Hub Heavyweights: West Med vs West Africa
Will the advent of deep water hub ports in the Gulf of Guinea spell the end of double digit growth for West Med hubs?
Morocco’s Tanger Med transhipment hub has been a huge success since it opened in 2007. Growth of nearly 40% in 2013 has been followed by a further 20% growth in 2014, with volumes breaking the 3 million teu mark for the first time (see Figure 1). Other major hubs in the West Mediterranean have also continued to grow, with Algeciras up by an estimated 6% in 2014 to 4.6 million teu. Elsewhere, Sines on the Atlantic coast is likely to register a 2014 volume increase of around 33%, reaching 1.25 million teu. Las Palmas in the Canary Islands saw volumes decline slightly but is still likely to see throughput of nearly one million teu in 2014.
Throughput of Selected West Med and Atlantic Transhipment Hub Ports, 2013-14 (million teu)
Note: Includes some estimates
Source: Drewry Maritime Research (www.drewry.co.uk)
The vast majority of the traffic at all of these ports is transhipment and a significant part of this involves serving West Africa. Mainline vessels on east-west and north-south routes connect with both north-south and feeder services calling in West Africa.
However, the Lome Container Terminal (LCT) in Togo is now operational, having commissioned its first 300 meter berth, and is starting to act as a hub for direct calls by MSC from the Far East. LCT is a 50:50 joint venture between Terminal Investment Limited (TIL) and China Merchants Holdings International. Its first call by a large vessel was the 6,500 teu DS National in December 2014, the first of a series of bigger vessels to join MSC’s Africa Express direct Far East service in the coming months. Future calls are planned to be with 8,500 teu vessels, much larger than the current maximum size calling in West Africa.
This is the start of MSC pioneering a West African hub and spoke strategy with LCT at the center of the new network design from which feeder services will initially connect on a weekly basis to nine different ports up and down the coast. The terminal will have 15.5 meters draft alongside and a capacity of two million teu p.a. at full build out, by 2017. Vessels of up to 14,000 teu will be able to be handled and reportedly the facility will be run as a multi-user terminal and not solely for MSC’s needs.
At the same time, also in Lome, the Togo Terminal run by Bolloré has been expanded with capacity being increased to 1.2 million teu per annum. A doubling of quay line to 920 meters, and an increase in depth to 15 meters means that this terminal can also accommodate much larger ships.
Elsewhere in the Gulf of Guinea, a second container terminal at Abidjan in Cote d’Ivoire is being developed by a consortium of APM Terminals, Bolloré and Bouygues, and due to be operational by 2018. The new facility will offer 1,100 meters of quay with a depth alongside of 18 meters, and an ultimate capacity of 2.1 million teu per annum – again, big ship capable.
Plus there are major new projects in Nigeria including for example, at Lekki and Badagry. The $1.4 billion Lekki project involves the construction of a greenfield deep water multipurpose port near Lagos. International Container Terminal Services Inc (ICTSI) in partnership with CMA CGM holds a 20 year sub-concession for the container terminal which will have an ultimate capacity of 2.5 million teu per annum with a quay length of 1,200 meters. The initial draft will be 14 meters, but significantly has potential to be deepened to 16.5 meters.
The Badagry port project, located 55km west of Lagos, will have a container terminal with at least 14.5m draft and one million teu p.a. capacity initially, as well as bulk, roro, general cargo and offshore oil support facilities in a Free Trade Zone. The consortium behind the project includes APM Terminals, TIL, infrastructure investor Macquarie and local partners.
In all, there is potential for over 10 million teu of new deep sea container terminal capacity in the Gulf of Guinea region, as shown in Figure 2.
Gulf of Guinea Deep Sea Container Terminal Capacity Expansion Projects
Source: Drewry Maritime Research (www.drewry.co.uk)
These developments do not seem to be dampening enthusiasm in Morocco. The Tanger Med 2 project involves the expansion of the port by developing two more terminals. Capacity will be increased from 3 million teu to 8.2 million teu per annum with the first of the new terminals having an ultimate capacity of 2.5 million teu. In addition, the Government of Morocco is calling for tenders for infrastructure works at Nador West Med Port, a new multipurpose port to be located on the Mediterranean coast, to the east of Tanger Med. This would include a 3 million teu capacity container terminal with a quay line of 2,400 meters. The first phase of the port is scheduled for operations to begin towards the end of this decade.
Port investment plans are evident in the Canary Islands too. Besides the established activities at Las Palmas, on the island of Tenerife, the greenfield Granadilla port development is aiming to become operational within a few years. It will reportedly have a container terminal with a quay line of 650 meters and a maximum depth of 16 meters. The African transhipment sector is a stated target market. Meanwhile at the existing port of Santa Cruz de Tenerife, Terminal de Contenedores de Tenerife (TCT) has seen investment (including additional post-Panamax gantry cranes due in 2015) and boasts deep water (up to 16 meters). Its operator OHL Concesiones clearly has its eye on West African transhipment business.
The development of ports like Lome and Abidjan as West African hubs in the Gulf of Guinea is likely to dampen growth rates at West Med hubs. However, the need to fill ever larger vessels on Asia-Europe and north-south services will mean that the attraction of wayport calls for hubbing at West Med and Atlantic ports will remain significant.