Gateway to London?

When it was announced that APM Terminals had been awarded the concession to operate the first of two container terminals there, near panic broke out at the southern Spanish port of Algeciras. The fear was that the Maersk the shipping line might use the significant cost advantages available on the other side of the Straits of Gibraltar to renegotiate contracts both with the Algeciras Bay Port Authority (APBA) and also with over-paid port stevedores.

Publicly, the APBA played down all talk of Maersk transferring its activities to the new port, which is to be known as Tanger Med. It pointed out that the 400,000 sq metre terminal had only 800 metres of quay and could not therefore readily absorb all the transhipment traffic that the carrier currently handles in Algeciras.

Nevertheless, decidedly off-message comments duly appeared in the press from ex-APBA officials who pooh-poohed any suggestion of the ‘complementary’ nature of the North African development.

Instead they suggested that no hard-headed business person would be able to resist the temptation of labour costs at least five times lower than those to be found at Algeciras, just 14km further north.

Former oil-industry executive Said Elhadi, who is chairman of the executive board of Tanger Med Port Authority, concedes that the new port is an excellent location from which to undertake transhipment activities between relay services, not just between those linking Asia and Europe, but also between lines serving the Americas and Africa.

THE RO-RO LINKAGE However, his vision also includes a potentially much more daring role for Tanger Med: that as a gateway port for northern European cities such as London! His thinking goes like this: rather than rotating containers out of Tanger Med by sea, it would make sense for international companies to establish value-added facilities in the planned 1,000ha logistics free zone area, which will wrap itself around the new port. From here, trailers could be distributed across a broad geographical zone thanks to the enormous amount of ro-ro capacity currently available between Algeciras and the existing port of Tangiers City, which is ultimately due to relocate to Tanger Med. Indeed, even last year, ro-ro traffic between the two ports amounted to 2.5m passengers, more than 200,000 trucks and 600,000 cars.

“Tanger Med could generate important cost savings for UK importers, given that London is just 48 hours away from Tanger Med using a combined truck and ferry service. Cities in the south of France are even closer, being just 30 hours distant. Our labour costs are significantly more competitive, which is why we believe the port can effectively function as a major European gateway for imported goods, ” stresses Elhadi.

If his vision does eventually become a reality then Algeciras might, indirectly, become a significant beneficiary of this increased trade, since by far the most developed ro-ro links between Africa and Europe pass through the port. In fact, while Tanger Med’s initial box terminal is scheduled to open in July 2007, its inauguration will coincide with that of the port’s three-berth ro-ro concession.

An oil refining terminal is scheduled to open at around the same time, which should also eventually enable Tanger Med to function as a Mediterranean bunkering centre. This will provide shipping lines with an even greater incentive to commence calls especially with a second container terminal due to commence operations by the end of 2008, along with an expanded 9-berth ro-ro facility.