Growing volumes at container ports across the Iberian Peninsula have understandably prompted expansion of facilities in a desperate race to keep capacity aligned with demand. Ports are eager to showcase new infrastructure; as to whether shipping lines deign to use it is another matter entirely.<\/p>\n
Bilbao is a case in point. Two brand new box terminals were inaugurated as part of the port’s Outer Harbour development. The thinking was that by providing the infrastructure and quayside lift new transhipment business could be generated. More than five years in, operators TMB and ATM are struggling to keep their heads above water. Both have abandoned part of their respective operating areas. A proposed joint equipment maintenance company now looks to be morphing into a single terminal operator, as ATM is rumoured to be looking to buy out rival TMB.<\/p>\n
Last year, box traffic at the port peaked at 523,124 teu, a gain of just 3.83%; for January-June 2007, a 4.14% increase was reported. Across Spanish ports as a whole, there were respective gains of 8.86% and 12.95%. Bilbao, therefore, simply isn’t performing.<\/p>\n
Of course, located deep within the Bay of Biscay, Bilbao is hardly situated at the optimum point on most major shipping lanes. Further north, Le Havre involves less of a deviation for lines looking to rotate boxes out by sea to smaller, regional ports, while also having the major advantage of being the main import-export port serving Paris. Bilbao’s home market is more modest.<\/p>\n
If Bilbao Port Authority could be said to be somewhat troubled by recent talk of consolidation between incumbent stevedores, their counterparts at Algeciras Bay must surely be experiencing some sleepless nights of their own.<\/p>\n
A major new container terminal capable of potentially handling up to 4m teu when fully developed is about to be put out to tender. Such capacity at the nodal point of one of the world’s major shipping lanes is definitely needed, but who is going to bid for the concession? Maersk might; but then again, it might not.<\/p>\n
The problem is that, in July, Maersk commenced operations at its new Tangier-Med facility, just opposite the Straits of Gibraltar in Morocco. Here, it is contractually bound to be handling 1.3m teu within three years. While the terminal’s full capacity is expected to peak at 1.5m teu, this is easily half the throughput the line currently handles at Algeciras. So, even if it wanted to, Maersk couldn’t transfer its entire southern Spanish business across the water to the new port.<\/p>\n
However, labour rates in North Africa are significantly lower than anything to be found in Europe. Margins in the competitive world of box handling aren’t that great and a shipping line would have to be acting counter-intuitively if it were to ignore substantial savings of transferring at least a part of its business to a lower-wage economy.<\/p>\n
Productivity at Algeciras isn’t that great either. Agreed, this is due partially to the congested conditions in which Maersk’s shore side affiliate, APM Terminals, has to work. But another huge contributing factor is the strong-willed attitude taken by the port labour unions. With the central government seemingly turning a blind eye towards ever increasing restrictive working practices, unionised labour has profited greatly over the years from Algeciras’ virtual monopoly provision of transhipment infrastructure in the Straits of Gibraltar.<\/p>\n
In recent negotiations aimed at hammering out a new collective bargaining agreement prior to the issuing of the tender for the abovementioned new box terminal concession, unionised feet were dragged to such an extent that potentially interested parties will now have to bid without knowing what future labour rates will be.<\/p>\n
It is harder to think of a worse public relations disaster for the port as a whole. While publicly at least, port authority officials are confident of retaining Maersk’s business, or at least some of it, into the foreseeable future, they clearly have major concerns behind the scenes.<\/p>\n
And they have a right to be concerned, because attempts, so far, to get any other major line to commit to the port have ended in failure.<\/p>\n
CMA CGM, for example, did used to undertake some ad hoc handling of boxes using a mobile harbour crane at the port’s Isla Verde quay. However, reconditioning work in the area temporarily put a halt to this. The French line nevertheless ‘intimated’ that it would definitely be interested in returning when the work had been completed and a new operator installed at what would be the port’s second container terminal.<\/p>\n
Managers at the subsequent joint venture between Barcelona Container Terminal (TCB) and construction giant Acciona, Terminales de Contenedores de Algeciras (TCA), waited in vain for the return of CMA CGM, while Maersk, which had also indicated an interest in using the facility to absorb overspill traffic from its own terminal, was also curiously noticeable by its absence. In the end, no other shipping line pitched up. With terminal managers at their wits end, Maersk, becoming desperate for somewhere to stack containers then took up all available capacity at TCA.<\/p>\n
In 2006, Algeciras Bay, effectively full to bursting, boosted throughput by just 2.06% to 3.2m teu. However, the subsequent arrival of additional handling equipment has helped Maersk accommodate further traffic this year, achieving gains of 12.82% in the first six months.<\/p>\n","protected":false},"excerpt":{"rendered":"
Both Bilbao and Algeciras have pursued the risky strategy of expanding without commitments from lines, as Alex Hughes discovers<\/p>\n","protected":false},"author":8,"featured_media":2299,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[13],"tags":[],"sponsor":[],"class_list":["post-2298","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-europe"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts\/2298","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/comments?post=2298"}],"version-history":[{"count":0,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts\/2298\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/media\/2299"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/media?parent=2298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/categories?post=2298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/tags?post=2298"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/sponsor?post=2298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}