Major dredging works to keep up with the big ships may be a \u2018given\u2019 for the ports which already have the volumes, but what about the rest?<\/p>\n
Ben Hackett of Hackett Associates explains that despite other variations, there\u2019s a pretty harsh dividing line for ports around the 16m draft point as this is what it takes to accommodate the new generation of big box ships.<\/p>\n
However, while depth will probably follow volumes, it won\u2019t necessarily work in the other direction. \u201cIf a port sees itself as a main services facility today, it\u2019s probably committed to dredging if this means keeping its market share… but if a port doesn\u2019t have the volumes right now, it\u2019s got to ask itself some hard questions before playing with its depth.\u201d<\/p>\n
So, will the second tier ports just content themselves with \u2018their bit\u2019 of the market? Unfortunately the status quo has a habit of changing and Alistair Mackie of HFW explains that the big debate at the moment is what the industry will do with the box ship tonnage that becomes obsolete: \u201cSome say many older ships will simply get scrapped, others think the North-South trades and feeder routes will get the fallout.\u201d<\/p>\n
But even if the cascade doesn\u2019t become an avalanche, there\u2019s still an enormous upward pressure on ship sizes. He says: \u201cI\u2019d say if box terminals leave it at 10m this really means staying at the bottom end and excluding quite a lot of tonnage. To make it a competitive, forward facing operation I think you are really looking at least three or four metres on top of this.\u201d This is, he says, leaving aside deep sea hubs which would probably be looking at another six to eight metres.<\/p>\n<\/p>\n
Mounting costs<\/b> <\/p>\n
Fuel is a deciding factor, Mr Mackie explains. A rule of thumb for older ships is that a doubling of vessel size results in a 30% to 40% decrease in bunker costs per box slot for a full vessel, and there\u2019s additional items like crewing, so running a 10,000 teu ship is going to be cheaper than running a couple of older 4,000 teu vessels, even if it\u2019s not quite filled up. Further, Mr Mackie adds: \u201cLines have a tendency to demand capacity for the whole fleet, and though much of it might be largely below 10,000 teu, if there\u2019s a couple at 14,000 teu they will want those to be able to call.\u201d<\/p>\n
So ports might find their favourite lines want just a little more from them especially if a couple of ships go off charter and new, bigger ones come in.<\/p>\n
It\u2019s an issue that is broader than boxes. Howard Holt of Seeports explains that smaller ports resting on a niche market won\u2019t have much choice. But, and this is a big but, it\u2019s not as if there\u2019s immediate payback; he says: \u201cThey can put up their charges, and that\u2019s about it.\u201d<\/p>\n
Mr Holt points out that small to medium sized ports are often pulled in a couple of directions at once \u2013 on one side they want to differentiate themselves, but secondly this can too easily mean they are mostly catering for a pretty specialised market and if their customer\u2019s ship size goes up, the port\u2019s bottom has to go down. Of course, the costly nature of this kind of work in turn means these ports are fairly vulnerable to market changes and it can leave them uncomfortably exposed.<\/p>\n<\/p>\n
One basket<\/b> <\/p>\n
The Port of Ramsgate in the UK is a case in point. No sooner had it completed a limited dredge for a ferry operation than the company went to the wall. However, explains Mr Holt, \u201cRamsgate is now in the interesting position of having some space to spare, and looking at dusting off a plan to deepen and develop an alongside berth.\u201d However, he adds that the port doesn\u2019t want to get into the same position as before with one key player that can go away or go under. \u201cRamsgate is looking at civil dredging works, but this time it\u2019s to broaden its market potential and give itself some resilience rather than being subject to demand from one customer,\u201d he explains.<\/p>\n
However, as Mr Hackett explains, the issue remains for those ports dealing predominantly with boxes \u201cis that the lines have got the leverage \u2013 big operators have got the ability to demand not just good, but also tighter terms”.<\/p>\n
The point about \u2018tighter\u2019 isn\u2019t lost on anyone familiar with the dark side of contracts. Alistair Mackie points out that lines can be nimble, and it\u2019s not just transhipment ports either that suffer: \u201cIt doesn\u2019t take very much to get lines to move. They might have had a great sweetheart deal, but lines can so easily have their head turned by the terminal next door and be looking for an \u2018out\u2019, which often comes down to, \u2018I know we have an agreement on volumes, but you can\u2019t handle my ships, so I\u2019m afraid the deal\u2019s off\u2019…\u201d.<\/p>\n
Further, he reiterates that there\u2019s no rock solid or immediate return for the dredging outlay: \u201cUnfortunately it\u2019s not as if a port can expect a line to sign up for a 10 year contract on the back of a deepening to 15m depth.\u201d<\/p>\n<\/p>\n
Act fast<\/b> <\/p>\n
Dredging consultant to HR Wallingford, Nick Bray, says: \u201cEven if the issue has historically been a simple rocky outcrop in the way, then a port might have put off making the commitment to dredge because the costs seem to outweigh the actual scale of the work; there\u2019s a large rump of mobilisation charges that can actually be bigger than the price of the work itself – unless of course you can snare a passing dredger.\u201d Of course this means acting pretty fast, not something that most ports can do easily when it comes to large projects.<\/p>\n
So, if a port hasn\u2019t bitten the bullet yet, what reasons can there be to start looking at dredging now? The simple answer is changing cargo flows which are moving the order of not so much the top end racers, but the pack of ports following behind.<\/p>\n
For the UK this has revolved around a large influx of wind energy cargo, and interestingly, a few of them in the west have got together to bring in a dredger to minimise the costs. <\/p>\n
However, Mr Bray points out: \u201cIt\u2019s not just the dredging: most quays can\u2019t take being deepened by much without causing serious problems so a lot more building work often comes with the dredge.\u201d Equally difficult, a port has to think about the changes the work brings. \u201cIf a port gets rid of a \u2018doorstep\u2019 that\u2019s been blocking up the channel, for example, or decides to deepen its entrance channel, it might find that it has lumbered itself with an ongoing maintenance dredge as the silt comes flooding into the nice low bed that\u2019s been made for it.\u201d<\/p>\n
It often isn\u2019t much easier in places where the port is state owned \u2013 take the issues that India’s Nhava Sheva has had in getting funding. Further, while the Brazilian government pays for some of its port-related capital works such as deepening the fairway or main channels, it doesn\u2019t always take on responsibility for the turning basin or berths, which is for many the main issue: so it still leaves the ports raising a large slice of finance.<\/p>\n","protected":false},"excerpt":{"rendered":"
To dredge or not to dredge can be a loaded question for second tier ports, as Stevie Knight explains<\/p>\n","protected":false},"author":8,"featured_media":1981,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[26],"tags":[],"sponsor":[],"class_list":["post-1980","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-container-cargo-handling"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/1980","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/comments?post=1980"}],"version-history":[{"count":1,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/1980\/revisions"}],"predecessor-version":[{"id":1982,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/posts\/1980\/revisions\/1982"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/media\/1981"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/media?parent=1980"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/categories?post=1980"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/tags?post=1980"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/greenport-congress\/wp-json\/wp\/v2\/sponsor?post=1980"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}