Ports as System Integrators, Not Just Ship Service Providers – Part 1

Can we be certain that a modern port has to plan for its development based on the growing size of containerships? Perhaps the time has come to ask what sort of advantages these vessels bring to the production and distribution system. Slower, less flexible, uncontrollable in the event of accidents, they may pose a danger to ports rather than an opportunity. If port investments do not attract private funding, we might say that so-called project financing is too often a joke, indeed it adds to the costs borne by public finance and fails to guarantee building quality. For this reason it is necessary to gauge investments in relation to the actual situation in the country and avoid the planning of colossal works. The current crisis is proving to be more complex than a normal cyclical crisis. While the shipping industry is finding it easy to position itself in global markets offering business opportunities, ports are affected by the economy of the territory forming their hinterland. Gross domestic product of the Italian economy is now being fuelled only by exports. There is no competition with northern ports as Italy’s logistical system cannot offer an alternative to clients in central Europe. The BalticAdriatic corridor may be a great opportunity as a platform for the Russian market, but in order to be competitive in that area megacarriers are not needed. Ports should be a factor favouring the integration and governance of a system and, instead of being at the sole service of
shipping companies, should be defending “good work” and preventing the continuing slide towards temporary labour cooperatives and agencies.
Part 1 – Trying to understand the logic of an itinerary 
The dominant philosophy in leading European ports is that of “bringing infrastructures into line with the new dimensions of full containerships”. This dogma is repeated by large ports such as Rotterdam and medium-sized or even medium-small ports such as the majority of Italian ports. Here I propose to call into question this dogma, due to its many weaknesses. Next year Maersk Line will be receiving the first of the ten 18,000 Teu ULCCs that the Danish shipping company has ordered from the Daewoo shipyard of South Korea. In January of this year the largest full containership in the world started operations. The “Marco Polo”, owned by CMA CGM, has a capacity of 16,020 Teu, and operates in collaboration with MSC. These are the ports visited during its round trip (the service is called FAL, French Asia Line):
Westbound (China-Northern Europe)
Ningbo – Shanghai – Xiamen – Hong Kong – Chiwan – Yantian – Port Kelang –Tanger Med – Southampton
Eastbound (Northern Europe-Emirates-Northern China)
Southampton – Hamburg – Bremerhaven – Rotterdam – Le Havre – Malta – Khor Fakkan – Jebel Ali– Ningbo
The FAL service engages, in addition to “Marco Polo”, a further eight vessels, five having a capacity of 13,830 Teu, two of 13,500 Teu and one of 13,102 Teu. These may include the two twins of the “Marco Polo”, the “Alexander von Humboldt” and “Jules Verne”.

Source: www.cma-cgm.com
At first sight the following considerations can be made:
– in a westerly direction (westbound) it collects goods in five Chinese ports plus Hong Kong, and visits Port Kelang, where it collects freight from south-east Asia
– it does the crossing from East to West in 17 days and unloads in a single  transhipment port, Tanger Med
– it skips all the ports of the Northern Range, before visiting them on the return trip
– it concludes the trip at the DP World terminal in Southampton after 33 days
– in an easterly direction (eastbound) it follows the same logic, collecting European cargo being exported from all major ports of the Northern Range, excluding Antwerp
– it calls at a single transhipment port in the Mediterranean: Malta
– it calls at Khor Fakkan, one of the three ports governed by the Sharjah Port Authority of the United Arab Emirates, in the terminal run by the company Gulftainer (1)
– it visits the DP World terminal in Jebel Ali
– it completes the final crossing towards Ningbo in 16 days.
The logic seems clear. Load as much freight as possible before the east-west crossing, in order to benefit from economies of scale. It is presumed therefore that the vessel travels fully laden in a westbound direction only on days dedicated to the crossing (17 days out of 33) and, in an eastbound direction, only on the 11 days of the Malta-Khor  Fakkan leg and the 16 days of the Jebel Ali-Ningbo crossing (27 days out of 43). It travels at full capacity, indicatively, for a little less than 58% of the round trip, in terms of days of actual navigation, and a little more than 65% in terms of nautical miles. Why visit the United Arab Emirates only in an eastbound direction? Some  operators explain that this is due to a) the international plaque tournante role of Abu Dhabi and Dubai as trade sorting centres, re-exporting goods to Asia, the Indian Subcontinent, Europe, Africa and, more recently, South America, b) the growing importance of Hamriyah Free Zone, where more than 5,000 enterprises from all over  the world are now established, in particular from Asia and Europe. (2)
These terminals moreover lead to an extensive network of feeders for Africa, the Indian Subcontinent, Europe and Gulf nations. Sharjah offers investors very advantageous tax conditions, also with regard to the repatriation of capital, and to traders a very efficient, transparent and unbureaucratic customs organisation. In a sense Abu Dhabi and Dubai form the crossroads for east-west and north-south trade flows. Notwithstanding the serious world recession, the two terminals run by Gulftainer at Sharjah posted a 26% growth in trade in 2012, thanks in particular to rising exports from the Emirates to emerging countries. The website of the Al Fakkan terminal describes a quay frontage of 800 metres, a depth of 16 metres, 20 gantry cranes, including 4 Megamax Tandem-Lifts, with 450,000 m2 of yards. Gulftainer has recently opened a terminal at Recife, in Brazil. The stop-off only on the eastbound journey may be explained by the fact that from China there is not a sufficient type of freight for the  Emirates or for emerging countries, while from Europe there are sufficient goods to  warrant two stop-offs, or that in the Emirates there are sufficient goods to load for China. The fundamental criteria regarding the choice of ports are: a) the type of goods, and b) the frequency of feeder connections, dedicated connections being preferred (this is the case, for CMA CGM, of Hamburg and Jebel Ali).
1. “Al Mawanie Magazine”, issue no. 41, September 2012
2. Interview with Rashid Al Leem, head of the Seaports and Customs Department and Authority of the Hamriyah Free Zone, in “Al Jumruki Magazine”, no. 72, July-September 2012. The Emirates are also important for European luxury goods, where goods can be kept on hold, or where workshops are located (according to one Italian operator dealing in jewellery of a major name in the business)