MLTC CATRAM Market Study Container Terminals West and Central Africa

8/10/2019 MLTC CATRAM Market Study Container Terminals West and Central Africa

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Market study on container terminals

in West and Central Africa

Final report 23/01/2013

Final report

MLTC/CATRAM


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Market study on container terminals in West and Central Africa

Final report MLTC/CATRAM 23/01/13 2

Contents

Glossary ................................................................................................................................... 3

Study summary and recommendations .................................................................................... 9

PHASE 1 CURRENT STATUS ........................................................................................... 13

1. Maritime and port analysis ........................................................................................... 13

1.1. Maritime services ................................................................................................. 13

1.2. Types of vessels ................................................................................................... 32

1.3.

Shipowners strategies ......................................................................................... 59

2. Infrastructures, traffic and organisation ....................................................................... 64

2.1. Ports in detail ........................................................................................................ 64

2.2. Freight handlers strategies ................................................................................ 115

PHASE 2 PORT REQUIREMENTS .................................................................................. 118

1. Evolution in maritime container traffic ........................................................................ 118

2. Consequences for port infrastructures ...................................................................... 123

This study was financed by the Agence Franaise de Dveloppement.

AFD is not responsible in any way for its contents.


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Glossary

Marit ime agent See consignee below.

Al liance Agreement made between shipowners on the principal global routes for

sharing of resources, notably vessels, and coordination of maritime services.We talk of global alliances when shipowners collaborate on at least the three

large East-West routes.

Port authority Organisation delegated to managing port facilities and the ports public

equipment. Port facilities may be granted to private concerns. The port

authority is in charge of sovereign functions and in some cases certain

shipping services (piloting, mooring, towing etc.).

BAF Bunker Adjustment Factor: a tax compensating for variations in fuel prices

(maritime transport).

B/L Bill of lading: a negotiable contract for the carriage and ownership of goods

transported by sea, clearly stating the nature of the goods, their packaging, net

weight, gross weight, volumes if required, declared value, the sender and the

recipient. These details are attached to the cargo manifest.

BOT Build, Operate, Transfer: using the BOT concession approach is designed to

allow private companies to conduct infrastructure projects that would have

been carried out and managed by public institutions or public sector

companies. The private company has a concession to finance, build and

manage the operation of the project during the concession period. At the end

of the concession period the project returns to the Government.

Cabotage Short-distance maritime transport, national or international, which takes place

along the coastline or between islands (for example, along the coast of the Gulf

of Guinea: Nigeria-Cameroon-Gabon-Sao Tome).

It concerns vessels navigating in defined areas, in principle limited to one

country. Cabotage is different from long-distance navigation or navigation

restricted to an area close to the home port.

CAF Currency Adjustment Factor: a tax compensating for fluctuations in exchange

rates, for example freight in dollars (maritime transport).

Car-Carrier A vessel specialised in car transport (new or used). It also extends to PCC

(Pure Car Carrier) or PCTC (Pure Car and Truck Carrier).

Carrier Haulage In contrast to Merchant Haulage: control of the land transport pre or post-

delivery by the shipowner and not the consignee or his nominated haulage

contractor.

CWA Central and West Africa


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Liner conference A group of shipowners serving the same lines, having reached agreements

between themselves on tariffs, traffic and organising routes, in order to control

competition. As of October 2008, Europe repealed the antitrust exemption

granted to liner conferences. They are illegal for all maritime traffic to and from

ports in the European Community.

Consignee Also known as a Shipping agent. The representative of the shipowner in the

port who deals with the formalities concerning the vessels call in port and

makes the various declarations (particularly vessel, crew, loaded/unloaded

goods, waste, dangerous goods)

Consortium The pooling of vessels by shipowners on a maritime route. An integrated

consortium (now inexistent) meant a system whereby shipowners shared

resources, but also costs and revenues.

Conventional This refers to freight or traffic which does not use containerisation and

therefore requires traditional handling techniques. Conventional vesselstransport goods which are neither containerised nor capable of being

rolled/driven.

Detention This refers to the length of time a container is detained by a shipperoutside of

the port. The shipowner has the right to invoice a shipperfor penalty charges

for any detention beyond the time stated in the contract.

Port charges Taxation levied on the vessel or goods at a port to recover the cost of the use

of the port infrastructure. These charges may be applicable to the vessel (paid

by the owner) or goods (paid by the shipper).

TEU Twenty Feet Equivalent Units for defining the container capacity of a vessel

(also of storage capacity on land, etc.).

Feedering The organisation of feeder lines (feederisation). A service provided by the

feeders. The collection and redistribution of goods. The transhipment between

large vessels (mother ships) calling at a limited number of ports, and smaller

vessels (feeders) that carry the goods to smaller ports which owners do not

serve with a direct line.

Charter A vessel rented out by its owner. In parallel with this, chartering is to hire a

vessel.

Gateway Port A port in which the majority of the traffic either originates in or is destined for

the hinterland (this is the case for all historical ports).

Hub A large port where a significant share of the traffic is destined for transhipment.

Hub and spokes Literally as it sounds. One means of conducting transhipment (interlining being

the other). It is a system for collecting and distributing containers to and from

ports generating small volumes limited or hindered by infrastructure which

does not allow them to receive large ocean-going vessels. It uses smaller

collection-distribution vessels (feeders) through transhipment in a large port


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(hub).

ICD Inland Container Depot, a term used principally to designate an intermodal

platform, but can also be applied to simple storage facilities outside the port (at

Tema for example).

Interlining/Relay The mapping of major shipping lines and transhipment of containers between

ocean-going vessels of various shipping lines to serve a maximum number of

pairs of ports (origin and destination) while minimising the number of times

ships of the various lines have to call into port. In the case of parallel lines, we

use interlining, and relay when connections are radial (intersection of west/east

and north/south lines for example).

Tonnage The registered volume of the vessel used for calculating the taxes applicable to

it, as well as insurance premiums. The unit of measurement is the tonne, equal

to 2,831 m3 (a British measure of 100 cubic feet).

Gross tonnage: the interior volume of a vessel plus the volume of enclosed

space on deck (minus the volume of the double hull and some spaces above

the upper deck and the volume of various equipment which is found on a ship:

kitchens, auxiliary machinery etc.).

Net tonnage: Gross tonnage, minus machinery space, cabins, staff and crew

offices, fuel tanks etc. Anything that does not have a direct commercial

function.

Regular line (As opposed to tramping or sailing on demand): a service provided by a

shipping company's vessels sailing at regular intervals between specified ports.

Shipping services are organised according to a fixed itinerary, the ports served

are identified with a set frequency of service. The shipper (industrial or

commercial) wishing to use these lines reaches an agreement on transport

conditions with the shipowner.

Liners terms The provision by liner conferences of tariffs for maritime transport.

Manifest An on-board document detailing the cargo loaded and unloaded in each port

and its nature, to which the corresponding bills of lading areattached providing

detailed information.

Handling Designates the loading and unloading of a ship, and operations in storageyards and despatch areas.

In African ports a distinction is made between on-board handling(loading and

unloading of ships), a service paid for by shipowners, and quayside freight

handling (movement of goods between the dock and storage yards and

despatch areas), for which the freight handler will charge the forwarding agent.

