Port Strategy September 2020

SEPTEMBER 2020 VOL 1020 ISSUE 7

portstrategy.com

ECSA to USA Box Trade Resiliant | More Digitalisation Wanted | Port Power Opportunity

WHAT LIES AHEAD FOR THE MED? BEIRUT BLAST: THE INQUEST EMISSION REDUCTION STRATEGY

PORTSTRATEGY INSIGHT FOR PORT EXECUTIVES

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

VIEWPOINT MIKE MUNDY

“Something to reflect on…”

The pursuit of autonomy in port and terminal operations has proven time and time again to have delivered a successful outcome. While there are always instincts of self or collective preservation in play when port management comes to review their strategic options experience shows fortune favours the brave

“Autonomy”, officially defined as “the right or condition of self-government” is today a widespread feature of port operations around the globe. In its purest form it has entailed whole port privatisation and then scaling down from this the full corporatisation of port management (which can be defined as the ability to act without reference to government other than in conjunction with statutory requirements) and below this semi-corporatisation where there is still referral to government on key issues such as port pricing.

Experience tells us that autonomy has brought many tangible benefits to the international ports sector, not the least of which is private sector funding through the implementation of Public Private Partnership (PPP) schemes usually in conjunction with terminal assets. A less tangible benefit but an equally important one is the management culture that comes with being master of your own destiny. There is nothing like standing on your own two feet to develop a more proactive and responsible culture to getting things done in the right way.

It is a salutary lesson to reflect on this when looking at PS’s front cover this month, highlighting the devastating impact of the explosion of 2750 tonnes of ammonium nitrate – a highly combustible material used to make fertiliser and bombs – that was stored at Beirut Port in unsuitable climatic conditions, with no expert oversight, for more than six years. It arrived in the port by default, as a result of a vessel detention and there followed what is now an almost unbelievable chain of toing and froing between Lebanese government officials as to what to do with this inherently dangerous cargo but without any resolution as to who should take responsibility for selling or destroying it. In the end this dithering proved fatal with the ultimate cost estimated at over 200 dead, many more people missing and thousands injured!

It is reasonable to suggest that under a more autonomous port regime that that such a chain of events would never have been allowed to happen. In effect, it is the lack of a clear line of responsibility and the general malaise that goes with this that has undoubtedly contributed to this catastrophic situation. Under a more commercial culture, there would be clearer lines of responsibility, stronger accountability, powers of action and better decision making.

In a more general sense, this is something to reflect on for ports under public ownership and operation – typically, for example, when considering making the transition from a semi-corporatized management body to full corporatization or evaluating whether to operate terminals under PPP arrangements.

You have to have vision to look beyond your experience to-date and to properly evaluate the benefits of taking a more autonomous route.

Prevailing government politics should not come into the equation (socialist regimes who have guaranteed no job losses for example) or a general resistance to change for reasons of self or collective preservation.

Real management is about looking beyond these self-imposed limiting factors and taking the best path to realise tangible benefits – cost effective port and terminal operation, safe operations and all those good things that have seen enlightened port management move on a huge scale to adopt a more private sector led management culture.

There are numerous success stories that underpin these assumptions just as there are instances of costly mistakes by those that have not participated, Beirut being a prime example.

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

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

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SEPTEMBER 2020 | 3

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CONTENTS SEPTEMBER 2020 VOL 1020 ISSUE 7

portstrategy.com

ECSA to USA Box Trade Resiliant | More Digitalisation Wanted | Port Power Opportunity

NEWS 16 Chinese influence Grows in Greece

16 Roerdam invests Accelerating the spend

SEPTEMBER 2020 FEATURE ARTICLES 19 What Lies Ahead for the Med? Transshipment challenges

17 Upbeat France

Ports positive despite troubles

WHAT LIES AHEAD FOR THE MED? BEIRUT BLAST: THE INQUEST EMISSION REDUCTION STRATEGY

On the cover There are many lessons to be learnt from the devasting Beirut Port explosion. One interesting theory is that under a port operating with greater autonomy, giving stronger overall management, that the patchwork of complacency and mismanagement that took place leading to the explosion would not have occurred – see Viewpoint Picture Source: Steelguru.com

17 JNPT cranes collapse Storms destroys cranes

19 Santos profitability Storms destroys cranes

19 New lift trucks With DREAM cab

11 Cambodia’s step-up Sihanoukville ship target

11 Go in Greece

More privatisation

13 Four-way deal

Bintulu partnership

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13 Green Valencia Big technical plans

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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

22 Beirut Killer Blast Mismanagement and complacency

25 New Singapore The rise of Tuas

26 A Flipping Trade

ECSA to USA resiliant

28 Call for Action

More digitalisation wanted

31 The Optimum Path Optimising terminal moves

32 Emission Reduction Building strategy

34 Evolving Trailers Design Innovation

36 Tread Carefully

REGULARS 14 Pandemic Budgeting Slower recovery focus

14 Nouakcho Pain Government criticism

15 Stressing Importance Ports tick the essential box

Tyre designs advancing

39 Port Energy Opportunity

Energy power brokers

40 Cruise: COVID Headwinds

Struggles continue

46 Postscript

Transnet: Reality Check

15 UK Freeports

Questions asked

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

SEPTEMBER 2020 | 5

NEWS REVIEW

GROWING CHINESE INFLUENCE IN GREECE In 2016, COSCO won a 35-year concession to upgrade and operate Piraeus, the largest volume container port in Greece.

In 2106 the state-supported Chinese company bought a 51 per cent stake in the port.

Now, Thessaloniki Port Authority has signed a co-operation agreement with China Merchants Port Holdings (CMPH) to use the Chinese company’s container operating system. Plus, CMPH has agreed to help promote Thessaloniki as a gateway port for Chinese access into Europe.

This means that both of China’s government-backed port companies are directly involved with the largest two container ports in Greece, albeit that Thessaloniki is 67 per cent owned

by Terminal Link, Deutsche Invest Equity Partners and Belterra (in a 34-year concession). Interestingly, Terminal Link’s interests in Thessaloniki was not included in the recent investment by CMPH into the CMA CGM portfolio However, the interest from China in Thessaloniki is another dot being joined in Greece and follows 16 trade deals being signed between the two countries in November 2019.

The growing closeness was seen in March 2020 when significant volumes of medical equipment arrived in Greece (especially Athens) to help combat COVID-19.

Then there is the “Golden Visa” initiative, which is officially used to

BRIEFS PSA takes SECH & Pra’ PSA Investments (PSA) – a fully owned subsidiary of PSA International Pte Ltd - and Gruppo Investimenti Portuali (GIP) have approval from the Genoa Port Authority for the proposed restructuring of their Genoa based operations.

PSA will become the majority shareholder and obtain management control of both PSA Genova Pra’ and SECH. PSA and GIP have been operating and investing in the port for over 25 years.

6 | SEPTEMBER 2020

8 What is next for China’s involvement in Greece?

help leverage investment in Greece. The programme was launched in July 2013 and it grants a five-year residency visa

in return for an investment in real estate. It does not require a minimum stay and children up to 21 years are included in the

family applications. The visa can be renewed every five years without any minimum stay condition and citizenship can be granted after seven years of residency only.

According to statistics from the Greek Ministry of Migration and Asylum, a total of 86 per cent of Golden Visas issued in the year 2019 was to Chinese nationals – a rise on the figure of 40 per cent in 2017. This visa policy has created a convenient way to acquire ‘citizenship by investment’ and, consequently, EU residency and citizenship, enabling free movement within the EU.

ROTTERDAM TO ACCELERATE INVESTMENTS The Port of Rotterdam Authority reported a nine percent drop in volumes for the first half of 2020, with the strongest declines in dry bulk cargoes. Based on the current economic position, the authority is also expecting volumes to remain unchanged for the second half of the year meaning that 2020 volumes will be down significantly compared to 2019.

However, the situation is not going to slow down the port’s planned investments, as Allard Castelein, CEO of the Port of Rotterdam Authority confirmed.

“The Port Authority has conducted a review to determine which public-private investment projects can be accelerated. In that way, the government and the

port of Rotterdam can team up to further the sustainability of the economy, while giving it a kick-start at the same time.”

The port authority is also highlighting a pro-active involvement in a broad range of energy and digitisation projects.

These include establishing hing an inland shipping system m with exchangeable batteriess and development for the construction onstruction of a green hydrogen plant ant and a hydrogen network in the he port.

Despite the pending impact of the COVID-19 pandemic, c, for the first half of 2020 gross investments nvestments in Rotterdam totaled more ore than $150 million. The authority rity is

Napier pandemic dip

Elbe Green berthing

Napier Port has experienced a year-on-year reduction of 17.4 per cent to 74,000 TEU for containers and a 24.2 per cent fall to 600,000 tonnes in bulk cargo, during the quarter to June 2020. With all but Government-deemed “essential” cargo reducing sharply in April, Napier Port chief executive Todd Dawson says his business has experienced the full impact of COVID-19 during the quarter, but a gradual increase in volumes has been noted as the lockdown eased.

expecting to maintain investment for the full year of 2020 at a level similar to 2019, which means it is reasonable to expect around $400 million to be spent.

The port authority is still predicting a slow and cautious recovery in the second half of 2020.

8 Allard Castelein, CEO, y, wants Rotterdam Port Authority, ment to accelerate port investment

A newly built berthing area in the Elbe River is powered by nineteen solar panels.

The ‘solar systems’ provide power to capstans, as well as working lights in order to guarantee safe berthing.

The dolphins are equipped with triple and quadruple 125 and 150-ton quick release hooks. The Port of Hamburg is the second major port to opt for this sustainable solution, after the Port of Rotterdam.

Wind Farm auction on The US Federal Approval Process for auctions of offshore wind sites could commence in 2021.

Three prospective locations are Morro Bay, Diablo Canyon and Humbolt Bay. The process will be overseen by the Bureau of Ocean Energy Management (BOEM).

Between the three possible sites, a total of 21 different companies have applied for leases. However, the US Navy and US Defense Department are concerned of possible interference with radar and low altitude flights.

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

NEWS REVIEW

BRIEFS Evergreen’s $300m for fleet growth

Taiwanese liner shipping company, Evergreen Marine, has announced a plan to issue US$300m of overseas bonds. It will be the company’s first ever overseas bond issue and the proceeds are going to be used for the acquisition and chartering of ships, as well as overseas bunker fuel payments. Evergreen said the funds raised from the bond process will help the company keep its long-term competitiveness.

UPBEAT MOOD IN FRANCE DESPITE DIFFICULTIES Le Havre, the largest volume container port in France, saw throughput fall by 29 per cent in the first half of 2020. By comparison, Rotterdam’s fall was seven per cent and Antwerp saw a 0.4 per cent increase.

A similar position in the Mediterranean too, with Marseille Fos enduring a 17 per cent fall, compared to 11 per cent drop for close rival Genoa.

A number of strikes in the ports has occurred, linked to the country’s broader unrest against pension reforms, with labour unrest in December 2019 and January 2020 in Marseille and Le Havre generating concerns and misgivings about operational reliability.

These two ports have responded to the weaker demand by offering rebates, waiving penalty payments for parked vessels or cargo and postponing property charges. Marseille Fos is planning to reduce port tariffs by as much as 50 per cent from September, while Le Havre is offering a two-year discount for new shipping business.

Le Havre remains committed to its five-year, €500 million spending plan for improvements, which includes improving links with rail and inland waterways.

“I’d like to see the glass as half-full,” said Laurent Foloppe, commercial director of the Le

Havre port authority. He adds: “A complicated start to the year, but we have a lot of qualities, and our clients know it. There is an economic benefit to going via French ports.”

Likewise, Marseille Fos is also continuing with its €57 million investment in 2020, including capacity expansion at container terminals and improving railway connections. This is despite what

8 Port of Marseille Fos, like Le Havre, investing in 2020, regardless of COVID-19 and strikes

Herve Martel, CEO of the Port of Marseille Fos predicts will be a “significant” sales decline in 2020.

However, he is also upbeat and looking forward, not back. “Forget this disastrous semester, between the strikes and the COVID-19 crisis, and look forward.”

Cranes Collapse at JNPT

Geraldton Investment

The Western Australian Government is to pour A$11.6 million into Geraldton Port to seek increased exports of mineral sands and concentrates. Wharf 4 will be strengthened as it is the port’s primary export wharf for mineral sands, talc and concentrates, which amounted to 1.2 million tonnes in 2018-19. The investment is seen as extending the design service life of the structure by another 25 years.

NZ Debut for Tideworks

8 Strong winds and heavy rains caused three ship-to-shore cranes to collapse at Jawaharlal Nehru Port (JNPT), India. Fortunately, there were no ships berthed at the quayside when it occurred. The port has since confirmed that the other six cranes did not appear to be damaged.

On average, four ships per week call to the location where the damaged cranes are based, but the port has said it does not expect the situation to impact operations due to rescheduling of vessels.

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

Seattle (United States)headquartered terminal operating system solutions provider Tideworks Technology has made its first entrance in the New Zealand and Oceania marketplace, with a deployment at Ports of Auckland (PoAL).

Since implementation and go-live in June 2020, the terminal has reportedly automated manual processes and improved operational efficiencies through elimination of errors experienced with its previous system.

SEPTEMBER 2020 | 7

NEWS REVIEW The Santos Port Authority (SPA) made an operating profit of Reais 163.6 million (US$30.87 million) during the first quarter of this year, up 9.9% over the same period of 2019.

The authority’s intense bid to reduce costs and increase revenues is working based on net revenue of Reais246.3million during Q1 2020, an increase of 4.5 per cent on the Reais239 million of Q1 2019.

In-keeping with the cost-cutting regime at the SPA, implemented by outgoing president Casemiro Tercio Carvalho and incoming CEO Fernando Henrique Passos Biral (previously the vice president and Chief Financial Officer at the SPA), administrative expenses have also improved. They show a 7.6% decrease, to Reais45.5 million, due to the various actions implemented by SPA to rationalise its expenses, mainly through re-negotiations and revisions of contracts with third parties. As a result, expenses now represents just 18.5 per cent of net revenue in the first quarter, compared to the 20.9 per cent posted for the same period in 2019.

“We are making the SPA more efficient all the time and making it ready for our eventual move into the private sector,” Biral told Port Strategy.

The SPA is working hard to reduce its workforce numbers by offering early retirement to some older employees – over 55 – and extending early retirement to some employees suffering from chronic illnesses, that might make them vulnerable to COVID-19.

“The good first quarter reflects the efforts to improve the operational efficiency of the Port

SANTOS ON ROAD TO PROFITABILITY

Chinese Port Jam

Tough for Cosco Ports

Intensive testing of meat, seafood and other food products is impacting customs clearance times and raising the possibility of congestion and delays in Chinese ports.

