Size isn’t everything
It isn’t the size of your port that matters – it’s what you do with it. Felicity Landon reports on a new ‘connectivity index’
It's reassuring that even in the ports world, the best things can come in smaller parcels. Drewry’s new global container port connectivity index has thrown up some unexpected stars – and pushed some giants further down the list than they might ever have expected.
Drewry launched its bespoke index in order to rank and monitor how well connected the world’s container ports are, and it will be updating the data every quarter in order to track the ups and downs across the sector.
No surprises that the world’s largest port, Shanghai, also takes top spot in the index with a score of 100, based on 168 mainline services per week and six trade routes served – the maximum, based on Drewry’s breakdown of world regions. Ningbo is second, Singapore third, Busan fourth. Nine of the top ten ports are in Asia, with Rotterdam coming in at tenth place.
But reading down, the list gets more interesting. Savannah tops the list for North America, with 55 mainline services per week serving the maximum six trade routes, giving it a connectivity index score of 32.7. The east coast US port has a global ranking of 13 – ahead of New York, which is at number 17, with 45 services a week and a connectivity score of 26.8.
Looking at North America as a region, the top four slots are all taken by East Coast ports; the largest port in the region, Los Angeles, only makes it to sixth, and the second largest, Long Beach, is in twelfth place. That reflects the fact that these largest ports are more focused on Asia. Oakland is also ahead of LA/LB, taking fifth place on the North America list.
Another surprise hit is Valencia, which emerged as the most connected port in the West Med region, ahead of both Algeciras and Barcelona, with 43 services a week serving six trade routes giving it a connectivity score of 25.6.
“We did this analysis because we could see it would be an interesting comparison – we didn’t know what the results would yield,” says Neil Davidson, Drewry’s senior analyst, ports & terminals.
“You naturally assume that the biggest ports are the best connected – but our methodology showed that you didn’t have to be the biggest port to be the most well connected. And from the shipper point of view, connectivity is better than size. You want to use a port not only for frequency of services but also for the widest possible range of places, and that is where Savannah has scored, with direct connections to all the six world regions.”
Only two other ports on the US east coast were found to have similar connections but they didn’t have as many services per week, he explains. “How can that be, given that New York is so much bigger? The answer is that you might be a smaller port, but having services twice a week with smaller ships rather than once a week with bigger ships is a big factor. From a shipper perspective, frequency and range of services is the most attractive thing.”
Savannah, of course, is delighted. Ed McCarthy, chief operating officer at Georgia Ports Authority, says: “To be the most connected port in North America is truly an honour and it has taken decades of preparation to get to where we are today.”
Savannah embarked on a clear strategy more than 20 years ago which has effectively transformed it from an export-dominated port to one that has a good balance of import and export.
“The port authority saw a lot of land within five miles of the port and we started to reach out to the carriers and the market. We started to help our export market – instead of bringing empties in to load, we started bringing in imports, so that the same containers could be loaded for export. And in this past year, we went from export to import dominated.”
Making the most of assets
Savannah’s volumes out are mainly raw materials, including clay, forest products and poultry. Bringing the containers in with imports and turning them around fast is good news for the carriers, which get more use out of their equipment, points out Mr McCarthy.
What is the secret to Savannah’s success? “Absolutely it is finding out what the cargo owners desire and making sure that we maintain our image of doing business.”
The availability of land close to the port has been a major factor. “We are connected to the major highways and have 55 square feet of warehousing in adjacent counties within 20 minutes’ drive of the port. We also have two on-dock railyards, so offer the benefit of rail services directly into the port.”
None of this is to suggest that Savannah is not seeing larger vessels. Two years ago it was mostly handling 6,000-8,000 teu ships, he says. Now, 60% of vessels calling are 10,000 teu or larger, and the port is handling vessels of over 13,000 teu .
Savannah gained from the alliance reshuffles last year, and has gained at least one more service since then.
“As for success, it is really all about when that vessel gets to the dock, we are able to put six or seven cranes on the large vessels and do 5,000-6,000 moves on and off in a 30-hour period.”
Swift rail and road links are also vital, he points out. “That is really connectivity for the end shipper, who is not looking for large or small vessels – we get no particular feedback on that. It really comes down to last-mile connectivity. If we can deliver on that, each and every day, that is where we gain the confidence of shippers and we are rewarded with more business.”
For New York, the raising of the Bayonne Bridge and the deepening of the main access channel to 50 ft, both completed last year, removed a significant limitation on ship size accessing the port. New York is now regularly handling ships of over 14,000 teu, and simulations have shown that it can handle container vessels of up to 18,000 teu. This also has implications for other US East Coast ports, points out Edward Kelly, executive director of the Maritime Association of New York/New Jersey.
“Any successful East Coast service requires a call at New York, because of the volume of business. You have to do New York, and then it is a question of where else you go in terms of a mid-Atlantic and a south Atlantic port. These larger vessels were almost completely halted from working on the East Coast, until the Port of New York was able to handle them.”
Any resultant reshuffle could lead to changes in the Drewry index, of course. Mr Kelly also emphasises the importance of landside connectivity. As well as terminal operators deepening berths and upgrading cranes during 2017, New York saw the development of the new intermodal rail service and expanded on-dock rail capacity, improvements to on-terminal roads, and the updating and digitalisation of terminal gates to speed the flow of trucks.
Apart from Bayonne, three other major bridges were upgraded or rebuilt in the port area and millions of square feet of new warehousing and distribution centre capacity were added.
“If you are not connected, you can’t move,” says Mr Kelly. “Severe congestion can make a port too expensive and causes a public outcry from domestic truck drivers and private drivers. It becomes a matter of high expense and increased road pollution. The port handles a large volume of business going into the hinterland. A good volume of this will move by rail and never go on the local roads, and that is important.”
SAVANNAH'S VISION PAYS OFF
The Port of Savannah handled just over 4m teu in 2017 and volumes continue to rise. “We have now had 15 straight months with back-to-back improved volumes,” says the port's Ed McCarthy.
The port works closely with neighbouring ports such as Charleston and Virginia, benchmarking and sharing information "so we can all be better and stronger".
“We serve the east coast, all of us, and the competition is really for the US heartland. Los Angeles and the west coast are near capacity and sometime struggle to meet demand. If we can get a small part of that volume, it will be big benefit for us.”
Three years ago, Savannah had four super post-panamax cranes – today it has 12, with another six on order. GPA has just finished its ‘Focus 2028’, and the plans include investing $2.5bn over the next decade to increase capacity from 5m to 10m teu through new equipment, densification of existing facilities and using land nearby.
“We are blessed to have some amazing geography and the tremendous foresight of 20 years ago has turned the port into what we see today,” says Mr McCarthy.
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