Freight handler The handling operator who loads and unloads ships, deals with storage (in the

case of containers) and delivers to transporters (or vice versa).

Tidal range The difference in sea level between low and high tide.


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Merchant Haulage In contrast to Carrier Haulage: control of the land transport pre or post-delivery

by the shipperor his nominated haulage contractor.

Nautical mile International unit of measure which is 1,850m and corresponds to the length of

one minute of arc of latitude along any meridian.

Mother ship Long-distance ocean-going vessel, travels on the mother lines making few

stops and links with smaller vessels for transhipment, see Feeder.

Multipurpose

vessel

As the name suggests, a multipurpose ship.

Knot A unit of speed (1 nautical mile per hour or 1,852m/h)

IMO International Maritime Organisation. Created by a UN convention in Geneva on

17 March 1948, one of its main tasks is to develop legislation relating to safety

at sea.

Equipment We distinguish between quay equipment (cranes or gantries) and yard

equipment (straddle carriers, reach-stackers, RTG and RMG as well as port

tractors and Tugmasters providing traction)

Over-Panamax (or

Post-Panamax)

1. Describes a vessel with a width that prevents it using the Panama

Canal (more than 32.3m wide).

2. 2. Describes handling equipment suitable for over-Panamax vessels.

Panamax A vessel whose width allows it to use the Panama Canal (a width of not more

than 32.3m), or handling equipment capable of dealing with vessels up to

Panamax width.

Yard Open ground for stocking containers awaiting loading or delivery.

Keel clearance Minimum depth which must be left below the vessel. This can be up to one

metre, for safety reasons of course, but also to ensure good water flow

beneath the ship. It varies in accordance with local nautical conditions and the

associated risks.

Pool Agreement between shipowners, members of a liner conference, that results in

the pooling and sharing, according to agreed quotas, of transportationequipment and/or cargo and/or operating results.

Deadweight The difference between the weight of a completely loaded vessel and the

weight of the empty or nearly empty vessel. It is the maximum loading capacity

allowed by international safety regulations.

Reach-stacker Handling equipment for storage yards allowing containers to be stacked up to

four high, but requiring fairly large aisles between the rows, resulting in a

relatively low storage density. Reserved for handling low volumes.

RMG Rail Mounted Gantry, a yard gantry operating on rails. Devices capable ofstoring containers extremely densely (up to eight containers high and 12


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containers wide). However, their poor flexibility has led to RTGs often being

preferred (see below).

Rolltainer Self loadingTrailer, for containers of 20 or 40. It is an equipment considerably

more expensive to purchase and to use than a simple flat trailer. In demand

among shippers in French overseas territories who wish to retain the containerin their establishments for some time to overcome limited storage capacity.

Route Direction followed by a vessel.

RTG Rubber Tyred Gantry, a yard gantry on wheels. Allows for very high density

storage of containers, in blocks of around six wide and up to four or five in

height. Ensures good capacity in ports with only limited ground space. More

efficient in terms of density than reach-stackers or even straddle carriers and

more flexible than RMGs (see above).

Shift In a port, the standard working hours of a handling team is usually called ashift. Conventionally, a shift has a duration of between six and eight hours in

French ports.

Slot Refers to the storage position on a cellular container vessel.

Slow steaming Navigation at reduced speed to save fuel. Its a procedure progressively

introduced by shipowners and now becoming generalised to cope with very

high fuel prices which are difficult to pass on to customers. Consumption grows

geometrically with speed, and the savings that can be achieved by slowing

from 24 knots to 16, for example, are considerable. Some services may drop to

12 knots (super slow steaming).

Bunkering Operation providing the fuel necessary for the operation of the ship. Supply of

fuel for boilers or engines in a vessel.

Automatic

spreader

Automatic tool linked to a mobile crane or gantry which grips the container. The

spreader seizes the container via the corner pieces located at the four upper

extremities of the container.

Surcharges Various supplements in addition to tariffs (freight rates). Some are always

applied, such as those arising from the nature of the packaging or certain port

fees or special taxes levied in the countries served. Others are exceptionalbecause they depend on current conditions: currency fluctuations, fuel prices,

port congestion etc.

Demurrage Penalty imposed under a charter agreement by a shipowner to the charterer (in

the case of a charter which has exceeded the contractual duration of the trip).

Also used, for example, where a penalty is charged by a handler to the shipper

via an agent when goods have been left for longer than the contractually

agreed free storage time in the yard.

User taxes Charges levied on users of superstructures (yards, warehouses, gangways

etc.) or equipment (cranes, silos etc.).


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THC Terminal Handling Charge. Fee set by the liner conferences or by shipowners

and paid under handling by a shipper (via an agent) to the shipowner who pays

the handler for all services, both on-board and quayside. It is nearly universal

in container transport, with the notable exception of Africa and French

overseas territories.

Draught The vertical distance between the waterline and the keel or lowest point of the

ship.

Tramping Maritime service available on demand, in other words the vessel is chartered

for a particular voyage or period of time. This type of service is used for the

transportation of oil, iron ore, coal and grain. It is the opposite of a regular

service.

Forwarding agent Works in the port to provide customs clearance of the goods, pays for all the

maritime and port services required for the goods on behalf of the shipper and

in due course re-invoices for these fees. In Europe, most freight forwarders arealso logistics organisers (organising on behalf of the shipper the entire logistics

chain, including land transport).

VLCS/ULCS Very Large Container Ship or Ultra-Large Container Ship. VLCSs are vessels

with a size of between 7,500 and 10,000 TEU and ULCSs are vessels with a

size of above 10,000 TEU.


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Study summary and recommendations

Main findings

Maritime services in West and Central Africa

Nearly three million containers were transported in West Africa in 2011. This is a remarkablefigure for the region but it, however, needs to be put into perspective, as some 500 million

TEUs were exchanged worldwide. Nevertheless, the growth rate in volume terms illustrates

the dynamism of Africa and its potential.

It is for this reason that most of the world's leading container shipping companies have a

presence on the West African coast (Maersk, CMA-CGM, MSC etc.), sometimes with

different strategies.

The development of container traffic has long been hampered by the unreliability of port

operations, but infrastructure improvements, changes in the governance of terminals - the

introduction of port concessions - and the arrival or strengthening of world leaders in port

handling have contributed to recent developments. Many port projects have emerged in the

recent past: the problem and the challenge now rest on the correspondence between the

strategies of shipping companies and the relevance of developments and port projects.

Which transhipment hubs in CWA?

This is a fundamental issue. It appears difficult to determine which port could play the role of

a continental transhipment hub and if there is a real need for one in this area. The presence

of large, very competitive transhipment hubs in the north of the continent - Algeciras, Tangier

Med and Las Palmas - and in the south - the South African ports- means any possible hubs

would have to be both well located geographically, in other words towards the centre of the

region, and be competitive in terms of costs, with the risk of creating a slow return on

investment.

Logic would dictate that a pairing equivalent to Algeciras/Tangier built in the south of the

continent, reinforced by the importance of markets in Angola, DRC and Cameroon, would

allow these countries to develop efficient ports and create the possibility of services on the

Asia-Latin America east coast routes etc.

It is difficult to understand the proposed MSC project in Lom, even though it is part of

MSCs overallstrategy based on transhipments. It should be noted, however, that the Lomproject does have some significant strengths: excellent draught, relatively low capital cost

and low-cost labour. It should also be noted that the strategy of transhipment ports in the

south is already used by shipowners through ports in South Africa and Pointe-Noire.