The normal process is three days but reports of 10 days have arisen. Stringent testing has commenced after Chinese authorities claimed an imported salmon could be responsible for Beijing’s outbreak of COVID-19 in June. The process could curb sales of meat to China.

of Santos and strengthens the Dock Company’s position in facing the impact expected for the rest of this year. In addition to the uncertainties arising from the COVID-19 pandemic, we will have important events this year that we did not have in 2019, such as dredging expenses,” said SPA Director of Administration and Finance, Marcus Mingoni.

8 Santos: Targeting efficiencies for privatisation

Taylor Machine Works, Inc. has confirmed the release of its new XH-650L and the XH-700L Lift Trucks. “These two new models retain full rated capacity when equipped with side shift carriage and paired with standard spec forks. Combined with the new all steel Taylor DREAM cab, these two heavy capacity lift

NEW LIFT TRUCKS RELEASED trucks offer uncompromised durability,” said Hal Nowell, Director of Sales.

The XH-650L and XH-700L are powered by a 250-hp Cummins QSL9 Tier 4 Final turbocharged diesel engine. This robust and reliable power plant brings

low-end torque but now benefits from a range of structurally enhanced Ultra-View XD Masts to cover lifting applications found at industrial and port locations.

The XH-650L and XH-700L are also equipped with heavy-duty planetary axles, wet disc brakes, multi-speed automatic powershift transmissions and a very durable steer axle, to help ensure durability and long-term reliability.

The new trucks, like all Taylor products, are supported by Sudden Service, Inc. and specially trained personnel, with direct factory store locations across the United States and abroad. The Taylor XH-650L and the XH-700L Lift Trucks are additions to a robust line up of over 100-models of material handling equipment.

8 New XH650L lifting truck

BRIEFS For the January to June 2020 period, container terminals in which Cosco Shipping Ports is involved saw a drop of 4.3 per cent, to 47.3 million TEU, compared to H1 2019. Facilities that comprise the Chinese portfolio, equivalent to 71 per cent of the group’s total activity, saw a bigger drop of 5.6 per cent, to 33.7 million TEU, over the same comparable six-month period. The decline at nonChinese assets was only down by 1.1 per cent.

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

Victoria Ports debate The future of ports in the Australian state of Victoria is being debated through the release of a discussion paper by the state government.

Melissa Horne, Ports and Freight Minister, says there has not been a comprehensive review of Victoria’s ports since 2002, during which time there have been significant changes, including the lease of Melbourne port. Victoria’s freight volumes are expected to triple over the next 30 years.

DPW Down in H1 2020 DP World handled container throughput of 33.9 million TEU across its global container terminal portfolio in the first half of 2020.

The total represents a decrease of 5.3 per cent year-on-year. The company’s flagship operation at Jebel Ali handled a total of 6.7 million TEU in the January to end of June 2020 period, reflecting a decline of 6.8 per cent compared to the first half of 2019.

SEPTEMBER 2020 | 9

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NEWS REVIEW

SIHANOUKVILLE STEP-UP

BRIEFS Go for Greek Privatisation

The latest release of ports for privatisation in Greece has finally been undertaken. The Hellenic Republic Asset Development Fund (HRADF) is the agency responsible for privatising Greek stateowned assets and it has now issued three separate international public tenders to cover the development of the ports of Alexandroupolis, Igoumenitsa and Kavala.

Westport Harbour Rejuvenation

Cambodia is to build a deep-sea terminal at Sihanoukville spread over three phases as it prepares for rising container volumes.

Construction of Phase 1 of the terminal is scheduled to start soon using designs already completed, Thay Rithy, Deputy Director General of Sihanoukville Autonomous Port, told the government controlled AKP news agency.

“Now we have entered the stage of selecting builders. The construction will begin in 2021 and is scheduled to be completed by 2024,” he said. The first phase

of the deep-water port terminal will be built with a loan from Japan of US$209 million.

The terminal will be 350m long and have with a water depth of 14.5m, allowing it to handle container vessels needing a draft of 13m and medium-sized ships with a capacity of 5,000 TEU – a significant step up for Cambodia.

“At present, the ships entering and leaving here are small vessels, but to make the port a gateway of the country’s development and an independent economic gateway that connects Cambodia to other

8 Sihanoukville Autonomous Port is planning a “step-up” in ship sizes

countries, leaders of line ministry and port are thinking of consecutive development plans,” he said.

Studies for Phase II and Phase III have been made and the port is seeking funds from the ministry and development partners for work scheduled to begin in 2027 or 2028, Thay Rithy said.

The plan is for the terminal to be expanded to 410m long and 16m deep for Phase II and then 440m long with 17.5m for Phase III.

CLEAR VISUALISATION FROM TGIBOX TGI Maritime Software (TGIMS) has launched an innovative new feature on its TGIBox - realtime visualisation of container handling equipment activity on a tablet display.

This latest offering enables what the company calls “real time geolocalisation” of container handling for equipment on a maritime terminal. This means optimising container handling equipment in use with the known locations of containers to deliver the most effective performance for a particular handling function and overall.

The new feature of TGIBox has

been developed in conjunction with SOMACOM to generate real-time visualisation. Use of the tablet ensures the equipment operator gains a clearer readability of positioning in the yard, which is especially valuable if working at night or during bad weather.

Practical operating benefits include the lock/unlock phase of the handling process quickly and clearly shown directly on the screen, while a real-time alert is raised to the driver if the container is overweight.

While the availability of information to the driver in charge

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

of handling a container is not a new concept and has been in use for some time, TGIBox works in a logical process that helps to optimise the efficient path of the mobile terminal equipment and builds towards better productivity.

The product delivers clear and precise information using rugged and robust equipment, that can withstand the rigours of continuous use in a busy container terminal, while ultimately helping to improve performance, reduce costs and minimise risk/enhance safety at all times.

Westport Harbour is targeting commercial cargo shipping opportunities, following receipt of a NZ$7 million Provincial Growth Fund (PGF) commitment from the New Zealand Government. The PGF endorses the project’s business case, which includes retaining the purpose-built dredge Kawatiri and investing in necessary decking, fencing and other “fit-for-purpose” facilities to complement the existing concrete wharf and to attract new bulk trades. Discussions are underway with West Coast Bulk Logistics over a new mineral sands exporting business.

San Pedro Truck Charge Hold

The two San Pedro ports in Southern California have delayed the US$10 per TEU surcharge aimed at helping the transition of the drayage fleet to 100 per cent zero emission trucks. The fee was due to be introduced in the Fall (Autumn) of 2020 but has now been postponed until “some time in the new year” due to ongoing effects of the COVID-19 pandemic and US-China trade issues.

SEPTEMBER 2020 | 11

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NEWS REVIEW

FOUR-WAY DEAL AT BINTULU

BRIEFS Townsville Rail Incentive

A four-way partnership has been set up to develop Malaysia’s Bintulu Port as a Biohub Port.

The four signatories to the Memorandum of Understanding are Bintulu Port Holdings Bhd (BPHB), the Port of Rotterdam along with AIM, the innovation agency of the Malaysian government and local property developer Regal Lands, The move is part of an ambitious plan led by the Malaysian government to develop the Eastern provinces of Sabah and Sarawak.

“The cooperation considers the development of a Biohub Industrial Port and Industrial

Estate in Sarawak, Malaysia. In first instance the project will focus on studying the suitable location for the development of the Biohub project in close cooperation with Bintulu Port Holdings Berhad,” the four parties said in a joint statement.

Officials from the four companies were contacted but did not elaborate further, only saying that planning is in its early stages and the COVID-19 pandemic has disrupted plans for site visits.

Biomass, organic matter used to generate energy, is a developing technology with Sarawak, Bintulu’s home province considered

abundant in product sources.

Bintulu Port is “enthusiastic” for business growth in this Biohub Project, according to Datuk Mohammad Medan Abdullah, Chief Executive Officer, BPHB Group, “The move to embark on this project is also in line with our Bintulu Port Group Smart Digital Green Port (SDGP) Blueprint initiative,” he said.

“With this cooperation, we foresee greater achievements within the aspirations of the SDGP Blueprint for the Port to transform its operations, energy efficiency, management and organisation and its approach to the environment,” he added.

GREEN VALENCIA’S TECHNICAL PLAN Valencia’s new container terminal, part of its northern expansion scheme, is targeting the largest container ships in service, but will be green. The new fourth container terminal covers an area of 1,382,000m², has a total quay of 1,970m, with the draft of 20m at the berth and in the basin, supported by an access channel 22.5m deep.

Annual capacity of the Northern Terminal will be 5 million TEU. The project is adopting strong environmentally-friendly features, such as the use of shoreside electrical power to support ships, energy supply from renewable sources and extensive use of electrically-powered cargo handling equipment. The net effect is expected to be the near elimination of terminal generated CO2 emissions and similar plans are in place for the new cruise/ ferry terminal complex.

These developments are part

of five key aims being developed by the port as part of its 2030 Strategic Plan: 5 New business opportunities and technological development 5 Energy transition, decarbonisation and fight against climate change 5 Digital transformation 5 Innovation 5 Port-City relationship The Strategic Plan also considers the development of new business and logistic development opportunities such as the promotion of the railway, the modal integration and the integration with the TransEuropean Transport Networks or the promotion of logistic areas.

Within the framework of energy transition, decarbonisation and the fight against climate change, the new Plan is aligned with 2030 objectives of zero emissions.

Another of the objectives of the new Strategic Plan is the firm

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commitment to the Digital Transformation to promote new digital business models and connectivity and to position the port as ValenciaSmartPort.

These projects are pushing ahead, despite the growing impact of the COVID-19 pandemic. Valencia remains a key gateway of import/export activity and barometer for the Spanish economy. The January to end of May 2020 period confirmed a fall of 10.0 per cent for loaded exported containers, a 9.9 per cent decline for incoming loaded units and empty boxes down by more than 15.4 per cent over the same period for 2019.

These results are not surprising but are not slowing down the port’s future plans. There is a clear focus for Valencia to ensure it is one of the first ports to define its strategy in the post-COVID-19 era, including action in health emergency situations.

Queensland Transport Minister Mark Bailey said A$20 million has been obtained from the state government’s incentive scheme to encourage freight operators and the resource industry to use the rail line, connecting the mineral-rich province to Townsville Port. He said Queensland’s North West Mineral Province contains about 75 per cent of the state’s base metal and minerals, including copper, lead, zinc, silver, gold and phosphate deposits.

Major Boost for Whanganui

A NZ$26.75 million Provincial Growth Fund (PGF) investment in Whanganui Port is expected to deliver significant benefits for coastal shipping and all commercial interests.

Key spending includes a NZ$12.5 million investment in port infrastructure and a NZ$7.5 million grant for a lower river infrastructure project. Doug Smith, Manager, Coastal Bulk Shipping Company, said the spending will “keep the port operational.”

PD Freeports Reply PD Ports has submitted its response to the UK Government’s consultation on Freeports by underlining the huge investment and jobs boost that a Freeport located on the River Tees can deliver for the local and regional economy. The operator added that an innovative and ambitious Freeport will help the Tees Valley capitalise on its leading role as a chemicals and manufacturing centre, increase the potential for more inward investment and create jobs to add to the 32,000 already identified.

SEPTEMBER 2020 | 13

THEECONOMIST BEN HACKETT

BUDGET PLANNING DURING A PANDEMIC Planning for a 12-18 month period has been difficult during the past few years as globalization has come under pressure and the Trumpian trade wars with friends and foe alike are creating enormous uncertainties. Now with the COVID-19 pandemic here and no end in sight it is something of a nightmare.

Economists have reverted back to the alphabet projections of the Great Recession of 2008-9.

V, L and W shapes to the recovery were in common use.

Today, the overly optimistic crowd put faith in the V shape – a sharp collapse followed by sharp return to growth. The pessimists lean towards the W which reflects the collapse of economic activity followed by stimulus induced recovery and a subsequent 2nd wave of the pandemic and then recovery. The L crowd are the super pessimists who see a new norm with a slow recovery some years out. Then

8 Which letter will the economic recovery take?

there is the J curve which reflects the collapse, a hesitant recovery followed by a new norm of economic activity a couple of years out by 2022 that brings sustained growth.

I tend to go with the J crowd as the current situation of yo-yo economic fundamentals such as retail sales, industrial production and inventory building are not

providing proof of sustained growth as unemployment rises as various international furlough schemes come to an end and consumer uncertainty is resulting in rising levels of savings. The travel and service industries are worst hit as working from home is the new norm leaving city centres empty.

Shipping, and consequently

ports, are enjoying some growth in activities but this appears to be somewhat of a false hope not fully supported by a strong demand for goods. Carriers are having a surprisingly good financial year despite the decline in cargoes. I suspect that this is due to significant savings in fuel costs and strict management of capacity as the three alliances exert their new found strength to raise freight rates while avoiding market share battles of days gone by. New building orders are at an historic low as well.

Meanwhile some port expansion plans are being scaled back as volumes decline.

In light of these events it appears that the safest planning process should avoid both the optimistic and pessimistic scenarios being painted and instead focus on a slower recovery.

THESTRATEGIST MIKE MUNDY

NOUAKCHOTT PRIVATE DEAL PAIN The saga at the port of Nouakchott, Mauritania, continues, underlining the point made in the last of issue of PS that negotiated port deals, as opposed to the letting of terminals via public tender, are inherently risky and do little for the public good.

The Parliamentary Investigation Committee (CEP) established by the current Government of Mauritania to look into the economic management of the country under the former Mohamed Ould Abel Aziz regime has recently published a provisional report that recommends the PPP agreement privately negotiated with Arise, an entity jointly held by Olam International and African Finance Corp (AFC), be renegotiated or as

14 | SEPTEMBER 2020

an alternative to this the government should withdraw from the agreement.

Arise following a reorganisation now has three arms: Arise IIP, under which sits the Nkok Special Economic Zone in Gabon plus its planned operations in Benin (Glo-Djigbe) and Togo; the second vertical structure is Arise Infrastructure Services, which is involved in airports and highways, and is controlled by Olam International (40.5 per cent), CDC Group (38.5 per cent) and African Finance (AF) (21 per cent).

The third structure is Arise Ports and Logistics which includes the port of Nouakchott, the mineral port of Owendo and the San Pedro Multipurpose Industrial Terminal. It is this latter entity –

the one now under scrutiny in Mauritania in conjunction with Nouakchott - that AP Moller Capital has acquired a 43 per cent stake.

The recommendations made

by CEP are justified in the following statement: the agreement was “prepared, negotiated and signed under exceptional circumstances marked in particular by rushed and sloppy administrative processing; suspicions with regard to the relationship between Arise and the signing interdepartmental committee made up of the Prime Minister, the Minister of Equipment and Transport, the Minister of Oil and Gas, Energy and Mines and the Minister of Economic Affairs and Finance; as well as glaring

contradictions in the chronology of certain administrative and legal steps.”

Further, major points of concern highlighted in the detail of CEP’s findings include: the cost of the project which at USD390m was felt to be high, tax benefits detrimental to the country, a lack of terminal performance minimum standards and the ability for the terminal to set pricing without restrictions.

