Land lovers
The Van Oord trailing suction dredger hopper Utrecht carrying sand to shore during work on a project related to Maasvlakte 2. Credit: Retska; Dreamstime
Now's the time to lay the groundwork for future port growth, as Stuart Pearcey finds out
It's inescapable that the world's global economic recovery is going to be built, at least in part, by dredgers deepening channels and creating new land for larger ports.
The upturn will come; and when it does, the world and its ports will have changed. Ships will be larger than ever before, and the whole dynamic of trade will arguably have shifted with the realisation of the potential for those larger ships to ply different global routes, which will soon be offered by Panama Canal developments that will give 'panamax' a whole new meaning.
That expansion is poised to change the structure of the whole world's shipping industry; on both seaboards of America port authorities are alive to the possible consequences. Further afield, governments as far apart as China and Europe are moving towards investment in waterways.
For some hard-up ports, all of that potential could hardly have come at a worse time. In places, ports are in financial difficulties because trade is down; for some it has almost disappeared. Some marginal ports have lost all container traffic. It's a point on the circumference of a vicious circle. Faced with longer ships with deeper draughts, ports can be desperate for maintenance dredging, but they can't afford it because they don't have the income. Shallower berths and approaches restrict trade, which in turn restricts income, which makes growth still harder to achieve. Ships are getting bigger, and with bigger ships at the top, the whole system 'moves up'.
So size matters. And dredging companies are thinking bigger today than ever before. The 2,000-hectare Maasvlakte 2 is re-defining Rotterdam, Lagos will be larger by 800 hectares when Royal Haskoning completes the project it announced in March this year, and next April's opening, at Orissa in India, of a port capable of handling 83m tonnes of cargo, carried in super capesize vessels, is on track.
The last, being created with the help of Belgian dredgers DEME, will have 13 berths offering 18m of draught. And DEME are bullish about growth. Having written off the Port Rashid project in Dubai, the firm is said still to have orders worth ¢655m ($932m), much the same as they were at the end of 2008. Furthermore, earlier this year it announced plans to invest ¢500m ($711m), adding vessels at the rate of one a year since the turn of the millennium.
Just when, and how quickly any recovery will come depends on whom you ask. Are there green shoots of recovery, or are they merely weeds growing in the desolation of economic uncertainty?
In Rotterdam, half-year figures released in mid-July are bullish. Port chief executive Hans Smits is reported by Transport Intelligence to have said he expects throughput to stabilise this year, to be followed by modest growth next year, and the opportunity for the port to contribute to the recovery of the Dutch economy.
Antwerp Port Authority chief executive Eddy Bruyninckx is less confident, acknowledging some stabilisation, but predicting there's not enough. And in Hamburg, container volumes have plummeted by 30%, and Hapag-Lloyd is looking for a major cash injection.
So how to prepare for an upturn, and the larger vessels it may well bring? Is now the time to be thinking hard about reclaiming land for port expansion, like Rotterdam, and booking a dredging contractor in advance?
Change in the volumes of dredging work in the Middle East has made contractors hungrier for work, says Anthony Bates of the Anthony Bates partnership. "We found 12 months ago that we couldn't find a trailer dredger; people are now knocking on our door looking for work, which certainly wasn't the case 12 months ago."
Booking ahead, for which the industry has no policy, says Mr Bates, can be a double-edged sword. "Because of oil price volatility contractors are reluctant to book too long term. The price of oil price is a gamble, because it can move so suddenly that contractors can find all their profit removed from a job."
Nevertheless, he says, this could still be the time to go out to tender. "A bird in the hand may well be worth having for a hungry contractor; having the prospect of two to three years' work is reassuring."
Koos van Oord, president of the International Association of Dredging Companies, is keen to reinforce the role of dredging companies in the world economy. He says: "Clearly, with the appropriate commitment, rivers, waterways and coastal areas are significant assets that will remain important both to business and the broader community. Dredging as always has a tremendous role to play in realising these goals, in helping to stimulate the economy and, literally and figuratively, in keeping things afloat."Images for this article - click to enlarge
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