For the majority of shipowners interviewed, Walvis Bay is too close to the ports of South

Africa to be a major transhipment hub and its weak hinterland is a clear handicap.

Geographically, it is Pointe-Noire that receives the most votes.

Moreover, there are few or no exchange systems between vessels of intercontinental lines

(mother ship to mother ship relay/interlining) in place in West African ports. This is due to

several reasons:


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Major operators have sufficient services to reach directly all the major ports of the

region with differentiated services at very short intervals. For secondary ports they

use radial feedering (hub and spokes).

Relay operations are outside the range, mainly in the major hubs of the north

(Algeciras, Tangier Med and Las Palmas). As we noted earlier, all Maersk CWAcontainer services dealing with traffic from Europe and withpart of the flow from

Asia,are transhipping at Algeciras and Tangier Med. Delmashas even got two

services at Tangier Med.

In fact, the logic of exchanges between lines implies that they are carried out in

ports on the major intersections between east-west and north-south flows, which

is not the case for any port in CWA.

Geographical constraints, shipowners strategies and the evolution of the size of vessels

have resulted in the establishment of regional hubs and secondary services which make it

possible to have a cascade of services to all coastal ports depending on their nautical

capacity and commercial importance.

Risks linked to the volatility of transhipment traffic

The traffic passing through gateway ports is a function of the traffic flow generated by the

hinterland of the port in question and can be considered captive to a certain extent, provided

the port remains commercially and operationally competitive vis--vis competing ports whose

hinterlands may overlap1.

In cases where multiple ports are in competition, a judgement is ultimately made by the

shipper based on several criteria: cost and quality of passage through the port, cost andduration of inland transport, maritime transit time, etc.

In contrast, transhipment traffic is controlled by the maritime operator who chooses to serve

a port directly or via a transhipment hub based on commercial and operational criteria:

volume of traffic under consideration, vessel size and capacity of the final destination port,

competition etc.

Transhipment costs are, therefore, the responsibility of the shipowner who considers them an

operational cost and constantly seeks to minimise them. This has an impact on a large

number of parameters: changes in the size or type of vessels operated, changes in the type

of service etc.

Shipowners can very quickly move large volumes of traffic from one hub to another based on

their current strategy and the commercial attractiveness of the various hubs.

Some transhipment ports have seen their traffic gradually fall as new competitors, better

placed geographically or economically, came on the market. This is the case, for example, of

Gioia Tauro, built in 1995 and whose traffic peaked in 2004 at 3.26m TEU before falling

every year, reaching 2.35m TEU in 2011. Over the same period, its closest competitor,

Marsaxlokk (Malta) saw traffic increase from 1.4 to 2.4m TEU. Similarly, Singapore has seen

its position as a major (if not hegemonic) South-East Asian hub challenged by the

1 While acknowledging that competition between ports in West and Central Africa is severely limited by the distances

involved and the poor quality of road and rail infrastructure when available.


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commissioning in early 2000 (less than 50km away from the port of Singapore!) of the port of

Tanjung Pelepas in Malaysia. Thanks in particular to the transfer of Maersks transhipment

activities, the latter has grown rapidly in strength and handled 7.5m TEU in 2011,

representing 25% of the volumes handled by Singapore.

Transhipment flows therefore exhibit intrinsic volatility which is difficult to regulate. However,this volatility is a function of the investments made by shipowners in transhipment port

terminals and in the terms of theconcession contracts made with the port authorities: indeed,

the more an owner has invested in the long term in a terminal and the more punitive the

contract in cases of non-compliance with the agreed volumes of transhipments, the less

likely an owner is to rapidly change its maritime services in response to the offers of

competing ports in the region.

Any new port or port development in West and Central Africa whose business model is solely

or largely based on transhipment traffic is vulnerable. Especially when large competitors

already exist or are being developed at both ends of the region, and the shipping companies

serving CWA do not seem for the most part to have incorporated regional transhipment intheir future strategy.

Investments

The risk of overcapacity cannot be ignored and in particular for projects such as Lom,

Abidjan and Dakar, which is why the involvement of port operators and shipping companies

in various projects seems to be necessary to perpetuate the investment.

In Africa, as in other parts of the world, terminal operators (much more so than shipowners in

the African region) agree to invest in infrastructure. This is particularly the case in Dakar

(Dubai Port World has built a third berth), in Lom both for Bollor (third quay) and forTIL/MSC (LICT), Pointe-Noire and Cotonou (Benin Terminal) for Bollor, etc.

It should be noted, though, that in all the cases cited these investments relate to operational

infrastructure (dredging and quays). In absolute terms, the investments concerned are

therefore not huge. In the case of LICT in Lom, TIL/MSC have taken much less of a risk

because theywere able to sell for a good price halfof their share to China Merchants, as

well as havingthe contributions and loans from lenders.

The need for profitability results in tailored concession periods and, no doubt, in some cases

in relatively high tariffs. But experience also shows that the existence of high tariffs is not

only the result of significant investments made by a concessionaire but mainly the result of

insufficiently carefulgovernance.

Currently, we arenow seeingmore ambitious projects such as the BOTs on greenfield sites

in Nigeria, proposed by some quite powerful consortia bringing together multiple specialised

partners as in the case of Badagry and Lekki. While investments seem high, the expected

growth of the various activities in these future ports can easily allow us to anticipate strong

profitability provided the duration ofthe concessions is sufficient. A case study on the subject

is provided by that of the BOT in Shanghai where the activity grew by two million TEU per

year.

A terminal dedicated solely to transhipment could be viable if a shipping companyagreed to

bear the full costs. If we believe the statements of MSC, this would be the case in Lom. This


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seems, however, to be contradicted by the emergence of China Merchants Holdings

International, which is obviously seeking a return which can only be found in import-export or

transit traffic.

Port environments

The port system in the countries of West and Central Africa displays numerous

heterogeneities, not only in the quality and suitability of itsinfrastructure and equipment, but

also in their institutional and regulatory environments and land-based logistics.

The performance of some ports such as Tema, for example, suffers significantly for these

reasons, combining the negative impacts of restrictive and obsolete regulation, an

inadequate institutional framework and severe saturation of its land access. This port is far

from alone in experiencing this type of problem. Although progress has been made over the

past 10 years in this area, much remains to be done and careful attention must be paid to it

in the future.

Principal recommendations

1. Continue the policy of improving infrastructure and port facilities

2. Create institutional reforms where they are needed (Ghana, Angola etc.) and

encourage the modernisation of port regulations

3. Encourage and be involved in the establishment of real one stop shop systems

corresponding to the common standards of the different ports

4. Contribute to the improvement of port hinterlands (roads, land-based platforms

positioned at strategic points in the hinterland etc.)

5. Avoid monopolistic situations in a port as part of a policy to reduce port passage

costs (if received volumes are sufficient)6. Generalise port concessions and involve port operators and shipowners in

investment for sustaining infrastructure

7. Support projects that focus on domestic traffic

8. Be involved in the improvement of serving landlocked countries


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PHASE 1 CURRENT STATUS

1. Marit ime and port analysis

1.1. Maritime services

The maritime container services serving ports in West and Central Africa were identified

using the Alphaliner database.

