Review of Maritime Transport-2014

Part 4: Port Development

A. Container Ports

• Containerized Cargo Accounts for more than half the value of all international seaborne trade with only 1/6th of the volume

Countries Throughput (2013)

2013 (Growth)

2012 (Growth)

Developing/ Transitioning

466.1 mn TEU 7.2% 5.2%

Developing 184.9 mn TEU 1.7% 4.3%

World 651 mn TEU 5.6% 5%

72%

28%

Throughput Share

Developing/Transitioning

Developed

Container Ports

• Developing Countries Share is Increasing:

Greater Participation in Global Value Chains

Increasing use of containers for dry bulk cargo

• Negative growth for :

Columbia- Trade decline in Caribbean Basin

Egypt- Political Uncertainty

Hong Kong- Competition from Shanghai and Singapore

Oman- Competition from Neighbouring Ports

• Top 20 Developing Countries:

Asia-16 (China has largest throughput, 26.8% of world)

Central & South America- 3

Africa- 1

• All of Top 10 Ports are in Asia

• Top 20 ports accounted for 46% of total container throughput

B. Terminal Operations

• Container terminal is a fragmented industry, still there are some international players who have achieved a global presence

• Top 10 global terminals control 37% of total container throughput (about 224 mnTEU)

• Terminal operators with shipping links (APMT, Mitsui OSK) have sold off some assets whereas traditional terminal operators (DP World, Stevedoring Services of America) have made more investments

Terminal Operations

• High volume of throughput is not necessary for berth efficiency

• In port terminal competition is driving berth efficiency in ports like Tianjin

• Port expansion and improvements have added to efficiency in Khor Al Fakkan, UAE

• Highest efficiency in Europe was for Euromax Terminal Rotterdam (100moves/hr)

• Average berth efficiency in Africa was around 19 moves/hr

Evolving Port Role• In developing countries tax collection at ports is a major revenue for

government• Eg: The Port Authority of Tanzania and Tanzania International Container

Terminal Services paid $43 million and $15 million, respectively, giving them a combined position of third place in the country for tax contributions

• A recent report by the World Bank on the United Republic of Tanzania cited that improved efficiency at the port would enable greater efficiency in tax collection, which in turn would substantially increase tax revenues

• So, port development and port reform are essential components of a developing country’s financial well being

• However, in developed countries tax collection at the port has become less important. This is partly due to the advent of new methods to tax, for example, income tax and payroll taxes, as well as to efforts to streamline port processes and facilitate the flow of goods (low duties)

C. PORT RELATED DEVELOPMENTS

Transit Route Panama Canal:

• Serves more than 144 maritime routes connecting 160 countries (1700 ports)

• Total Crossings- 12045 (25% Container Vessels) with 319mn tons of cargo

Panama Canal

• Expansion of Panama Canal with addition of 3rd set of locks as well as deepening and widening existing channels (to 54.86 metres) for accommodating ships up to 13500 TEU

• Largest Ship still cannot transit the canal

• Cost of expansion is currently $7bn (overrun of $1.8bn)

• Expected additional revenue- $ 1bn (Currently- $1.8bn)

PORT RELATED DEVELOPMENTS

Transit Route Proposed Nicaragua Canal:

• Proposal passed in June 2013

• Likely to be 278 kms long and would wider and deeper than Panama Canal

• Would be able to accommodate the largest ships

• Hong Kong Nicaragua Canal Development Investment Co. Ltd has been given 50 yr concession to build and operate the canal with option to extend concession for another 50 yrs

• Est. Cost- $50bn

• Est. Time for construction- 5yrs

• Work started- Dec 2014

PORT RELATED DEVELOPMENTS

• Mandatory container weight checks was introduced after agreement at IMO (International Maritime Organisation)- To start in July 2016

• Responsibility for ensuring containers weight is verified lies with the shipper

• Weigh bridges and twist lock load sensors on cranes to be used for measurement

Due to reliance on shipping companies on technology to navigate the English Channel, The UK Govt. Has began installation of 7 e-Loran stations along the UK Coastline (20 stations by 2019)

The stations will act as a backup to the current GPS systems being used by companies to determine position and course in case of any incidents

Navis, a division of Cargotec Corporation has come out with its 4th generation Terminal Operating system, SPARCS N4

It allows customers to run multiple operations spanning numerous geographical locations from one central location

Currently present in 107 sites in 47 countries (63 are live)

OTHER PORT RELATED DEVELOPMENTS

D. Some Current Challenges Facing Ports

• One of the major challenges for container ports today is the upgrading of facilities to cater for the increase in vessel size and the corresponding pressures this places upon the spatial and time aspects of cargo handling.

