Containers sink

Container throughput of Big Port of St. Petersburg continues sinking while no “bottom” is seen so far. In January-July 2009, the port’s container throughput fell by 38% to 703,364 TEUs.

Free falling

As PortNews IAA learnt from the Administration of Big Port of St. Petersburg, the rate of container throughput decline accelerated this July as compared with that of July 2008. In June of the current year container handling fell by 38.3% against June 2008 to 104,375 TEUs, while in July the decline made 40%, year-on-year, to 105,701 TEUs.

The core volume of containers in the Big Port of St. Petersburg is handed by First Container Terminal (managed by National Container Company), Petrolesport and Moby Dick (owned by N-Trans Group).  According to the statistics, the above stevedoring companies face major container losses.

The growth of container turnover in the Big Port of St. Petersburg is demonstrated only by Neva-Metal CJSC (owned by Severstal) owing to containerization of ferrous metal. As PortNews IAA learnt from Mikhail Panov, Director General of Neva-Metal, the company almost doubled its container throughput in January-July 2009 to 23,895 TEUs.  “Containerization of ferrous metal was driven by the fall of large customers’ demand amid crisis with smaller customers requiring door-to-door delivery,” Mikhail Panov said. However, containers handled by Neva-Metal cannot change general situation in the port.

Back to the future

In this context, a question is brought up in respect to the development of terminal facilities in the North-West region. It is clear that there is an excess of them today while the deficit was forecasted when making decisions before the crisis on construction of new terminals and expansion of the existing ones.

Nowadays a conflict is developing in the sphere of investments into new terminal facilities for container transshipment in Ust-Luga port (Leningrad region). Fesco Transport Group (formed on the basis of Far Eastern Shipping Company) has suspended investments in the project considering it to be economically unreasonable to launch new facilities in the present context. Moreover, introduction of a container terminal in Ust-Luga could take over a part of containers from St. Petersburg thus reducing its container throughput. Another investor of Ust-Luga terminal - First Quantum – has announced it would possibly phase down this project because of Fesco’s suspension of its financing. Meanwhile First Quantum proposed Fesco to leave the project in order to complete it jointly with the German container operator Eurogate.  It evidently expects overcoming the crisis within a year and recovery of container throughput.

Ust-Luga Company OJSC also plans handling containers in Ust-Luga port, at Yug-2 terminal.

There are also investment programs aimed at the development of Big Port of St. Petersburg.  In particular, Sea Port of Saint Petersburg confirms its investment plans and continues construction of the first phase of a 350,000-TEU sea container terminal.

All operations on introduction of the first phase including designing, construction, equipment installation and personnel training are to be completed in the end of 2009.

Preliminary cost of the project is some RUR 5 bln.

According to earlier announced plans, investment into container business of Petrolesport will make some $250 mln by 2015. The first phase of the investment program ($100 mln) will increase Petrolesport container terminal capacity to 1.2 mln TEUs, while by 2015 the stevedore will be able to handle up to 1.8 mln TEUs. In particular, the program envisaged construction of a new 190-meter long berth, introduction of a refrigerated terminal with 2,000 sockets as well as purchase of coastal container handling equipment and doubling of a railway zone. Container business is to occupy 60 hectares of 110 hectares owned by Petrolesport. The program is to be financed by Petrolesport and N-Trans own resources as well as by bank loans.

In June 2006, a new investment program was developed and approved by First Container Terminal focused on capacity increase to 1.6 mln TEU by 2012. The company’s strategic plans envisage expansion of warehouse area with its more efficient use through placing of containers in several levels. 

The fate of these projects is unclear – investors prefer to be tight-lipped.  One could only assume that part of them can be frozen for an indefinite period until the “bottom” is seen and a perspective of crisis overcoming is evident. On the other hand, they are not likely to be entirely rejected as recession is not endless and those who do not waste time are to win when it is over.