They are divided into several categories:

Local feeder or cabotage services; in other words services serving several ports on the

West African coast departing from a port in West Africa,

Feeder services departing from a transhipment hub and destined for ports on the West

African coast,

Direct lines serving West Africa departing from northern and southern Europe and the

Mediterranean,

Direct lines serving West Africa departing from Asia,

Direct lines serving West Africa and arriving from North and South America.

For each of these categories, we have distinguished those maritime services operating only

cellular vessels (cc) and other maritime services operating the following types of vessels:

Multipurpose (mp), Roll-on, Roll-off or Ro-Ro (ro), Reefer (ref), Barge Carriers (bg).

Key indicators for the services (source Alphaliner)


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The containerised maritime service offer for West Africa currently comprises 84 services.

Nearly 60% (50 services) are considered direct services and 40% (34 services) as feedering

services.

The services considered as direct services are those serving the ports of the West African

coast from: North and South America, Asia, northern and southern Europe, and theMediterranean. Services are considered to be feeders if they operate as local feeders

departing from a port in West Africa, or if they are lines out of a transhipment hub such as

Las Palmas, Algeciras and Tangier Med with destinations on the West African coast.

Concerning the current vessel offer, it should be noted that a total of 392 ships operate on

the lines serving West Africa. Nearly 71% (280 vessels) are containerships that vary from

ships with a capacity of between 1,000 and 2,000 TEU to ships with a capacity of 3,000 to

5,999 TEU. The rest of the fleet (29%) is mainly composed of Multipurpose and Ro-Ro

vessels, and the share of Reefers is relatively low.

Around 30 different shipowners are currently serving the ports of West Africa. Most of themoperate independently; however, others exploit some lines in the form of partnerships. The

three main global shipowners, namely Maersk Line, MSC and CMA-CGM, unsurprisingly,

dominate, notably for vessels coming out of Europe and Asia.

A total of 38 ports from 21 countries between Mauritania and Namibia are involved in the

maritime services included in our study. The ports most visited are those of Abidjan and

Pointe-Noire, followed to a lesser degree by the ports of Lagos, Tema and Dakar. These are

the ports that have the most favourable conditions for receiving vessels (nautical access,

draught, quay length etc.).


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Container services in detail

Seven services out of 16 use specialised containerships with a capacity varying from 300 to 1,900 TEU. T

not full container but operate multipurpose vessels offering capacities varying between 300 and 1,300 TEU.

Niledutch and Maersk Line/Safmarine are the operators with the largest presence in the market, both in te

frequency of services. To a lesser extent, we find MSC and Delmas. The operators PIL, Camship and OAC

market.

It should be noted that the shipowners on the intercontinental routes use their own feeder services in coastal

extent that there is no independent local offer. In addition, there is no cooperation between operators in resp

within the same groups (for example, Maersk and Safmarine). However, slots can be rented on feeder servic

Source: Alphaliner


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Source: Alphaliner

Summary of services

Source: Alphaliner


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Northern Europe West Africa services

Source: Alphaliner

With 18 services, the direct route from northern Europe to West Africa is one of the sectors with the most represent a total of 102 ports of call serving 31 different ports. It should be noted that the majority of service

ports in Europe are from the port of Antwerp (60%).


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Services in detail

Five services use only containerships, with capacities ranging from 1,600 to 2,500 TEU.

The other services (13 in total), operate mainly Ro-Ro ships - this is particularly the case for

the services offered by Grimaldi - and multipurpose vessels. A service using reefer ships and

another using barge carriers are also present in this market.

The total capacity on the northern Europe to West Africa route is in the region of 118,000

TEU.

Source: Alphaliner

Concerning the capacity available for full container services, Delmas (CMA-CGM) is the

maritime operator with the largest presence in the northern Europe-West Africa market with

38% of the total capacity. It is closely followed by MSC (29%) and, to a lesser extent, by the

MOL, Hapag Lloyd, Zim partnership (18%) and finally the Dutch shipowner NileDutch (15%).

Market share of shipowners


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Source: Alphaliner

On services other than full container, Grimaldi has the largest presence. It operates five

services from northern Europe with a fleet of 21 Ro-Ro vessels. The Italian operator is the

only one to use this type of ship. BOCS, EuroAfrica, UAFL and Safmarine also offer services

from Europe, using multipurpose vessels.

Summary of services

Source: Alphaliner


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Southern Europe/Mediterranean West Africa services

Source: Alphaliner

The route between West Africa and ports in southern Europe and the Mediterranean offers a total of 11 d

represent a total of 52 ports of call, serving 23 different ports.

From the Mediterranean, services leave the ports of Valencia in Spain, Fos and Port-Vendres in France and

Italy. Other services from southern Europe are exclusively from Portugal, notably the ports of Lisbon and Lei


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Services in detail

Nearly 70% of the services between southern Europe and the Mediterranean to West Africa

use containerships, with the remaining 30% using Ro-Ro and reefer vessels.

The capacity of containerships varies between 1,100 and 2,600 TEU.

In total, 34 containerships are used on these routes, making it the third largest market in

terms of the number of cellular vessels used.

Source: Alphaliner

With an offer comprising vessels with capacities of between 2,500 and 3,000 TEU, MSC is

the operator with the largest share of the southern Europe/Mediterranean to West Africa

market segment. It is followed by Delmas (CMA-CGM) and to a lesser extent by the

partnership of Zim/COSCO, Lin Lines, Marguisa and Portline.



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Hub services West A frica

Source: Alphaliner

Routes to ports on the West African coast from transhipment hubs comprise a total of 18 services, the majo

the worlds largest shipowner. In total, they represent a total of 47 ports of call in West Africa, serving 22 diffe

In order of importance, Algeciras (Spain), Tangier Med (Morocco) and Las Palmas (Canary Islands) are the

services to West Africa.


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Services in detail

All the services leaving the transhipment hubs use containerships. Capacities vary between

1,100 and 3,600 TEU. It should also be noted that vessels with a larger capacity, of between

3,000 and 5,099 TEU, are present.

The average weekly capacity of services from hubs to West Africa is around 1,747 TEU for a

total weekly capacity of 31,450 TEU for all services.

Source: Alphaliner

Maersk Line and its subsidiary Safmarine have, by far and away, the largest presence in

services to West African ports from a transhipment hub (64%). They offer at least 11

container services from Tangier Med and Algeciras. In total, the offer comprises 53

containerships with a weekly capacity of 20,169 TEU.

MSC is the second largest operator of services from a hub, with 12% of the total available

capacity. Departing from Las Palmas, MSC offers three services with a weekly capacity of

around 3,800 TEU. It is closely followed by the partnership formed by shipowners UASC,

Hanjin and Evergreen which, since 2010, have offered a service from Algeciras with the

particularity of being operated by three containerships with capacities of between 2,000 and6,000 TEU.

On a smaller scale (9%), CMA-CGM offers, through its subsidiary Delmas, two weekly

services from the port of Algeciras for a capacity of about 2,800 TEU. Finally, the partnership

of MOL, Hapag Lloyd and ZIM provides one weekly service from Algeciras with a capacity of

1,532 TEU.


