After sharpest European growth, Barcelona port set for strong year

After sharpest European growth, Barcelona port set for strong year

The Port of Barcelona.

Barcelona’s exceptional performance lends weight to a spate of forecasts that the Mediterranean waterfront is poised to grow faster than its bigger rivals in the dominant Le Havre-Hamburg range. Photo credit: Shutterstock.com.

LONDON — The Port of Barcelona faces ‘boring’ times in 2018 following a spectacular performance last year, when it was Europe’s fastest-growing container hub, with traffic soaring by a third. All this occurred despite a spate of national dock strikes, political anxiety, and economic uncertainty in the wake of Catalonia’s controversial independence referendum.

The rise in traffic to 2.97 million TEU was largely driven by the launch of five new services by Mediterranean Shipping Co., the world’s second-largest ocean carrier, starting in May, that connected the northeast Spanish port with top markets, including the US East Coast and West Coasts, Canada, Saudi Arabia, India, and Brazil.

But there was more to Barcelona’s massive traffic surge, as transhipment containers skyrocketed 137 percent and rail volume increased 8 percent to a record 243,585 TEU.

Import traffic grew by 8.3 percent, and export shipments were up 2.6 percent from 2016, with China consolidating its position as Barcelona’s top trading partner, accounting for just over 44 percent of the port’s imports and 11.6 percent of exports.

Broad-based port recovery

“These figures indicate a significant degree of recovery compared to pre-crisis levels,” the Barcelna port authority said in a statement. “Reactivation of traffic in export containers had already begun in 2010, but it is worth noting that in 2017, the Port of Barcelona channeled 68 percent more of this type of cargo than in 2007.”

The port’s overall traffic, including dry and liquid bulk cargoes and roll-on, roll-off (ro-ro) shipments, surged 26 percent in 2017 to a record 61 million tonnes (67 million tons).

Furthermore, the business boom continued into 2018 with container traffic jumping 18 percent to 786,000 TEU in the first quarter. “We are doing quite well but we won’t have another quantum leap,” said Laura Domingo Pardo, the port’s chief spokesperson. “We are trying to consolidate.”

As noted, while volume growth in 2018 will not match 2017, Barcelona will continue to benefit from its location in Catalonia, which generates more than one-fifth of Spain’s GDP and accounts for more than a quarter of the nation’s exports and domestic investment.

Further, Barcelona’s exceptional performance lends weight to a spate of forecasts that the Mediterranean waterfront is poised to grow faster than its bigger rivals in the dominant Le Havre-Hamburg range, due to a mix of factors, including improved north-south European rail routes and tunnels through Switzerland that will ease their access to the European hinterland and China’s growing investment in the region, as part of Beijing’s ambitious One Belt, One Road project. That major China initiative has already transformed Piraeus, Greece’s top port, from a backwater to a leading, regional container hub.

Barcelona versus rivals

But what really sticks out is Barcelona’s performance compared with its top domestic rivals, which until recently had been growing their national market share at Barcelona’s expense. Valencia ousted Algeciras as Spain’s top container port, but its traffic grew only 2.3 percent to 4.78 million TEU in 2017. Algeciras was down 7.9 percent at 4.39 million TEU, largely due to the impact of the dock strikes and overtime bans last year that had the biggest impact on the transhipment hub, as carriers switched calls to other Mediterranean ports for container transport to their final destination.

Regarding 2018, Barcelona, where Maersk’s APM Terminals and Hong Kong-based Hutchison Ports operate terminals, looks set for another strong year, owing to the resilient recovery of the domestic economy whose banking sector had to be bailed out by the European Union six years ago. Spain’s GDP increased a substantial 3.1 percent in 2017 — the third straight year it grew by more than 3 percent — and the expansion is expected to continue in 2018, but probably at a slower rate than last year.

Nevertheless, Barcelona has to be on its toes, as it faces tougher competition from local rivals, particularly Valencia, whose largest terminal came under the control of China’s Cosco Shipping Ports, following its €203.5-million ($251.8-million) acquisition by the owner of the Port of Piraeus.

