Odessa’s dream founders on summit

The recent amendment to the “Law on Cargo Transit” and the customs code aimed at the development of transhipment containers in the Ukraine, together with discounts for transhipment terminal handling charges were all positive steps, “but not enough to encourage lines to use the Ukraine as a transhipment hub”, said Steve Wray of Ocean Shipping Consultants on his return from the 4th Black Sea Summit.

Moreover, it’s a picture complicated by the prospect of overtonnaging, explained Mr Wray. “The main conclusion of the summit – set somewhat against the organiser’s hopes – seemed to be that despite a modest return, Odessa still suffers from tariff charges which are both just too high as well as being inflexible. This covers every aspect from handling costs to port dues, and this is one issue that will have to change before the port can function as a transhipment hub.”

Despite the downturn that reduced throughput in many major ports by half or more (Constanta was down 57.1%, Odessa down 55.3% and Ilyichevsk dropped by 67.1%), there stand to be some notable winners. The Egyptian transhipment hubs at Port Said East (SCCT), Damietta and AICT, were all able to increase volumes handled in 2009, in spite of the economic slump, because of their role as transhipment hubs for the region.

Others which will benefit, explained Mr Wray, are going to be “ports which have deepwater, longer quays and ability to handle the bigger ships that will be cascading down from the shipping lines investment in even larger vessels”.

So, it is likely that the shipping lines’ “economies of scale” will be hit as vessels are put on to routes where there may not be the immediate demand.

This, according to Mr Wray, will increase and concentrate transhipment. He added that because of the increase in fuel prices, there will be a reduction of port calls per string, further alliances between lines on routes, and relay demand increasing. This all means that the trend will favour centrally placed, larger ports in the region.