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Summary of services

Source: Alphaliner


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Asia West Afr ica services

Source : Alphaliner

The maritime container route between West Africa and Asia offers 15 direct services. In total, these represen

The services currently in place from Asia come in large part from China - 75% of the total direct services - aand Shanghai. China is followed by India, which has 13% of the services. Finally, Malaysia and South Korea


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Services in detail

Some 80% of the services departing from Asia are operated using containerships, with the

remaining 20% using multipurpose vessels.

The capacity of the container ships in service on the Asia to West Africa route varies

between 1,000 and 4,500 TEU. Not surprisingly given this type of ship, services to West

Africa are limited to a small number of ports with adequate navigational capacities, such as

Abidjan, Tema, Lom, Lagos, Pointe-Noire and Luanda.

The average weekly capacity for this market segment is in the region of 2,472 TEU, with a

total weekly capacity of 29,662 TEU for all services.

In total, of the 130 vessels operating on these routes, 119 are containerships making it, by

far, the largest market in terms of the number of containerships used.

Source: Alphaliner

Maersk Line and CMA-CGM have the largest presence on the Asia to West Africa route, with

respectively 31% and 29% of the total capacity available, including one service operated

jointly. CMA-CGM has three services of its own compared to two for Maersk Line, which

operates larger capacity vessels at a lower frequency.

With 18% of the total capacity, PIL is the third largest operator on the Asia to West Africa

route. It has three services giving a weekly capacity of 5,372 TEU.

NileDutch, the partnership of CSCL, K Line, Hapag Lloyd and NYK and the partnership of

GSL and Evergreen complete the maritime container offer for Asia to West Africa with

respectively 8%, 7% and 7% of the total capacity.


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Source: Alphaliner

For services other than full container, we find PIL, Maersk Line and Cosco, each of which

runs multipurpose vessels.

Summary of services

Source: Alphaliner


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Container services in detail

Only one service of the six offered operates container vessels. The five other services are

composed of multipurpose and Ro-Ro vessels.

The capacity of the containerships varies between 1,700 and 1,900 TEU. It should be noted

that out of a total of 28 vessels operating on these routes, only five are containerships.

Source: Alphaliner

Delmas (CMA-CGM) and NileDutch are the only shipowners to offer containerships from

South America.

Maersk Line and UAL operate respectively two and eight multipurpose vessels, departing

from the ports of Houston and Savannah.

Grimaldi and Nordana Line complete the current offer, operating respectively 11 and two Ro-

Ro vessels.

Source: Alphaliner


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1.2. Types of vessels

Analysis of the avai lable fleet

The containership fleet is not as well segmented as the bulk carrier fleet. Nevertheless, we

can see the classic differentiation of Panamax ships (with a capacity of between 3,000 and

5,099 TEU) as is found in many maritime markets. Generally, a definitive commercial

equilibrium has yet to be established for container vessels.

The table below provides an initial overview of how the current containership fleet is

distributed. This is a recent fleet which has seen an almost continuous growth in its number

of units. The most striking feature, however, is the use of ever larger ships.

Distribution of the containership fleet by age of vessels

Source: BRS


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Fleet availability according to draught and length

Source BRS: October 2012

The scatter graph above shows both the current and future fleet of containerships 2.

Unsurprisingly, there is a positive correlation between vessel size and the draught required

for a port call.

The high and low limits take into account both the maximum draught registered in the ports

of West Africa (namely the ports of Cotonou, Lagos (Apapa Terminal) and San Pedro which

have a draught of 13.5m) and, on the other hand, the minimum draught, which is found in the

port of Douala with 7m. The average draught of all ports in West Africa is 11.3m (blue line).

Thus, if we take into account only the draught of the ship, we can see that accepting ships

with a capacity of less than 2,000 TEU, and part of the fleet with a capacity of between 2,000and 3,000 TEU, is not a problem for most of the African ports included in this report.

Note on the scatter graphs: Each point on the graph represents one or several ships. Ships

are often constructed as part of a more or less long series. Ships in the same series, sister

ships, have identical characteristics but appear as only one point on the graph, leading to a

bias against the largest series. Some of these series may be relatively large since the same

design developed by a shipyard may be offered to a number of shipowners. For example,

132 ships were built from theCV1100 Plus design, in many different European and Chinese

2The orderbook has been taken into account where the information was available in this case for 536 ships on order.


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Eligible fleet for Dakar container terminal

The nautical conditions3 in the port of Dakar allow it to accommodate a very significant

proportion of containerships with a capacity of between 3,000 and 5,099 TEU, and a small

proportion of vessels with a capacity of between 5,100 and 7,999 TEU. The quay is long

enough for all vessels in the active fleet. In comparison with other ports, Dakar is one of the

ports on the coast of West Africa with the best nautical conditions.

3The current nautical conditions for the port of Dakar are a draught limited to 13m and a quay length of 660m.


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Eligible fleet for Banjul container terminal

The nautical conditions4for the port of Banjul, notably in terms of draught, remain restrictive

for a proportion of ships between 1,000 and 1,099 TEU. The draught prevents it hosting

ships with a capacity greater than 2,000 TEU. On the other hand, the length of the quay(300m) is sufficient for the fleet of containerships with a capacity of less than 5,099 TEU, and

a significant proportion of ships with a capacity of between 5,100 and 7,999 TEU.

4The current nautical conditions for the port of Banjul are a draught limited to 10m and a quay length of 300m.


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Eligible fleet for Freetown container terminal

The nautical conditions6 for the port of Freetown allow it to accommodate a significant

proportion of the Feeder fleet (ships with a capacity of between 0 and 999 TEU), and a

limited proportion of ships with capacities of between 1,000 and 1,999 TEU. The length of thequay (722m), on the other hand, is sufficient for all the active fleet.

6The current nautical conditions for the port of Freetown are a draught limited to 9.5m and a quay length of 722m.


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Eligible fleet for San Pedro container terminal

The nautical conditions8 for the port of San Pedro, notably in terms of draught, prohibit a

proportion of ships with capacities of between 5,100 and 7,999 TEU. In addition, the draught

prevents it accommodating ships with a capacity greater than 8,000 TEU. The quay (325m),however, is sufficient (with some exceptions) for the entire fleet of containerships with a

capacity of less than 8,000 TEU.

8The current nautical conditions for the port of San Pedro are a draught limited to 13.5m and a quay length of 325m.


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Eligible fleet for Abidjan container terminal

The nautical conditions9 for the port of Abidjan allow it to receive a significant proportion of

containerships with a capacity of between 1,000 and 1,999 TEU. However, the draught of

11.5m limits access to much of the fleet between 2,000 and 3,000 TEU. Beyond 3,000 TEU,

the draught is insufficient. The quay length, though, makes it possible to receive a large

proportion of vessels between 3,000 and 5,099 TEU.

9 The Abidjan terminal container has a total quay length of 1000m, broken down into several berths. However, the Vidri

Canal prevents access to vessels with a length exceeding 250m. The draught is 12.5m.


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Eligible fleet for Takoradi container terminal

The nautical conditions10for the port of Takoradi remain restrictive for a significant proportion

of vessels between 1,000 and 1,099 TEU, particularly in terms of draught. Under 9m, the

entire Feeder fleet (with some exceptions) can access the port.

10The current conditions for the port of Takoradi are a draught limited to 9m and a quay length of 190m.


