,069TEU moved via rail in 2019, although the figure remains similar to 2020, Annual figures show a 2018 total of 107,000TEU by rail, 2019 registered 135,000TEU and last year accounts for 148,000TEU, each year representing the highest of all terminals in Brazil. In the near future, says Lima, Cambé will be connected to the Novo Ferroeste rail network that is expanding out to Foz do Iguacu, and then to Guaira, both on the Paraguayan border, and will help facilitate the rapidly growing container flows from Asuncion and Cidade del Este, the two biggest cities in Paraguay, to the rest of the world, via Paranagua and TCP. On top of this there is a plan – for a Bi-Oceanic corridor – to connect Paranagua to Paraguay and Bolivia, and then for a trucking connection over the high Andes to a north Chilean port, probably Antofagasta. This will fit in well with China’s Belt and Road Initiative. In terms of dredging TCP has increased its draft from 12.1m to 12.5m in July, and this year hosted its biggest ever vessel, a Yang Ming 12,700TEU capacity, 332 meters long, 48.2 m beam ship – albeit with draft restrictions. The terminal expects to have 13m by the end of this year and 15.5m by 2025, in line with APPA, the local port authority and the Brazilian Navy. On the equipment side TCP deploys eight Ship to Shore Gantry Cranes (six of which are New Panamax) and two Mobile Harbour Cranes.

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

NOVEMBER 2021 | 37

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PORTSTRATEGY INSIGHT FOR PORT EXECUTIVES

TSR INTERMODAL

TSR: POTENTIAL BUT HANDCUFFS Recent times have seen a major uplift in container transport on the Trans-Siberian Railway. There is more to come but as Oleksandr Gavrylyuk explains ‘handcuﬀs’ need to be removed On 1 October 2021, Russian Railways (RZD), the country’s state-run rail monopoly, launched East-West (EW), a transport and logistics terminal at the railway station of Chernyakhovsk in the nation’s Baltic enclave of Kaliningrad. Constructed close to the Russo-Polish border and equipped with a four-track-span gantry crane, the new facility is intended to handle export and import cargoes, as well as to transship transit containers from the Russian (1520mm) to the European (1435mm) gauge railway and vice versa. With its good geographical location, EW will potentially be able to compete with its peers at the Belarusian-Polish border and integrate itself into the New Silk Road (NSR) and other Trans-Siberian Railway (TSR) based corridors, according to Oleg Belozerov, Director General, RZD. “This is one of the most promising directions of cargo transportation. Annual container transit traﬃc through the region has increased by a factor of seven over the past three years. Now, it is going to expand even further,” he comments, pointing to the EW-generated additional capacities. It is planned that the new terminal will initially handle the China-Europe-China transit services (two train-pairs a week) of the United Transport and Logistics Company – Eurasian Railway Alliance (UTLC-ERA) of Russia, Belarus and Kazakhstan, regular container trains from Moscow, as well as car sets and components supplied from the European Union (EU) for the Kaliningrad-based Avtotor assembly factory.

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The only viable course of action in the opinion of market analysts is to keep building TSR capacity Meanwhile, at the other end of the TSR, Russia’s Far Eastern terminals have found themselves unable to cope with the dramatically growing number of container cargoes coming from China. Soaring prices for the traditional transSuez shipping from China to the EU has prompted a boom in overland transcontinental railway deliveries. The rail transportation from the Russian Pacific port of Vladivostok or Nakhodka via the TSR is much cheaper and faster than that through the seven seas, according to Igor Rebelsky, founder and CEO of the VIG Trans forwarding company operating in both Russia and China. As a result, the Russian Pacific harbours are overcrowded with containers, while newly arriving vessels have to wait oﬀshore for weeks to be unloaded. Given that the situation is not going to change in the near future, it is anticipated that the federal authorities will take steps to improve it. Aleksandr Isurin, President of the nation’s leading privately run rail container operator TransContainer (TC), has suggested Moscow should saturate the Trans-Siberian route with new locomotive engines and improve the existing workflow by replacing all the paper documents with electronic ones. Whatever their immediate eﬀect, such measures will only go a limited way towards achieving a real breakthrough. The only way out, in the opinion of Russian market analysts, is to keep increasing the TSR’s capacity.