Progressively port Nouakchott’s new container terminal development is standing out as a prime example of all that can go wrong with negotiated port deals as opposed to taking the more conventional and transparent route of a public tender.

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THENEWYORKER BARRY PARKER

STRESSING THE IMPORTANCE In the commercial shipping realm, one of the major disappointments (dare I say “scandal?”) tied to the COVID- 19 pandemic has been the difficulties in the movement of seafarers, brought on by a maze of travel restrictions and bureaucratic impediments.

One lesson that has emerged is that the ship-owning industry, which has run to far-flung places to set up companies and/ or register ships, has not been effective in making its case in front of political decision makers.

Happily, the port business has generally been vocal in making its case known, through well run organizations with a strong presence in the halls of governments, whether at a national level (the American Association of Port Authorities comes to mind) or regional configurations (American Great Lakes Ports Association (AAPA) is top of my mind here). During 2020, where events have been

“unprecedented” on many levels, initial responses to virus matters were inconsistent; the debate between local versus centralised authority is nuanced and complex, so let’s just leave out the judgements and say that ports have become much better organized - and credit is due to associations that bring them together.

For results, look no further than the legislative agenda on Capitol Hill. At the Federal level, in a refreshing burst of bi partisanship, the House and the Senate are

8 Ports, like Savannah and all others in North America are “essential”

now both working on versions on what is essentially emergency relief for ports facing unanticipated (and maybe unprecedented) expenses in responding to an emergency (or a natural disaster. The relief, in the form of grants that would be administered by the Maritime Administration (part of the U.S. Department of Transportation), would cover a wide swath of costs, ranging from sanitizing and

cleanup, though financial components such as debt service, and also human resources costs tied to retaining the workforce if business activity shuts down. A press release from the AAPA concludes a list of items with the wording “….and other essential needs.”

Early on, like in March and April, the word “essential” was way overused, but in our context, ports are indeed essential, and the folks who work around the ports are also essential. Longtime readers will note that I do not dispense kudos or compliments easily; however, our business should be commended all around for the great job that it’s doing. Unlike the vessels that call at our ports (where “visibility” outside of the terminal gate is an uncomfortable concept), the ports have been able to get in front of government and stress the importance, and, indeed, criticality, of ports in the broader maritime transportation system.

THEANALYST PETER DE LANGEN

THE UK FREEPORTS INITIATIVE The UK, after claiming that the EU had been holding back the development of UK’s ports, launched a UK Freeports initiative as a major instrument to shape the UK’s economic development post-Brexit. Up to 10 Freeports are foreseen. These Freeports are to be privately developed in rail, air and seaports -probably mainly the seaports- and to be selected through a competitive bidding process. The UK has launched a public consultation to develop its freeport policy.

The Freeport (or freezone) model works well in a variety of countries, including UAE and Panama. the key benefit of freeports in general is lower import taxes. However, a freeport status is certainly no guarantee for success and freeports have disadvantages too. First, they

create a different treatment of companies inside and outside a Freeport area. Thus, it may spur regional economic development in one place at the expense of development in other places. In addition, they may lead to an unfair playing field between firms inside and outside freeport areas as well as distorted competition between ports in the UK, some with a freeport status and others not. Finally, freeport policies may erode the tax base of a country – especially if the firms that invest in the freeport area would have invested in the country in any case. Thus, the freeport approach is best suited for relatively small developing economies for which attracting Foreign Direct Investment (FDI) in manufacturing is a key to economic growth.

One of the key challenges for

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the UK is the ability to develop the freeports policy in such a way that the freeports mainly attract manufacturing that otherwise would have been done outside the UK. If the freeports attract investments in logistics, services and manufacturing for the domestic market, they create benefits for the freeport developers as well as the companies in the freeport, but not for society at large. Is such a targeted approach a realistic policy ambition? I am not convinced (yet); the UK has gradually transformed to a service economy, it is hard to imagine a reversal of that trend. In addition, the trade tariffs on most products are actually very low (or non-existent). Furthermore, getting stakeholder support for attracting manufacturing activities may be challenging -that is the case in

ports in all developed economies.

Finally, policies aimed at attracting specific types of activities are risky: the (free)ports may find out that there is more potential in attracting other activities, such as warehousing, sustainable energy production, circular manufacturing, commercial real estate and the like.

The UK ports certainly deserve a policy that helps them in building their ‘port business ecosystems’. And this initiative may help getting such a policy.

But the visionary tale of ten new freeports that allow the UK to dramatically improve its standing as a trade nation may turn out to be quite a bit overblown. And I would not be surprised if the idea of selecting up to 10 freeports is abandoned and replaced with policies that apply to all UK ports.

SEPTEMBER 2020 | 15

THEENVIRONMENTALIST CHARLES HAINE

NAUTICAL TERMS & COVID-19

One of the positive outcomes of COVID-19 is the entertainment we can derive from new terminology that has arisen during these five months.

The lexicographer Susie Dent collectively termed these the ‘coronalexicon’.

Alongside ‘quarantinis’ (cocktails made from spirits found at the back of your cabinets), while WFH, we’ve all seen ‘covidiots’ outside their ‘bubbles’.

The now familiar term ‘quarantine’ has its origins in 14th century maritime trade. The significant rise in cargo exchanges between Europe and the East caused a spike in on board infectious diseases. At peak Black Death (1348), the Port of Venice imposed isolation protocols for crews upon arrival.

A hub was established on an island in the Lagoon. The minimum period of 40 days was known as ‘quarantena’ from the Italian for forty – quaranta.

Of course, nautical and seafaring terms have long enriched our languages. Some

businesses are to be found in ‘deep water’ (out of one’s comfort zone), with some homeworkers left ‘all at sea’ (state of confusion) or ‘down in the doldrums’ (stuck in a rut/ when sailors had no wind).

Another good example of a familiar and well-known phrase is definitely to be left ‘high and dry’ (abandoned in a tricky situation).

It is clear that social distancing, namely giving people a ‘wide berth’ is both a wise – and required – move in force throughout the world. This is a description that stems from berthed vessels moving with the tide, as restricted by their anchor ropes and it is also relevant too, as it is for COVID-19. It is always sensible to give other craft plenty of room to avoid accidents.

During coronavirus, my team has been ‘all hands-on deck’, to ‘stem the tide’ (prevent a situation from becoming worse).

Through ‘thick and thin’ (the method of using both thin and thick pulleys and ropes to hoist sails) we’ve been keeping an

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eagle eye out for ‘loose cannons’ (spontaneous danger/mayhem on deck when a cannon broke free) and with a collective mantra to not ‘rock the boat’.

Certainly, COVID-19 has been a ‘shot across the bows’ (warning shot). It has not been ‘plain sailing’ in ‘running a tight ship’.

We’ve had to ‘batten down the hatches’ (securing a vessel’s hatchways in inclement weather).

Getting back ‘on the right tack’ involves ‘turning the corner’ (first used by sailors passing the Cape of Good Hope in Africa and Cape Horn at the tip of South America) and this is certainly relevant at the moment.

We cannot ‘turn a blind eye’ (wilful refusal to acknowledge a reality – à la Horatio Nelson at the Battle of Copenhagen) to the economic and climate challenges that lie ahead.

8 The cruise industry is seeing the application of many of the nautical phrases that can be applied to COVID-19

We need to ‘clear the decks’ (be prepared for battle) and show our ‘true colours’ (some ships would hoist false flags instead of their national flag prior to battle). We won’t want to have to ‘man the lifeboats’ (make a quick escape).

Well, for now: ‘Bottoms up!’ (when English sailors checked for the Royal Navy con-trick of putting a coin in a beer – the unsuspected holding of the coin was deemed to be accepted payment for immediate enrolment into the Navy).

I’m going to have to ‘scrape the barrel’ (searching for food scraps) for a rum-based quarantini nightcap!

‘‘

It is always sensible to give other craft plenty of room to avoid accidents SEPTEMBER 2020 | 17

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POST COVID-19: MED HUBS

WHAT LIES AHEAD FOR THE MED? The Mediterranean transshipment market has been one of the positives for container trade for many years. However, the market is changing and being accelerated by the COVID-19 crisis

8 Will Yilport succeed at Taranto where others have failed?

Container demand in the Mediterranean has been badly hit by the COVID-19 crisis with volumes slipping in virtually all the major gateway ports. Until economic recovery is firmly underway the weakness in these markets can only continue – the regional transshipment hubs have been impacted, but the position is complex.

There are major trends underway that will reshape this important market, with far-reaching investment implications.

WHAT IS HAPPENING? Figure 1 summarises the development of transshipment demand in the Mediterranean since 2015. The market is divided into the western market (focused on Algeciras and Tangiers) the major Spanish gateway ports that handle significant transshipment (Valencia and Barcelona), the central Mediterranean hubs – dominated by Gioia Tauro and Malta – and the eastern Mediterranean (Egyptian ports plus Piraeus).

Demand has grown from 24.1m TEU to 30.1m TEU over the period 2015 -2019. The major trends have been the increase in East Med volumes and market share and steady expansion in the combined volumes of the Gibraltar Straits terminals.

The central Mediterranean has been squeezed in terms of volume and market share.

Only partial data is available for the COVID19-impacted first half of 2020 and this is summarised in Table 1 which focuses on those ports where transshipment is the dominant business.

It is shown in million TEU. At this stage only total port volumes are available, but the trends are clear:

8 Figure 1: Mediterranean Transshipment Volumes, Key Regions 2015-2019 in million TEU

5 Overall volumes have fallen by around 6.5 per cent – this is a less severe decline than noted for Med gateway terminals.

5 Smaller terminals have been most severely impacted, with the squeeze on central Mediterranean ports intensifying.

5 Piraeus and Tangiers have seen robust demand, despite the weaker broader position.

So, what’s going on and why?

EAST-WEST POLARISATION Initial demand growth for transshipment was driven by the central Mediterranean hubs as lines sought to serve Italy, France and Spain by feedering due to limited facilities and poor labour relations in regional ports. Both drivers are no longer present. Direct calls in the largest vessels are the order of the day, with hub ports limited to a local distribution role to secondary ports and the Adriatic. Also, ship sizes have run ahead of these ports, with further investment required to upscale both water depth and handling equipment. The lack of interest in Cagliari’s new concession tender is a symptom of this.

Investment in these ports (for transshipment) needs to be carefully considered. Upgrading existing facilities – for example, TIL’s full takeover of Gioia Tauro from Contship Italia – can make sense with limited required investment. Developing an essentially new offer such as Yilport’s purchase of Taranto must be more problematic in these markets. Development of new facilities in Tunisia (Enfidha) also promises to be difficult to bank.

The western ports offer other possibilities. Their location makes relay transshipment (linking discrete deep-sea services) highly competitive and this has driven demand more than the classic ‘hub-and-spoke’ model. Low cost and efficient terminals will continue to grow demand – even if the macro position remains uncertain. Recent interest has been focused on the sale of crisis-hit Hyundai’s 50 per cent shares in its TTIA terminal in Algeciras, which has now been confirmed

by CMA CGM. Longer term investments in Tangiers continue.

The eastern market has been primarily driven by Cosco’s investment in Piraeus which has seen volumes grow by around 54 per cent over 2016-2019. Piraeus’s transshipment hinterland includes the Black Sea, where port development continues to lag behind demand for political and investment reasons.

The Greek port has succeeded in diverting volumes from central Med ports on the basis of low costs, critical mass and

Source: Mundy Penfold Ltd, from port data

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SEPTEMBER 2020 | 19

POST COVID-19: MED HUBS favourable location for Asian containers. Cosco seems committed to further expansion at the port.

These forces have also driven volumes and investment in Egypt – especially the twin ports of Port Said.

These trends will continue with lines deploying larger vessels on direct Mediterranean services, bypassing central Med hubs. The western terminals will continue to grow their relay business and the eastern ports will benefit from strong regional demand and limited investment in Black Sea littoral terminals.

SHIPPING MARKET SPILLOVER… Developments in the container shipping market will have significant impacts on Med transshipment prospects. Specifically: 5 Oversupply in the largest vessel classes is the dominant issue. Lines are bleeding badly on these investments and demand is simply insufficient to absorb existing and planned capacity. This is being obscured by tonnage management measures based on current crisis conditions. The rationale for these vessels was predicated on high transshipment activity to lift load factors.

In reality these vessels are trading light and can actually enter many ports. These rotations are not ideal, but the lines have to do something with the capacity and this will continue. Use of transshipment hubs rather than, say, direct calls in Marseille Fos is much less attractive in reality than on paper given over-capacity. This will exert negative pressures on some locations.

The question of vessel size transiting the Mediterranean is also a direct issue insofar as some ports constructed during

2016

2017

2018

2019

2020**

% change***

Algeciras

4.76

4.38

4.77

5.12

2.55

-5.6

Tangiers

2.96

3.32

3.47

4.80

2.35

1.5

Marsaxlokk

3.06

3.15

3.31

2.71

1.28

-8.5

Gioia Tauro

2.80

2.45

2.33

2.52

1.11

-7.5

Piraeus

3.67

4.14

4.91

5.65

2.80

1.5

Alexandria

1.63

1.61

1.70

1.80

0.75

-6.5

Damietta

0.81

1.31

1.15

1.07

0.68

-12

Port Said

3.04

3.00

3.10

3.82

1.95

-1.5

Total

22.73

23.36

24.74

27.49

13.47

* - selected data ** - estimated 1st half volumes 6 months 2020 / 6 months 2019 Source: Mundy Penfold Ltd

the initial transshipment boom are not ideally formatted for the largest classes of vessels, either in terms of water depth or handling equipment. In a market where margins are wafer thin decisions to invest further will be highly problematic.

-6.5 8 Table 1: Major Transhipment Hub Ports – Total Volumes, 20162020* in Million TEU

5 The Cape Option – i.e. routing via the Cape of Good Hope rather than Suez for Asian trades to northern Europe – could be a major headache. At present, this is driven by the need to absorb capacity by increased haul lengths and by the very limited price differential on low-sulphur fuels. The Suez Canal Authority has sought to mitigate this by lowering transit fees, but the scope to directly influence deployments, and maintain profits for the Canal, is limited.

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POST COVID-19: MED HUBS If a significant proportion of Asia-north Europe services continue to be routed via the Cape, then the scope to combine north and south Europe cargoes by transshipment in the Med will be reduced. It seems likely that some of these ‘short term’ alterations may prove durable. The impact will be focused on terminals within the Mediterranean, especially in the central region, with Port Said also seeing some negative fallout. Conversely, the impact could be positive for the Gibraltar Straits terminals give their relay emphasis and minimum diversions.

Although not actually in the Mediterranean but serving overlapping markets, this could also boost prospects at Lisbon and in the Canaries.

It seems certain that the overall outlook for Mediterranean transshipment will be modified by the combined impact of these trades.

IMPACT ON PORT INVESTMENT It is clear that past assumptions about demand growth will need very careful examination. The idea that you could simply build new capacity and transshipment would fill up the terminal is long-dead. The major demand trends will continue to focus the need for capacity on the far west and eastern parts of the market for the reasons here defined.

