[ID] => 10469
[post_author] => 5714
[post_date] => 2019-01-11 10:26:35
[post_date_gmt] => 2019-01-11 10:26:35
[post_content] => The bulk liquids storage terminal network in the Mediterranean is far less concentrated than its counterpart in northern Europe. Lacking a focal point, as is provided by the major ports of the Hamburg-Le Havre range (and, in particular, the Amsterdam-Rotterdam-Antwerp (ARA) region), the diversity and lack of coordination among the numerous ports and terminals results in inefficiencies and a weak focus for terminal customers.
In order to address this, the Port of Tarragona has for some years now been promoting itself as a hub for the chemical industry in the western Mediterranean, highlighting its benefits in terms of a comparatively large chemical node, deepwater jetty facilities and connections both within the Iberian peninsula and more widely into the rest of Europe. As part of those efforts, the Port of Tarragona organised a second Hub Day workshop this past November to provide a forum for the discussion of a creation of a logistics hub for petrochemical products and to stress its aim of becoming a sustainable alternative to the ARA region.
The two-day event focused on the benefits that Mediterranean ports can offer in contrast to other well-developed logistics platforms in Europe. The port of Tarragona itself has 11 ro-ro ramps and is equipped with four twin-gauge intermodal rail tracks for trains of up to 750 m. The port’s rail lines connect to the Zaragoza-Madrid service and to Valencia and Barcelona. The port of Tarragona is also recognised as the largest petrochemical cluster in southern Europe, with enormous potential for more rail transport links in the future.
Tarragona’s Hub Day aimed to raise debate about the steps that must be undertaken if Mediterranean ports are to become a serious competitor of the ARA region. The port of Tarragona acts as an excellent launchpad for innovation in this sense, due to its geography and infrastructure.
SUPPLY AND DEMAND
The event kicked off with a boat tour around the port followed by a site visit to the TEPSA terminal, The tour, which was led by Genoveva Climent, commercial director at the Port of Tarragona, gave delegates the chance to see first-hand the different areas that are dedicated to petrochemicals. According to Climent, petrochemicals represent more than 60 per cent of the port’s total traffic. The site visit gave an excellent overview of the growth happening within the port’s bulk liquids terminals while giving some idea of the potential of the port of Tarragona to act as a hub for the petrochemicals sector.
According to TEPSA, the port’s flexibility and commitment to the quality of its services has led to the company becoming a strategic ally in its clients’ logistics chain, and its latest investment in tank storage at the Port of Tarragona has facilitated that journey. Other liquid bulk and container terminals at the port, such as DP World, mirror this sentiment, proving the potential for growth and development in the west Mediterranean region and specifically within the Port of Tarragona itself. Day one of Hub Day 2018 closed with a networking event and drinks reception, allowing everyone to come together and discuss the experience so far.
The second day started with a welcome address from Josep Andreu i Figueras, president of the Port of Tarragona Authority. Andreu welcomed everyone with a brief insight into the port as well as an introduction to the day, which primarily focused on presentations from the event’s speakers on topics such as market trends, competitiveness and sustainability.
The keynote presentation came from Olivier Maronneaud, associate director chemicals at IHS Markit. Maronneaud spoke about the current state of the European petrochemicals market and trends over the past three decades. In his opening statements, Maronneaud discussed the different drivers that propel the petrochemical market, in the form of feedstocks, intermediates and end products. “When we talk about industry globally, we track the different markets,” said Maronneaud. “We track capacities and demand, as well as prices, and analyse production costs and margins.”
“When looking at trends over the last 40 years, we can see a clear cycle in average earnings on base chemicals and plastics,” continued Maronneaud. “From what we can see, these cycles repeat every five to seven years, with another down cycle expected soon.” Maronneaud also gave an insight into surplus capacity and annual demand growth trends over the last 30 years. There have been several spikes in both capacity and demand at various points throughout recent history. Notably, there was a large spike in surplus capacity, increasing to 12 per cent in 2008 during the global financial crisis, as a result of demand falling by an all-time record of 4 per cent.
“Any time that there has been a big decline in demand, it has impacted the capacity surplus and that has put more pressure on the market,” said Maronneaud. “The impact that we see in the early 2000s was actually relatively short-term. The investment cycle – or at least the consumption cycle – has picked up globally through the support of the central banks, which has helped to lift demand leading to a relatively positive environment for quite some time now.”