Last year, the aggregate volume of containers railed through the Eurasian overland route made up 592,000TEU (up 54.2 per cent on 2019), according to Aleksey Grom, Director General, UTLC-ERA. During the first half of the current year, the figure reached 336,600TEU, including 220,100TEU delivered from China to the EU and 116,500TEU in the reverse direction. The 2021 annual volume is estimated at 670,000TEU. Traffic is set to expand further, taking into account the penetration of the container into Russia’s railway services. As of today, RZD’s level of containerisation is pitifully small, around 10 per cent compared with around 50 per cent in the US, 20 per cent all over Europe and 15 per cent in India. The container system, however, is widely seen as the key growth driver of the country’s transport market. Thus, the total volume of containers railed within the national borders rose by 16.5 per cent to 5.8 million TEU last year, as per RZD’s statistical data. In the coming five years, it is expected to increase by about a quarter to 7.2 million TEU, with transit traffic to more than double to 1.7 million TEU. “The pace of containerisation is truly impressive, filling in some quarters the gap in activity left by a move away from coal to container transport. It is containerisation that is contributing to the development of our railway network,” underlines Sergey Mukhin, Vice President, TC. However, the railway approaches to the Russian harbours need to be upgraded, according to him, since they were built to deliver commodities, which have been dominating the country’s exports up to now. Even so, a number of traditional commodity cargoes are seen to have good containerisation potential, in the eyes of local experts. For instance, it is around 10 per cent with a growth potential of 260,000TEU for grain and 70 per cent with 75,000TEU for alumina. Another problem that has to be tackled is RZD’s rate policy favouring freight transportation in covered railcars rather than containers. “If RZD changes its policy to encourage container traffic, the level of containerisation will soar up in within five years from now,” Sergey Mukhin believes.

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

8 Recently inaugurated, the new East West rail terminal in Chernyakhovsk in the Kaliningrad region supports increased TSR activity but more needs to be done system wide

NOVEMBER 2021 | 39

CONTAINER HANDLING OPERATIONS

AUTO’ TWISTLOCKS: BULL RUN? John Bensalhia looks at the issues and potential benefits surrounding the use of fully automated twistlock and pinning solutions...

8 RAM’s fully automated ‘wharf drive-thru pinning station’ oﬀers remote pinning operations away from quay cranes

In theory, full automation in the world of pinning and twistlocks should present a golden opportunity to container handling concerns. In terms of eﬃciency, safety and cost/ labour saving, fully automated pinning and twistlock handling provide the answers. Manual pinning has been a necessary feature of container handling, with around two billion twistlocks handled manually every year. However, investment to optimise container flow becomes sustainable, and cargo handling systems, especially quay cranes, can yield unseen productivity levels if pinning is fully automated. “Automated pinning removes a harsh, risky, and routine task in the container handling process, putting the industry in step with global progress towards better working methods and standards,” says Mani Chellappa, PinSmart Project Manager, RAM Spreaders. “Since the early 2000s, port cranage and other systems have expanded in size and number rapidly to match the increasing size and capacities of mega-vessels, but pinning methods have remained largely unchanged. Manual pinning must be replaced if ports want maximum performance from modern machines.” “Current quay crane hourly performance ranges, on average, between 25-35 moves per hour, a marginal improvement from the 1990’s average of between 25-30 moves per hour. This is in contrast to the 300 per cent increase in the average container vessel size.” Chellappa contends that manual pinning is a direct cause of slowing down operations, taking a minute or more for each container lifting move. Automated pinning, therefore, will naturally speed up operations and allow terminals to reduce operational costs. Insurance costs, he argues, will also be reduced by removing the dangers of manual pinning. “Current and future users of tandem lift operations to increase throughput by