Margins are extremely thin for container transshipment everywhere and the over-capacity in parts of the Mediterranean market focus these concerns.

There are a number of on-going or planned expansion projects, as shown in Table 2, where transshipment is a factor.

It is important to note that the most successful transhipment

Port

Development Project

Summary Details

Beirut

Rebuilding & reconstruction

From explosion

Piraeus

Ongoing investment

US$600 million from Cosco on expansion

Valencia

Northern Terminal

New terminal, ultimately 5 million TEU p.a.

Livorno

Europa Platform

New terminal, 1.6 – 2.0 million TEU p.a.

Savona

Vado Ligure (APM Terminals)

New terminal, 1.1 million TEU per annum & additional multipurpose facility

La Spezia

LSCT (Contship Italia)

Expand capacity to 2 million TEU p.a.

Taranto

Taranto Container Terminal

Acquired by Yilport, re-commissioning and investment works

Gioia Tauro

Medcenter Container Terminal

MSC acquired remaining 50 per cent not owned

Source: Port Strategy

terminals in the Mediterranean region are those with lineequity ownership. Strategic decisions by lines focus demand on their own facilities as has been illustrated by Cosco in Piraeus and Maersk Line in both the east and west of the region.

Line involvement will remain critical, although the financial strength of most lines will be sorely tested regarding port investment.

The jury is still out on the role of lines in the port sector at the global level. This is nowhere more significant than in the Mediterranean markets.

8 Table 2: Selected Port and Terminal Investment Projects at Mediterranean Hub Ports

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

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

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SEPTEMBER 2020 | 21

SPECIAL REPORT: BEIRUT

BEIRUT KILLER BLAST

Credit: Getty Images/AFP/STR

Who is responsible is for the horrific Beirut Port blast will be formally decided in due course but already it is clear that a patchwork of mismanagement and complacency underpins this catastrophic event, the likes of which must not be allowed to happen again

The University of Sheffield, UK estimates that the blast in the Port of Beirut was around 1.5 kilotons in TNT equivalent.

That makes it one tenth the strength of the atomic bomb dropped on the Japanese City of Hiroshima.

As of August 13, 2020, the death toll from the August 4, 2020 explosion was reported at 220 people, with a further 6,000 injured.

Michel Aoun, President of Lebanon, has stated the blast was caused by 2,750 tonnes of ammonium nitrate stored unsafely in a Beirut Port’ warehouse.

In short order following the explosion, the government announced that a number of port officials have been placed under house arrest pending an investigation.

ALMOST SEVEN YEARS IN STORAGE The ammonium nitrate arrived on a Moldovan-flagged ship, the mv Rhosus, which entered Beirut port in November 2013.

The vessel was suffering technical problems during its voyage from Georgia to Mozambique, according to Shiparrested.com, which deals with shipping-related legal cases.

The Rhosus was inspected, banned from leaving and subsequently abandoned by its owners, sparking several legal claims. The cargo was then placed into storage in a port warehouse.

The explosion is thought to have occurred when sparks from a welding machine ignited a warehouse containing fireworks, quickly causing a fire to spread.

Ammonium nitrate in its pure form is not dangerous. It is, however, heat sensitive. At 32.2 degrees Celsius (89.96 degrees Fahrenheit), ammonium nitrate changes its atomic structure, which affects its chemical properties and in the Beirut warehouse the heat generated caused a chemical ignition.

22 | SEPTEMBER 2020

8 The full impact and reconstruction costs are yet to be known – but container ships are already working and are going to be needed to assist humanitarian efforts

8 An estimated 2,700 tonnes of ammonium nitrate sat in a Beirut Port warehouse for nearly seven years – a ticking time bomb Credit: Images/Z.Tamanna

The head of the Beirut Port and Customs Authority reports writing to the judiciary several times asking that the chemical be exported or sold on to ensure port safety with no response received.

Hassan Koraytem, General Manager, Port of Beirut, has confirmed that the port was aware the material was dangerous when a court first ordered it stored in the warehouse.

LINER REACTION Container shipping lines diverted ships immediately after the blast, with CMA CGM using Tripoli, Lebanon and Hapag Lloyd diverting a vessel to Damietta, Egypt.

CMA CGM had a ship in port at the time of the explosion, the 11,400TEU mv CMA CGM Lyra. In a statement, CMA CGM reports the vessel, which was 1.5km from the blast, was not damaged and neither were any crew members hurt.

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

Source: Reuters

SPECIAL REPORT: BEIRUT

Hapag-Lloyd, whose Beirut offices were completely destroyed in the blast, had no ships in Beirut at the time, but it believes all laden and empty containers were destroyed.

In 2019, Lebanon handled around 1.2 million TEU over 1100m of quay with 16 ship-to-shore cranes.

The ‘new kid on the block’ in Lebanon is the Tripoli Container Terminal, operated under concession by Gulftainer, but currently with just 600m of quay served by two ship-toshore cranes it does not offer a wholly satisfactory alternative to the Beirut Container Terminal and as such it is very fortunate that the Beirut Container Terminal has been able to resume operations quickly.

Longer term, Gulftainer has plans to develop Tripoli to rival Beirut but it clearly has a lot of work to do before enjoying this status.

immediate effect, all CMA CGM lines will resume their calls at Beirut Port…”

Likewise, Hapag-Lloyd is reinstating services to Lebanon via Beirut Port. The German carrier’s first vessel (mv Mona Lisa) on the Levante Express (LEX) Service called at Beirut on August 14th, 2020.

Hapag’s East Med Express (EME) service also reinstated Beirut calls, with the first vessel calling on August 15th, 2020.

The company reports: “Alongside our service reinstatement, we are also reopening booking acceptance for cargo to and from Beirut…”

The situation with regard to other facilities and notably the 120,000-tonne grain silo capacity is, however, really catastrophic with this facility completely destroyed and thus presenting considerable challenges regarding the import of foodstuffs.

BACK IN BUSINESS Initially there was concern that without adequate port facilities Lebanon may get cut off from the global economy.

In terms of container operations, however, just nine days after the blast on August 13, 2020, CMA CGM informed its customers that the operational situation in the port is “now back to normal again.”

The line said: “Damages to Beirut Container Terminal being less serious than what could be expected after the tragic events that took place on August 4th, a first CMA CGM vessel m/v Nicolas Delmas has been operated with success. With

PRIVATISATION – BLOWN OFF COURSE? The Beirut Container Terminal was actually engaged in a concession process at the time of the explosion, a process which had already been delayed but now in the aftermath of the explosion the timing of the concession process is even less clear. Offered by the Ministry of Public Works & Transport Beyrouth, the current process represents a further concession of the terminal which in a previous process had been awarded to the Beirut Container Terminal Consortium which has run the concession since 2005. The consortium comprises Lebanese-based International Port Management Beirut (IPMB) and UK and USA-based interests.

CMA CGM, which provides a third of the terminal’s business, is considered a likely bidder, but the timing of the privatisation programme under the current circumstances remains to be confirmed.

‘‘

Damages to Beirut Container Terminal are less serious than expected after the tragic events that took place on August 4th, a first CMA CGM vessel m/v Nicolas Delmas has been operated with success. With immediate effect, all CMA CGM lines will resume their calls at Beirut Port…

8 The port’s grain silos took the brunt of the blast. The structure stored an estimated 85 per cent of the country’s grain and has now been destroyed, along with all of the surrounding port infrastructure

FUNDAMENTAL QUESTION The fundamental questions remain, however, – why was this cargo stored for so long and why were correct safety protocols for hazardous cargo not being followed?

Lessons need to be learned from this catastrophe, and quickly, beyond understanding why IMO safety codes and practices were not followed.

Beirut’s experience may provide salutary lessons to others and hopefully leading to prevention not cure!

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

SEPTEMBER 2020 | 23

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SINGAPORE: PORT DEVELOPMENT

THE NEW SINGAPORE RISES Tuas Port is being developed as the next generation container port in Singapore.

Gordon Feller assesses what the project will include

8 Artist’s impression: Tuas Port – designed to be an economic engine while meeting challenging environmental requirements

When fully completed in the 2040s, after construction of up to 30 years, Tuas Port will be the world’s single largest container port, capable of handling up to 65 million TEU per annum. The new port is to accommodate the move of the current city terminals when their leases expire and will be the consolidated location for all of Singapore’s container activities, significantly reducing inter-terminal haulage operations and green-house gas emissions.

According to Er Tham Wai Wah, Singapore’s Maritime and Port Authority Chief Engineer and Senior Director (Engineering and Project Management), “Tuas Port represents a bold vision for Singapore” with a focus on the “commitment to balance environmental protection with port development.”

To adapt to rising sea levels, Tuas Port will have an operational platform of five metres above maximum sea-level, with over 50 per cent of the total fill materials coming from dredged material and excavated earth from construction. Reusing such materials reduces reliance on sand for reclamation, saving over S$2 billion in material costs. Reclamation began in 2015 and is due to finish in 2021. The reclamation process is relocating corals, with an expected 80% survival rate. (Singapore’s coral reefs are home to more than 250 species of corals and habitats for a great number of marine organisms).

HEIGHT OF A 10-STOREY BUILDING Caissons (watertight retaining structures) for Tuas Terminal’s construction was determined to be a cornerstone of the construction approach. The caissons used are some of the largest in the world. Each is to be prefabricated onsite, weighs 15,000 tonnes and measures 40m in length, 28m in width and 28m in height – the equivalent to the height of a 10-storey building.

Finger-piers using caisson quay walls are to be adopted to maximise limited land and sea space, while creating 115ha more land. Coupled with long linear berths and a design depth of -23m at Chart Datum, the design will accommodate mega-container ships exceeding 450m in length. Above ground space will also be introduced, adding 240ha of land area for port-related uses.

Tuas Port will be automated, digital. Digitalport@SG and Just-in-Time (JIT) Systems will streamline vessel clearance processes thereby enhancing vessel turnaround times.

Extensive use of automation and robotics will be employed in conjunction with quayside and yard handling systems with operations controlled from a remote Operations Centre.

The new port will also encompass what it refers to as a “complementary supply chain” – namely, inclusion of warehousing, container depots, factories and other typical satellite port facilities. The aim is to support efficient cargo flows connectivity between the marine facilities and localised high-growth industries.

The location of Tuas Port is close to the Jurong and Tuas industrial areas with this thus capitalising on shorter haulage of import and export containers to and from the new port.

VALUABLE LAND FREED-UP The development of Tuas Port will free-up valuable land in the city and more urbanised areas, which will be used for commercial and residential activities.

Singapore has limited land and port space - there are already many competing demands for space for marine facilities in addition to cargo-handling terminals ranging from shipyards, oil and chemical terminals through to cruise passenger terminals.

In a 2019 speech, Singapore’s Prime Minister reiterated the national importance of adapting to climate change, particularly to rising sea levels. Consequently, the country is committed to spend S$100 billion, which includes the development of Tuas Port.

‘‘

‘Tuas Port represents a bold vision for Singapore’ with a focus on the ‘commitment to balance environmental protection with port development’

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

SEPTEMBER 2020 | 25

ECSA – USA: TRADE ANALYSIS

A FLIPPING TRADE Despite the Coronavirus pandemic and poor economic climate, East Coast South America (ECSA) to US East and Gulf coast trades is holding up well for Brazilian exports, as Rob Ward discovers

8 Santos Brasil investing in new cranes, despite losing market share to rival, BTP

26 | SEPTEMBER 2020

8 Figure 1: January to end of May 2020 Exports from Brazil to US East & Gulf Coast, in TEU

%) $$$ %( $$$ %' $$$ %& $$$ %$ $$$ ) $$$ ( $$$ ' $$$

!

& $$$

‘‘

Then, just as signs of consumer confidence were starting to emerge at the end of last year COVID-19 arrived

THE KEY COMMODITIES Terminal port managers in Brazil have confirmed that the main exports to the US are wood pulp and plywood. It is likely to be for stores such as Home Depot and was in growing demand once the US implemented lockdowns. Other items are coee, cheap machinery and vehicles (especially from Caterpillar). By comparison, the major imports from the US were petrochemicals, polymers and synthetics.

This view is endorsed by Datamar, revealing that during the first five months of 2020 the top imports from the USA were polymers of ethylene (25,996TEU) and similar various materials and products (20,885TEU). For the same period in 2020, leading exports moving consisted of sawn wood/ wood chips (15,537TEU), building products and stone (13,701TEU) and plywood (13,641TEU).

Figure 1 further highlights the leading exports from Brazil to the US. According to Datamar the leading Brazilian port in the ECSA to US trades is, as expected, Santos (the largest for boxes in South America, with 4.2 million TEU handled in 2019, up from 3.9 million TEU in 2018).

Container handling figures for 2019 according to Sao Paulo-based Datamar showed that Brazil and the River Plate exported 449,094 TEU, to the US. This represents an increase of 4.8 per cent over the total for 2018 (of 428,479 TEU), and a rise of 3.8 per cent per annum since 2010 when 320,219TEU was moving.

During this time, the trade has “flippedâ€? with the head-haul switching from southbound to northbound. This is because imports fell from 411,682TEU in 2010 to just 348,481TEU for 2019 (albeit up slightly from 345,803 TEU generated in 2018). “Weakening local currencies, especially the Brazilian Real and the Argentine Peso are probably the main push factor in this trade lane flipping,â€? said one veteran Brazilian shipping consultant, who did not wish to be identified. “And the terrible state of the Argentine economy, with the threat of a major IMF default hanging over the country, and the poor economic performance of Brazil during and since the last two years of the left-wing Dilma Rousse government [2011 to 2016] has totally undermined consumer confidence in both countries.

Then, just as signs of consumer confidence were starting to emerge at the end of last year COVID-19 arrived.�

Several box terminal managers in Santos told Port Strategy that the end of last year was, “very positiveâ€? with throughput showing double digit growth in many service lanes, but it then fell away as the full eects of the COVID-19 pandemic took hold and carriers started scheduling blank sailings to keep freight rates up.

Source: Derived from Datamar base information

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

ECSA – USA: TRADE ANALYSIS In terms of ECSA to US cargo, Santos handled 117,229TEU during 2019, slightly down from the 118, 546teu in 2019. There is some evidence that over the past year or so Santos – which some port users now claim is often over-crowded since the two Libra Terminais terminals (with 800,000TEU capacity) closed down 18 months ago – has lost cargo, especially transhipment boxes, to Itapoa, Navegantes and Rio Grande, in the far south of the country.

ITAPOA GAINING TRACTION Indeed, Itapoa has been gaining traction on ECSA to US trades, jumping 50 per cent from the 2015 total of 41,925TEU (according to Datamar) to 63,337 TEU for 2019). The port has confirmed 28.700 TEU for the first five months of 2020, up slightly from 28,000TEU for the 2019 period and despite the impact of COVID-19.

