Transshipment hubs play key role in growth of Mediterranean ports

The container ports of the Mediterranean often act as the transshipment hubs for the services running between Europe and Asia through the Suez Canal. In recent years, there has been a shift in growth to the Eastern Mediterranean ports like the Greek port of Piraeus and the Turkish ports of Ambarli (Istanbul) and Mersin.

The transshipment hubs are keying growth among Mediterranean box ports. Transshipment hubs like the Spanish ports of Valencia and Algeciras, Italy’s Gioia Tauro, Malta, Ambarli [Istanbul] Turkey, and Piraeus in Greece reflect the trend among Mediterranean ports [see chart on Key Mediterranean Ports]. While these ports serve as distribution centers for the intra Mediterranean trade, they play a big role in the wider distribution of goods moving to and from Asia to Europe, much funneled through the Suez Canal. Although there are no “super” hubs in the Mediterranean, major ports like New York/New Jersey, LA /Long Beach, Rotterdam or Hamburg, there are seven ports regularly posting two million teus or better, five of which have throughputs exceeding three million teus. Western Mediterranean Ports Historically the business has been tilted towards the Western Mediterranean ports like the Spanish ports of Valencia, Algeciras and to a lesser extent, Barcelona. However, two mid-Mediterranean ports play special roles in balancing container ship service schedules. The Italian port of Gioia Tauro was effectively a purpose built transshipment port aimed at being the first or last call for freight moving to or from Europe via rail connecting with the Suez services. Overall the northern Italian ports like Genoa and La Spezia have the most direct rail and road services into Northern Europe. Being an industrial region with a cosmopolitan consuming population, Northern Italy is more a freight generator as transshipment hub. The northern Italian ports, not unlike others in the Mediterranean, have suffered from delays brought on by Suez services. Also, there has been an ongoing shift of traffic to East-to-West from South to North. An example of the “West” in the East-West traffic is the Spanish port of Algeciras which was up nearly 6% to 4.35 million teus, and had a rail throughput of 18,228 TEUs, although not a lot, the service was up over 192% and might be a glimpse of the future of the port as a rail hub. The port of Maarsaxlokk, located on the island of Malta, sits south of Sicily astride the Mediterranean’s major trade routes. The Ionian Sea is northwest and the Suez Canal southwest making Maarsaxlokk a perfect way station, albeit with limited space, for containership services. It is the ultimate transshipment port. An estimated 95% of the container throughput is transshipment. Unlike Gioia Tauro or even Algeciras, Malta is based on the “hub” concept. The larger line haul container ships discharge and load from a network of smaller box ships with calls throughout the Mediterranean. Probably the only hub similar to Maarsaxlokk is Las Palmas. Las Palmas in the Canary Islands (Spain) handles over a million teus annually. It is similar to Malta as the island port acts as a waypoint for trade heading to Europe, especially Spain and Portugal, as well as traffic from Africa and entering or exiting the Mediterranean. While this is not exactly hub and spoke, both island ports act as a balancing mechanism for service schedules. Eastern Mediterranean Ports Rising Although the bulk of the services are still in the Western Mediterranean, there has been real growth in the Eastern Mediterranean in ports like Piraeus in Greece and the two Turkish ports of Ambarli (Istanbul) and Mersin. The increased growth reflects both improvement in local economies and the importance of new gateways. Ambarli (Istanbul) serves a number of roles. It is the crossroads between Europe, Asia and the Middle East and at the same time, the gateway to a population of 20 million largely urbanized consumers. Until recently the Turkish economy was doing well (see economic story) and this prosperity was reflected in higher box totals. In the case of Ambarli, in 2011 the port handled 2.69 million teus but in just two years that total rose to almost 3.1 million teus. There was similar growth in the Port of Mersin in Southern Turkey. The port, owned by the Turkish State Railway (TCDD) and operated by a consortium (PSA-Akfen) had a throughput of 1.13 million teus in 2011. By 2013 the total had risen to 1.3 million. Mersin is in the midst of a port expansion project designed to make the port accessible to 18,000 teu ships at 23 rows across. The first phase is expected to cost $160 million and should double the port’s throughput to 2.6 million teus. Although it seems unrealistic in the current political environment, the idea behind the expansion is to build a gateway for countries like Syria, Iraq, Iran and the CIS countries of Azerbaijan, Kyrgyzstan and Uzbekistan. It is a situation that only time will tell whether it was a good investment or white elephant. Perhaps the biggest surprise in the Eastern Mediterranean is the Port of Piraeus, Greece. Back in 2011 the port’s throughput was 1.68 million teus. In 2014 this total jumped to 3.16 million teus, and Piraeus looks well on its way to being the largest port in the Eastern Mediterranean and perhaps the entire Mediterranean in a few years. What is most remarkable is this growth has occurred during a difficult economic period for Greece. Piraeus’ rapid growth is predominately due to Piraeus Container Terminal (PCT), a subsidiary of China’s Cosco Pacific. PCT handled 2.52 million teu last year at its concession Terminals II and III, a better performance than the 2.4m teu predicted. With the 644,000 teu handled at the Piraeus Port Authority (PPA)’s Terminal I, the 2013 total is 3.164m teu. The Cosco Pacific concession posted a 20% increase in 2013, which followed the 77% boom recorded in 2012. In 2013 the PPA terminal posted a 3% increase, making the overall increase the largest in the world in 2013. Completion of Cosco’s new Euro 230 million investment in upgrading the western section of Terminal III will increase Piraeus’ capacity from an annual 4.2m teu to 6.2m teu, potentially making the port the largest in the Mediterranean.