Outside the box
Through traffic enabled Algeciras to weather the global crisis, but things are changing, explains Stevie Knight
The star of Mediterranean transhipment, a 5% boost last year placed Algeciras as Europe’s fourth largest port. Having said that, it’s definitely having some ups and downs: firstly, its part-Hanjin owned TTIA was left hanging before being rescued by Hyundai Merchant Marine (HMM).
Secondly, Algeciras was hit harder than most by the Spanish dockworkers strike, losing both traffic and possibly opportunities. Its transhipment focus made it vulnerable as not only were vessels diverted away but then Maersk moved around 150,000 teu a year across to nearby Tanger Med on a permanent basis. In itself, 150,000 teu isn’t a great deal, but it was a definite threat. Maersk has it within its power to withdraw two thirds of the traffic from the APMT terminal, over half of the port’s overall activity. While that scenario is unlikely, the possibility does makes life uncomfortable.
The strikes, alongside a general slowing in the market, may have also contributed to dampened interest in Algeciras’ third terminal, tender deadlines being put back a number of times. “It’s a big tract of land... but the timing doesn’t seem to be quite right,” says David Bull of RHDHV.
And you can’t avoid the looming development of Tanger Med II on the horizon, which promises to bring total capacity of the port’s main competitor to over 8m teu.
While through traffic helped it ride out the 2008 downturn, Algeciras is now getting seriously interested in raising its import-export cargo. According to Javier Lopez, head of the port's commercial division, this is an organic development “driven by demand”. He says: “It’s been a slow move... but year by year we have been growing our back yard, working with shipping companies, logistics companies, inland connectivity and technology.”
In fact, in 2016 gateway volumes jumped by around 15% to close to 400,000 teu. It may be small compared with the 4.76m teu transhipment business, but Mr Lopez says it’s still “a significant amount”. He adds that the process of rooting the port firmly in its hinterland has been boosted by the recent inauguration of the daily rail link to the Madrid Coslada, adding that “we are now a competitive option as a shipment can get from Shanghai, all the way up as far as Madrid, in 26 days”.
Another important factor is that cargo can get from the north of Brazil to Algeciras in a week, so chilled traffic from South America has added another flow. As a result, the port closed 2016 having handled 46,000 teu reefers, a 30% jump over the previous year. And interest is rising: last year Logistica del Sur y Dalse was joined by the AGRO Merchants, generating a new 15,000 pallet cold storage platform with the object of handling 8,000 reefers per annum. Just how seriously this element is being taken is shown by the way the port has courted and won the next Cool Logistics Global Conference event.
Underpinning the strategy is the new Port Community System window. This, while benefiting all callers, is mostly aimed at raising gateway efficiency. It’s drawn in more than 120 companies, large and small, and while Mr Lopez admits the long, two year process wasn’t always smooth, “we did have a high level of engagement with the stakeholders”. He adds the wait is going to be worth it: “By the time a ship enters into the water controlled by the port authority, every port service will be in place.”
Mr Lopez believes the port is robust enough to weather the storms and points to the diversity of cargo that actually predates container growth: steel, petrochemicals, thermal coal and general cargo, and adds that in fact, when it comes to ro-ro traffic, “Tanger Med is a good partner – a collaborator”. So, it’s not all about competition for the boxes.
It’s a solid strategy, but there’s a fly in the ointment. “Everything is pointing to sucking more cargo into the economy, into mainland Spain... it would work if that economy was doing well, but – it’s not, at least at the moment,” says Mr Bull. Still, Algeciras is providing it’s hinterland with useful support, and as Mr Lopez says, it’s resulted in “more and more trust in our potential”.
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