Another port gaining at the expense of Santos is Navegantes, which is part of the Itajai Port Complex. Its volumes have doubled, from 27,774TEU in 2015 to 62,526TEU in 2019, which is a likely indication that MSC is transhipping more containers from the southern port, which it owns outright since Terminal Investment Limited bought out the shares of start-up partner Triunfo Participações e Investimentos SA. The port of Rio Grande, operated by Wilson, Sons in the far south, is also gaining in the US trades, increasing by 14.3 per cent from 25,907TEU in 2018 to 29,567TEU for 2019.

“Rio Grande used to do a roaring business exporting tobacco, shoes, furniture, textiles and many other high value products to the US but that all disappeared after the 2008 financial crash affected US consumption and it never really came back with the same volumes,” says Leandro Carelli Barreto, a director with the Solve Shipping consultancy.

“When I worked for Hamburg Sud, we were looking at creating a budget to cater for 400,000TEU per year out of ECSA to the US in the early 2000s through to 2008. By 2010 it had sunk to about 200,000TEU, owing the crisis in the US. But these volumes are slowly coming back,” he adds enthusiastically.

FEWER LINER SERVICES In Santos there are far fewer liner strings providing services to the US than 10 years ago. Barreto suggests that before the 2008 financial crisis, there were around 14 regular services to the US Gulf and East Coast compared to just six today (four to the US Gulf and Caribbean and two dedicated to just the East Coast). In terms of direct links between ECSA and the US East Coast, the number has fallen from six or seven services to just two at present Barreto adds that the average size of vessel on the ECSA to US East Coast trade lane is between 6,000 TEU and 6,600TEU, as MSC and its partner ZIM (via its US String/XNS services) operates nine ships of 6,046TEU, while Hamburg Sud (Tango) and Hapag Lloyd (SEC) deploy seven ships of 6,530 TEU on its offering.

According to shipping line schedules, in early 2018 the average ship size was 5,400TEU, (albeit ranging from 3,100TEU to 6,900TEU), before several larger vessels were then introduced.

For the ECSA to US Gulf trade lane, ship size varies hugely, from the eight vessels of 7,445TEU deployed on the GS1 service, to the four units of 2,987TEU vessels on the Amazon/ CX1 service.

Solve Shipping research shows that 10 years ago there were four separate US East Coast services and eight to the Gulf, although with much smaller vessels at the time. The combined weekly capacity has stayed very similar, with 30,849TEU previously and 32,247TEU today.

At Santos, the MSC ECMA service calls BTP and the Maersk

Line/Hamburg Sud and Hapag Lloyd offering utilises Santos Brasil. The five US Gulf services are shared between all three terminals - Santos Brasil, DP world and BTP. Antonio Carlos Sepulveda, President, Santos Brasil, says that the overall throughput in Santos for the first six months of 2020 had shown a small volume decrease, down just 1.9 per cent to 2.15 million in terms of TEU. However, the total was actually up by 4.54 per cent in terms of FEU “as exports are doing well and many of them are reefer 40 footers,” he explained.

8 ECSA to/from US is dominated

by Hamburg Sud, whose brand is still a strong one, even after its takeover by Maersk Line

BRAZILIAN CYCLES Sepulveda explains further. “Brazil operates in economic cycles every 10 to 15 years and for the past five years our GDP growth has been declining and consumption is falling, plus the exchange rates are hurting imports. But at the same time our exports are being helped by the exchange, where our agri-business sector is very competitive.”

One Santos terminal manager notes that the carriers are feeding extra loaders into their associated terminals – such as BTP and Itapoa – and blanking sailings at those of third party operators, such as DP World and Santos Brasil.

In terms of operators, the ECSA to/from the US trade is dominated by Hamburg Sud, whose brand is still a strong one, even after its takeover by Maersk Line. Hamburg Sud was responsible for 126,800 TEU of imports from the US into Brazil and the River Plate, with Brazil generating 94,503TEU. MSC is second, with 88,000TEU, followed by Hapag Lloyd moving 82,000TEU. CMA CGM is a long way back with just 22,000TEU. SANTOS BRASIL INVESTS Santos Brasil’s Tecon Santos terminal welcomed the arrival of two Super Post Panamax Ship to Shore Gantry Cranes (SSGCs) earlier this year, which have boosted productivity and given the terminal a competitive edge over its rivals.

Each of the SSGCs cost $11m.

Despite this Santos Brasil is losing market share to rival BTP, a joint venture between MSC and Maersk Line.

These ocean carriers massively favour where they have a terminal interest – naturally - when choosing where to place service strings and when it comes to Blank Sailings and Extra Loaders. More of the former for the likes of Santos Brasil and other third party terminals and less of the latter, choosing inhouse facilities such as BTP, or Itapoa, Portonave and in the case of AP Moeller Itajai in the south.

‘‘

Carriers are feeding extra loaders into their associated terminals – such as BTP and Itapoa – and blanking sailings at those of third party operators

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

SEPTEMBER 2020 | 27

UNLOCKING DIGITALISATION

A DIGITAL CALL FOR ACTION Multiple factors are pushing digitalisation to the fore – the ports sector has its pioneers but IAPH for one believes more can be done

8 The introduction of 5G can help achieve the greater digital integration of standardised data in the port environment

COVID-19 has slowed and disrupted trade globally, so with a number of industry organisations announcing a “call to action” for greater use of digitalisation and smart technology, can ports take the necessary steps forward?

In an industry where cost pressures, increased regulation and stricter environmental standards are more manifest than ever before, the incentives for ports to exploit digital technologies such as geospatial technology, artificial intelligence, automation and connected devices have never been stronger.

The position is nicely summarised by Ted Muttiah, Chief Commercial Officer, South Asia Gateway Terminals (SAGT), Sri Lanka. Interestingly, SAGT recently confirmed it is adopting the Blockchain Technology by collaborating with TradeLens, a digital platform jointly developed by A.P. Moller - Maersk and IBM. Muttiah underlines, “Digitisation and digitalisation offer all stakeholders to the supply chain significant operational cost efficiencies.”

There is clearly a need across the industry to see greater use of digital processes.

Table 1 summarises the aims and objectives of three major industry bodies which aim to exploit digital processes in order to boost port and supply chain performance in general.

The work of these three organisations suns up to a significant extent what can be achieved at a practical level and the ensuing benefits. These groups are involved in the movement of cargo on an unrivalled worldwide scale, so offer a truly collective expectation of what can be achieved.

Looking at these initiatives in more detail, the non-profit Digital Container Shipping Association (DCSA) wants to use further digitalisation of container shipping technology standards to achieve its Industry Blueprint (IBP).

The organisation has recently published its connectivity standards for shipping containers, which includes radio standards for gateways on vessels, land, at event locations and in handheld devices via an Internet of Things (IoT) interface.

According to the DCSA, with these new standards shipping lines and supply chain partners can ensure shippers and

28 | SEPTEMBER 2020

beneficial cargo owners have an “uninterrupted flow of information regarding the whereabouts of containers and their contents at any point along the container journey.” There are three planned IoT releases which will cover connectivity requirements for reefer and dry containers and RFID registration of containers.

PORT SECTOR, PLAYING CATCH-UP? So, there are clear initiatives underway to promote digitalisation in the supply chain but in the view of the International Association of Ports and Harbours (IAPH) the port industry still has some ground to make-up compared to other players in the supply chain to secure the benefits of digitalisation. IAPH suggests in a collaborative June 2020 paper, “Accelerating Digitalisation of Maritime Trade and Logistics – A Call to Action,*” that: “The COVID-19 crisis has painfully demonstrated the heterogeneous landscape that currently exists across ports worldwide. There is a need to accelerate the pace of digitalisation” So, the COVID-19 pandemic is at least in part, a catalyst to a more pro-active approach to harnessing the powers of digitalisation, with typical hallmarks of this being a stronger focus on smart port developments and better port–to–port integration and communication, as data and information sharing becomes more common.

A recent survey by Haven Inc. (a a leading supplier of Transport Management gement System (TMS) solutions for international ational shippers and beneficial cargo owners) ners) also confirms that the coronavirus virus pandemic is actually a catalystt for shipping digitalisation, with many stakeholders in the logistics supply pply chain choosing to abandon manual nual processes and instead target greater ater use of automated solutions to drive uture. cargo growth and build for the future.

8 Ed Dawson: “Processes in ports and shipping are antiquated” – COVID-19 has contributed to showing there is a new way: digitalisation

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

UNLOCKING DIGITALISATION

Organisation

Role

Activity Progress & Objectives Targeted

Key Contact

IPSCA – 46 members in 50 countries, over 50 billion electronic messages annually covering 500 million TEU and 10 billion cargo tonnes

Supports electronic communications platforms from Port Community Systems .

Best Port Community Systems put in place through delivery of e-services and pro-active port communities

Richard Morton, Secretary General

DCSA - independent group established in 2019 by leading global container shipping lines (MSC, Maersk Line, CMA CGM, Hapag-Lloyd, ONE, Evergreen, Yangming, HMM, Zim)

Enable carriers to bring innovative solutions to market by introducing technology and frameworks

Delivering The Industry Blueprint (IBP) - all processes commonly used in container shipping are mapped out and validated by carriers and publishing IoT connectivity standards

Thomas Bagge, CEO & Statutory Director

IAPH - global alliance of 180 ports (and 140+ port-related businesses) in 90 countries, handling over 60% of the world’s seaborne trade and nearly 80% of the world’s container traffic. A non-profit and non-governmental organization (NGO).

Promoting interests of ports worldwide through member relationships, collaboration and information-sharing to advance sustainable practices and improve how ports serve maritime industries

Accelerating digitalisation through nine priorities to establish smart ports and standardised processes and data exchanges*

Dr. Patrick Verhoeven, Managing Director, Policy & Strategy

8 Table 1: Aims and Objectives of Digitalisation in Port Industry

*= in conjunction with BIMCO, International Cargo Handling Coordination Association (ICHCA), International Chamber of Shipping (ICS), International Harbour Masters’ Association (IHMA), International Maritime Pilots Association (IMPA), IPCSA, International Ship Suppliers’ Association (ISSA), Federation of National Associations of Ship Brokers and Agents (FONASBA) and PROTECT Group

‘‘

42 per cent are expecting to upgrade systems through investment in digitalisation The survey shows that 35 per cent of respondents believe the use of manual processes causes delays, 30 per cent state obtaining quotations takes too long and 20 per cent express the view that booking processes are cumbersome.

These statistics are supported by the IAPH. Patrick Verhoeven, Managing Director, Policy and Strategy, IAPH, states: “Exchanging paper by hand and relying on person-toperson interaction simply doesn’t cut the mustard anymore, neither from a safety nor efficiency standpoint.”

Ed Dawson, Associate at WSP’s UK-based Maritime Group, further notes: “There is no doubt that many processes in the port and shipping industry are antiquated and have always been done a certain way. Many want to see greater use of digitalisation and the global business lockdowns have highlighted that time and cost savings are possible by stepping away from traditional management processes heavily reliant on paperwork.”

This view is endorsed by the Haven Inc survey, with a high proportion of those canvassed expecting to upgrade towards a greater use of digitalisation. As Figure 1 shows, 42 per cent are expecting to upgrade systems through investment in digitalisation of their international shipment processes, with 37 per cent looking to upgrade in one-to-three years and 12 per cent doing so in three-to-five years. In fact, only eight percent have no plans to make any investment in the next five years.

Brad Klaus, Chief Executive Officer of Haven Inc., elaborates: “With so many people working from home during the pandemic, companies have found new ways to trade and this has opened their eyes to digital solutions. From a management point of view, once you see the benefits, it’s hard to go back to manual systems and mountains of paper.

The survey proves that the current pandemic has shown it is possible to streamline processes using technology.”

The lack of standardisation and the wide gap that still exists between different ports is still a concern. As IAPH notes: “Some port communities have seized the opportunities of the fourth industrial revolution and developed into fullyfledged ‘smart ports’, many others have barely grasped the essentials of digitalisation and continue to struggle with a larger reliance on personal interaction and paper-based transactions as the norms for shipboard, ship-port interface and port-hinterland based exchanges.”

NEED FOR DATA SHARING Dawson at WSP points to one challenge that must be addressed. “There is a clear need for stronger focus on data sharing activities within a port setting. This is being driven by demands for optimal port operations through real time navigation, digital twinning, and automation.”

Modern ports are consumers and providers of information but there must be a greater digital integration of (standardised) data. The introduction of 5G can reportedly help, by enabling use of multiple data streams to improve all asset situational awareness; but even so challenges remains.

Dawson sums up what is needed: “The smart port of tomorrow that wants to integrate into the new supply chain dynamic will need an integrated and seamless technology base that will reduce total cost of the supply chain through optimal asset utilisation, lower inventory costs through efficient cargo management and visibility of the entire value chain from manufacture to end user. But this needs to be a collaborative effort and an understanding that future supply chains will be based more on data than knowledge.”

PORT SECTOR INITATIVES Many ports are working on digital initiatives. The following represents a cross-section of some projects underway: 5 Valencia (Spain) - firm commitment to Digital Transformation to promote new digital business models and connectivity, positioning the port as ValenciaSmartPort.

5 Hamburg (Germany) - conducted tests with 5G, sensors on ships transmit movement and environmental data in real time, linked traffic lights to mobile network to control traffic in port. Targeting more intelligent IoT-supply chain.

5 Amsterdam (Holland) – new Digital Port Programme, with data availability making port transparent for users. Now trialing new monitoring system exploring drone usage.

5 Rotterdam (Netherlands) – digitalisation initiatives focus on better control and management of port/infrastructure and improved efficiency of logistics processes.

5 Montreal (Canada) - using Artificial Intelligence (AI) for new predictive tools to optimise port logistics and enable operational planning in order to positively impact transit times for containerised cargo in the supply chain, especially rail freight.

5 Los Angeles (USA) – launched a US Terminal Efficiency Incentive Programme where 90 per cent of ocean carriers feed data into a “Port Optimiser” to better plan cargo flows through terminals. Future focus on end-to-end supply chain data integration with Blockchain.

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

SEPTEMBER 2020 | 29

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TERMINAL PLANNING

PREDICTING THE OPTIMUM PATH A joint venture has seen the implementation of machine learning at HHLA’s Container Terminal Burchardkai to optimise import container yard positioning and reduce re-handling moves The elimination of costly re-handling moves of import containers has recently been the focus of a joint project between container terminal operator HHLA, its affiliate Hamburg Port Consulting (HPC) and INFORM the Artificial Intelligence (AI) systems supplier. Machine learning sits at the heart of the system.

‘Dwell time’ is the unit of time used to measure the period in which a container remains in a container terminal with this typically running from its arrival off a vessel until leaving the terminal via truck, rail or another vessel.

For import containers there is often no specific information available on the pick-up time when selecting a storage slot in the container stack. This can lead to an inefficient container storage location in the yard generating, in turn, the requirement for additional shuffle moves that require extra resources including maintenance and energy consumption.

