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PORT DEVELOPMENTMiddle East magnetismDespite the fall in oil prices, theMiddle East container markethas remained relatively strongand there is considerable potential forgrowth as manufacturing and assemblyindustries become more important inthe region. Meanwhile, the import ofconsumer and capital goods by privateindividuals, government agencies andcompanies has more than held up, despitethe fall in oil and gas prices over the past12 monthsFigures published by UK-based ContainerTrades Statistics for the first fourmonths of 2015 confirm this bullish picture,with containerised imports increasingby 10.1% to 4M TEU in the January/April period. Emerging markets led theway, with imports from Africa and Centraland South America up 27.6% and21.3%, respectively.The largest trades into the Middle East,from Asia and Europe, grew by 8.7% and9.5%, respectively, which was very similarto their performance in 2014 (see table, p20).On the upWhile exports have slowed this year, theoverall trend is up. Over the past decadethe imbalance between full imports andexports has narrowed considerably, whichis good news for liner operators as itmeans a higher percentage of carryingscomprise loaded boxes.Industrial diversification programmesbeing pursued by governments acrossthe region are also fundamental to thesechanges as factory output is primarilygeared to selling products in internationalmarkets. In part, these projects are beingspeeded up as a consequence of the sharpfall in oil and gas prices that has takenplace over the past 12 months.Michel Looten, maritime director ofthe Netherlands-based consultancy groupSeabury, is very optimistic about the Asia-Middle East/South Asia trade. “Despitethe market being more seasonable thanthat between Asia and Europe, last yearsaw growth rates on the Asia/Middle Eastleg grow faster and I expect this ‘outperformance’to continue in 2015,” he said.“The market is being propelled bystrong rises in the demand for raw materialsand consumer goods, with lighting,table and kitchenware items and domesticappliances up by 99%, 19% and 13%, respectively,in 2014 on the previous year.”Strategy rethinkLooten projected that by 2020, the Asia-Middle East/South Asia trade would belarger than that between Asia and Europeand this called for “ocean carriers to rethinktheir strategies” when it comes toserving the overall Asia-Europe corridor.Over the past three years, the Asia/Middle East (including Red Sea)/Asiatrade has seen several new entrants, a raftof new partnership agreements signedand, above all, a spike in the size of vesselsdeployed. These trends are continuing, asoperators look for the most efficient andcost-effective way of serving the market,and they have a surfeit of large ships thatthey need to find trading homes for.Earlier this year, Geneva-based MSCstarted its New Falcon service with eight8,000 TEU ships previously deployed inits Asia/Europe network. The link, whichreplaced a transhipment operation overSingapore, offers the line’s customers improvedtransit times and enhanced levelsof reliability.The service focuses on China, withvessels calling at six ports in the country,the growing exchange of cargo betweenthe Middle East and India, and SaudiArabia’s burgeoning chemical exports. Itsfull itinerary comprises Xingang, Busan,Ningbo, Shanghai, Fuzhou, Chiwan, PTP,Singapore, Colombo, Jebel Ali, Dammam,Jubail, Mundra, Nhava Sheva, Singapore,PTP, Chiwan and returning to Xingang.With liner trades to/from the Middle Eastprojected to remain bullish, terminals arebeing improved and new ones built toaccommodate the expected growthployed on an itinerary that involves callsat Busan, Shanghai, Ningbo, Chiwan,Shenzhen, Singapore, Port Klang, Colombo,Kochi, Nhava Sheva, Mundra andJebel Ali. The ships return to Busan viaPort Klang and Hong Kong only.As in the core east/west trades, the use ofbigger ships is being accompanied by theformation of larger operating pacts. Theseare essential if the volume of cargo neededto ensure high utilisation rates is generatedand carriers are to realise the economiesof scale from using larger tonnage.Port investmentsMiddle East port authorities and terminaloperators are generally well positioned tocope with the anticipated increases in cargoBOOSTING CONTAINERvolumes and the phasing in of larger ships.Currently, an estimated US$35B-40Bis earmarked for modernising, upgradingand building new ports in the MiddleEast, as they are seen as catalysts for newindustry, logistics ventures and even cities.The region has seen the widespreaddevelopment of vertically integrated portcomplexes where industrial zones, logisticsvillages and associated service industriesare clustered around traditionalcargo handling facilities.In particular, the strategy has been drivenby a desire by port authorities and terminaloperating companies in the regionto forge closer links with end customers.This enables the parties to then offer arange of logistics and support services thatgo well beyond standard stevedoring andcargo handling activities.The port of Khalifa (UAE), King AbdullahPort (Saudi Arabia) New Doha(Qatar) and developments planned onBoubyan Island (Kuwait) and at Al Faw(Iraq), all feature elements of this approach.Saudi spendingSaudi Arabia is ploughing massiveamounts of capital into modernising itstransport infrastructure, including itsports. A second terminal is under constructionin Dammam, boosting capacityby at least 1.8M TEU/year, Jubail hasbeen modernised and substantially upgradedto handle containers and the newsuper port at King Abdullah EconomicCity on the Red Sea coast is taking shape.Currently, King Abdullah Port (KAP)comprises a 1.15 km quay for containers,with capacity to handle 2.5M TEU/year. By 2017, the port’s capacity will be3.7M TEU, and by 2030 it could be asHANDLING PRODUCTIVITYTEREX PORT SOLUTIONS – CUSTOM AND HOLISTIC SOLUTIONS TO MEET YOUR NEEDSTerex Port Solutions offers a comprehensiveportfolio of products and services:A For loading & unloading, transport,stacking and handling containersA For terminals of all shapes and sizesDiscover our holisticcontainer handling solutionswww.terexportsolutions.comA For manual and automated terminalsA Advanced software to provide realistic viewsof terminal cargo flows prior to constructionA Value-preserving life cycle support toreduce downtime and cost of ownershipJoint serviceElsewhere, in the North East Asia/MiddleEast trade, Singapore-based intra-Asiaspecialist Regional Container Lines hasjoined up with Emirates Shipping Line,Korea Marine Transport Co and HanjinShipping Co, to start a new service. Seven6,500 TEU capacity ships are being de-Terex, the Terex Crown design, Terex Gottwald and Works For You are trademarks of Terex Corporation or its subsidiaries. All other trademarks are property of their respective owners. © 2015 Terex Port SolutionsJune 2015 19

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