Increasing efficiency – increasing return on investment in

Mediterranean PortsJoint Trade Conference

Parliamentary Assembly of the Mediterranean (PAM)and the

United Nations Trade and Productive Capacity ClusterHosted by UNECE and UNCTAD

Palais des Nations, Geneva, 4-5 May 2011

Vincent F. Valentine, Officer-in-Charge, Transport Section,

Division on Technology and Logistics, UNCTAD

World seaborne trade

• It is estimated that world seaborne trade by volume amounts to 77 per cent of total world trade. Some 16 per cent of world trade passes overland, 6.7 per cent through pipelines and only 0.3 via air[1].

Source: [1] Lloyds MIU (2007)

Port development

• Ports are a catalyst for trade development.– Well developed ports attract shippers and spur local

enterprises to export– Value added services (e.g. repackaging, engineering

and design, knowledge processing, light manufacturing and processing, warehousing and logistics) can be performed within ports or adjoining FTZ.

– Consolidation services (e.g.container stuffing) allow smaller exporters to group cargo

Challenge for ports: Growing customers

• In 2011 Maersk ordered 10 Malaccamax 18,000 TEU ships for delivery between 2013 and 2015 with an option to buy 20 more.

• 16% bigger and 20% more energy efficient

• Beam: 59 meters • Draught: 14.5 meters• Dwt: 165,000 metric tonnes• Reefer capacity: 600• Top speed: 23 knots

For video explanation: http://www.youtube.com/watch?v=z8f4ESIRK0o

Emma Maersk

Port’s solution: Growing crane capacity

Ceres Paragon – AmsterdamCeres Paragon – Amsterdam Maximum discharge rate- 300 TEUs ph

Jebel Ali Port (United Arab Emirates)

Twin FEU

The port has 16 Tandem lift cranes

Average moves per hour > 60

Shenzhen Mawan Container Terminal, China

Re-design of the quay side crane

• AMPT – Fastnet crane system said to double present handling capacity

• Cranes are suspended from the girders allowing them to deploy more cranes per vessel,

For video explanation: http://www.youtube.com/watch?v=zuQzwe8ZmYo

Super post-panamax cranes

• The latest container cranes with an outreach of 23 TEU cost around US$8million each

Global terminal operators have a monopoly of the largest cranes

• Global terminal operator control all the ship-to-shore gantry cranes with an outreach specification of 22 rows and above in the following regions:– Caribbean/Central America,– the Middle East,– South Asia and– South Europe

• In northern Europe only three out of 108 super post-panamax cranes are in non-global operator terminals.

Source: Drewry (2010) Annual Review of Global Container Terminal Operators

Public/private control of container terminals

(Million teu)

• The share of traffic moved by state-owned terminals – other than those controlled by state-backed global terminal operators – is declining.

• In 2002 - 22.4% • In 2009 - 20.5% • By 2015 - 19.5%

Source: Drewry (2010) Annual Review of Global Container Terminal Operators

World container port handling by region and ownership, 2008-2009

Source: Drewry (2010) Annual Review of Global Container Terminal Operators

Prerequisites for attracting international terminal operators

• A clean and transparent bidding process

• Quality and Capacity landside connections (multi-modal) and port infrastructure

• No Government cap on profits• Good safety and security

requirements

UNCTAD meeting on Globalization of Port Logistics: Opportunities and Challenges for Developing Countries, December 2007, Geneva

• A training and retrenchment of labour plan

• A clear role for the port authority (e.g. landlord model)

• Smooth customs procedures• Absence of corruption

Source: World Bank Port Toolkit

Aspects of Port Labor Potentially Affected by

Reform• Restrictions on which entities can offer services in the port• Reducing overstaffing• Rigid and outdated job descriptions and duties• Limitations on working hours and days• Inefficient overtime allocation at excessive wage rates• Hiring of port labor exclusively through the unions• Restrictions on output• Unsettled and combative workplace culture• Insufficient training and retraining opportunities• Lack of clear and meaningful productivity objectives• Inadequate occupational health and safety procedures

Recent activity by global/international operators in the Mediterranean

Ranking of Mediterranean Container ports(Millions of TEUs )

Source: Cargo Systems (2008) Top 100 Container ports and Containerisation International Online database 2011

DecreaseIncrease

2008 2010 Port 2008 2010

28 39 Gioia Tauro 3.45 2.8530 41 Algercias 3.41 2.8135 26 Valencia 3.00 4.2037 .. Istanbul 2.86 ..38 33 Port Said 2.82 3.4742 56 Barcelona 2.60 1.9460 50 Malta Freeport 1.90 2.3763 62 Genoa 1.86 1.7678 .. Pireaus 1.37 ..85 75 La Spezia 1.19 1.2986 76 Haifa 1.15 1.2694 88 Marseilles 1.00 0.9595 108 Alexandria 0.98 0.6696 77 Damietta 0.97 1.21

ThroughputRank2008 Ranking

Ports with Intra port competition

Intra Port Competition- Mediterranean Ports where global operators compete head-to-head

Source: Cargo Systems (2008) Top 100 Container ports and Drewry (2010) Annual Review of Global Container Terminal Operators

2008 Ranking

Ports with Intra port competition between global terminal operators

Review of Maritime Transport 2008

Port opportunities

Import /export port

Gioia Tauro

Dalian

logistics centre port

transshipment port

HKS’pore

Rotterdam

Source: UNESCAP (2005) Free Trade Zone and Port Hinterland Development, ST/ESCAP/2377.

Other issues to consider

• National transport systems need to be linked together with international trade networks.– Road and rail networks should extend into the

hinterland – National networks should extend to and

across national borders to regional networks (e.g. AH, TAR TEN-T)

– ICD should be situated at nodal points combining multimodal transport.

Recommendations to improve port performance

1. Reform labour laws governing port workers.

2. Seek public-private partnerships as a way to provide investment and increase productivity.

3. Make the process as transparent as possible and avoid excessive regulation.

Further information

• UNCTAD’s Trade Logistics Branch

www.unctad.org/ttl

• UNCTAD’s Review of Maritime Transport

www.unctad.org/rmt2010

• UNCTAD’s Port Training Programme

http://learn.unctad.org/