40 | NOVEMBER 2021

handling twin 40’ / 45’ or quad 20’ containers will experience faster cycle times by using a twin cradle PinSmart with four robots altogether reducing the pinning time from the cycle.” THEORY INTO PRACTICE? But in practice, is this automated solution favoured? A paper written by Michael Kugler and Marcus Brandenburg, entitled Analysis of Twistlock Handling Automation in Container Terminals, puts forward the view that automated twistlock handling systems have hardly been implemented. It suggests that automatic twistlock handling has hardly been adapted, with manual application still the main method used in container terminals. Reasons given for this include technological, strategic and economic issues. Kugler and Brandenburg argue that money is required for maintenance, disturbances in port operations, and physical integration of automatic twistlock solutions in existing cranes. The Barriers… …Mixed up twistlocks… Chellappa says that a persistent factor that hinders pinning automation is the range of twistlocks. This is because twistlocks from discharge containers are frequently recycled for fixing in conjunction with a loading container. “When the sequence of moves starts with a loading cycle, twistlocks must be obtained from vessel bins containing diﬀerent, even irrelevant, twistlocks. “Twistlocks get mixed up over time between vessels that berth next to each other. The PinSmart Project Team envisages that this problem will be corrected over time, as ports can incentivise vessel masters’ co-operation to keep an organised inventory based on credible and proven automation.” RAM’s revamped 2019 PinSmart can fix and remove a variety of twistlock types in quick succession with this proven

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

CONTAINER HANDLING OPERATIONS in mock-up trials. “Each individual robot in PinSmart travels to all corners of a 20’ container and is capable of manipulating all present and future twistlock models.” Since then, RAM has developed a fully automated ‘wharf drive-thru pinning station’ for ports that prefer remote pinning operations away from the space under the quay crane. “The drive-thru pinning station is located at both ends of the berth’s crane group and removes congestion caused by pinning activity away from the working cranes. Consisting of pinning and sorting cells, each cell has a set of interchangeable tools and shape recognition technology to detect and install or remove twistlocks once the containerbearing trailer comes to a stop within the driveway.” “The ‘Pinning cell’ robots work off storage cassettes that are filled with the correct type of twistlock by the ‘sorting cell’ robots. A much-reduced stevedoring workforce transfers the cassettes between the storage and pinning cells, and a separate depository for large vessel operations, using forklifts,” explains the company. …Automation, exciting and worrying, and… Another issue is that psychologically, automation tends to simultaneously excite and worry. “This is a problem for any industry willing to adopt new automated systems designed to improve operations and boost profits through productivity,” says Chellappa. “It is indeed a curious anomaly,” he continues, “that in the port industry, which has seen many innovations and technological changes to improve the efficiency of container handling operations, the important task of twistlock handling has not changed since the birth of containerisation in the mid-1950s. The fact remains that there has been a lack of comprehensive automation perpetuating resistance to the idea…” …Job losses The social issue of displacing jobs is another factor. Container lashing and pinning count as dangerous occupations, posing a daily risk of injury to quayside workers. Chellappa says that decision-makers must consider that prime movers in other industries with similar risk levels would be held to account for allowing the continuation of an archaic practice due to social pressure and to the detriment of worker safety. “The initial dislocation of workers is an inevitable price for removing the dangers away from the quayside,” Chellappa states. “History has shown that higher value and different jobs are created to offset those lost beyond the adjustment period.” MORE INTEREST Despite these latter negatives, however, the other side of the argument is that automated techniques in this field are garnering more interest. With respect to recent sales, Chellappa says that several container terminals have shown interest in PinSmart. “This interest,” he elaborates, “will likely increase in the coming months, given worsening port congestion, labour immobility, and shortage. In this dire situation, automated pinning will help terminals increase their throughput, alleviate congestion, and bring down freight costs to a satisfactory level within a year or two of implementation as the environment needs to adapt to the new technology.” OTHER SOLUTIONS Other manufacturers have come up with automated solutions. Container Quick Lock’s self-closing system, for example, comprises two aspects: the adapter (which is welded to the trailer) and the locking system (which is put in

the adapter). Capable of locking containers onto a trailer, the Quick Lock system has been designed to ensure that potential unlocking of a container is impossible, protecting cargo against possible vibrations, dislodging or theft. Quick Lock is designed with the driver’s ease of use in mind. A driver can easily and quickly lock at the press of a button without having to exit the cab during loading/ unloading. Quick locking saves a time span that exceeds 10 minutes for locking and unlocking.

