Spain's ports are having to seriously re-think long term strategic goals in the light of Morocco's Tanger Med success. Alex Hughes investigates
APM Terminals is committed to Algeciras despite fears that Valencia will outstrip the port to become Spain's leading container port by the end of the year
Spain's two south coast ports of Málaga and Algeciras Bay are in trouble.
The former reported a 28.3% drop in traffic in the first five months of this year, while the latter saw a decline of 2.04%. Both are transhipment hubs, whose longer term viability has been put into doubt through the opening of Tanger-Med, where rock bottom labour rates are proving highly tempting to shipping lines. In contrast, the two main Spanish import-export hubs of Valencia and Barcelona continue to report growth. While the latter reported a modest 3.26% increase in the year to the end of May, the former boosted traffic by 8.23% to 1.34m teu. Astonishingly, this is just 50,000 teu fewer than Algeciras handled.
Could it be that Valencia will outstrip Algeciras to become Spain's leading container port by the end of the year?
APM Terminals shows absolutely no signs of pulling out of the concession it operates at Algeciras, despite its own major presence at Tanger-Med I and II. Nevertheless, managing director Anders Kjeldsen insists that APM Terminals and Maersk Line have to be viewed as two separate companies.
“Our customers, which include Maersk, have their own network strategy, which also includes using ports such as Málaga, Cádiz and Tanger-Med. If APM Terminals at Algeciras does a good job, it will retain its customers’ business,” he says.
Significantly, Mr Kjeldsen emphasises that the import-export market, which currently accounts for around 5% of total throughput, is one that Algeciras has to be able to compete in. The recent addition of a major rail complex to serve its Juan Carlos I terminal and the decision by the port authority to invest in two logistics activities zones outside the city limits are surely testament to this.
“We are not yet shifting a lot of containers by train, but we have done some important trials recently. It's not company policy as such to go down the import/export route; however it is something extra we want to provide,” he says.
Asked about the impact of Tanger-Med on business at Algeciras, port authority commercial director, Gerardo Landaluce, claims it is influencing developments across the whole West Mediterranean and even in the Canary Islands, where transhipment hub Las Palmas has seen growth of just 1.44% this year and import-export-based Tenerife a drop of 15.86%.
“Tanger-Med is concentrating attention on the importance of the Straits of Gibraltar as a whole,” he emphasises, noting that its impact will ultimately be similar to Port Saeed's on the Eastern Mediterranean. “While overall volumes in the Mediterranean are going to increase a lot, in the short term, there may be some overcapacity, particularly if all the proposed projects along the corridor connecting both ports come to fruition. Nevertheless, it is open to doubt as to how many of them will eventually see the light of day.”
Having noted in which direction the wind was blowing some years ago, Algeciras adopted a strategy of diversifying traffic. It is now looking at further diversification through the arrival of Hanjin as terminal operator in 2010, says Mr Landaluce. A better ratio of import/export to transhipment traffic is also being sought.
“The new Hanjin terminal will allow us to develop import-export opportunities. Inbound traffic from Asia passes by our port, although mostly enters Europe via ports in the north, which then have to send it south. This makes no sense. We therefore see an opportunity to develop Algeciras as a gateway port for the whole of southern Europe.”
One of the ways this could be achieved, he suggests, is by expanding the port's already well developed feeder network. An alternative is to use the rail link to the port, which is being extensively upgraded. The efficiency of freight-on-rails in Spain is being boosted as new, dedicated high speed rail lines open, freeing up capacity on existing lines for more cargo trains to operate.
As to how this enhanced import-export role will ultimately affect Algeciras' incumbent operators, Mr Landaluce says that Maersk Line and APM Terminals are clearly trying to diversify their interests. “Up to now, APM was solely dedicated to handling Maersk traffic, but now it appears to be looking at attracting other third-party business. In the past, the terminal couldn't spend much time on import-export traffic, because Maersk was interested mostly in transhipment traffic at Algeciras. Priorities now appear to be changing somewhat."
Could it be that Valencia will outstrip Algeciras to become Spain's leading container port by the end of the year?
APM Terminals shows absolutely no signs of pulling out of the concession it operates at Algeciras, despite its own major presence at Tanger-Med I and II. Nevertheless, managing director Anders Kjeldsen insists that APM Terminals and Maersk Line have to be viewed as two separate companies.
“Our customers, which include Maersk, have their own network strategy, which also includes using ports such as Málaga, Cádiz and Tanger-Med. If APM Terminals at Algeciras does a good job, it will retain its customers’ business,” he says.
Significantly, Mr Kjeldsen emphasises that the import-export market, which currently accounts for around 5% of total throughput, is one that Algeciras has to be able to compete in. The recent addition of a major rail complex to serve its Juan Carlos I terminal and the decision by the port authority to invest in two logistics activities zones outside the city limits are surely testament to this.
“We are not yet shifting a lot of containers by train, but we have done some important trials recently. It's not company policy as such to go down the import/export route; however it is something extra we want to provide,” he says.
Asked about the impact of Tanger-Med on business at Algeciras, port authority commercial director, Gerardo Landaluce, claims it is influencing developments across the whole West Mediterranean and even in the Canary Islands, where transhipment hub Las Palmas has seen growth of just 1.44% this year and import-export-based Tenerife a drop of 15.86%.
“Tanger-Med is concentrating attention on the importance of the Straits of Gibraltar as a whole,” he emphasises, noting that its impact will ultimately be similar to Port Saeed's on the Eastern Mediterranean. “While overall volumes in the Mediterranean are going to increase a lot, in the short term, there may be some overcapacity, particularly if all the proposed projects along the corridor connecting both ports come to fruition. Nevertheless, it is open to doubt as to how many of them will eventually see the light of day.”
Having noted in which direction the wind was blowing some years ago, Algeciras adopted a strategy of diversifying traffic. It is now looking at further diversification through the arrival of Hanjin as terminal operator in 2010, says Mr Landaluce. A better ratio of import/export to transhipment traffic is also being sought.
“The new Hanjin terminal will allow us to develop import-export opportunities. Inbound traffic from Asia passes by our port, although mostly enters Europe via ports in the north, which then have to send it south. This makes no sense. We therefore see an opportunity to develop Algeciras as a gateway port for the whole of southern Europe.”
One of the ways this could be achieved, he suggests, is by expanding the port's already well developed feeder network. An alternative is to use the rail link to the port, which is being extensively upgraded. The efficiency of freight-on-rails in Spain is being boosted as new, dedicated high speed rail lines open, freeing up capacity on existing lines for more cargo trains to operate.
As to how this enhanced import-export role will ultimately affect Algeciras' incumbent operators, Mr Landaluce says that Maersk Line and APM Terminals are clearly trying to diversify their interests. “Up to now, APM was solely dedicated to handling Maersk traffic, but now it appears to be looking at attracting other third-party business. In the past, the terminal couldn't spend much time on import-export traffic, because Maersk was interested mostly in transhipment traffic at Algeciras. Priorities now appear to be changing somewhat."