According to Maronneaud, the petrochemicals sector is currently in a period of stability. HIS Markit runs analysis reports every six months, with current results showing a relatively good view with regard to capacities coming onstream in the next five years. According to Maronneaud, most of the global demand is being driven by China. It is expected that the market will remain stable over the coming five years.
Discussing the European market, Maronneaud said: “Europe is the third largest market in the petrochemicals industry. Looking forward, the relative share of west Europe is declining in both capacity and demand. This is mainly due to increases in consumption in Asia and production in China.” That means that Europe is becoming significant as a key import region for chemicals. European domestic demand is slowly picking up after a wave of closures and rationalisations during the recession. Additionally, new investments have been announced throughout the value chain, which aim to drive growth in the European chemicals market.
Focusing specifically on the Spanish market, Maronneaud explained that imports into Spain equate to 2.3m tonnes in 2016, rising to 2.5m tonnes in 2017. Spain accounts for 9 per cent of the western European market for methanol, most of which is sourced from the Americas and Africa, with west Europe and the Middle East holding smaller shares. Maronneaud concluded by pointing out that the industry remains positive about the dynamic for petrochemicals in Europe, especially given that chemicals imports are rising.
COMPETING FOR BUSINESS
Patrick Kulsen, managing director at PJK International, spoke about storage market trends and competitiveness between the ARA region and the Mediterranean. “The ARA region benefits most from the River Rhine,” said Kulsen. “The infrastructure of the region allows it to serve intercontinental trade flows. The ARA is concentrated in the Benelux, while the west Mediterranean ports are stretched out along the coastline. According to market share analysis, throughput through the ARA – in terms of liquid bulk – is four times greater when compared with the west Mediterranean.”
In terms of overall bulk liquids storage capacity, the Port of Tarragona is the smallest with 911,000 m3
while the Port of Rotterdam boasts more than 20m m3
of total storage capacity. However, when it comes to logistics capabilities, there are fewer observable differences. “Logistics capabilities determine the accessibility and attractiveness of the port,” said Kulsen. “From my point of view, inland shipping is the major difference between the north of Europe and the west Mediterranean. A lot of canals and rivers that enable transport of liquid bulk via barges prove to be a very efficient mode of transport. Additionally, a lot of pipeline connections in the ARA region boost its attractiveness.”
Kulsen provided two case studies as examples to support the adoption of the western Mediterranean as a logistics platform: jet fuel imports via Marseille and chemicals imports via Lavéra, both in southern France, versus Antwerp. The former is a matter of competitiveness in the southern part of the Central Europe Pipeline System (CEPS) pipeline. Due to increasing demand for jet fuel at European airports, there is more demand for pipeline capacity. “The northern route is quite congested,” said Kulsen. “The southern route, however, is not, and a lot of that has to do with pricing.”
That pricing structure, which is based on the length of pipeline, meant that Rotterdam and Antwerp were handling a lot more jet fuel than Marseille. However, changes introduced in 2018 mean that it is now cheaper to transport jet fuel through the French port, bolstering the potential of the Mediterranean. According to Kulsen, the total transport cost of jet fuel from the Middle East is now $27.02/tonne via Rotterdam and $22.91/tonne via Marseille.
The second case study looked at chemicals imports via Lavéra as compared to Antwerp. The northern region of Lombardy is the main centre of Italy’s chemical industry. Chemicals can be shipped in via the Mediterranean and the Adriatic Sea to Lombardy using rail and tank trucks; however, for imports from the US Gulf coast, the ARA is comparatively cheaper. Kulsen concluded by observing that it is difficult to gain an objective view and it is important to compare cost-effectiveness on a case-by-case basis.
COLLABORATION AND CHANGE
In a brief presentation, Josep Forcadell, sales director at Vopak Terquimsa, presented the findings from a case study regarding Vopak and the potential in the Mediterranean. Vopak currently has 66 terminals in 25 countries, with a total storage capacity of 35.9 m3
. Vopak has two terminals in Spain, one in Barcelona, which acts as a distribution terminal, and another in Tarragona, which is the company’s industrial and hub terminal in the western Mediterranean.
“What we can see when we look at Spanish port competitiveness is that there is growth for different products,” said Forcadell. “Of the different coasts in Spain, the eastern coast is the one that has the most potential. Obviously, it varies product by product, but in particular when we look at chemicals, we see a positive trend.”
