A pensive peninsula

In 2009, most of the ports in the Iberian Peninsula handled fewer containers than they did in 2008. Overall, traffic fell by an estimated 9.3% to 11.34m teu.

Those ports that rely mainly on import/export cargo were the worst affected as ocean carriers seeking to achieve better economies of scale and expand their networks at the lowest possible cost pumped even more cargo through their established transhipment hubs.

In Spain, this resulted in Valencia and Algeciras, relay hubs for MSC and Maersk Line respectively, posting generally better performances than gateway facilities.

Sines, which is Portugal’s main deepsea relay hub, was also resilient with its traffic rising 8.7% to a record of almost 254,000teu (see table overleaf).

In contrast, BarcelonaÕs box traffic declined by 30%, Bilbao saw a 28.3% downturn and Lisbon, the largest container gateway in Portugal, suffered a fall of about 12%. In the case of Valencia, MSC is now believed to account for about 65% or more of all containerised cargo handled at the port.

With such a high reliance on one carrier and a substantial slice of the business also being transhipment in nature, this makes the port highly vulnerable to a change in this carrier’s strategy. Moreover, the worldÕs second largest liner shipping company has a 20% investment in Tanger Med’s Terminal 2, which is located just across the Straits of Gibraltar in Morocco and, arguably, in as suitable a position to handle its western Mediterranean relay cargo. Its cost base is also lower and it has an established terminal operating company in place in the guise of Eurogate as the manager of the facility.

The competition for transhipment cargo in the western/central Mediterranean area is intensifying and Spain could be a loser if it is not careful.

Tanger Med, for instance, is moving ahead with its Terminal 3 project, which is scheduled for completion in 2014 and will increase handling capacity by 3m teu a year.

Elsewhere, DP World has an ambitious plan to develop a 1m teu-plus terminal at the port of Djen Djen in Algeria, while Tunisia has ambitions in this direction too.

Elsewhere, Marseilles-Fos is likely to become a bigger competitor in the future as it attempts to combine its growing role as a logistics and distribution centre for the Rhone Soane corridor and southern Germany/Switzerland with that of a maritime hub connecting the east-west and north-south trades.

As part of its terminal expansion programme, the port authority recently granted approval for Hutchison Port Holdings (HPH) to develop the Fos 4XL container terminal. Potentially, it will be capable of handling 1m teu per annum.

Meanwhile, the port’s 2XL complex will open next year with Port Synergy which includes CMA CGM and MSC the concessionaires. Marseilles-Fos’ expansion plans will add as much as 2.5m teu of extra throughput capacity a year over the next seven to eight years and so there will be plenty of space for the port complex to increase its share of the region’s transhipment cargo base.

Valencia is determined to hold on to what it has and the port authority is moving swiftly ahead with its northern extension project. It has already completed work on 600 metres of the embankment section of the main breakwater and built a 14ha esplanade for ancillary facilities. The plan is intended to double ValenciaÕs current box handling capacity.

Barcelona also has ambitious expansion plans, but in the short term the focus is on stemming the decline in its all-important container traffic.

This declined by almost 30% in 2009 to 1.8m teu and was still in arrears at 435,372teu in the first three months of 2010, down 0.4% on the 437,166teu processed in the same period the year before.

Every sector was affected in 2009 according to Jordi Valls, Port de Barcelona CEO, with exports down 15%, imports 26% softer and transhipment off by 43%.

He says that the port, which froze its taxes in 2009, has implemented a 1% cut in 2010 as a means of helping its customers. He also stresses the importance of the portÕs diversification model.

"This allows us to have reasonable revenue and a good level of cash flow, which guarantees the development of our investment plan," explains the executive. "We have to focus our efforts on developing our strategy and we are deploying an aggressive commercial policy to attract more customers and to strengthen our hinterland."

He alludes to the tremendous progress made on the rail front where container volumes actually increased last year despite the recession. Indeed, the 60,000teu moved to/from the port and cities such as Saragossa, Tarragona, Madrid, Burgos and Vitoria o Lio was up 13% on the previous year and reflected better schedules and enhanced levels of reliability from service providers.

Valls views the provision of more effective intermodal rail services as being highly important in the port’s future strategy and a key component in its competitive battles with rivals.

Tarragona, which is located just 95km from Barcelona, was among the fastest growing ports in Spain last year. It benefited from the decision of Haifa-based Zim Line to transfer its services from its larger neighbour.

The Israeli carrier has also invested in the port and, in conjunction with DP World, owns the local stevedore Contarsa Sociedad de Estiba (Contarsa), which operates the container terminal.

Currently, the terminal comprises 680 metres of wharf with depths alongside of 15.5 metres, along which are positioned a single post-panamax and two panamax ship-to-shore gantry cranes. In excess of 10ha is currently available for container handling/storage activities, although this can be expanded to 36ha as cargo volumes dictate. Indeed, according to Contarsa, the existing facility can be developed to handle up to 1m teu a year

Elsewhere in Spain, Algeciras saw its traffic slide by 8.5%. This softening was partly caused by some of its customers changing their service strategies in the region, with Maersk Line transferring some of its western Mediterranean and West Africa transhipment traffic to Tanger Med. This process will continue in 2010.

Recently, the Hanjin Shipping Company-fronted Total Terminal International Algeciras (TTIA) facility opened in the Isla Verde Exterior region of the port. While it will handle third party traffic as part of the concession agreement concluded with the Algeciras Port Authority, it will also serve as Hanjin’s main hub in the western Mediterranean. The facility has an initial handling capacity of 1.5m teu a year.

The proportion of relay traffic handled at ports in northern Spain is much less. This is partly because they are located some distance from the main shipping channels. Indeed, Bilbao, Santander and Vigo all rely heavily on the trade with northern Europe, which for most of 2009 was very depressed.

Of the three ports, Bilbao has the most ambitious expansion plan, with new deepsea cargo handling berths being constructed in the port’s Zierbiena area.

Meanwhile, Vigo is modernising and upgrading its multipurpose cargo handling facilities and building a dedicated logistics zone in the port area.

Elsewhere, Ferrol, which is also located on SpainÕs northern Atlantic coast, has an ambitious construction programme in place. It has awarded the first phase contract of a possible 3m teu container handling facility to Perez Torres, a local stevedore.

Portugal’s principal ports posted a mixed performance last year (see table), with Sines the best performer. In Q1 2010 its box traffic was up more than 70% on the same period the year before to 76,500teu.