Posted by: kvsonghai | 16 March, 2010

Investment is still pouring into the world’s ports [CNBC Business]

According to the March 2010 edition of CNBC Business magazine, “Global trade is falling, economies are buckling and environmental challenges are mounting, yet investment is still pouring into the world’s ports“.

The writer, Colin Brown, noted that “[k]nowing the economy has to rebound at some point, particularly on the back of expected trade growth in China, India and Indonesia, few major hubs appear to have curtailed development plans conceived during boom-times. And the confidence is not misplaced: 90% of the world’s goods still go through their highly computerised conveyor systems, a percentage that might actually increase should air freight fall out of favour with an increasingly climate-conscious business world“.

Listed amongst the global developments within this industry, are:

  • The 80km Panama Canal:…a €3.6bn bet on continued growth in international maritime transportation. And it’s all music to the ears of a vast shipping infrastructure that has been completely at sea these past 12 months.While other construction projects have stalled as the global economy has faltered, Panama’s Canal Authority has persisted in deepening its existing channel and blasting access to a new set of larger locks. When completed in 2014, the canal expansion will allow all but the world’s eight largest container ships (all built for Denmark’s Maersk) direct water access between the factories of Asia and the densely populated cities of America’s Eastern Seaboard.” It is further noted that “[w]ith super-sized vessels presently too large squeeze through the Panama Canal, 70% of Asian cargo is currently offloaded at ports on the West Coast and moved by rail or truck across North America“.
  • Europe’s largest port, Rotterdam: “Determined to defend its position as Europe’s largest port…despite the global downturn, the Port of Rotterdam Authority is pressing ahead with an ambitious €1.1bn expansion into the North Sea, dredging up 240 million cubic metres of sand from the seabed to create a new spur of land“. According to the article, the project “[k]nown as Maasvlakte 2, the project will extend the Port of Rotterdam area by 20% when the spur is joined to the rest of it by road and rail links. Under phase one of the plan, the first container terminal, built and operated by Rotterdam World Gateway (RWG) consortium, is due to open in 2013, with the second, operated by APM Terminals, following a year later“.
  • Germany’s largest port, Hamburg: According to Brown, Hamburg port “…is preparing cut harbour fees, spend on improvements, and build a brand-new terminal as it looks to the future after a year of misery“.
  • Maritime ports in the Baltic Sea region: Apparently these ports “…are facing plenty of logistical, infrastructure and environmental challenges as pressure builds to move heavy cargo operations out of inner city port areas”. “Maritime ports in the region carried 0.4% less cargo in 2008, with only liquid bulk, mostly oil, and international container shipments seeing growth, both by 5%, according to the regional industry group Baltic Ports Organization (BPO). It’s quite a change from recent years: annual increases in Baltic container traffic averaged 15% between 2004 and 2007, with growth higher to the east, says BPO secretary general, Bogdan Oldakowski. In terms of overall cargo, it has been “very positive” for the past 10–15 years, with Russia the biggest engine for growth, says Antti Saurama, a researcher at Finland’s University of Turku’s Centre for Maritime Studies”.
  • Singapore retains coveted crown of world’s busiest port: “Singapore, our port operators are taking advantage of the slowdown to upgrade the skills of their port workers and to retrofit port equipment. The Maritime and Port Authority of Singapore is also pressing ahead with port development, as well as investments in systems and technologies to raise the efficiency and productivity of the port.”Among the initiatives are WISEPORT, a scheme bringing wireless broadband to ships in Singapore port waters, and BunkerNet, an industry-wide web-based platform to facilitate communications among all parties of the bunker supply chain. “These projects do not just pump prime the economy, they build new strengths that will otherwise not be there later,” added Choi. “Similarly, we want our port operating entities to be well positioned for growth when it returns. Hence, Singapore is not letting up with the capacity expansion of Pasir Panjang Terminal. Works to add 16 berths with a total additional capacity of 14 million TEUs are proceeding without delay.”

