From Med to Black Sea - industry titans keep an eye out for the near future
 Black Sea people form cultural melange divided by their different beliefs, yet share a salt water expanse which Greeks say Jason and the Argonauts crossed in search of the Golden Fleece in 1450 BC, which would bestow riches and kingly power.
Two thousand years later, Italian merchant-adventurer Marco Polo crossed the sea again to create the Silk Road to China - a route that is today revived by China as the Belt and Road initiative.
Given this, the Black Sea deserves a fresh look, as its citizen now enjoy economic revival after a long slump. GDP is once again on rise. In Bulgaria, Romania, Ukraine, Russia and Turkey, though Georgia is having a bearish time, while its neighbours are enjoying a bull run.
According to available statistics, the Black Sea Six handled 2,460,028 TEU in 2016, with laden boxes up 9.63 per cent to 1,785,618 TEU year on year. In 2017, Ukrainian volumes were up 30.6 per cent, Romania increased 4.7 per cent, Russia, 7.5 per cent and Bulgaria, 4.6 per cent.
The top five container terminals of the region in 2016 changed their positions in total volume handled: DP World (Constanta, Romania) still was on the first place, Hamburg's HHLA-operated Container Terminal Odessa, Ukraine moved from third to second place, APMT's Poti (Georgia) moved from second place to third, NLE (Novorossiysk, Russia) moved from the fourth to fifth place, and NUTEP (Novorossiysk, Russia) moved from fifth to fourth place.
As for the leading carriers of the region, they remain Maersk followed by MSC, CMA CGM, ARKAS and Zim. Combined these carriers controlled 73.38 per cent of this market.
Generally, these countries have poor roads, impassable in winter, and ill-stocked, but ever-grasping treasuries, sticklers about rules that will produce revenue from fines.
Looking on the bright side, after an economic slump, these economies are looking up. The big event in 2017 was a bumper grain crop, which has caused major congestion at otherwise smoothly running ports.
The OECD said Russian economic growth is projected to rebound to one per cent in 2017 and 2018. A stabilised exchange rate and lower interest rates will boost business confidence and investment.
On the southwestern shore of the Black Sea lies Bulgaria and its port of Varna, which because of poor roads leaves shippers only a small, but economically promising hinterland to exploit.
Varna West is Bulgaria's most modern port facility 30 kilometres from the city itself. All berths and warehouses have access to the national rail and road networks and container facilities, which handled 103,000 TEU in 2013.
Varna West has 19 berths and a high-tide 10.5 metres of water alongside and quay length of 3,430 metres. It has 346,397-square metres of storage and 20,998-square metres of warehousing as well as two gantry cranes with a 35-tonne capacity.
Romania's road quality limits the role of its Port of Constanta to anything much beyond a gateway to its own hinterland, now marked by modest growth.
Nonetheless, container traffic through Constanta increased 5.7 per cent year on year to 661,908 TEU in the first 11 months of 2016 while total cargo throughput was up 5.35 per cent nationwide, according to the National Company of Sea Ports Administration.
As for neighbouring Ukraine, the World Bank said: "Recovery was supported by a bumper harvest. The economy was up 2.3 per cent in 2016 leading to stronger growth of 4.8 per cent in the fourth quarter. Real GDP grew after contracting by a cumulative 16 per cent in the previous two years rose again.
The coal and trade blockade with the ethnic Russian-held and coal-rich Donbas region in the eastern Ukraine is expected to hurt steel production and electricity generation, the World Bank said.
Ukraine's 133.3-hectare Port of Odessa contains eight cargo-handling complexes, including a modern container terminal with capacity for over 500,000 TEU and a Special Free Economic Zone. There are 54 berths with a quay length of 9,000 metres, able to dock ships of 100,000 tons and up to 300 metres in length with maximum draft of 13 metres.
Turkey's growth was edging up three per cent last year and is expected to continue at this level through 2018, said the World Bank. Consumer price inflation is in double digits, but projected to slow. Fiscal and other measures, supported by an increase in exports, have stimulated private consumption and investment.
Turkish growth is being marked by an acceleration of goods exports, on the back of improving demand from Europe, but service exports, while dominated by tourism (16 per cent of total exports), remain weak.