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Eligible fleet for Lom container terminal

The nautical conditions12for the port of Lom allow it to receive a large proportion of vessels

with a capacity of between 1,000 and 1,999 TEU, and some vessels with a capacity of less

than 3,000 TEU. The quay length is adequate for the entire active fleet.

12The current nautical conditions for the port of Lom are a draught limited to 11m and a quay length of 430m.


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Eligible fleet for Cotonou container terminal

The nautical conditions13for the port of Cotonou allow it to receive a significant proportion of

the fleet of vessels with a capacity of between 3,000 and 5,099 TEU, and a proportion of

vessels with a capacity below 7,999 TEU. The quay length is sufficient for the entire active

fleet.

13The current nautical conditions for the port of Cotonou are a draught limited to 13.5m and a quay length of 540m.


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Eligible fleet for Lagos container terminals

Apapa container terminal (port of Lagos)

The nautical conditions14 for the Apapa container terminal in the port of Lagos allow it to

receive a significant proportion of vessels with capacities ranging from 3,000 to 5,099 TEU,and a limited proportion of vessels with a capacity of between 6,000 and 8,000 TEU. The

quay length is sufficient for all vessels in the active fleet. Likethe port of Dakar, the Apapa

container terminal has nautical conditions which are particularly advantageous when

compared to other ports on the West African coast.

14The current nautical conditions for the Apapa container terminal are a draught limited to 13.5m and a quay length of 500m.


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Tin-can Island container terminal (port of Lagos)

The nautical conditions15for the Tin-Can Island container terminal in the port of Lagos allow it

to receive a significant proportion of the fleet with capacities of between 1,000 and 1,999

TEU, and a limited proportion of vessels with capacities of between 2,000 and 2,999 TEU,

but in terms of draught it remains restrictive for vessels with higher capacities. The quay

length is sufficient for the entire active fleet.

15The current nautical conditions for the Tin-Can Island container terminal are a draught limited to 11.5m and a quay lengthof 770m.


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Eligible fleet for Douala container terminal

The current nautical conditions16 for the port of Douala allow it to receive a very limited

proportion of containerships. In fact, the particularly restrictive draught in this port (7m), limits

access to a significant proportion of Feeder vessels (0 to 999 TEU) and above. However,

the quay length is sufficient for the entire active fleet.

16The current nautical conditions for the port of Douala are a draught limited to 7m and a quay length of 660m.


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Eligible fleet for Libreville container terminal

The current nautical conditions17 for the port of Libreville allow it to host a significant

proportion of vessels with capacities of between 1,000 and 1,999 TEU, and a limited

proportion of vessels with capacities of between 2,000 and 2,999 TEU, but in terms of

draught it remains restrictive for vessels with higher capacities. The quay length is sufficient

for the entire active fleet.

17The current nautical conditions for the port of Libreville are a draught limited to 11m and a quay length of 475m.


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Eligible fleet for Pointe-Noire container terminal

The nautical conditions18 for the port of Pointe-Noire allow it to receive a significant

proportion of the fleet of vessels with capacities of between 3,000 and 5,099 TEU, and a

limited share of vessels with capacities of between 6,000 and 7,999 TEU. However, the

draught restricts access for vessels with capacities of more than 8,000 TEU. The quay length

is sufficient for the entire active fleet.

18The current nautical conditions for the port of Pointe-Noire are a draught limited to 13m and a quay length of 800m.


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Eligible fleet for Luanda container terminal

The nautical conditions19for the port of Luanda allow it to receive a significant proportion of

vessels with capacities of between 1,000 and 1,999 TEU, and a limited proportion of vessels

with capacities of between 2,000 and 2,999 TEU. However, the draught restricts access for

vessels with higher capacities. The quay length is sufficient for the entire active fleet.

19The current nautical conditions for the port of Luanda are a draught limited to 11m and a quay length of 550m.


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Eligible fleet for Lobito container terminal

The advantageous nautical conditions20for the port of Lobito allow it to receive a significant

proportion of the fleet of vessels with capacities of between 2,000 and 2,999 TEU, and a

limited proportion of ships with capacities of between 3,000 and 5,099 TEU. However, thedraught restricts access for vessels with higher capacities. The quay length is sufficient for

the entire active fleet.

20The current nautical conditions for the port of Lobito are a draught limited to 12m and a quay length of 550m.


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Eligible fleet for Walvis Bay container terminal

The nautical conditions21for the port of Walvis Bay allow it to receive a significant proportion

of the fleet of vessels with capacities of between 1,000 and 1,999 TEU, and a limited

proportion of ships with capacities of between 2,000 and 2,999 TEU. However, the draught

restricts access for vessels with higher capacities. The quay is sufficient for the entire active

fleet.

21The current nautical conditions for the port of Walvis Bay are a draught limited to 11.5m and a draught of 550m.


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Evolution of the fleet

The evolution of the containership fleet, both in quantitative terms (number of vessels) and

qualitative terms (vessel size) is an important feature of container transport. It is difficult topredict today whether the growth in the size of ships will continue or if it has reached its

maximum. However, considering the many changes that have taken place over the past two

decades, as well as the arrival of the new CMA-CGM container vessels with a capacity of

16,000 TEU, it would appear that the first option is the most likely.

The worlds containership fleet has experienced particularly strong growth in capacity since

1995, growing at an average annual rate of 11% (while the increase was only 8% per year

between 1985 and 1995). This trend was also accompanied by successive technological

leaps in terms of vessel size and motorisation. However, while capacity has long been

increasing, is has not done so uniformly over time.

Between 1995 and 1999, the world containership fleet grew strongly, in line with

the mass introduction of over-Panamax vessels (more than 4,500 TEU).

2000 to 2001 saw a lull due to a period of consortia reorganisation and mergers.

2000 to 2003 was a period of recovery, notably with the launch of 8,000 TEU

vessels. This was followed by a slight decrease over the next two years even

though the orderbooks were full.

2006 to 2007 was a successful year. Deliveries of vessels continued at a high rate

compared to 2005, particularly for over-Panamax vessels and for ships with

capacities between 300 and 1,500 TEU and 1,500 to 3,000 TEU (+69.3%). Not

only were these deliveries large in number but they also displayed a concentrationat both ends of the size spectrum with the increasing capacity of the larger ships

creating new needs for feeder services, generating traffic that benefitted the hub

ports.

2008 was the first year of the downturn, driven by the financial crisis, and 2009

was a year of crisis management. The brutality of the downturn, following a long

period of euphoria in maritime transport, took owners and operators by surprise,

forcing them to urgently review their development strategies. In addition to the

short-term measures - deferrals of deliveries of chartered vessels and mothballing

of ships - operators had to review their order levels, which in 2008 represented

60% of the fleet and risked creating massive over-tonnage. 2010 was marked by a sharp upturn. The increase in recorded volumes

throughout the year enabled operators to increase the capacity available and

therefore bring many ships back into service.

In 2011, operators adapted their fleets to match the volumes to be transported:

the relative stability of volumes led operators to bring online a capacity roughly

equivalent to that available in 2010 on the major East-West routes, which helped

to ensure a correct level of vessel usage despite many new ships coming into

service.


