A recent article by Lloyds Loading List1 asked ‘Was 2013 a turning point for container shipping?’ Against a background of ongoing overcapacity and plummeting box rates on many routes2, some surprising developments took place.
First, Maersk introduced the first of its 18,000+ twenty-foot equivalent units (TEU) ships into service – and China Shipping placed orders for five more.
At the same time, and perhaps in response, three container liners are asking the regulators to approve the P3 alliance – the largest vessel-sharing agreement of all time working together to establish a jointly-managed fleet. The proposed alliance would give the three carriers a 24 per cent share of the trans-Pacific market, a 42 per cent share of the Asia-Europe route and a similar share of the transatlantic market.
Across the Atlantic, the Panama Canal widening project moves on. Despite contractual issues, it is still expected to open for operation in 2015. This new capacity – allowing 12,000 TEU vessels to transit from the Atlantic to the Pacific – must have an important impact on the patterns of shipping movement (and port calls) up and down the coasts of North and Central America. A game changer, perhaps, for competing ports in the region?
In the UK, the new port at London Gateway is now in operation. When completed, it will provide six deep-water berths with depth alongside of 17 metres. That is enough even for the new megaliths with an annual capacity of 3.5 million TEU, proximity to the heart of the UK economy and great access to the road and rail networks of the country. Surely this will change the UK port geography!
From Steer Davies Gleave’s perspective we need to understand the implications of these changes on the traffic that uses the surface routes we study – the proposed Iliana toll road at the heart of the US transcontinental freight routes, the continental toll network connecting Marseilles, Le Havre and Rotterdam, and the overloaded rail network in Great Britain. We are also increasingly involved – with investors and operators – looking at the shipping and ports assets themselves and the potential for investment in these opportunities.
Across the Atlantic, the last few years have seen varied projects completed in the maritime sector, from assessing the potential and value of new passenger services across the East River in New York to due diligence studies for investments in new ports and terminals – including recent work we have carried out at the Tuxpan and Manzanilla ports in Mexico.
There are other opportunities globally, however, and in the two case studies following we discuss work that SDG is carrying out looking at canal and river transport – in the first, helping launch a PPP project for transport facilities on the Rio Magdalena in Colombia, and in the second providing Technical Due Diligence for major lock facilities.
These assignments indicate just a small part of the work that Steer Davies Gleave – working alone or with partners who might bring specialisms the project demands – is doing in the maritime sector.
Over the last decades the largest Colombian river, the Magdalena River, has not played a big role in freight movements across the country. However CORMAGDALENA, a public entity promoting the economic recovery of the Magdalena River, is currently setting up the framework for a Public Private Partnership (PPP) contract to undertake a major upgrade of the navigability of the river.
Two thirds of the total investment of around US$600 million will be allocated to infrastructure improvements while the remainder will be used to maintain a depth of at least two metres. The project aims at reducing logistic costs for freight movements between the ports at the Caribbean Coast and the main centres of production and consumption in the Colombian inland, and at establishing the Magdalena River as part of an integrated multimodal transport system.
In 2013, Steer Davies Gleave was commissioned by CORMAGDALENA to estimate the potential future demand for freight movements on the Magdalena River, and to prepare a cost benefit analysis for the planned substantial investment. In addition, SDG reviewed the institutional arrangements and usage charging schemes in different countries such as France and Germany, to provide CORMAGDALENA with effective advice for their future administrative scheme.
Waterways and locks are perhaps the most easily visualised examples of transport arteries: locks act as valves to facilitate the regulated flow of ships and barges. Vessels are getting bigger and bigger: at 500m long and 68m wide, the Berendrecht Lock at the Belgian Port of Antwerp is currently the world’s largest; the Deurganck Lock currently under construction at Antwerp is deeper and will take the top spot when it opens in 2016. (No fewer than six locks based on the Antwerp lock designs are currently being constructed as part of the US$ 5.2 billion upgrade of the Panama Canal.)
Locks have not traditionally been constructed under PPP arrangements and there is now much interest in the Sea Lock PPP Projects programme in the Netherlands. All eyes are on the Limmel Lock PPP, first in the procurement queue. The present lock does not meet the demands of modern large barges using the Juliana canal between Limmel and Maasbracht. Five consortia (out of nine) prequalified in January 2014 for the next phase of this EUR 60m, 33-year DBFM project – with three shortlisted consortia expected to be chosen in mid-March for Competitive Dialogue.
The Sealock IJmond, the gateway for sea-going vessels between the North Sea canal and the Amsterdam harbour, is due to be tendered in the first quarter of 2014 together with the smaller Eefde lock PPP. Also planned for 2014 is the Lock Eefde on the Twentecanal, an important thoroughfare for navigational traffic from and to Twente. The third Beatrix lock, Canal Zone Gent-Terneuzen, and Volkerak locks - Expansion of Capacity Phase 1, are also in planning as PPPs.
So water transport PPPs look here to stay, and not just in the Netherlands. Belgium, in addition to cooperating with the Netherlands on projects relevant to both countries, is forging ahead with its own programme. The recent decision in France to cancel the Canal Seine Nord as a PPP came as a big disappointment to many in the industry, but the Netherlands and Belgium have come to the rescue with impressive and seemingly very attractive programmes.
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