Making inland work for bulk
John Bensalhia looks at how bulk cargo handling can be a boon for inland ports looking to branch out from container handling.
Thinking of establishing an inland terminal for handling bulk cargo? It could prove to be a wise investment. While inland ports tend to focus more on container handling, there's also opportunity for bulk cargoes. If there's no room at the port, then an inland port can be a good funnel for bulk business, both saving time and making money.
Some port organisations and authorities have seen the potential of both expanding and creating inland terminal facilities to handle bulk cargo. In Canada, $28.2m is to be invested in expanding the Ashcroft Terminal inland port (located around 211 miles east of Vancouver). Singapore’s PSA International (which has a 60% stake in the terminal) will use this expansion as a means of connecting transloading operations with possible markets in the Asian region. The expansion is expected to be ready in summer 2021, with the investment money put into an additional rail connection with the CN mainline, expansion of the internal road network, and a new warehouse that will provide plenty of room for storage.
The Safe Ports Regional Gateway is another new project, having been introduced this year as an inland port that provides both security and economy. The 1,000 acre SPRG in Jordan was formally announced by its three partners - the Mafraq Development Corporation (MDC) of Jordan, American company Safe Ports, and the Jordanian Air Force. With planned, gradual growth, SPRG includes a transhipment hub and facilities for distribution and warehousing. The potential of this inland port means that it can link overland routes with access to some of the top regional ports and airport, acting as a transportation hub for moving goods in the region.
Ports considering a new inland bulk handling terminal should take some key factors into account. For one, Turi Fiorito, director of the European Federation of Inland Ports (EFIP), explains that concessioning of the terminal to private operators must be considered. “More than half the inland ports authorities do not run a cargo handling terminal by themselves, but through concessions to private terminal operators and/or a subsidiary company.”
From the port's perspective, three questions need to be answered when considering a new inland terminal, he adds. “One, will it improve the financial sustainability of the port? Two, will it maximise the port throughput in volume? And three, will it maximise the added-value of the port in its surrounding environment (employment, local economic competitiveness, sustainable waterway transport usage)?”
An inland port handling bulk cargo needs a combination of efficient port infrastructure and port superstructure (including surface arrangements, and cargo handling equipment). But as Mr Fiorito explains, this is highly dependent on the kind of cargo that is to be handled by the port. “An agriculture-centric port will have very different equipment than a coal-centric port. In general, investment in multimodal infrastructure connections with other transport modes notably reinforces the handling of any kind of cargo.”
A benefit of an inland port handling bulk cargo - besides the positive economical impact - is its effect on the environment. Operator of some of the biggest inland ports in Canada, the Port of Toronto says that it has helped to reduce the city's carbon footprint. Transferring cargo by ship replaced around 54,000 40-tonne trucks last year. The result? Less congestion, and more importantly, less air pollution.
Whims of the market
One financial issue with bulk cargo handling is that it is subject to market fluctuations. Mr Fiorito explains that the price especially depends on the industrial production, agricultural crops, energy variations, price of fuel and/or building-construction activity, whereas container handling activities mostly rely on import-export and GDP factors related to consuming issues.
But for an established bulk cargo handling operation, this is an ideal method of attracting new business. “For an inland port an important consideration is the attraction of new business for land rental purposes. Well-developed bulk cargo handling is more likely to attract said business.”
The recent creation of North Sea Port in the later part of 2017 was the result of a merger between Ghent Port Company and Zeeland Seaports. Figures for this year have been impressive, with seaborne cargo traffic reaching 66.6m tonnes in 2017 (with respective shares of 71% import and 29% export), and 56.5m tonnes for inland navigation cargo traffic (totalling 123.1m tonnes).
Good relationships with supply chain parties are another important aspect of successful inland ports' bulk cargo handling. “As key nodes and gateways to the European transport sector, the building and maintenance of strategic and economic partnerships with the different actors and customers involved all along the multimodal supply chains is crucial,” says Mr Fiorito. “Inland ports involved in bulk cargo do not operate on an individual level and are very dependent on synergies.”
Mr Fiorito adds that in general, a key factor for inland ports is related to the water levels of the inland waterways, good maintenance and dredging-related issues, especially on the Danube network.
With the exception of coal (as a result of decarbonisation targets), Mr Fiorito says that the evolution of dry bulk looks very promising, not least because of the implementation of circular and bio-based economic clusters within and around port areas.
“The wood industry is considered as highly promising (+700% over the last 10 years in Europe) due to biomass by combustion projects,” says Mr Fiorito. “Construction materials are an extremely strategic market segment as well, with many construction projects located all around Europe, which make this sector accounting for the majority of the overall inland waterway volume traffic in Europe.”
On the other hand, Mr Fiorito says that while the liquid bulk sector is stable, it is not expected to increase any more, especially in the view of an expected “de-fuelling” economy in the future.
“As trade volumes keep increasing and road infrastructure becomes unsustainably congested, it is to be expected that bulk cargo growth together with other segments will continue to grow,” says Mr Fiorito. “In general, inland ports are positioning themselves more and more as efficient and innovative solutions for freight transport within cities: urban freight distribution by water is considered as very promising for the future, which would impact the overall bulk cargo sector.”
He gives the example of the Grand Paris Express, which includes the construction of 200 kilometres of new metro lines and 68 new stations. All the excavation, spoils and construction materials like gravels, sand and minerals estimated at 4.5m tons/year are being moved by water in the Paris urban area. The works won't be concluded until 2030.
“Last, but not least, the retrofitting of the existing fleet and inland ports actively working on the provision of alternative fuels - such as LNG and shore-side electricity - and digital solutions might enhance flows, including that of bulk cargo.”
DRY BULK PIPS LIQUID BULK INLAND
Dry bulk cargo represents a bigger market share of inland ports than liquid bulk cargo, according to data from the Portopia project, an EU-funded initiative to collect and analyse key performance indicators (economical, environmental, social, etc) of ports.
“In 2015, the average of dry bulk handled in inland ports was 2.5m tons, whereas the average of liquid bulk handled in inland ports was 2.0m tons.”
An example of dry and liquid bulk cargo comparison can be seen at the North Sea Port. Here, bulk cargo includes food, iron ore, coal, grain and fertiliser. Just over three quarters of the seaborne cargo traffic is made up by bulk goods. Most of this is dry bulk (47%), although liquid bulk goods still occupy almost a third of the seaborne cargo (29%).
Mr Fiorito adds that another interesting observation concerns the development of the average for both liquid and dry bulks. “Between 2013 and 2015, the average evolution of dry bulk handled in inland ports is constantly increasing, whereas the average evolution of liquid bulk is very stable from one year to the other.”
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