    Singapore is spending €1bn to expand its port in a bid to increase annual capacity by a jaw-dropping 50% within three years. Aware of the potential ecological impact, €10m has been set aside to mitigate the impact of the marine environment, including silt screens and the relocation of affected corrals. In addition, port operators have introduced electric cranes and are testing the use of hybrid engines.Such bravura seems to be hard-wired into the Singapore DNA. For evidence look no further than downtown Singapore’s harbour and Singapore River. What was once the flood-prone site of the country’s original ports is now one edge of an enormous fresh water urban lake. By building a dam across the mouth of the Marina area, engineers created a collecting reservoir for the nation’s water supply that also doubles as a tidal and flood control barrage. It also provides the dramatic setting for a new water recreational area anchored by a futuristic casino complex, whose doors are due to be opened by casino resort company Las Vegas Sands in the coming weeks”.

  • Hong Kong holds own against Shanghai & Shenzhen: “Unlike most major hubs, its container terminals are all privately owned and managed, which means competition between the five rival operators keeps costs down. Independent companies also run the midstream cargo transfer business, a cheaper alternative to the terminals that accounted for 28% of Hong Kong’s total throughput of 24.5 million TEUs in 2008.The government does, however, provide unbeatable back up. Hong Kong’s pilots and vessel tracking system (VTS) – which monitors more than 220,000 ships a year and one of the world’s busiest shipping lanes, the Lamma Channel – are among the best in the world, thanks to heavy investment in training and technology. The Marine Department is also currently awaiting environmental sign-off to dredge the whole of the Kwai Tsing container basin and the approach channels, in preparation for the arrival of a new generation of 15,000–18,000 TEU mega-ships.

    Other projects in the pipeline include the construction of a bridge linking Hong Kong to the western delta region via Macau and plans for a 10th container terminal. The latter was originally due to open in 2015, but in the wake of the financial crisis the date has been put back to 2018. Government officials insist, however, that they are still seeing strong demand and are pressing ahead with a feasibility study on a site on the southwest of Tsing Yi Island”.

  • Dubai likely to remain trading hub of the Middle East for some time: “Dubai’s Jebel Ali claims to be the third largest transshipment hub in the world after Singapore and Hong Kong, with about half the goods coming through Jebel Ali destined for countries other than the UAE. Although mega-markets like India and China play a role in the re-export trade, transshipments are mainly bound for smaller ports in other cash-rich but port infrastructure-poor Gulf countries, such as Qatar.Despite talk of a major rail network to connect Middle East destinations by land, other regional seaports will continue to thrive, which explains why Jordan is investing heavily in its Aqaba port, a jumping-off point for the Red Sea and Suez Canal. A €160m expansion project aimed at making Aqaba a gateway to the greater Levant is expected to raise the port’s annual capacity to two million TEUs.

    Further north, Turkey’s Haydarpasa, located on the Asian side of the Bosphorus Strait on the Sea of Marmara, remains a vital trade hub as it provides a link to Mediterranean ports, such as Greece’s Piraeus, as well as Ukraine’s Sevastopol, which are both within 1,000km”. “But it is Dubai that will continue to see the greatest share of the region’s trading activity. Already the seventh-largest port for containerised vessels in the world, plans are under way to expand further, including the largest airport in the world – Maktoum International – and a logistics park. After a €1bn expansion project that will raise Jebel Ali’s capacity more than 50%, Dubai appears ready to become the world’s fifth-busiest port following Singapore, Shanghai, Hong Kong and Shenzhen.

Time will tell how the African port authorities choose to react to the positioning taking place within the industry, however it must be an issue to be taken seriously. This is for numerous reasons, most pressing of all being that many nascent emerging economies of Africa will lean quite heavily on the export of goods, minerals, oil & gas; all of which is predetermined by a strong and reliably competitive transport and logistics infrastructure, of which ports are central.

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