Panacea or potential headache?
export port makes good sense. The ships are calling such as Barcelona, are logical choices for transhipment hubs
Alex Hughes investigates whether transhipment is the pot of gold everyone thinks it is for Mediterranean ports.
This phenomenon is clearly reflected in analysis developed by consultant Drewry Shipping, which shows that around 26% of total global container port throughput is currently accounted for by transhipment teu moves. Significantly, 20 years ago, transhipment was less than 15% of the world total.
According to Neil Davidson, the company's research director: "We believe that the 26% transhipment level now reached is pretty much the ceiling and will prevail going forward. However, even though the percentage incidence of transhipment isn't likely to increase, in absolute terms, volumes will of course increase, because the overall container port market is growing. By 2020,we therefore expect there to be an additional 200m teu of transhipment activity worldwide."
While on first viewing transhipment does appear nowadays to be divided up among the global stevedoring groups, Mr Davidson nevertheless stresses that it is still possible for ports to break into this business segment. In order to do so, it is essential to have the backing and/or volume commitment of at least one major shipping line, he says.
Furthermore, while the industry will often refer to transhipment hubs, such as Singapore, Tanjung Pelepas, Algeciras and Gioia Tauro, many import/export ports are carving out substantial niches in this market, too.
"From the port operator and shipping line point of view, carrying out transhipment at a major import export port makes good sense. The ships are calling anyway so transhipment can be carried out at minimal extra cost,"says Mr Davidson.
He cites Barcelona and Valencia as two examples in the Mediterranean. While Spain does have an established transhipment hub at Algeciras, a lot of transhipment traffic has nevertheless been developed at these two ports. This isn't, he argues, really due to a shortage of transhipment hubs; rather it is a reflection of the sound logic of using major gateway ports for transhipment as well,provided that they are in the right locations.
So what factors make a port attractive as a transhipment hub? "Location, location, location!" emphasises Mr Davidson. He also cites low tariffs, high productivity, deep water and available capacity. "You also have to look at critical mass;the bigger the hub,the more connectivity it has, the greater range of feeder services it has and so on. Bigger really is better, which makes it hard for new hubs to break into the market."
Mr Davidson argues that most places in the world will need to build additional transhipment capacity in the longer term. While he acknowledges that water depth remains an issue, he highlights the fact that we are fast reaching the point where shipping lines are having to make sure they build ships which can access the main ports, rather than building ships and assuming or hoping that ports will dredge deep enough to accommodate them.
Finally, Port Strategy asked Mr Davidson whether transhipment should be viewed as either a panacea or a potential headache for ports, with rivals endlessly trying to poach customers. He responds by conceding that transhipment is a highly competitive sector of the port market and volumes are footloose."That is why so many hub ports now have shipping lines as shareholders or involved in a joint venture partnership, since this acts as a highly effective way of locking them into the business."
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