Over the past decade, Georgia's economy has grown at an average annual rate of five per cent according to the World Bank. This despite numerous shocks, including the global financial crisis of 2007-08, the conflict with Russia in 2008, and the regional headwinds of 2014.
The big Georgian Port of Batumi has the capacity for 80,000-ton tankers to take materials such as oil that are shipped through Georgia from Central Asia. Additionally, the city exports regional agricultural products. The annual revenue from the port is estimated at between $200 million and $300 million.
There are also extensive shipping services to Black Sea ports, some direct from Asia and many more from the Mediterranean and criss-crossing the region as short sea feeders.
Maersk, the Black Sea market leader, has comprehensive regional coverage. In Georgia it has weekly feeders to Turkey. In Bulgaria, weekly feeders dock at Varna and Burgas.
In the Ukraine, Maersk feeders link Chornomorsk, Odessa and Yuzhny to Turkish and and Egyptian ports. There is little Maersk website information on Russia other than to say that it serves the Port of Novorossyk. Maersk has weekly feeders to and from Constanta. With offices in Istanbul, Turkey's only Black Sea port. Maersk provides regular services from seven Turkish Mediteranean ports.
Hapag-Lloyd serves Istanbul (Mardas & Kumport & Marport), Gemlik (Borusan), Istanbul (Kumport and Marport), Poti, Samsun, and back to Istanbul (Mardas & Kumport & Marport).
Zim's network includes the ZMP service, offering a link between Asia and the east Med/Black Sea ports with connections to regional lines, and the India Med Express service (IMX).
CMA CGM also has a Black Sea loop called the Black Sea Med Express that links Turkey, Romania and Ukraine to Algeria and Morocco. It offers links to main ports of the Black and Aegean seas and the north of Morocco (Tangier and Casablanca) and Algeria (Annaba). Four 1,700-TEU ships operate the route, also calling at CMA CGM's hub at Malta from Odessa, Constanta, Ambarli and Izmir.
APL has announced the addition of Durres, Albania and Thessaloniki, Greece as new ports of call to its Mediterranean Express 1 (MX1) service, and Novorossiysk and Poti to the MX2.
APL says the extended network provides connectivity for north Asian shippers with a full rotation of Qingdao, Busan, Shanghai-Yangshan, Ningbo, Xiamen, Guangzhou-Nansha, Shenzhen-Yantian, Singapore and Malta where shipments are transshipped to Durres and Thessaloniki.
The refined MX2 service is now calling Qingdao, Shanghai-Yangshan, Ningbo, Kaohsiung, Hong Kong, Shenzhen-Yantian, Singapore and Piraeus where cargoes are transshipped to Novorossiysk and Poti.
Major global port operators are also engaged in the Black Sea. The British branch of Hong Kong's Hutchison Ports has signed a deal with the Ukraine for a new terminal 22 miles from Odessa at the Port of Chornomorsk.
The fortunes of Maersk's APM Terminal's facility at Georgia's Poti will tied to those of the Baku-Tbilisi-Kars (BTK) railway, the success of which depends on taking goods from one side of Eurasia to the other in just 15 days via Turkey and Iran.
Manila's International Container Terminal Services Inc (ICTSI) rivals Maersk's APMT at Georgia's Port of Batumi, at the Batumi International Container Terminal. BICT's current annual capacity sits at 150,000 TEU. Its 284-metre long container berth is equipped with two mobile harbour cranes averaging 35 moves per hour. The terminal has a 14-hectare yard area, 625 square metres of which houses the customs warehouse.
Dubai's DP World operates on the other side of the Black Sea in Constanta, that boasts of deep-water access with first class feeder connections to the Ukraine, Russia, Georgia and Moldova.
Constanta's DP World development includes a new highway link with a two lane overpass for uncongested road access while national and international rail connections are serviced by a dedicated, multi-track rail terminal operated by rail-mounted gantry cranes.
Looking at the Black Sea and its prospects, it is easy to dismiss it as having a long way to go - not to mention massive road and rail building - before it becomes anything like a useful backdoor to Europe. But given its economic recovery and brightening prospects, and the fact that it is off the beaten Mediterranean track, the Black Sea region stands for opportunity in the future - the not too distant future at that. |