8 The MacGregor C8A fully automatic dual-function twistlock is said to maximise safe operations

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Automated pinning removes a harsh, risky, and routine task in the container handling process A veteran of the automatic twistlock world is the MacGregor C8A fully automatic dual-function twistlock. As an alternative to manual twistlock application, the C8A is designed for improving both safety and performance levels during cargo container handling. In terms of performance, the time rate is reduced from 20 seconds to virtually zero. SAFETY FOCUS Safety is highlighted as a major benefit of automated solutions. From a safety angle, the MacGregor C8A enables stevedores to work from a distance away from heavy equipment or cargo during lifting. Chellappa says that pinning operations in container handling represent a textbook opportunity for automation. “The situation is now more pressing as ports accommodate larger vessels and need to handle more containers in a shorter time, turning around ships faster to compete. Ports are also under pressure to make the wharf a safe environment and secure from unauthorised access. The introduction of available technology such as PinSmart is the definitive holistic solution, especially when tandem lift operations become the new norm in container handling.” Safety is also a defining facet of SEC Bremen’s heavy duty fully automatic twistlock. Its breaking load is doubled at a minimum of 1000 kN, exceeding the highest levels of safety standards. Safe locking is guaranteed against lifting forces during a voyage, and with extra strength in mind, the SEC Bremen automatic twistlock is made from materials such as high tensile cast steel.

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

NOVEMBER 2021 | 41

PORT OF BAR: MONTENGERO

CHINESE FLAG OVER BAR? The port of Bar, Montenegro may just avoid being the second port to fall into a Chinese debt trap – but its not certain yet. Eugene Gerden reports The Port of Bar, Montenegro, faces an uncertain future. Underpinning this uncertainty is a one-billion-dollar loan agreed by Montenegro with China in 2014 for the purpose of building the initial 41km section of the country’s first motorway linking the port of Bar in the south to Serbia in the north. It is, however, no ordinary motorway, because the construction plan incorporates 40 bridges and 90 tunnels across frequently very difficult terrain. Yet as it stands out of the total 170km length only 40km have been built with the project dogged by corruption allegations, construction delays and environmental issues. The first section of the motorway was originally scheduled for completion in 2019, but construction delays and the COVID-19 pandemic are cited as responsible for pushing the deadline back to November 30 this year. More importantly, however, Montenegro is facing serious financial difficulties (primarily associated with the fall in tourist traffic due to the COVID-19 pandemic). This, in turn, raises the key question of, how does the country re-pay the Chinese loan? – leaving aside the issue of how it completes what has become known as the ‘motorway to nowhere’. The take-up of the Chinese loan took place against a background of Montenegro previously looking elsewhere for funding. In this context both French and American feasibility studies highlighted the risks of such an oversized project. The European Investment Bank and the IMF also declared that it was a bad idea. Hence this has made attempts to refinance the debt very difficult.

‘‘

… it has raised the prospect of the port of Bar eﬀectively falling into a Chinese debt trap It has also raised the prospect of the port of Bar eﬀectively falling into a Chinese debt trap, whereby a failure to repay the loan provides China with a gateway to taking over the port of Bar in a similar fashion to what previously occurred with the port of Hambantota in Sri Lanka. Here, the Government of Sri Lanka was unable to repay a US$1.2 billion loan and was compelled to hand over the lion’s share of equity in the port and 15,000 acres surrounding it as part of a 99-year lease. This scenario has been a serious prospect for the port of Bar which is understood to have signed a loan agreement with China with some strange characteristics, including giving up sovereignty over certain areas of land and agreeing to an arbitration process governed by Chinese law. So far, Beijing has agreed to defer repayment of Montenegro’s first tranche of the loan, which was originally due in July, but has now been pushed back to late 2022. Apart from straight refinancing, another idea that has been floated as part of the problem is the takeover of Montenegro’s debt by Serbia, whose landlocked status causes big problems for its economy and for which gaining control over the port of Bar could provide serious benefits. At the eleventh hour, however, it seems that a helping hand will come to Montenegro’s aid in the shape of assistance

42 | NOVEMBER 2021

from the EU. Essentially, Montenegro’s saving grace is that the motorway project represents what amounts to a test case of the EU’s willingness to counter China’s growing influence on the periphery of its territory.

