Onwards and upwards

The recession that forced a large scale re-think on many port expansion plans around the world failed to dent Middle East optimism and a number of terminals added new capabilities throughout the downturn.

One terminal that has stoically avoided the maelstrom was Khalifa Port Container Terminal. The Abu Dhabi Terminals-managed hub handled around 650,000 teu in the first six months of this year, equivalent to growth of 25%. Overall traffic is expected to reach 1.2m teu by the end of the year, up around 20% year-on-year.

Chief executive Martijn van de Linde explains: “The majority of this is coming from increased exports and transhipment traffic. Imports are rising too – in the region of 5%-6% – but this is more in line with the overall increase in GDP.”

This boom in export boxes has involved such sectors as steel, aluminium, polymers, pharmaceuticals and food processing. The aluminium sector in Abu Dhabi exports more than one million tons annually, while polymers are due to double to 4m tons in 2015. This helps explain KPCT’s own export growth, which is forecast to continuing its double digit growth over the next few years.

In terms of transhipment, Abu Dhabi now has feeder links serving the upper Gulf, other emirates and also India.

“We first started developing transhipment traffic last year based on the fact we were getting calls from larger vessels,” says Mr van de Linde. “Transhipment currently accounts for 16% of total traffic, which we predict will increase to around the 25%-30% mark.”

In phases

KPCT, which first opened for business two years ago, will eventually have capacity of 2.5m teu in its first phase development. At the moment, it is limited to 2m teu, although the extra 500,000 teu will be achievable once three new quayside gantry cranes are put into operation. This will then be followed by Phase II, for which civil works are already in place.

“Phase I capacity will be sufficient to see us through to 2019-2020, while Phase 2 should allow us to handle up to about 5.5m teu,” he says.

Khalifa port will eventually assume responsibility for the majority of cargo handling once undertaken by Mina Zayed. Containers were the first to be moved, to be followed shortly by ro-ro and then bulk and general cargo, leaving just cruise ships to call at the old port.

With alongside draft of 17 metres, KPCT can accommodate the largest vessels afloat, although the terminal currently only handles 14,500 teu ships; however, additional dredging to the turning basin will ensure that larger vessels will encounter no manoeuvring difficulties.

All together, KPCT has nine operational cranes and another three on the way. These are super post-panamax units whose dimensions have been slightly revised. They are now a couple of metres higher to avoid any air draft issues with any part loaded 18,000 teu ships that could be higher out of the water.

Growth plans

Israel is also adding capacity. Two new ports – Bayport and Southport – are to be built to reflect projected trade needs. Although they share a common basin with existing ports at both Haifa and Ashdod, they are geographically distinct and have separate road and railway access.

Chief operating officer of Israel Ports Company, Dov Frohlinger, notes that government policy is to promote competition in the provision of services. “The new facilities address this policy and create a framework that deals with long-term traffic demand growth, factoring in the latest shipping trends.”

It might seem strange to site the two new facilities relatively close to existing ones, however Mr Frohlinger notes: “As part of our 50-year master plan, we explored alternative locations along our 200 km Mediterranean coastline, but found them challenging due to environmental and urban planning factors. The new projects provide a more sustainable solution and have been designed with a better balance between economic and environmental considerations.”

At present, Israel Ports is in the middle of a tender for the operations of the two new facilities. Four global operators have been pre-qualified to participate in the bid stage, which is, in itself, of interest, since existing container terminals are operated by state-owned port companies. These are also slated for privatisation at some time in the future. The competition authority has forbidden the existing operators to bid for the new facilities, although is not against the creation of deeper draft berths, which would enable them to compete with the new facilities.

Deep goals

Indeed, both Bayport and Southport have been designed to accommodate EEE class vessels with 17.3m water depth at the quayside. First phase capacity will be in the region of 800,000 teu, with further phases bringing the potential to over 1.5m teu.

As for the implementation timetable, Mr Frohlinger points out that construction should commence at Ashdod later this year, with the first phase becoming operational in 2020-2021. A subsidiary of China Harbour & Engineering is building this facility at a cost of $900m. Work, which will take seven to eight years to complete, will include construction of a 1,050-metre pier north of the existing port, as well as a 2,800-meter breakwater.

Meanwhile, two Israeli groups are competing for the construction contract at the second port at Haifa. This will take five to six years and involve building a 1,100-metre pier and a 3,100-metre breakwater at a cost of $1bn.

On whether the new ports will be unionised, Mr Frohlinger notes: “The new facility operators will recruit employees who will be free to decide if they want to unionise in accordance with the law (or not). I expect that the global operators will bring their vast experience to the project and shape optimal working conditions.”

Transhipment switch

Meanwhile, Saudi Arabia’s Red Sea Gateway Terminal, located at Jeddah Islamic Port (JIP) has experienced a switch from transhipment traffic to more import-export boxes. In the first six months of this year, it handled around 655,000 teu, down 5.6% over the corresponding period in 2013. According to RSGT managing director, Soren Hansen, this is due mainly to a decrease in transhipment volumes.

“The gateway (local) volume ratio has improved to 60% for 2014 year-to-date, compared with 56% in 2013,” he says. “We are expecting to end the year meeting our budget of 1.4m teu; an increase of around 2% from previous year. As a result, we are forecasting an increase of 10% in second half traffic compared with the second half of 2013, which is again down to an increase in local traffic at JIP.”

Mr Hansen notes that RSGT currently has enough capacity to serve the main customers calling at the terminal. However as a committed long-term investor in JIP, RSGT says it is actively exploring all options to improve overall conditions, which includes expanding its capacity and equipment capabilities in the near future.

As for hinterland development, RSGT serves all Jeddah’s import-export needs, with the city of Jeddah going through a tremendous growth rate in recent years, something which is expected to continue into the future.

“RSGT is well placed and prepared to serve the expected cargo growth going through JIP.”

Gateway volumes

So far this year, transhipment has made up 40% of cargo throughput, although this has declined somewhat as shipping lines have shifted transit volumes to other ports while increasing import-export boxes.

With a dedicated dual-way channel with a draft of up to 16.5 metres and a 650m turning basin, the terminal has no limitations on the size of vessels it can accommodate. “As a result, we can accommodate vessels of over 16,000 teu,” says Mr Hansen.

In terms of productivity, RSGT currently averages 124 moves per hour across the berth, which is an improvement of 51% from the average performance of 2013, when it was just 82 moves. This, notes Mr Hansen, has been the result of adding more yard equipment, which was first put into operation in 2013, as well as continuous efforts to raise the skill of the manpower and improve teamwork. Indeed, should the stowage plan so allow it, the terminal is prepared to commit up to eight quayside gantry cranes per deep sea vessel call.

On the land side, average truck turnaround time is in the region of 25 minutes, broadly similar to the figure posted in 2013.

Significantly, the Kingdom of Saudi Arabia is investing heavily in equipping the country with a modern rail network. Upon completion, rail and ports will be able to operate together, cutting the travel time for freight, says Mr Hansen. “This will benefit both RSGT and JIP in providing a land connection for cargoes by railway from the eastern side of Saudi Arabia and its neighbouring countries, which will further increase cargo volume going through Jeddah.”