Changing the guards
The order of things is changing in Mediterranean container transhipment operations.
Gioia Tauro, once the new kid on the block that shook up Mediterranean container handling operations overall, can now be viewed as part of the establishment, facing the unenviable task of needing to re-engineer itself in order to compete with a new generation of lower cost hubs.
In March this year, Gioia Tauro announced that it was laying off 280 workers, around a quarter of its payroll, in response to falling cargo volume and increased competition from the new Tanger Med container terminals.
Malta Freeport, like Gioia Tauro, can be regarded as part of the old order but in contrast to Gioia Tauro has just announced that it is to press ahead with the expansion of its Terminal 2. The North Quay will be extended from 480 metres to 668 metres and the West Quay from 118 metres to 312 metres. The terminal area will be increased by 25,500 square metres.
As indicated above, one of the premier forces of change is the new Tanger Med port which under its phase one development offers a 3m teu capacity. Two terminals have been developed under the port’s phase one development: TC1 started operations in the summer of 2007 and is managed by APM Terminals with its local partner the Akwa Group. TC2, which opened in October 2008, is managed by Eurogate Tanger, a consortium of terminal operators Eurogate of Germany and Contship Italia with the shipping lines CMA-CGM and MSC also partners in the project.
The impact of the opening of Tanger Med on container transhipment operations in the Mediterranean has been immediate. The two terminals employ labour forces at around 25%-30% of the cost of more mature transhipment operations in the Med and this factor combined with the proven capability of the Tanger Med terminals to deliver high performance standards (in excess of those offered by the long established parties) has naturally acted as catalyst to the switch of volume to Tanger Med.
Algeciras, Malaga and Gioa Tauro have all suffered as a result of this trend. And it is expected to be progressive; MSC is expected to move more volume through Tanger Med in 2010 which could negatively impact other established hubs such as Valencia. Overall, the port’s two terminals offer a throughput capacity in excess of 3m teu which is certainly adequate to handle the short to medium-term requirement particularly with the recent economic downturn in play. In 2009, the combined throughput of the two terminals accounted for 1.2m teu.
The economic crisis has also served to delay the second phase expansion of Tanger Med, the proposed TC3 and TC4 terminals. TC3 was planned to deliver another 3m teu of capacity for a dedicated terminal to be used by Maersk and operated by its sister company APM Terminals.
Maersk, however, has now decided not to go-ahead with the project. It says it will keep it under review but for the time being the door is closed on it. The plan for TC4, however, is still on track albeit with a time line pushed back from initiation in 2012 to 2014 and with some structural changes in terms of management – notably PSA International has withdrawn from the project and the Moroccan state port operator, Marsa Maroc, has taken over its role as concession holder and operator.
Another growing force in Mediterranean container transhipment operations is the East Port Said container terminal which is now proceeding with its second phase development.
Also now returning to the fore, after a postponement when the economic crisis hit, is the Kuwait and Gulf Ports International (KGLPI)-backed project to build, finance and operate a major container terminal development in Damietta, Egypt. This will eventually offer an annual capacity of 4m teu. Both the latter projects, like those referenced in Tanger Med, have shipping line equity partners, another major dynamic that is changing where transhipment business is undertaken in the Mediterranean.
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