Risk management factors make La Spezia the Mediterranean port to watch this year
 ANYONE familiar with a map of western Europe, but unfamiliar with the ways of Asia-Europe shipping, would think that the quickest way to European markets from Asia via Suez would be by a Mediterranean port.
The idea of going past Gibraltar, around the Iberian Peninsula, crossing the stormy Bay of Biscay, then wending one's way through the congested English Channel would seem counterintuitive at the very least.
Yet that has been the traditional way, because near the Northern Range ports - Le Havre, Antwerp, Rotterdam and Hamburg - is where most affluent Europeans live, and where road and rail links are shorter, cheaper and better than in the pastoral south.
But that is not necessarily so today, say emissaries from north Italian Port of La Spezia. That's because of game-changing technologies and techniques in the last decade have come into play, not to mention infrastructure upgrades in southern Europe itself.
The Port of La Spezia, between Pisa and Genoa on the French side of the Italian boot, now cites much improved rail service, the advent bigger ships and dredging to accommodate 14,000-TEU vessels, which mean lower slot costs.
This is expected to bring an end to punitive Asia-Med rates, traditionally the result of the lack of cargo, the need for smaller ships to deliver it. As evidence, La Spezia points out Asia-Med and Asia-North Europe rates were equal or lower in 2018 during 28 weeks out of 52.
"Add to that, the THC [terminal handling charges] in south Europe are 10 per cent cheaper compared to the northern range," he said.
And of course there is the saving of 2,000 nautical miles by docking at La Spezia, rather than turning the ship around in faraway Rotterdam. And with all the talk of carbon emissions today, that matters more than it did to ecologically sensitive retail shippers.
Much has changed in 10 years, says Daniele Testi, marketing director, Contship Italia, the German-listed company in the Eurogate group, that runs the Port of La Spezia.
Much bigger ships can now access the freshly dredged La Spezia, with its 15 metres alongside, to go to 16 metres at four mega berths next year.
"As for hinterland, we are talking Austria, Switzerland, Germany and the advantage customers gain bringing cargo via La Spezia," he said.
"And you can save time," he told a gathering of Hong Kong shipping interests. "If we are talking about Hong Kong and La Spezia, we are talking 23 days at sea, plus three days to move a container from La Spezia by train to Basel or Munich.
"Compared to Rotterdam, which is 34 days, or 31 days and three days and transport by train means that you can save seven or eight days. It's 23 per cent of the total transit time," said Mr Testi.
La Spezia, he said, was the first port in Italy to welcome the ultralarge containerships back in 2011. So when we consider the new big tonnage coming from Asia we now have to cope with 14,000 TEU as well as 16,600 which is the Asia-Med maximum.
"La Spezia has a massive rail ability - 200 trains a week - one train every eight hours to Milan and from Milan we have daily connections to Munich and Zurich and Vienna and Lyons. That means that if a container unloads in La Spezia on Monday - on Wednesday it can be delivered to the door of the shipper in Zurich or Basel," Mr Testi said.
La Spezia serves the highly productive northern regions - Piedmont, Lombardy, Venetia, Tuscany and Romagna - where 50 per cent of Italy's GDP is generated. "That means that 40 million TEU in imports and almost 21 million tonnes in exports," he said.
"We have a plan to expand the capacity of La Spezia with EUR230 million of private investment. We plan to extend the capacity which is 1.4 million TEU today. But with, with a higher percentage of rail transport - 32 per cent - we plan to reach two million TEU capacity.
No other port in Europe can say the same, he said. "At Garibaldi Pier we will dredge to 16 metres from the present 15. There will be four deepsea berths for large container carriers. There will be semi-automation in the yard area. There will be on-dock rail. Rail is the only way to get containers out of the port," he said.
While costs are important, a more important reason surfaced in Migros Swiss supermarket giant's thinking in dividing Asian imports between Northern Range and Med port.
"We call Migros, this is a big Swiss retail company - 140,000 employees - the first trend setter because it uses the southern gateway. Why? Well, actually they were not talking about costs; they were talking about risk management," said Mr Testi.
"The risk was that the supply chain was getting more and more fragmented, more and more global and harder to control. So they didn't want 100 per cent of their cargo stuck in a single corridor because of problems, delays and congestion that will affect the shelf life of their products," he said.
In the beginning Migros only shipped 10 per cent of the cargo through La Spezia. "They were very Swiss about it. Very mathematical. Only 10 per cent because they wanted to reduce the risk, and then for some specific reason, they wanted to move almost 50 per cent.
"And now Migros is moving 50 per cent via the north, 80 per cent of that, via Rotterdam and 20 per cent via Antwerp. And 50 per cent through the south, with 80 per cent via La Spezia and 20 per cent via Genoa," said Mr Testi.
Risk management is becoming a bigger topic in Europe. There are water level issues on the Rhine, one of the main arteries for barges moving containers from Rotterdam to southern Europe, Germany and Switzerland, he said, adding that the river's barge capacity is less than it was.
As for infrastructure upgrades there is the Swiss-Italian Gotthard rail and road tunnel expansion. "Capacity will almost double. Our train is 500 metres in length and we can put only 1,600 tonnes. From November will be 750 metres long and 2,000 tonnes in weight, which means an increase of 30 per cent. Same cost but a chance to move more containers," he said.
Giving an overview, Contship Italia development director Peter Hill said: "This is the natural terminal of the ancient Silk Road and indeed the signing of the Belt and Road MOU during President Xi Jinping's state visit to Rome last March laid the foundation of our close cooperation between Italy and China to build and accessible, safe and sustainable connectivity between Europe and Asia.
"The system can promote Euro-Asia integration, leveraging on the strategic position on wide connectivity with the rest of Europe and the robust supply chain of its harbours, in particular, the La Spezia gateway," said Mr Hill.
“The Italian government is keen on developing the southern gateway and more and more becomes the obvious choice for Asian operators to deliver goods to the Alps region and Germany. Among the many advantages of this choice, shipping companies can count on a container operator with 50 years of experience just like Contship," he said. |