Even so, Barcelona’s attraction to global terminal operators was highlighted earlier this year when Hutchison Ports increased the height of three out of 11 ship-to-shore gantry cranes at its semi-automated BEST terminal by 3 meters (about 10 feet) to 47 meters to handle the largest ships loaded with containers that are stacked up to 11-high on their decks.

BEST is the only terminal in the Mediterranean with 11 cranes capable of handling the world’s largest container vessels, according to Hutchison Ports. “It is the clear port-of-choice for the largest mega-ships and last year we had 139 calls by vessels of over 13,000 TEU,” said BEST CEO Guillermo Belcastro. “Thanks to this new investment BEST has strengthened its strategic position as the most efficient terminal in the Mediterranean, offering productivities by crane at over 40 moves per hour in a sustained manner, which deliver significant savings to our customers.”

Barcelona also has a rail advantage

Barcelona is also making headway in the rail sector, which currently has a 13 percent share of its traffic, as it is the only Spanish port currently connected to the main European network’s standard-gauge track, while the others are limited to the Iberian broad-gauge track.

This enables Barcelona to attract the new rail services that shippers are pursuing, as they switch from Europe’s capacity-tight trucking sector. Germany’s DB Cargo recently launched a weekly vehicle transport service linking a terminal north of Stuttgart and two auto terminals in Barcelona, deploying the first 700-meter train to operate on the track, which already has about 20 rail freight services.

Also, Barcelona got another boost earlier this year when Euro Cargo Rail, the French unit of DB Cargo, nominated it as a key hub in its new Mediterranean corridor, linking freight trains between southeast France, Italy, and Spain.

Barcelona’s performance in 2017 was even more impressive given the slide in Asian container shipments to the western Mediterranean — mainly in North Africa — in the final three months of 2017; shipments fell 3.4 percent to register their first decrease in nine quarters, according to Drewry Shipping Consultants.

Overall, however, the Mediterranean container market story is one of widespread growth, although there is a performance gap between the leading ports. Here, new container alliance schedules and carriers’ ownership of terminals play an increasingly important role. In 2017, Marsaxlokk, the Maltese transhipment hub, grew traffic just over 2 percent to 3.15 million TEU; Italy’s Gioia Tauro hub was down over 12 percent at 2.45 million TEU; the former underperforming Marseille-Fos jumped 10 percent to 1.4 million TEU; and Genoa jumped 14 percent to about 2.62 million TEU.

Further, it is hard to overstate the performance of Mediterranean ports. Simply, the sector is on a roll across Europe. Cosco Shipping Ports’ Piraeus terminal boosted traffic by 20.9 percent to 374,400 TEU in March, but its northern terminals are also posting strong growth, with Antwerp Gateway up 16.9 percent to 200,000 TEU for the month and Rotterdam’s Euromax Terminal, in which it has a minority stake, increasing 14.4 percent to 258,200 TEU. Traffic at the port of Antwerp, Europe’s second-largest container hub, rose 10.7 percent in the first quarter to 2.74 million TEU, with March volume hitting an all-time high of 980,000 TEU.

Carriers, terminals, investors eye Mediterranean waterfront

Moreover, there is no doubting the Mediterranean waterfront’s attraction to investors, from terminal operators and shipping lines to private equity funds, as its ports start to close the gap with their northern rivals.

DFDS, the Danish short-sea and logistics company that operates about 50 ships in northern European waters, last week agreed to acquire Turkish cargo shipping line UN Ro-Ro from local private equity firms Actera Group and Easa Holdings for €950 million.

UN Ro-Ro, which deploys 12 ro-ro ships on routes between Turkey and France, and between Italy and Greece, will significantly expand the European footprint of DFDS, which currently operates only one Mediterranean service, between France and Tunisia.

“Many of the trailers and containers transported between manufacturers and their customers via France and Italy will be using DFDS’s ferries in the [English] Channel and North Sea,” said Niels Smedegaard, chief executive officer of DFDS.

In another, recent deal, Genoa-based Spinelli Group, a unit of Icon Infrastructure, a UK private investment fund, acquired a 30 percent stake in Italy’s Salerno container terminal, which handled about 350,000 TEU in 2017.

Still, even with those transactions, Barcelona is the poster child for the Mediterranean waterfront, for now.

Contact Bruce Barnard at brucebarnard47@hotmail.com.