8 The road to a debt trap that has raised concerns over the port of Bar’s position

HELPING HAND After several episodes of the EU turning down the idea of helping Montenegro climb out of this deep financial hole, it seems there is an EU deal in the process of being worked out. This, informed sources emphasise, is strongly premised on countering Chinese influence. China’s presence in the Balkans has grown strongly in recent times, with the country investing billions into the region and raising concerns about financial dependence on Beijing that could serve to muddy the waters regarding the EU’s eastward expansion and Montenegro’s hopes of joining the Community. Hence a strong strategic motivation to remove Montenegro’s potential Chinese debt trap and move away from a scenario such as the Hambantota one. It is also foreseeable that when an EU-backed financing deal is agreed that the use of the funds will be much more closely controlled than has been the case with the Chinese loan. Montenegro is a country with a reputation for corruption as seems to be evidenced by the fact that US$400 million of the Chinese loan was paid out to sub-contractors with a number linked to a senior politician and with the appointment of these parties made without a public procurement process. Similarly, tax breaks, removal of import duties etc. enjoyed by the main Chinese contractor were extended to contractors without any real rationale for doing so but simply providing the opportunity for ‘legitimised corruption.’

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

PRODUCTS & SERVICES DIRECTORY

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

Overland Conveyor Pipe Conveyor Stacker & Reclaimer Shiploader

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

PACECO® CORP. World Headquarters 25503 Whitesell Street Hayward, CA 94545 Tel (510) 264-9288 email@pacecocorp.com www.pacecocorp.com

Specialist for pneumatic ship unloaders and mechanical ship loader. NEUERO follows the MADE IN GERMANY quality tradition. Now with more than100 years of tradition in the manufacture of reliable and high-quality conveyor systems worldwide. Email: neuero@neuero.de Tel: +49 5422 9 50 30 neuero.de/en/

As one of the leading manufacturers of quick connector systems,Stäubli covers connection needs for all types of ﬂuids, gases and electrical power. Tel: +33 4 50 65 61 97 connectors.sales@staubli.com www.staubli.com/en-de/ connectors/

Staubli_Directory Mar 2021.indd 1

Taylor Machine Works, Inc. Taylor Machine Works designs, engineers, and manufactures more than 100 models of industrial lift equipment with lift capacities from ,000-lbs. to 125,000-lbs. YOU CAN DEPEND ON BIG RED! 3690 N Church Avenue Louisville, MS 39339 USA +1 662 773 3421 CONTACT?SALES TAYLORBIGRED COM www.taylorbigred.com

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E LECTRIFICATION SOLUTIONS

14/07/2020 10:56

NEUERO Industrietechnik GmbH

26/05/2021 12:20

Over 60 years supporting Container Terminals in port operations: we create strategic ǁëŒƪėɆëŝĐɆļŝĉƎėëƖėɆƋƎŨǘƢëĈļŒļƢǈɆ ƢķƎŨƪİķɆƖŨŒļĐɆëŝĐɆƎėŒļëĈŒėɆ STS Portainer® and RTG Transtainer® cranes, services & Advanced Port Technologies.

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

Cimbria Directory.indd 1

C ONNECTION SOLUTIONS

27/01/2021 11:29 Telestack Directory June 2021.indd 1

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

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

#WeHaveTonnesToTellYouAbout

C ARGO HANDLING EQUIPMENT

Beumer Directory Jan 2021.indd 1

7EB DELLNERDAMPERS SE

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

Tel: +44 (0)2882 251100 Email: sales@telestack.com www.telestack.comw

Tel.: +49 2521 240 E-mail: info@beumer.com Web: www.beumer.com

G-SERIES

Dellner Dampers is an innovative Swedish company that supplies solutions to mitigate vibrations and absorb kinetic energy. Standard and customised buffers and dampers for port side applications such as cranes, spreaders and more. All designed and produced in Sweden. Tel: +46-(0)157-45 43 40 Email: info@dellnerdampers.se

D REDGING

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.

