13 March 14

Transshipment’s new lease of life

Genoa – Transshipment is re-emerging in the Mediterranean and looks to be a successful model for shipping. The London firm Drewry Maritime Research has stated that most major ports of the sector showed an increase of business in 2013: from Tanger Med (+38%) to Gioia Tauro (+14%); from Piraeus (+15) to Port Said (+9%).

The only exception was the Spanish port of Valencia (-3,2%).According to the operators of this sector, it is not only a resumption of trade, but a centralization of maritime transportation traffic at this type of port, as a consequence of ship gigantism and the big alliances among shipowners.

While container traffic went up 3% worldwide, it went up 6% in the Mediterranean, and total transshipment traffic actually went up 8.2%. There are high expectations for 2014. As Drewry explains, larger ships on the East-West routes and broader alliances will allow the major Mediterranean hubs to outgrow the market, by serving regions outside the Mediterranean with feeder ships.

These words would have seemed unlikely a year ago, when the apparent flop of the Tangiers port, the pride of the Moroccan monarchy, worried the Italian ports of Gioia Tauro, Cagliari and Taranto. The first two now show a growth of 14 and 12%, and only the last one is still suffering with a contraction of 25%.

Taranto reflects precisely the fact that it does not have a deep enough seabed to receive large ships. It has been expecting dredging works for years; these should start in the upcoming months to deepen the draught to 16 meters.

As Giovanni Grimaldi, VicePresident of Assoporti and president of Gioia Tauro Port Authority, states: “this is a significant recovery, and Gioia Tauro is showing it in the first two months of 2014. In the past, the transshipment ports in Italy have suffered with competition from North Africa, where labor costs are a third of ours. Now, the European ports have benefitted from the uncertainty caused by the Arab Spring movements which in Egypt, for example, actually led to some activities being suspended. In order to consolidate this growth, we need to complete structural upgrades to reduce costs: not salaries, but ancillary costs, such as excise taxes, social security charges, or the rates of technical nautical services.”

The shipowners, however, have little choice, because the megaships only have a few ports available to them. Gian Enzo Duci, president of the shipping agents in Genoa remembers: “In past years, there was talk of the end of transshipment. By choosing the slow steaming strategy [ed. a reduction of ship speed to save on fuel] shipowners were avoiding the hubs in favor of redirecting the ships to their end destinations. With the same size of vessels, transshipment was taxing. However, with an increased ship capacity, there is a trend towards a stricter selection of ports. The holds must be filled and consequently, traffic must be concentrated.”

According to Duci, even though the data provided by Drewry shows growth in both European and African ports, the competition between both shores continues: “today there is an ongoing search for ports capable of concentrating volume, I am certain the operation at Tanger Med is being profitable but I do not know what is going on at the European stops. I would like to see the balance sheets. An advantage of the latter is the high risk associated with African countries. The companies prefer to have a backup plan, in case of political instability. This explains why almost all companies have a second transshipment stop in a relatively small area as the Mediterranean”.

Source: The Medi Telegraph