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Evolution of the containership fleet over the period 1995 2013

In October 2012, the cellular fleet comprised 5,020 ships with a capacity of approximately

16.2m TEU. For the record, as of 1 January 2000, the fleet consisted of 2,615 vessels with a

capacity of 4.5m TEU. The fleet has therefore doubled in size and more than tripled in

capacity in just over a decade. These impressive figures illustrate the significant

development of containerised transport thanks to the globalisation of trade and the ever-

increasing role of China in this process.

Because of deferrals, only 163 ships with a total capacity of 1,055,591 TEU (an average of

6,500 TEU per ship) were delivered between January and October 2012 (for comparison, in

the same period in the successful year of 2008, 349 ships had already been delivered).

Shipowners have used all the means at their disposal to negotiate with the shipyards to delaythe deliveries of ships they have ordered. They also tried to negotiate cancellations or the

conversion to bulk carriers or oil tankers of the ships ordered in previous years for delivery in

2013 and 2014 and whose construction was less advanced.

Alongside these quantitative measures, operators have also conducted qualitative reviews of

their fleets, focusing on their larger and more modern ships in the redesign of their East-West

services, in particular on vessels of more than 10,000 TEU which were ordered in large

numbers in 2007 and 2008 (it should also be noted that these vessels can only be used on

routes between Asia and Europe) and transferring smaller vessels onto North-South

services, these moves being designed to streamline and focus services on the principal

routes.


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Source BRS: October 2012

Between January and October 2012, 128 ships with a total capacity of around 240,000 TEU

were scrapped (within the same period in 2008, only 41,400 TEU of capacity was scrapped).

Therefore, since 2009 a watershed year - the average age of containerships sent for

disposal has been decreasing. Moreover, one of the characteristics of containerships is their

longevity and, demand having been virtually constant since their launch, the level of ships

scrapped is traditionally very low, representing only a small percentage of the arrival of new

vessels.


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1.3. Shipowners strategies

General considerations

Operational choices of containership operators

Overall, there are strong similarities in the operational decisions taken by the main operators

of ships running on regular lines across the worlds oceans:

Almost total containerisation;

Increasingly large ships;

Growing tendency to serve secondary ports by fleets of feeders;

Streamlining of flows, by ensuring higher volumes of goods are transported on the

major maritime routes, and are distributed via transhipment platforms often by a

limited number of operators.

Other modes of transport using roll-on/roll-off or conventional, are not heretical or

contradictory methods. They are economically justified by the continued significant volumes

of goods which remain difficult or impossible to containerise and by the strategies of certain

niche market operators.

Specific problems in containerised transport

As with any merchant shipping, inactivity and the return (or repositioning) of empty

containers are costs which must be controlled to keep them at a minimum.

On any given line, the problem of 20 containers is different from that of 40 containers (as it

is for each type of special container), one or the other may occur in the other direction, with

neither inconvenience compensating for the other.

Having said this, for container traffic as for other forms of shipping, the case is economically

simple; in a competitive market, one must produce a unit cost of transportation as low as

possible by acting, primarily, on vessels and containers:

The type of vessel used (speed, consumption, payload, port productivity, ships

gear if necessary);

The size of the vessel, in order to maximise economies of scale. This is limited by

the need to optimise the loading of the ship for the complete rotation. In otherwords, the size of the vessel must be adapted to the market share of the operator.

Finally, the container fleet (purchase or rental, maintenance and repair, transport

of empties and rebalancing between areas with surpluses and areas with deficits).

The best kind of containerised transport involves the transhipment of goods. As a result,

networking, in other words the connection of the various regular services of an operator

(with or without partners), makes it possible to capture volumes made larger as increasing

numbers of ports and their hinterlands across the globe are connected. The very concept of

globalisation as we talk about it today would not have been possible without the changes

brought about by the maritime industry in containerisation making trade around the world

faster, cheaper and more efficient.


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In other words, today's globalisation is in proportion with the fluidity which containerisation

makes possible: containers can be transhipped from one vessel to another several times with

no damage to the goods, between any two ports, and shipyards now have the ability to

deliver more than 200 containerships per year, including more than 50 of 10,000 TEU, for a

total capacity of nearly 1.5 million TEU. The largest containerships will soon be able to carry

18,000 TEU with a deadweight of 200,000 tonnes. This fluidity is also due to the productivityof the terminals, equipped with modern gantries adapted to the constant growth in the

number of containerships, as well as to the computerisation of data transferred between all

the stakeholders. Loading a 10,000 TEU containership today does not require the same

effort as that needed 30 years ago to load a 1,000 TEU multipurpose vessel.

As far as the strategy of the shipowners is concerned they seem to have only one guiding

principle; to have as little as possible and to set nothing in stone. All that counts is the ability

to adapt, along with operational and commercial opportunism as far as this capital intensive

activity allows them.

In order to have as accurate a vision as possible of the operational choices made byshipowners in West Africa when faced with the existing constraints, interviews were

conducted with owners selected according to their representation in the market and for the

original nature of their approach, to provide the widest possible panorama of the strategies

used.

To this end, interviews were conducted with the following shipowners:

Maersk/Safmarine, CMA-CGM/Delmas and MSC, which are the three major

players in the CWA market and also the three largest shipowners in the world for

in container transport.

NileDutch, which is a shipowner specialised in serving the CWA market and

whose development in this market is particularly marked.

Grimaldi, a specialist in Ro-Ro transport and the leader in this form of transport in

the CWA market .

Hapag Lloyd, the worlds sixth largest shipowner and a new entrant in the CWA

market.

The shipowners and operators met during these interviews account for more than 80%

of the capacity in service between CWA and the other regions of the world.

The interviews were designed to highlight the strategies implemented by shipowners in the

West African market. To this end, the following topics were discussed with the different

representatives of the companies:

The services offered

The size of ships

Transhipment strategies

Shipping companiesselection criteria for ports

Their views on the African ports they serve

Future developments


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Summary of interviews and comments on shipowners strategies

Shipowners strategies

First of all it should be noted that all the global carriers are present in the CWA market, which

was not the case 15 years ago. Then we must place the CWA strategy of these shipowners

within the context of their overall strategy: the concentration of liner operators at the global

level has a direct impact on the maritime services present in CWA. The absorption of

Safmarine by Maersk and of Delmas by CMA-CGM has contributed to strengthening the

weight of these players in the CWA market and changed the type of shipping services they

perform through synergies established between their different lines.

Shipowners strategies for serving CWA derive directly from their position in the market and

we can therefore distinguish two clear trends:

- Global shipowners seek to maximise the benefits linked to their global market coverage by

connecting their different lines through their major hubs. They can take advantage ofeconomies of scale by increasing the size of their vessels while providing a very large

network of destinations. The only drawback of this strategy may be the loss of a certain

specialised expertise in CWA, which is no longer considered to be a destination like any

other.

It is Maersk Line which has taken this approach the furthest, removing all its direct services

to CWA from Europe and replacing them with services centred on Tangier/Algeciras and

connected to the major East-West services (Europe/Asia in particular), thereby rationalising

the use of capacity on its ships and benefitting from the reduced operating costs of its giant

vessels (14,000 TEU and, soon, 18,000 TEU) serving on the Europe/Asia routes. The

services of CMA-CGM-Delmas have partially adopted the same configuration, also fromTangier and Algeciras. As for MSC, the company is currently reviewing the organisation of its

lines to better serve West Africa, particularly from Asia.