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

C OMPONENTS

The BEUMER Group is an international leader in the manufacture of bulk material handling systems:

LASE Industrielle Lasertechnik GmbH

C RANE COMPONENTS

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.

C ARGO HANDLING SYSTEMS

For more than a century, Bedeschi is providing effective and reliable solutions in a wide variety of industries (bulk handling, marine logistics and mining), capitalizing on synergies and cross competences. Via Praimbole 38, 35010 Limena (PD) – Italy Tel: : +39 049 7663100 Fax: +39 049 8848006 Email: sales@bedeschi.com Web: www.bedeschi.com

B ULK HANDLING

Bedeschi S.p.A

25/02/2021 15:49

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

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

NOVEMBER 2021 | 43

PRODUCTS & SERVICES DIRECTORY

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

H ANDLING EQUIPMENT

G RABS

Fogmaker Directory.indd 1

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 ID June 2021.indd 1

Künz GmbH Founded in 1932, Künz is now the market leader in intermodal rail-mounted gantry cranes in Europe and North America, offering innovative and efficient solutions for container handling in intermodal operation and automated stacking cranes for port and railyard operations. Gerbestr. 15, 6971 Hard, Austria T: +43 5574 6883 0 sales@kuenz.com www.kuenz.com

Phone : +919727738429 E-mail : Info@irmome.com Website : www.irmome.com

RuggON is here to offer high quality and future-proof one-stop rugged computing solutions, ranging from rugged vehicle-mount computers, mobile tablets and data terminals, to similarly durable data-capture accessories, for a safer and more efﬁcient automated port and terminal operations from quay, yard, gate, and all the way to warehouses.

+44 1329 825335 www.portstrategy.com

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

Contact Tim Hills or Hannah Bolland

Port Strategy Directory

20/01/2021 10:50

To advertise in the

Port Strategy Directory

To advertise in the

4F., No. 298, Yangguang St., NeiHu Dist., Taipei, Taiwan +886-2-8797-1778

RuggON_Directory_40x58.indd 1

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

With products ranging from Marine fenders, Offshore installation aids to products for the Foundation of offshore wind.

19/05/2021 14:16

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

IRMOME is the world’s most preferred offshore and marine rubber engineering products manufacturing company.

IRM Directory July-Aug 2021.indd 1 30/06/2021 14:24

01/02/2021 13:12

MRS Greifer GmbH

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

MARINE FENDERS

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.

Visy systems reduce VISY Oy expenses, optimize safety & security, and VISY takes pride solving via increase throughputin capacity operational problems,Our specialising process automation. singlein gate automation and system access platform gate operating control solutions in ports and and OCR solutions manage all terminals. Their solutions cargo, assets & personnel streamline processes resulting movements via quay, rail or road in saving money and to keep operations moving. increasing productivity.

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

Port Strategy Directory

S HIP UPLOADERS

I NSURANCE

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

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

Contact Tim Hills or Hannah Bolland

With thousands of installations worldwide, our machines handle your raw materials from forests, ﬁelds, quarries and mines, maintaining critical supply lines for manufacturers, mills, power plants and ports.

+44 1329 825335 www.portstrategy.com

www.bruks-siwertell.com sales@siwertell.com service@siwertell.com

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

44 | NOVEMBER 2021

TT Club Directory March 2021.indd 1

01/03/2021 For14:40 the

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

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

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

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

T ERMINAL OPERATIONS SYSTEMS

S IDELIFTER/SIDELOADER

Hammar Maskin AB

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

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

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

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POSTSCRIPT DO IT THE WwN WAY

‘‘

WwN is an integrated process which involves working to identify and exploit win-win solutions which respect nature