To mitigate this operational inefficiency, the project partners - HHLA, HPC and INFORM - have recently run a pilot project at HHLA’s Container Terminal Burchardkai (CTB) focused on machine learning technology with this applied in order to predict individual import container dwell times and thereby reduce costly re-handling/shuffle moves.

As a specialist in IT software integration and terminal operations, HPC employed the deep learning approach to identify hidden patterns from historical data of container moves at HHLA CTB. This was undertaken over a period of two years and with the acquired information processed into high quality data sets. Assessed by the Syncrotess Machine Learning Module from INFORM and validated by the HPC simulation tool, the results show a significant reduction of shuffle moves resulting in a reduced truck turn time.

PRODUCTIVE IMPLEMENTATION Dr. Alexis Pangalos, Partner at HPC discussing the project highlights notes: “It was a productive implementation of INFORM’s Artificial Intelligence (AI) solution for the choice of container storage positions at CTB. The Machine Learning (ML) Module was trained with data from CTB’s container handling operations and the outcome from this is a system tailor-made for HHLA’s operations.”

HPC together with INFORM have integrated the Syncrotess ML Module into the slot allocation algorithms already running within CTB’s terminal control system, ITS. PREDICTING DWELL TIME INFORM’s AI solution predicts the dwell time (i.e., the time period the container is expected to be stored in the yard) and the outbound mode of transport (e.g., rail, truck, vessel) – both of which are crucial criteria for selecting an optimised container storage location within the yard. A location that avoids unnecessary re-handling.

“Utilising machine learning and AI and integrating these technologies into existing IT infrastructure are the success factors for reaching the next level of optimisations”, says Jens Hansen, Executive Board Member responsible for IT at HHLA. “A detailed analysis, and a smooth interconnectivity between all different systems, enable the value of improved safety while reducing costs and greenhouse gas emissions,” he underlines.

DETAILED DOMAIN KNOWLEDGE “Data availability and data processing are key elements when it comes to utilising AI technology”, says Pangalos. “It requires a detailed domain knowledge of terminal operations to unlock greater productivity of the terminal equipment and connected processes.”

The implementation is based on a machine learning assessment INFORM undertook in 2018 whereby it set out to determine if they could improve optimisation and operational outcomes using INFORM’s broader ML algorithms developed for use in other industries such as finance and aviation.

As of 2019 system results indicated a prediction accuracy of 26% for dwell time predictions and 33% for outbound mode of transport predictions.

Dr. Eva Savelsberg, Senior Vice President of INFORM’s Logistic Division notes: “AI and machine learning allows us to leverage data from our past performance to inform us about how best to approach our future operations – our ML Module gives our Operations Research based algorithms the best footing for making complex decisions about what to do in the future.

“INFORM’s Machine Learning Module allows CTB to leverage insights generated from algorithms that continuously learn from historical data,” she concludes.

8 The reduction of costly re-handling moves boosts terminal efficiency and promotes costeffective operations

8 Further Information: Matthew Wittemeier m.wittemeier@inform-software.com

‘‘

Utilising machine learning and AI and integrating into existing IT infrastructure are the success factors for reaching the next level of optimisation

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

SEPTEMBER 2020 | 31

ENVIRONMENT: EMISSION REDUCTION

LOW EMISSIONS STRATEGY As ports look for ways to cut their emissions, management teams are faced with a bewildering choice of low emissions technologies, and the risk of implementing a technology that might become obsolete. Steve Roberts, Associate Director, Ports & Marine, AECOM, looks at how to navigate the options and find not only the best option technologically, but strategically

Environmental credentials have never been more important in the transport sector, and society as a whole, than now.

Globalisation was driven by cost reduction and maximised the comparative advantage of different economies creating a boom in seaborne trade in the process. This model only accounts for the direct financial costs of production and shipping, and not the wider externalities such as environmental impacts.

Today, shippers, striving to meet customer expectations of environmental responsibility, increasingly look for ‘green’ supply chain options with lower emissions. Some leading port groups have successfully differentiated their offering on this basis, with the reward that customers attracted by this attribute tend to be more captive.

There is also the opportunity to reduce operating costs by adopting low emission technologies, both from fuel and maintenance cost savings, and there may also be possibilities for ports to generate revenue.

VARIOUS SOURCES Ports are built on complex systems of operation and consequently reducing or eliminating port emissions is a complex affair. By default, most ports use at least two power sources (electricity and diesel) and sometimes more: LPG for forklift trucks, petrol for road vehicles, and if bunkering for vessels is provided other fuels enter the equation.

An immediate question for anyone devising a low emissions strategy is: which technology offers the best emission reduction and financial return (including consideration of whole-life costs)? To arrive at the answer, ports must consider which technologies currently on offer will be available over the next 10 or 15 years - the typical lifespan of port equipment that today cannot be fully or easily electrified. This, in turn, begs the question, is technical superiority the key to predicting which power source will gain the critical mass needed to become mainstream, and how much does that matter for your port? To help address this issue we consider some of the strategic, rather than technical, considerations.

For port systems such as buildings, supplying shore power to ships or bunkering of vessels lower emissions can be achieved through the purchase (or on-site generation) of renewable electricity, providing shore supply to ships if grid capacity permits, or provision of LNG as a bunker fuel. For these asset types, the best options are fairly clear-cut.

32 | SEPTEMBER 2020

For cargo handling equipment electrification appears to offer an ideal solution to many problems: eliminating on-site emissions and if supplied from renewable sources eliminating emissions altogether. While this is a good option for assets such as ship-to-shore and yard cranes, items such as terminal tractors, payloaders, reach stackers, empty container handlers and so on (‘mobile equipment’) remain difficult to electrify with current technology. Mobile equipment has the common characteristics of being mobile, subject to weight limitations, and having usage patterns that mean they have little downtime. It is this area of port operations where identifying the best low emission option is most complex.

For these situations alternative energy sources and technologies may be the answer. Alternatives to fossil fuels such as diesel include: 5 Electrification with cable connection 5 Battery electric power 5 Fuel cell electric power e.g. hydrogen fuel cell 5 Liquified natural gas (LNG) 5 Hydro treated vegetable oil fuel 5 Petrol or diesel hybrid drives 5 Biodiesel fuel 5 Hydrogen duel fuel 5 100% Hydrogen internal combustion engines

8 Mobile cargo handling equipment presents the biggest challenge when seeking to identify the best low emission power source

They offer varying: 5 Reductions in emissions 5 Capital, fuel and maintenance costs 5 Retrofit capability for existing vehicles and plant 5 Suitability for different applications in ports 5 Availability These alternatives can also be categorised as either: 5 Fully aligned to traditional internal combustion engine technology, e.g. biodiesel or 100% hydrogen internal combustion engines, 5 Partially aligned with internal combustion engine technology, e.g. hybrid drive technologies, or 5 Aligned with electrical power, e.g. fuel cell options, battery vehicles and pure electric options DECISION MAKING When creating a low emission strategy the following strategic factors should be weighed up in addition to the technical reduction in emissions and direct costs:

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

ENVIRONMENT: EMISSION REDUCTION Keeping things simple 5 How many different fuels and technologies do we want to be operating with? Each additional fuel, energy source or unique type of technology potentially adds: space requirements; inventory costs, training costs, and may require permitting for on-site storage. A non-standardised fleet also reduces flexibility and the ability to cover equipment breakdowns or staff shortages. Fewer different fuels and technologies will generally be easier and cheaper to manage.

Obsolescence or unfavourable perceptions in the future 5 Will other technologies become suitable for this application in the future? Some alternative fuels have shown promise and been used in pilot schemes but did not become as widespread as expected. Electricity is the most commonly convertible type of energy and used in the final drive of hybrid vehicles, fuel cell vehicles and battery electric vehicles, so technologies that incorporate electrical drives may suffer less obsolescence.

5 Does the technology result in a genuine reduction in emissions or does it create a new environmental problem elsewhere in the energy supply chain, or in the lifecycle of the equipment? The green credentials of biomass power stations are now being questioned as the notion of shipping wood chips from one continent to another, and the ability to re-plant sufficient trees at a fast enough rate, has already put some investors in the port sector off backing this technology in the future. Equally relevant, while battery electric vehicles potentially offer zero emissions at point of use and during power generation, battery waste at the end of vehicle life is still an open question.

5 Are there ethical considerations over how the fuel is produced?

Is there potential conflict between the production of the fuel or manufacturing of the technology and resources such as water, land for food production, or waste from mining? Today this may seem a small concern, but how could it look in 10 years’ time?

Implementation and operation 5 How does the technology match the duty cycle of the application? Does the refuelling/recharging time coincide with periods the equipment is not in use, both in terms of frequency and duration? This may depend on specific usage patterns at a port rather than a general characteristic of a given type of equipment.

5 How easy is it to implement? Does the technology require large amounts of infrastructure within and outside the port such as fuel tanks, pipelines or upgraded grid connections?

What investment in training is needed for staff, and how easy is it to source people with the right skills? What licences may need to be held? How dependant is implementation on the actions and cooperation of third parties? What are the space requirements? In general, small scale self-contained schemes will be easier to implement.

5 Scaleability – how easily can the technology be further rolled out if volume growth requires more equipment? Are there ‘tipping points’ that need to be reached before an increase in fleet or infrastructure makes financial sense for a given technology, and if so how big are the steps between tipping points?

Long term viability and lower unit costs 5 Will there be long term support and widespread adoption of this technology? What evidence is there the technology is gaining critical mass, at least at a local level?

5 What might happen to energy prices in the long term? This is hard to predict but as a general rule if something is

widely adopted costs should come down in the long term.

It is worth considering: can the energy be generated from a variety of sources and are those sources spread throughout the world? If so, unexpected price increases due to natural disasters, conflicts, loss of refining capacity, or cartels are less likely. Taxes on fuels should be viewed carefully: if currently higher taxed fossil fuels are largely replaced in the long term, how will governments replace this revenue?

8 The greater the investment the more crucial it is to de-risk the low or zero emission power source selection

Risks 5 What are the sunk costs if the technology proves unreliable and conventional equipment has to be brought back into use? And what are the consequences of disruption caused by equipment failure?

5 What are the options for leasing rather than purchasing?

Or for suppliers to fund some or all of the infrastructure?

5 If fixed infrastructure needs to be introduced, is there a risk of siting it in a location that inhibits future development plans?

Upsides 5 Can this energy source also generate revenue for the port?

Could the energy source be located in the port and any excess sold to third parties? Could the port be a hub for distribution or retailing of this fuel – even if generated by a third party – with a rent or % of sales creating a revenue stream for the port?

A LOGICAL PATH As with most things, there is likely to be a trade-off between cost and benefits. The greater the investment the more crucial it is to de-risk the strategy by choosing options likely to be reliable, simple to implement and become widely adopted. Options that incorporate electric drives and fuels such as hydrogen which is both non-polluting at point of use, can be produced using renewable electricity (creating ‘green’ hydrogen), and does not appear to conflict with other human needs; are likely to be safer long term choices.

However, hybrid drive or battery electric solutions may be more appropriate given the scale, equipment lifespan and space constraints of an individual port.

What is most suitable will depend on the specific circumstances of each port. A wide range of strategic considerations and a systematic decision-making process should guide development of a low emission strategy for ports.

‘‘

The greater the investment the more crucial it is to de-risk the strategy by choosing options likely to be reliable, simple to implement and become widely adopted

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

SEPTEMBER 2020 | 33

TERMINAL TRAILERS

TERMINAL TRAILERS: EVOLVING Longevity, strength and value are key trailer requirements for marine terminal operations.

John Bensalhia looks at some of the notable products and innovations to make the grade this year

8 Ports seeking the right trailer need to consider a wide range of requirements: strength, longevity, safety, value for money, ease of use and speed are high on the agenda

As the old maxim goes, “You get what you pay for.” Steffen Kohleisen, Sales, Seaports and Container Terminals, Seacom AG, is discussing the longevity of port trailers and their components. “If you want a port trailer to last a long time, you have to invest in high quality components: steel quality, sufficient dimensions of I-beams, heavy-duty axles and bearings, quality-brand tyres, and high-quality paint.”

Clearly, marine terminals seeking the right trailer need to consider a wide range of requirements. Strength, longevity, safety, value for money, ease of use and speed are all identified as primary requirements. Accordingly, trailer manufacturers are providing solutions for diverse unit loads.

CORNERLESS IS KING Recent trailer design trends have accommodated the latest requirements with facilitating fast turnaround high on the list.

With this in mind, terminals are opting for solutions like the cornerless chassis.

“Over the past few years, cornerless chassis have become more and more popular, as this design allows the quickest turnaround time,” says Kohleisen, He explains that drivers can pull away from the crane as soon as the spreader has lifted off, since containers do not need to be secured. “Gravity stoppers prevent smaller containers from shifting during transport. Terminal trailers are typically rated for speeds up to 25 km/hr.”

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Cornerless chassis are becoming popular as the design offers enhanced turnaround times 34 | SEPTEMBER 2020

Self-locating guides are also identified as a performance enhancing asset – as featured, for example, on CIMC’s 45ft Port Terminal Skeleton Trailer. Designed to carry one container up to 45ft, this skeleton trailer includes a clearly marked self-locating guide in order to hasten the level of container loading onto the chassis..

CHALLENGING CONDITIONS When investing in a trailer, operating conditions are also important to consider. Freezing conditions can prove to be a challenge for equipment, so finding a trailer that can withstand elements such as snow, ice, and rain is essential.

In June 2020, it was announced that the Port of Montreal’s Viau and Maisonneuve terminals would be taking delivery of new Buiscar trailers. The units were selected on account of their ability to withstand the -30 degree Celsius climate of a harsh Montreal Winter season. The design of the Buiscar trailer features high tensile, hot rolled steel main beams for the base, with a load capacity of 70 tons and the ability to move containers of up to 45ft in length.

Another reported benefit of the Buiscar platform configuration’s main beam wide design is that it features integrated collapsible twist-locks which enable any loaded containers to be secured in various positions. A recent skeletal trailer of this kind was constructed for an Antwerp-based customer in July 2020, with the capability of handling 20ft and 40ft containers with a 65 ton load capacity.

In April 2020, four skeletal trailers were provided for an Icelandic-based customer. The trailers are employed at a terminal that conveys containers and bulk cargo between various modes of transport including ships, trucks and trains.

The trailers accommodate containers between 20ft and 45ft with a load capacity of up to 65 tons.

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

TERMINAL TRAILERS

8 Port trailers need to be extremely rigid and heavy duty so as to withstand strong impacts up to 65 tons, plus the weight of the spreader in conjunction with twin-lift operations

In July 2020, China’s Shandong TITAN Vehicle Co., Ltd delivered to Tanzania a 40ft container port terminal semi-trailer design that comprised a truck chassis for both loading and unloading heavy containers with ease. The semi-trailer is made from high tensile-strength steel to ensure longevity, while the main beam of the trailer is strengthened via TITAN’s automatic arc-submerging welding procedures (a flexible product that can be adjusted to specific moving conditions for both loading and unloading).