• Larger ships mean investment is needed in bigger cranes that can reach out to collect the furthest container from the berth.

• Traditionally, container cranes were designed to serve vessels 13 containers wide and recent vessels require reach of about 22-23 containers

• Ports are hard-pressed by shipping lines to invest in this shore-side equipment or be excluded from major East–West trade lanes

• With the arrival of larger vessels, the previously largest vessels are being redeployed from the voluminous East–West routes with advanced ports to smaller less voluminous ports on the North–South routes.

Future Vessel Design• The next generation of container vessels will be bigger and plans have even been

conceptualized for vessels of 22,800 TEU and 24,000 TEU

• These vessels will have a width of around 64 metres and a length of 487 metres.

• Ship length is likely to be limited to around 400–450 metres

• Shorter and wider ships are more stable and have shallower draft, enabling them to better serve ports in developing countries that cannot afford dredging costs.

• In addition, wider ships require less ballast water (so less environmental pollution due to foreign species transfer)

Future Needs

• Ports need not necessarily build longer berths, unless they want to cater for multiple ships simultaneously

• Ports must construct deeper access channels, wider turning basins, more pilotagefacilities, strengthened quays, larger storage areas and more sophisticated terminal operating systems within the port

• Outside the port, the highways, inland waterways and rail networks need to be able to cater for increased cargo volumes

• The number of freight vehicles, railway wagons, barges or trucks needs to be increased

Environmental Concerns• Construction at Greenfield sites may displace indigenous wildlife.

• The wake of vessels may also disturb natural wildlife and make certain areas no longer habitable.

• The construction of ports close to cities may affect the health of humans living and working close by.

• The use of construction materials like cement has a well-documented impact upon the environment at all stages of its use from quarry to utilization.

• The need to dredge channels and berths has an impact upon the area being dredged and where the extracted material is then placed. Sometimes this material can be laden with toxins from vehicles or cargo contaminants that enter the sea as rainwater run-off from the quays.

• In construction of ports it is usual for an environmental impact assessment to be undertaken

• The displacement of natural habitat and wildlife are also considered in balance with gains to be made to local economy to produce a cost-benefit report

Sources of Environmental Concern

• Green house gas emission from inefficient diesel engines belonging to cranes, reach stackers etc.

• On-dock buildings for workers use energy for cooling and heating to keep operations at temperatures appropriate for workers

• Cargo may cause noise or dust during handling and storage

• Dry bulk cargo like fertilizers or animal feed have high organic concentrations that may cause nutrient enrichment & oxygen depletion destroying marine life

• Ferry traffic can cause queuing

• Excessive light from quayside operations

• Vibrations from ships

• Air pollution while loading and unloading operations

• Accidental Spillage

• Cold Ironing: Using shore side power rather than ships engine

• Introduce emission control measure or fuel oxidation catalysts or particulate filters

• Install water catchment facilities to filter debris in quayside storm water runoff and prevent it from entering sea

• Limit noisy activities to daylight hours

• Reduce drop height and fall velocity of bulk cargoes

• Introduce cargo netting or dust extraction technology

• Insulate buildings to efficiently regulate temperatures

• Utilize renewable resources where possible

• Develop robust emergency response plans for spillages

• Financial incentives based on ships efficiency

Pollution Control Measures

Major pollutants

Green house gases, CO2, CH4,N20,NOx, SOx, Particulate Matters

E. Conclusions• Container-port throughput continues to grow at an annual rate of 5–6 per cent.

This offers an excellent opportunity for exporters to seize the opportunities of utilizing empty containers in order to find new markets for existing products.

• There exists a potential for many developing countries to integrate further into global value chains through organizational planning.

• Ports require careful monitoring and planning to cater for the growing demand and deal with the mentioned issues

• The improved performance of individual port terminals bodes well for the future organization and planning of all ports.

• Just as the container became a universal standard, the same is being seen in the development of terminal operating systems. Information technology systems that can integrate into other global systems will also be a key feature of the future.

• As larger ships cascade down to developing-country markets, these countries’ ports will need to embrace the new technology. This will also make it easier for other parties, such as larger ports or customers, to provide assistance to make efficiency gains.

• Port collaboration will be a sign of the future and gradually the differences in port performance will narrow around the world