46 | NOVEMBER 2021

PIANC’S Working with Nature (WwN) approach to major dredging projects has much to recommend it. It is proven to work well in conjunction with river or estuary ports, the port of Seville being the latest recipient of the prestigious Certificate of Recognition that follows successful project implementation.. River or estuary-based ports arguably face greater challenges at an environmental level than their coastal-based counterparts. Inevitably, gaining approvals for capital dredging and/or setting up maintenance dredging procedures for the river or estuary approaches to a port is a more and more demanding process due to a variety of factors not the least of which, in the developed world, are today’s growing labyrinth of environmental laws and the increasing influence of environmental pressure groups. In the past, for example, we have seen this new reality in conjunction with plans to dredge the River Elbe which provides access to the port of Hamburg. Port interests wanted to undertake another dredging of the River Elbe to facilitate access for the latest generation of container vessels but green pressure groups lodged a legal complaint against the plans, arguing the environmental impact of dumping mud and sand on fragile coastal wetlands would be devastating. The net result of this, back in 2017, was that a court ruled that the proposed dredging plans must be improved before a stop order on the work could be lifted. In eﬀect, this meant a significant delay. The work to widen and deepen the 72 mile long Elbe fairway eventually got underway in mid-2019 with the Belgium-based DEME Group awarded a EUR 238 million deepening contract in April 2019. DEME’s remit involved the dredging, transportation and relocation of approximately 32 million cubic meters of material from the riverbed. While significant milestones have been achieved – for example earlier this year the port of Hamburg released a statement confirming that the Elbe waterway had been widened to 385m along the eight kilometre passage between Wedel and Blankenese thus enabling seagoing ships with a combined width of 104m, instead of the former 90m limit, to pass each other safely. At this time, it was also reported that “Pending the final completion of fairway adjustment on the Lower and Outer Elbe, some outstanding works connected with the deepening remain to be performed. These include removal of obstacles, profiling, soundings, etc and nature conservation measures.” The delay to the implementation of the dredging plans in Hamburg had consequences. One immediate impact, following the rejection of the initial dredging plans by Germany’s highest administrative court, was that shares in the port’s leading terminal operator HHLA fell by over 10 per cent. There was also the reality that the port of Hamburg was falling behind its peers in its ability to serve the world’s leading container lines and consortia. The project’s goal - since implemented -

was to permit ocean-going vessels with a draft of 13.5 metres, or 14.5 metres depending on tide to access/leave the port. This, in turn, would enable container vessels to carry approximately 1800TEU more per call. This benefit was in eﬀect removed for an extended period. GETTING IT RIGHT It is very clear that well laid plans to implement comprehensive dredging works are essential especially for estuary/river ports. Further, the failure of such plans can have significant negative consequences not the least of which is economic damage. So, is there a template for getting it right? Not exactly, as is usually the case with port projects there is always a bespoke element but despite this it is true to say that good guidance and a collaborative approach facilitating positive engagement with environmental interests is available through the Working with Nature (WwN) discipline, established by the World Association for Waterborne Transport Infrastructure (PIANC). This approach, which is literally certifiable, has been in existence for some time but is highlighted here as it is still an unknown entity to many port interests in both the developed and developing world. It has many beneficial features which have been proven to be extremely useful to ports in the planning and implementation of dredging works, and ultimately achieving projects with high standards of sustainability. Certainly, this has been the experience for ports such as Le Havre, France, Antwerp, Belgium and most recently Seville Spain. As described by PIANC, “WwN is an integrated process which involves working to identify and exploit win-win solutions which respect nature and are acceptable to both project proponents and environmental stakeholders. It is,” PIANC states, “a philosophy which needs to be applied from the very early phases in a development project when flexibility is still possible. “Instead of developing a project proposal and then assessing its environmental impacts, WwN advocates understanding the environment and engaging with stakeholders from the start in order to identify win-win options and to define project proposals that benefit both navigation and the environment.” A Certificate of Recognition is made available by PIANC for projects at any stage of implementation that are consistent with the WwN philosophy. The port of Seville’s recent award of such a Certificate was for the creation of new wetlands for waterfowl in the Guadalquivir estuary as part of works designed to achieve the improvement of navigation. Under this initiative the Port Authority of Seville and the Spanish National Research Council recorded more than 50 species of waterfowl and combined the creation of confined disposal sites for dredging spoil with the creation of new habitats that “favour the diversity of waterfowl in the estuary.” A win: win – WwN has much to recommend it!

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