NEED FOR STRENGTH In terms of safety, port trailers need to be extremely rigid and heavy duty. Kohleisen explains that compared to regular road trailers (which are being carefully loaded, then driven for several hours before being unloaded again), port trailers are constantly loaded with heavy containers with significant impact forces.

“Often, containers are being placed on a chassis with a substantial impact, and when loaded with a twin-spreader, two containers with a combined weight of 65 tons, plus the weight of the spreader, must be supported. This means that container guides, main frame beams, axles and rocker beams must be extremely rigid. Leaf suspensions or air suspensions, which are widely used in the transport industry, are not suitable for port operation,” Kohleisen underlines.

Trailer strength is also essential to facilitate efficient cargo handling. To avert wear and tear of both the cargo unit and the trailer, modern trailer designs are made with extra strength. The CIMC Tri-Axle 40ft Flatbed Trailer with Side Wall includes a reinforced tray box that is designed to prevent the risk of deformation when the trailer is fully loaded. Capable of holding either 1 x 40ft container or 2 x 20ft containers, the Tri-Axle trailer

while of a heavy duty design it is, thanks to the cornerless chassis, still relatively easy to manoeuvre.

NEW GENERATION TECHNOLOGY Electric vehicle and trailer combinations have already been devised, tested and used as a means of saving energy and using a trailer in conjunction with a fully electric tractor points the way forward for to meeting modern-day environmental requirements.

One manufacturer embracing this concept is Gaussin.

Earlier this year, Gaussin confirmed an order with New Zealand-based CentrePort for seven fully electric terminal tractors and seven TT terminal trailers. The container handling tractors are powered by Lithium Metal Polymer (LMP) batteries, which reduce emissions and noise pollution levels to zero and are claimed to simultaneously boost levels of safety, driver comfort and productivity.

The effectiveness of this alternative technology trailer/ tractor combination was verified in March 2020. Global freight and logistics company, UPS, tested six Gaussin electric vehicles for performance and strength when moving semitrailers and containers. The Trailer and Swap Body Mover combination is said to have a number of advantages. As well as zero emission levels, the battery-swap technology used means that when one battery goes flat, it can simply be swapped for a fully charged one. This, it is said, offers a key benefit for port operators because tractor and trailer cargo handling can be performed on a constant basis, 24/7.

The UPS test results further confirmed that autonomous tractor/trailer driving can deliver significant economies.

And with added strength, resistance to damage and flexibility, port operators seeking an optimised design look to have moved a step closer to this.

Tyres two key considerations A fundamental aspect of the trailer is the tyre. In order to ensure maximum protection of trailer tyres, terminal operators must ensure two important elements, as Kohleisen outlines.

“Ports need to ensure that they buy quality. Good quality tyres are essential for safe operation of the terminal chassis.

Seacom only uses quality brand tyres on its trailers and are not offering cheap no-name tyres. On dual axle chassis, regular road tyres can be used, but for single axle chassis we use special terminal tyres or industrial tyres with a high load rating (PR24).”

However, even the best quality tyres will not last for long if the tyre is under inflated, which can quickly become a safety issue. “On a fully laden chassis, a tyre failure can result in a roll-over of the chassis,” explains Kohleisen. “It is, therefore, essential to check the tyre pressure daily. Seacom’s design features a heavy-duty rocker beam with stub axles, where both tyres are mounted in twin configuration, thus both tyres are easily accessible from the outside of the chassis.”

The Continental Trailer Tyre is designed with maximum wear volume for high mileage and a long lifespan. As well as a

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

high loading capacity and low rolling resistance, the tyre design allows for low vibration (adding extra comfort for the driver) and greater reliability for ports, owing to less tread edges compared to a profiled pattern.

A wide variety of tyres from Emerald Tyres caters for many kinds of cargo trailer. These include tyres for bomb carts, flat deck trailers and ro-ro trailers. The tyres are made with a heavy duty compound that increases safety, strength, efficiency and value for port operators. A further degree of flexibility is afforded in a choice of sizes for different port trailer requirements.

SEPTEMBER 2020 | 35

CARGO HANDLING: TYRES

TYRES TREAD A POSITIVE PATH Tyre design for port operation continues to advance. John Bensalhia identifies the latest initiatives

8 Tyre producers continue to meet new design challenges in the ports sector

While there is a greater shift towards energy-saving, emission-free port equipment, a side effect of this is that it can place extra demand on key items of equipment, such as tyres.

A document released by the Port Equipment Manufacturers Association (PEMA) notes the issues that tyres face with respect to automation and alternative energy technology.

It says that with a sizeable number of ports shifting towards automated operations and/or non-fossil fuel power sources like batteries or fuel cells, this can potentially place larger demands on vehicle tyres.

The report further explains that this is due to greater acceleration and sharper braking brought on by electric battery units and automated equipment. Compare this with the traditional style of cargo handling vehicle – while there’s less pressure on tyres, there’s a greater emphasis on fossil fuel use.

ALLEVIATING THE QUANDRY In order to alleviate this type of quandary, tyre manufacturers are introducing products and solutions that are designed to cope with modern day demands.

“One of the main trends in ports today is the trend towards automation,” confirms Anika Hannig, Head of Marketing Communications, Commercial Specialty Tyres, Continental Tyres. “If you have a look at the types of machinery being used in today’s ports, you will find an increasingly high number of AGVs. The use of automated machinery affects all components, including tyres.”

Hannig says that there are two things to consider. Positively, an impact of the driver’s behaviour on factors such as wear and tear of the tyre become obsolete, but negatively there is a need for automated checks of the tyre’s health where there is no longer a driver present to manually check them.

“This remains very important as the wrong air pressure is not only one of the biggest causes of premature tyre failure, it also offers another significant benefit,” she confirms.

DEMANDS ON TODAY’S TYRES As well as the growth in automation, tyre manufacturers are responding to other new requirements from port operators.

36 | SEPTEMBER 2020

“Reliability and stability when operating with heavy loads are common demands placed on today’s tyres,” says Rosanna Kivinummi-Lahdenpohja, Marketing Manager, Nokian Heavy Tyres, adding, “Today’s notable trends in tyres when operating in ports and terminals are safety and stability in all conditions.

In addition, the combination of intelligent sensors and tyres to support economical, efficient and safe use of tyres.”

Hannig adds that there are two more major demands: a low wear rate of the tyre and the lowest total cost of ownership. “To address these demands, it is crucial to have a look at the specifics of the different vehicles and different applications – especially at times where machines develop, and vehicles are providing more variable functions.”

Hannig further explains that Continental distinguishes different operational tasks – such as pick and stack applications or load and carry applications. “Vehicles such as reach stackers are used to load and unload containers,” she says, before confirming, “There is a lot of short distance driving with a high volume of turning on the spot. At Continental, we offer V.ply tyres for this kind of application.

They are the right choice for such applications, as they reduce heat generation and abrasion, the two primary causes of tyre wear, to significantly extend tyre life – and therefore to reduce costs.”

REDUCING WEAR Another means to reduce tyre wear is the compound. “Tyres have to adapt to changes in vehicle design,” says Hannig.

“Manufacturers are making vehicles more compact now so they can work in narrower spaces. This means the axles are much heavier than they used to be, which means we needed to make the compound more resistant to tearing and wearing. At Continental, we launched our Port Plus compound with improved wear performance in 2018 to meet these demands by reducing tyre heat generation, minimising wear and consequently extend tyre life significantly.

Nokian Tyres has also established solutions to ensure tyre strength and lower risk of wear and tear. “We have developed rubber compounds to prevent accidental tyre damages and to extend the operating hours of the tyres,” says the company.

Examples from this manufacturer include tyres that can

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

CARGO HANDLING: TYRES

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Reliability and stability when operating with heavy loads are common demands placed on today’s tyres cope with the challenges of heavy loads and extreme weather conditions. The Nokian Hakkapeliitta Truck E2 tyre is designed to manage thick snow and slippery ice.

Teppo Siltanen, Product Manager, Nokian Tyres, explains that the new tyre has a number of special features that make movement much easier in bad weather. “Nokian Hakkapeliitta Truck E2 has better stability as well as grip in both deep and packed snow. Also, the grip lasts longer, thanks to some clever tread pattern features.”

Also, Nokian’s R-Truck Steer XL is a tyre designed to cope with heavy stresses. Siltanen explains, the tyre can cope with “the heaviest construction and timber trucks...” We want, he adds, to open up new possibilities for heavy trucks. The Nokian R-Truck Steer XL tyre brings good off-road properties to a new weight class. The open tread pattern and wide grooves mean that the tyre has a solid grip for controlled steering in all kinds of driving conditions. When used on rough surfaces, the stone ejectors in the tyre grooves ensure a long lifespan, which is also prolonged by the tyre’s rubber compound, resulting in low heat build-up and slow wear.

EXTRA RESISTANCE Considering challenging port handling environments, Trelleborg’s T-900 and TR-900 tyres include a number of aspects that are designed to make operations easier. The T-900 includes a reinforced sidewall that provides extra resistance to sudden side impacts. Stability and traction are boosted, thanks to the T-900’s extra wide tread. Meanwhile, the TR-900 tyre is designed to reduce the build-up of heat, helping to extend its life-cycle, and thus, save the port operator money.

The Magna ranges of tyres are designed with the same principles in mind. Specially created compounds ensure improved stability and longer lifetime. The Magna MB01’s wear-resistant tread compound has been made to avoid tyre cracks and provide an extended life-cycle. It is reported to be a tyre that offers reinforced support capability and a low level of heat generation, adding to its longevity.

Geared towards straddle carrier use, Magna’s M-Straddle+ is said to be able to increase a load rate by seven per cent due to its reinforced casing. It is also claimed that a straddle

8 Tyres have to cope with heavy stresses and challenging port conditions

carrier driver can experience greater comfort and boosted dynamic stability, thanks to the strong rib pattern of the M-Straddle+. Plus, the tyre is said not to get too hot due to special heat dissipation feature.

Modern day tyres are widening their horizons. In order to better reflect the broad choice of applications that it is suitable for, Continental has recently renamed one of its port tyres formerly known as StraddleMaster+ to TerminalMaster V.ply.

“In this way, the name of the tyre is not only limited to use on straddle carriers, it also includes use generally in industrial heavy-duty transports,” says Hannig. “Further, the name also shows the construction type of the tyre which is based on multiple layered high resistance polymer fibre construction.

According to Continental, the proven V.ply tyre portfolio offers a high degree of stability with excellent turning on the spot conditions, strong sidewalls and new abrasive and crack resistant compound.”

Remote monitoring, simulating for optimum m design…

Hannig explains that digital tyre monitoring systems like ContiPressureCheck and ContiConnect help operators of automated fleets to achieve an overview of the pressure and temperature of each tyre deployed.

“If a value deviates from the recommendation, it automatically warns, and a fleet operator can stop the vehicle and adjust the pressure and temperature before a tyre failure happens,” she explains.

Modern technology is also being used to devise ways of testing the strength of new tyres. Continental uses virtual as well as real testing.

“Virtual prototypes and 3D testing in our simulation lab help us to simulate the actual use of the tyre and its behaviour when used in real applications,” says Hannig.

She explains why this is a benefit. “The range of parameters that can be analysed during such simulations reaches from deformation and deflection behaviour under load to heat development when driven at higher speed. With the help of virtual testing, we are able to reduce the number of development cycles for the sake of a fast development and delivery of our tyres to the customer.”

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

8 Tyre strength is one of a number of design elements Continental assesses via simulation

SEPTEMBER 2020 | 37

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RENEWABLE ENERGY PROVISION

BIG PORT ENERGY TURNROUND Ports could become the power brokers in the provision of renewable energy in Europe, writes Stevie Knight “It used to be that the inland side provided the power and harbours provided the resources,” says Jillis Raadschelders of DNV GL Energy, “But this model could soon change dramatically with ports beginning to deal in renewable energy.”

The reason is simple. There is a huge increase planned for European offshore wind, from 16GW in 2017, to a targeted 56GW in 2030 and 168GW by 2050. This poses a conundrum that has been investigated in the new Ports: Green Gateways to Europe study by DNV GL, with input from Eurelectric.

EXCEEDING PRESENT CAPACITY To put it in perspective, the Netherlands’ electric grid currently handles somewhere between 15,000MW and 25,000MW, but by 2030 another 10GW of offshore wind will be added. This will “far exceeds present capacity,” underlines Raadschelders.

The idea is to absorb it at the coast, so there is no need to build out the entire onshore grid for peak power generation. “If you are able to land offshore wind close to port, you are already working with an optimised energy hub,” he explains further.

Location will be key, regardless, and many harbours will invite industrial partners to share in developing a local electrical grid. At the same time, a similar hydrogen network – created by an electrolyser at the port – will also be attractive and can partner with technical and safety expertise already available.

“BEYOND SMALL EXPERIMENTS” Magnus Hall, lead of both Vattenfall and Eurelectric, adds that renewably derived hydrogen “is one of the front runners” for decarbonisation. It can be used directly in a number of industrial processes, although he stresses that for efficiency “you have to put it in the harbour”.

Interestingly, he explains that in Sweden there are already discussions on the low carbon manufacture of steel, although he adds that it is necessary to “think beyond small experiments”.

Size will have more than a little influence. Some countries are looking to create a national hydrogen infrastructure with associated grid resources, but ports can be the first movers, providing a valuable tipping point and helping crystallise green transport initiatives. “History shows that in a harbour, supply creates demand... so if something is available, it will be utilised further,” explains Raadschelders.

However, investment choices might not always be clear, as Raadschelders confirms. “For one partner company, electrification might be the answer, but the one next door might want hydrogen, while a third could want both.

Therefore, there is a question about how best to utilise the available energy and balance demand. It’s about system integration, combining the two infrastructures.”

8 There’s a huge increase planned for European offshore wind which potentially brings with it a power broker role for ports

FALLBACK PLAN Yet all systems require a fallback plan, as wind power can be inconsistent. Hydrogen will have some kind of storage, but if looking at fulfilling a baseline electrical demand for clients, it is unlikely that hydrogen can then be switched back to electricity, “as is too valuable for that”, he explains.

The alternatives are conventional generation, battery storage and import or power connections from elsewhere, plus there could be demand side flexibility worked into the agreement. All this adds to the investment… and of course, it all needs to have a clean-green source if zero emissions are in the contract.

However, do it right and ports will have a compelling business case.

There is also a warning: “The decarbonisation roadmap will develop over time,” says Raadschelders, “so a straight line between start and finish is unlikely, but if you constantly change direction, you can strand your assets”. Therefore, choices need to have built-in flexibility, but be backed up by long-term policy decisions and, of course, remain firm enough to build on.

