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Given
this, there appears to be scope for the
entrance of at least one or two major new
hubs. All the more so if such a hub were
to offer minimum deviation from the main
trade lanes, top-of-the-range facilities,
competitive labour cost, access to free
money benefiting state authorities.
Port
Strategy has its eye on Sicily's Port of
Augusta as it has major port status with
numerous refineries. And development work
is underway in building a deepwater quay
in concert with existing container facilities.
Port
Strategy's next nominee is Tangiers; another
is Piraeus. Cost generally plays an important
part in the location of transshipment operations
as evidenced by the recent success of Cosco's
operations in Piraeus, it said.
Piraeus
is a major example of a transshipment hub
that has induced volume through keen pricing
as is reflected in the typical wages of
its workers which are EUR1,200 (US$1,259)
per month.
Beirut
is another location that due to cost advantages
has been able to attract container traffic.
It has plans to add new capacity through
the in-fill of its fourth port basin, a
plan which is being met with some resistance
by dockers.
In
Beirut, container throughput is in the one
million TEU range, rising from 300,000 TEU
10 years ago. In Piraeus, the Cosco has
seen phenomenal growth, with traffic rising
20 per cent in 2013 over 2012 volume to
2.52 million TEU, which followed on from
a 77 per cent increase in 2012. Another
big increase, in the order of 20 per cent,
is expected for 2014 when the official figures
are announced.
There
are two categories of port that can expect
to continue to compete in Mediterranean
container transshipment operations other
than the strategically located main hubs.
These
are cost competitive hubs such as Piraeus
and Beirut, and secondly those where transshipment
operations can be undertaken in conjunction
with gateway cargo operations. Valencia
is a case in point, though for such ports,
the issue of cost per move for transshipment
will increasingly be a prominent one.
What
makes this development - if successful -
so momentous is that it stands to change
the cost structure of shipping, perhaps
to the same degree Malcom McLean did with
his first standard shipping container.
As
Port Strategy points out we are heading
into a 20,000-TEU ship world which brings
down slot costs without substantially increasing
crew size or fuel bills.
All
this is against a background of an economically
stuttering Europe and America, on the road
to perdition given their addiction to printing
money or, or as we euphemistically say,
"quantitative easing".
For
trade flows to be sustainable under these
circumstances. Costs must be reduced drastically
to the extent achieved by the container
revolution. But with mega volumes on mega
ships via Suez swiftly handled at wayports
and feedered through southern European ports
and to the east coast North America, West
Africa and South America, it would change
the world of costs as we know it.
The
fate of the Northern Range of Europe might
be radically altered as indeed might US
west coast ports, perhaps relegated to becoming
gateways to California and to the sparsely
populated states of Oregon, Washington,
Idaho, Nevada and Arizona. Much the same
might happened to Europe's northern range
with fewer direct calls and more with feeders
serving England as ships shun the ECA carbon
control zones and ship overland from southern
Europe.
Should
the US and Europe return to recession or
worse if the wheels fall of "quantitative
easing", Americans and Europeans will
still survive after a bad patch. They still
know how to do things others are willing
to pay for and will undoubtedly emerge chastened
out of their slump to rise to a decent level
of prosperity again.
What
is interesting in the parallel development
of growing self-sustaining economies of
Africa, South America and Asia. These are
the new barely affluent states, ready and
willing and able to pay for all the things
westerners take for granted and will be
able to do if the price is right.
Getting
the price right means cutting down expenses
and reducing skyrocketing regulatory and
compliance costs and clearing up the mess
in the Med, before we can move to the next
step.
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