- Operators specialising in CWA favour direct services to African ports from northern

Europe, the Mediterranean and Asia, and stress the quality and speed of their services as

well as their personalised response to customers needs.

Types of ships used

A particularity of CWA services is the need in many ports to use vessels built specifically for

these routes: ships must be geared, have a reduced draught (less than 12.5m) and a lengthlimited to less than 250m. This entails ships from about 4,000 TEU upwards being over-

Panamax in size (to compensate for shallow draught and length limitations, vessels must be

wider than the standard) and cannot exceed 4,500 TEU. These technical particularities of the

vessels result in higher construction costs and represent an operational constraint to

shipping companies because of the difficulty of finding compatible ships on the charter

market (which also limits market entry for new players).

In addition, the fact that vessels are geared slows down operations when handling is being

conducted in modern terminals with container gantries.

Those ports or terminals which have no limitations on draught, or which seek to resolvethese problems in order to accommodate vessels of standard sizes, have a significant


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competitive advantage, which can only increase as the growth in traffic makes the use of

larger vessels necessary.

Many maritime services still use conventional vessels in this market, but these will disappear

and be replaced by containerships as an increasing range of goods are containerised. This

will mean that the growth rate in container traffic will be higher than the overall growth rate forvolumes.

Ro-Ro vessels, which were once a very common feature in CWA because of their ability to

operate with the minimum of port infrastructure, are tending to disappear both because of

specialisation and improvement in infrastructure, but also due to the disappearance of the

traffic in used vehicles (imports of which are now prohibited in many African countries) that

were the staple of their shipments. Indeed, new vehicles, which are now mostly imported, are

generally transported on specialised vessels (Pure Car & Truck Carriers) and not on Ro-Ro

ships. In addition, while the traffic in used vehicles came mainly from Europe, the route on

which Ro-Ro ships operated, the flows of new vehicles originate from countries or areas that

are not served by these vessels: Japan Korea, Turkey, Brazil, Egypt, South Africa, andNigeria, for example.

Only the Grimaldi company continues to base its strategy on Ro-Ro ships, though CMA-

CGM/Delmas have on order in Korea a series of Ro-Ro ships destined for the northern

Europe to CWA route (however, the date for putting these ships into service has been

postponed several times).

Operational problems

All the shipowners interviewed stressed the importance of taking operational aspects into

consideration in their decision-making, while very little reference was made to commercialissues. The problems or handicaps to be overcome in the ports of CWA are mainly the

following:

- Implementation of fixed berthing windows: This is a fundamental element in the regularity of

a maritime service and in optimising the management of a terminal. This procedure is in

place on all terminals hosting East/West services. The increasing size of the vessels serving

CWA makes it more and moreessential for optimising the utilisation of terminals and ship

turnaround. The specialisation of terminals between container traffic and conventional traffic

and Ro-Ro ships has already been a significant step forward and opens the way for

establishing fixed berthing windows at all ports.

- Increasing and maintaining draught: Shipownersare very keen on this point: it appears that

a draught of 12.5m is currently an acceptable minimum and an ideal draught should reach

14.5m in the future. This not only poses the problem of the initial costs of dredging to reach

this depth, but also the problem of maintenance costs due to the geographical specificities of

many African ports.

- Implementation of effective EDI systems: African ports lag behind in this area which is

extremely harmful to the fluidity of their port operations because the specificities of traffic in

CWA require precise computerised management: a large imbalance of container flows in

both type (40'/20') and number (export/import) which means sending back empty containersin large numbers, endemic overloading in terminals requiring rapid evacuation of containers


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and storage solutions outside the port area, and servicing of landlocked countries which

requires the creation of single-window systems and the exchange of data between

administrative and operational personnel.

- Improvements to handling equipment: As was noted above, maintaining geared ships on

almost all container services on the one hand reflects the lack of quayside handlingequipment at some ports and on the other reflects shipowners mistrust of the quality and

reliability of the services provided. This is mainly due to the persistence (frequency) of power

cuts in many countries and the concern that the maintenance of quayside handling

equipment is minimal.

- Management of empty containers: As highlighted above, the problem of empty containers is

structural as exports from CWA cannot balance imports, whether it be between Europe and

CWA or, more explicitly, between Asia and CWA. This problem is exacerbated by imports

being overwhelmingly in 40' containers, better suited for light goods, while exports are mainly

in 20' containers, which are easier to optimise with heavy goods such as raw materials. The

sorting, storage and rapid redirection of empty containers is fundamental to the efficiencyand economy of marine services in CWA.

On most of these issues, a clear competitive advantage emerges for those terminals licensed

and operated by major handling groups (such as APMT and Dubai Ports) which are

considered by shipowners to be better managed and more productive than public terminals.

Services to landlocked territories

The organisation of services to landlocked territories by shipping companies is hampered by

political instability in the countries on the coastline. Uncertainties about the sustainability of a

service in any given port does not allow the setting up of regular services, such as thoseestablished in Europe through freight corridors, to be implemented in CWA. The

consequences of events in the Ivory Coast (2006 and 2011) are relevant in this regard: the

port of Abidjan was virtually abandoned by most maritime services and they returned only

gradually. During this period, trading with Mali and Burkina Faso had to be conducted using

other routes (i.e. Dakar and Lom).

Currently, no shipping company appears to have a firmly established system for serving

landlocked countries and some shipowners even refuse to serve them as they are unable to

ensure control of their freight traffic.

With the development of consumerism and increasing exports from countries in CWA, a

better logistic network in the extended hinterland area offers a significant reservoir for

growth.

To take into account these potential flows, a number of measures would seem to be

indispensable: the implementation of single-window systems, improved EDI in ports, the

establishment of dry ports, safer and better road conditions, the consolidation of reliable rail

links and combating insecurity and abnormal practices (legal or quasi-legal taxes).


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Containerised traffic has grown by an average of 6% per year since the terminals were

allocated to DP World. However, it should be borne in mind that volumes have not reached

their 2007 level. The ratio of full/empty containers has changed in favour of full containers,

mainly due to the recuperation of traffic from Mali which has allowed containers for export to

be filled.

Transit traffic destined for landlocked countries is growing rapidly, having more than doubled

since 2009. This can be explained by the unstable political situation in the Ivory Coast, which

has enabled Senegal to capture a large share of Mali traffic.

The DP World terminal is the only one able to accommodate containerships. However, in

2011, 17% of containers were handled in other terminals. This situation is explained by the

fact that shipowners such as Grimaldi (pier 2) and Messina transport their containers on Ro-

Ro ships and unload them in their terminals.

In terms of consignment, agents for the three principal shipowners deal with the majority of

containers.


Nautical conditions

The port is suitably sheltered and well protected from bad weather, which usually comes

from the north/north-west. Tornadoes are very rare and relatively weak.

Port access for merchant shipping is safe and easy, and the docking of ships is rapid. Dakar

is one of the easiest ports on the Atlantic coast of Africa, served by good pilots and an

efficient tug service. Uncertainty about the port of the future project means we cannot

address this issue specifically. However, an eastward extension should give this new port a

situation that is as equally sheltered as the current one.


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Infrastructure/superstructure

DP World (one of the worlds leading port operators) was awarded the concession for the

port of Dakar in 2008 for a p

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MLTC CATRAM Market Study Container Terminals West and Central Africa

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