8 An electrolyser at a port will provide the basis for a local hydrogen grid and crystallise green transport initiatives

‘‘

The inland side used to provide the power and harbours the resources . . . but soon ports could begin to deal in renewable energy For the latest news and analysis go to www.portstrategy.com/news101

SEPTEMBER 2020 | 39

CRUISE AND COVID-19

BATTLING COVID HEADWINDS For the cruise sector COVID-19 is a catastrophe. It has effectively stopped the industry in its tracks and big questions remain about how and when it will be able to get back to work

8 Royal Caribbean Group, like its industry bedfellows, is feeling the pain of COVID-19 but it continues to make big investments in the future

The cruise industry is big business. Globally, the number of passengers has grown year-on-year by an average of 7.5 per cent since 2000 with the industry body Cruise Lines International Association (CLIA) reporting a total of 28.5 million passengers in 2018. No surprise that for many ports the cruise industry is a vital component of revenue and ship calls.

The North American segment, which includes the Caribbean region, currently accounts for a market share of 49.9 per cent – equivalent to more than 14.2 million passengers.

But then the COVID-19 pandemic struck and the entire industry went into lockdown with all cruise vessels laid up in diverse locations. The key question is, of course, when will the industry re-open for business?

For North America, the end of July 2020 marked the first US-based cruise ship setting sail since March. UnCruise Adventures, a small expedition cruise line specialising in what it calls “intimate sailings” left on a round-trip from Juneau with 37 passengers (out of a total capacity of 60) and 30 crew. Four additional sailings are planned, if the initial trip is successful.

Social distancing measures are being maintained at all times, additional health checks are undertaken, and selfservice buffets are no longer offered. Operators are generally cautiously optimistic of seeing additional sailings.

WHAT ABOUT THE HEARTLAND? So, what about the Caribbean region – the traditional heartland of cruise operations? Well, Port Strategy contacted a range of operators who service this region and while there remains a clear desire not to be named, the overall position of these service providers can be outlined based on the feedback obtained.

Table 1 summarises the current position of a range of different operators. The Caribbean region is faring no better or worse than other regions where cruise vessels operate allied to North America.

The extent of the damage to the respective businesses of cruise ship operators is plain to see – it is no exaggeration to

40 | SEPTEMBER 2020

say that COVID-19 represents the biggest challenge the industry has faced to-date. Equally, it is a big challenge for both the homeports and destination ports at which cruise lines call in terms of front-line port activities and the wider economic impact delivered by cruise passengers. It varies from case-to-case but it is clear that with a number of the island economies in the Caribbean heavily dependent on cruise related business these cruise centres are being hit hard with fundamental structural damage expected.

Nevertheless, the lack of cruise ship sailings and port calls does not mean there has not been any positive activity in the sector or confidence expressed in the future.

Notably, Royal Caribbean Group, with its new name adopted from July 30, 2020, has acquired the remaining 33 per cent of ultra-luxury brand Silversea Cruises, following on from its original buy-in.

The Silversea fleet currently comprises eight vessels, with a total capacity of 2,450 occupants and a total of 300 berths confirmed. Five more ships are scheduled to be delivered in the next four years.

Richard Fain, Chief Executive Officer, Royal Caribbean Group, is in no doubt about the value of the investment. He notes: “Silversea is the crown jewel and the acknowledged leader in luxury and expedition cruising – two key markets that are poised for growth. And adds: “Uniting our two companies presents an extraordinary aordinary opportunity to expand vacation options for guests and nd create revenue in strategic growth areas.”

PORT PAIN WIDESPREAD Such bright spots are, however, ver, not the norm particularly from a port perspective.

Moses Kirkconnell, Tourism sm Minister, Cayman Islands, reports that the Cayman Islands will be closed to cruise ships through to September 2020, if not longer.

“I don’t think that we’re going to see

8 Mike Maura, CEO, Nassau Cruise Port, Bahamas sees a phased re-start of cruise operations

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

CRUISE AND COVID-19

Current Caribbean Status/Latest Position

Bahamas Paradise Cruise Line

Cancelled sailings to September 30

Carnival Cruise Line

Cancelled nearly all departures worldwide to end of September

Celebrity Cruises

Cancelled most sailings to September 30 (and all Fall/Autumnal sailings to Canada, New England and Hawaii)

Crystal Cruises

Cancelled sailings of Crystal Serenity (until October 22) and Crystal Symphony (until October. 23). Sailings of Crystal Esprit cancelled to end of October). The line has also delayed the debut of its new expedition ship, Crystal Endeavor, until February 2021

Disney Cruise Line

Cancelled all departures to “early October.” Some sailings confirmed

Holland America

Cancelled all Europe, Alaska, Canada and New England sailings for the rest of 2020 and Vancouver (September / October) and some Hawaii cruises to February 2021

MSC Cruises

All Caribbean sailings to September 15 cancelled (other vessel changes ongoing)

Norwegian Cruise Line

All sailings to October 31 cancelled

Oceania Cruises

Cancelled sailings to September 30 and one sailing in early October – at present

Princess Cruises

Cancelled most sailings to December 15

Regent Seven Seas Cruises

All sailings to September 30 cancelled

Royal Caribbean

All departures cancelled to September 30, with all Canada and Bermuda sailings cancelled to end of October

Seabourn

Cancelled all sailings into October, ships planned to return to service between October 13 and November 20

Virgin Voyages

Postponed official debut of its first ship until October 16

8 Table 1: Current/Near Term Position of Cruise Operators Serving the Caribbean

Source: Cruise lines

Cruise Line

Note: Information correct as of early August 2020. All dates listed are in 2020 unless specified.

cruise vessels back in Grand Cayman in the third quarter or fourth quarter, to be quite honest,” he confirmed in July 2020.

The Cayman Islands was one of the first cruise port locations to close to cruise ships in February 2020. The port of George Town appears in western Caribbean schedules, with calls from Carnival, Royal Caribbean Group, MSC Cruises, Princess Cruises, Norwegian, Celebrity Cruises and Disney Cruise Line.

In the Bahamas, the Nassau Cruise Port is expecting to close out 2020 with just 38 per cent of the activity recorded in 2019, although this is still dependent on securing 635,000 cruise passengers in Q4 2020.

In a cruise webinar at the end of July 2020, Mike Maura, Chief Executive Officer, Nassau Cruise Port, stated he expected to see 1.47 million arrivals for 2020. “Through midMarch we had already handled 835,000 cruise passengers.

We didn’t anticipate any cruise passengers from April 1st until September 30th. We believe that it will be the fourth quarter of 2020 when cruise ships return,” he said.

Maura also does not expect a full rebound next year. “In 2021, we are still considerably less than 2019 numbers at about 2.6 million. These are just forecasts, our best guess in terms of what we see happening,” he explains.

He further highlights his belief that the cruise industry may have to consider a phased reopening, a scenario that he expects to play out in The Bahamas.

“In phase one we see a conservative return to the market where cruise lines reach out to excursions and tour operators asking about health and safety protocols. You have to bring confidence to the industry that you are doing everything reasonably required to protect yourself and your customer,” Maura underlines.

Barbados is a major homeport and cruise destination in the Eastern Caribbean and has traditionally enjoyed good support from UK, European and North American cruise passengers but with COVID-19 now getting a grip in the eastern Caribbean this is another cruise centre that does not expect to see the return of comprehensive cruise operations

soon. Equally, it is a prime example of how this reality is day by day eating away at economic fundamentals.

The Central Bank of Barbados is predicting a record double-digit decline of up to 13 per cent in economic activity this year. Significantly, the Bank reports that the overall decline, reported as of early May, has been driven largely by the sharp reduction in tourism and related activities during the second half of March. Tourism contracted by 16.2 per cent, the result of a 17.9 per cent decline in long-stay visitors and 11.5 per cent in cruise passengers during the period.

WHAT NEXT? The base reality is that the impact of COVID-19 already means that the number of people able, or prepared, to book a luxury cruise will be much more limited, while convincing ships’ crew to return after a lengthy repatriation process will also be a challenge.

The major concern for the cruise business everywhere is the fear of COVID-19 continuing to exert its influence. And the signs are not good. At the start of August, one suspected case was detected.

Norwegian cruise operator, Hurtigruten, has confirmed 36 crew members aboard the Roald Amundsen tested positive for COVID-19, along with five passengers. All planned expedition cruises are cancelled until further notice.

The outlook for the cruise sector – in the Caribbean and elsewhere – personifies the prevailing situation in many sectors of industry business. There is no realistic prospect over the short-term of returning to the way things were prior to COVID-19.

‘‘

Tourism fell by 16.2 per cent, with a 17.9 per cent drop in long-stay visitors and 11.5 per cent in cruise clients: Barbados

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

SEPTEMBER 2020 | 41

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PRODUCTS & SERVICES DIRECTORY

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

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

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

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

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G-SERIES

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

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

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

7EB DELLNERDAMPERS SE

D REDGING

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

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

+44 1329 825335 www.portstrategy.com

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

E LECTRIFICATION SOLUTIONS

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

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

Contact Tim Hills or Hannah Bolland

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

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

Port Strategy Directory

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

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

D REDGING EQUIPMENT

NEUERO Industrietechnik GmbH

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

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LASE Industrielle Lasertechnik GmbH

14/07/2020 10:56

When experience really does matter!

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

C RANE COMPONENTS

C OMPONENTS

Cimbria Directory.indd 1

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

D REDGING

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

Taylor Machine Works, Inc.

C ONSULTING ENGINEERS

C ARGO HANDLING SYSTEMS

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

C ARGO HANDLING EQUIPMENT

B ULK HANDLING

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

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

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

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

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

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

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

Westicker Str. 52, 59174 Kamen, Germany

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

SEPTEMBER 2020 | 43

PRODUCTS & SERVICES DIRECTORY

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

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

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

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

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

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

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

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

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

Port Strategy Directory

SANY offers reliable quality container handling trucks.

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

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

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

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

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

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

Check out our Mobile OCR!

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

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

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

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

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

S HIP UPLOADERS

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Sany Europe GmbH

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

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

Contact Tim Hills or Hannah Bolland

I T PORT AUTOMATION

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

Port Strategy Directory

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

Liebherr-MCCtec Rostock GmbH

Verstegen Grijpers BV

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

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

M ARINE FENDERS

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

I T PORT AUTOMATION

BLOK Container Systems Ltd

I NSURANCE

H ANDLING EQUIPMENT

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

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

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

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

We Keep Your Vital Business Moving!

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

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

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

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

44 | SEPTEMBER 2020

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

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

PRODUCTS & SERVICES DIRECTORY

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

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

T ERMINAL OPERATIONS SYSTEMS

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

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

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

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

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

Port Strategy Directory

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

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

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

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

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

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

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

T ERMINAL OPERATIONS SYSTEMS

S PREADERS

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

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

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

T ERMINAL OPERATIONS SYSTEMS

S PARE PARTS

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

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

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

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

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

SEPTEMBER 2020 | 45

POSTSCRIPT TRANSNET: TIME FOR A REALITY CHECK

‘‘

Transnet, South Africa’s government-owned port manager and operator, is under new leadership but the challenges keep coming with strong stakeholder criticism of the methodology behind tariff increases and concerns over the Transnet National Port Authority’s role in deploying objective port governance

Transnet, the multi-division government-owned provider of port and rail services in South Africa, has been under fire recently with a whole range of customer led criticisms ranging from corruption to inappropriate pricing arriving at its door.

With a number of senior Transnet executives removed from duty and now actively under investigation for corruption up until recently there have been many parts of Transnet that have been managed by executives that have been put in position on a temporary or ‘acting’ basis. In February of this year, however, Mohammed Mahomedy, the then acting Transnet, Chief Executive Officer (CEO) was replaced by Portia Derby as the new Transnet CEO who at the end of the same month implemented a new top leadership structure and following this vacant middle and other management positions have also been populated.

The new top leadership structure is not identical to the one that went before with, for example, the posts of chief strategy officer, chief business development officer and chief legal officer all designated as “existing positions that are to be reprofiled.” This “reprofiling,” according to informed sources, has also involved some executives being pushed towards the door, one example being Ndiphiwe Silinga, Chief Legal Officer, with Derby reportedly not happy with work carried out by the legal department in several contracts which were found to be flawed including the controversial 1064 locomotive deal which saw their price skyrocketing from R38 billion to R54 billion.

NEW BROOM It is in effect a ‘new broom sweeps clean’ situation but with the strategy underpinning these changes yet to be fully visible.

There are, however, some signs of a new direction under construction with Portia Derby stating recently that Transnet is to shift its focus to the South Africa Development Community (SADC). She has publicly stated that Transnet will come up with a detailed plan in this respect, “within the next year or so.”

Transnet has of course endeavoured to deploy both its rail and port know-how elsewhere in Africa – with rail notably in Ghana and Nigeria, and with ports in conjunction with two projects – the BeniSA Maritime Project, which flowed out of a government to government agreement with Benin, and the new port of Lamau in Kenya where concession arrangements were targeted.

There has also been discussion of Transnet supplying training and other packages to ports on the African continent.

RIGHT DIRECTION? The activities conducted beyond South Africa’s borders to-date in the port sector have, however, raised questions about whether these should be a Transnet priority given the problems associated with service levels and pricing visible in its own ports.

A study into two key aspects of Transnet’s port activities -port pricing and port governance – appears

46 | SEPTEMBER 2020

8 Transnet’s leadership structure is changing. Will this contribute to positive changes in port pricing and governance, the subject of recent heavy criticism?

to lend support to this view. The study draws its findings from the submissions of 137 stakeholders to the Ports Regulator of South Africa which were lodged in the period 2009/2010 to 2018/2019.

The division of Transnet that sets port pricing on an annual basis is Transnet National Port Authority (TNPA) which does so based on a methodology dubbed Revenue Requirement (RR). Interestingly, the findings from the submissions were that the RR methodology is arbitrary, is unjustifiable and incentivises overstating the required revenue by inflating the weighted average cost of capital (53 submissions). Annual above-inflation tariff increases were identified in 26 submissions plus there were submissions that suggested volume forecasts cause anomalies in tariff determination trends and other submissions all of which suggest the RR methodology is not the best path to promoting the country’s competitiveness.

TNPA, which has a dual mandate of lowering the logistics costs of doing business in South Africa and contributing toward economic development, comes in for some quite considerable criticism with regard to achieving effective port governance in its landlord role. Two notable complaints lodged at its door are: 5 Use of dominant position to prevent or lessen competition (it is being investigated by the South African Competition Commission in this respect), and 5 Cross subsidisation of loss-making divisions and cross subsidisation of some services -e.g. the container trade and automotive trades being charged premium tariffs and thereby being used to subsidise bulk trades.

There is insufficient space here to review all the new study’s findings – an extensive Abstract can, however, be accessed via the Internet, entitled South Africa’s port doctrine: dilemmas and the way forward.

Even this brief review, however, suggests that there is more than enough for Transnet to get to grips with at home without participating in port projects overseas where its knowledge base is lower and competition from the private sector is much stronger.

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

CONTAINER TERMINALS: Paths to Profitability

By Remco Stenvert and Andrew Penfold

Container Terminals: Paths to Profitability

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

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

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

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

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

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