Of the Spanish ports, Tarragona, Barcelona and Castellón are the ports with the largest volumes, especially in chemicals. Tarragona is also one of the largest import points for LPG. Forcadell explained that total traffic in the Mediterranean, while fluctuating the past, has seen steady growth over the past few years, with hub activity beginning to pick up since 2013.
The main focus of Forcadell’s presentation fell on whether there is a case for business in Tarragona. His answer, simply, was: “We do not know yet.” The case study that he presented showed two different options: traditional and alternative. “The traditional way is focusing on one particular type of chemical,” said Forcadell. “In this case, we are looking at methanol coming from the Middle East, going to the ARA region, then back to Tarragona via another ship. The alternative way looks at a ship going from Italy to Tarragona directly, dropping some cargo and then traveling to the ARA region where it leaves the remaining cargo.”
According to Forcadell, this door-to-door study not only covers the shipping and road legs but also the terminal costs, something Vopak had not looked at before. Forcadell concluded with the results that that alternative way, which travels through Tarragona directly, is cheaper, faster and cleaner. “It is approximately 8 per cent cheaper to go to Italy from Tarragona,” said Forcadell. In addition, that approach saves five days’ sailing time, which also has an impact on emissions. Vopak also found that Tarragona is less congested than the main ports in northern Europe and, with more capacity coming to the port in the future, Forcadell concluded: “I believe that we will start to see a diversion from the more traditional way to the alternative way.”
GET PLUGGED IN
The last to speak was Charles Misseghers, an analyst at Union Maritime et Fluvial Marseille Fos (UMF), who discussed the potential benefits of moving the shipping industry into a new digital era. According to Misseghers, there is a local problem and a global problem. The local problem is that the discrepancy between the liquid bulk flows in the north and south is too large, with 70 per cent of flows in the north range and only 30 per cent in the south. “Even if Marseille is a big player in the south, they are nothing when you look at the global market,” he said. When compared with the ARA region, the western Mediterranean has more than 30 sites that are scattered over several thousand kilometres, and as such the west Mediterranean has weaknesses that the ARA region does not.
“We are extremely split,” said Misseghers “The downsides of this mean that we attract lower volumes per site. It is also more difficult to massify flows as there are fewer vessels of differing capacities. It is a shipping industry problem that we are facing, whether you are a ship owner, a cargo owner or a ship broker. The ship broker is receiving money from the ship owner, not the cargo owner. This means that the broker is looking for a ship for every type of cargo and not thinking about the global market. Currently, you have one vessel and one type of cargo, so the only player that is receiving money is the ship broker, with a small percentage going to the ship owner.
“However, the situation should be that there is one vessel that is split into several capacities, and those capacities should then be sold as such. The main problem is that players do not talk to one another. Hub Day brings everyone together once a year and people talk at conventions, but other than that, players do not collaborate. It is time to boost and optimise the supply chain and unlock the potential of commercial and operational efficiency. When talking about digitalisation, the question is not when
are we going to be disrupted by digitalisation, but how
are we going to be disrupted?”
Misseghers spoke further about the necessity for partnerships within the shipping industry and about the importance of moving towards a collaborative community marketplace: “The aim is for everyone to work together. We need an online marketplace with full transparency where every player can utilise digital tools that will promote collaboration.” Misseghers introduced Shipping4all, a collaborative marketplace aimed at helping ship owners and operators to significantly improve the performance of their fleet, as well as to reduce costs and increase revenue margins across the board. The aim of the Shipping4all platform is to bring together businesses that want to buy or sell spare capacities and gives ship owners the opportunity to have an open discussion with one another, facilitating transactions and contributing to market and supply chain efficiency.
The second Tarragona Hub Day closed with an interactive Q&A session moderated by Arnaud Waché, president of AWBP Solution. The session provided an excellent opportunity for an open discussion with the event’s speakers and opened the floor for debate.
The event’s aim is to shed light on the potential for the Mediterranean to improve the current logistic routes, reduce costs, improve delivery times and reduce CO2
consumption, all of which it is working hard to accomplish. Through collaboration and open discussion, Hub Day is – and will continue to be – a great player in the move towards innovation and change within the Mediterranean region.
[post_title] => Mediterranean: Head west!
[post_status] => publish
[comment_status] => open
[ping_status] => open
[post_name] => mediterranean-head-west
[post_modified] => 2019-01-11 10:29:19
[post_modified_gmt] => 2019-01-11 10:29:19
[post_parent] => 0
[guid] => https://www.hcblive.com/?p=10469
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