• 2010 August 1

    Container volumes keep on rising

    Container traffic through the seaports of Russia and worldwide is being gradually recovered. In many cases the pre-crisis volume level has already been reached. There is no container shortage at ports yet, but investors continue to implement their port’s projects in hope the containers might be again in high demand very soon.

    Recovering from the crisis

    The volume of containerized cargo at Russia’s ports in the first half of 2010 increased by 36.4%.

    In particular, six-month container throughput at the Big Port of St. Petersburg surged 47% from the same period in 2009, to 880,737 TEUs. However, it is still 9% below the level of the first half of 2008.

    Novorossiysk Commercial Sea Port (NCSP) posted its container volume at 203,900 TEUs, or a 68.2-percent surge over H1, 2009 and a 8-percent gain from the same period in 2008.

    The total container trade volume via the National Container Company (NCC) terminals, namely First Container Terminal in St Petersburg and NUTEP, Novorossiysk Nodal Transport Forwarding Enterprise (in Novorossiysk), also exceeded the pre-crisis level. Thus, the NCC’s terminals half-year throughput amounted to 619,601 TEUs, or 32% up over the same period in 2009 and 4,3% higher than cargo turnover in "pre-crisis" 2008.

    Terminals of Global Ports Group (N-Trans), Moby Dick and Petrolesport at the Big Port of Saint Petersburg have also demonstrated growth trend since the end of 2009. According PortNews IAA, the six-month container throughput of Petrolesport soared 173% from the same period last year, to 222,867 TEUs, Moby Dick’s - by 32.4%, to 62,566 TEUs. Thus, in the first half of this year, the total throughput of container terminals of Global Ports has reached 70% of the pre-crisis volumes.
     
    As for the Far Eastern ports, Vladivostok Container Terminal (VCT) posted for the first half of 2010 a 55-percent spike, to 134,510 TEUs, surpassing pre-crisis figures. VCT’s June throughput amounted to 25,083 TEUs, down 0,4% from this May but up 66.73% from June 2009.

    Container trades via Port East in the reporting period increased by 32.6%, to 104,944 TEUs.

    In January-June handling of containerized cargo at the port of Vladivostok jumped by almost 70%, to 148,278 TEUs.

    Noteworthy, the growth in container volumes at the Russian ports this year exceeds the world average. Thus, the Chinese port’s H1 container throughput rose by 22.1%, to 61.8 million TEUs. In particular, six-month container traffic via the port of Shanghai increased by 18.8% from H1, 2009, to 13.86 million TEUs, Hong Kong’s - by 16.1%, to 11.43 million TEUs.

    Container trade at the port of Los Angeles (USA) in January-June was up 15%, to 3.66 million TEUs. The Long Beach’s container count rose by 19.8% from H1, 2009, to 2.79 million TEUs.

    According to National Container Company, the Russian container traffic, which has been growing since mid-2009, is a good indicator that the industry gradually recovers from the crises, PortsNews reports. "We expect the moderate growth to continue in the second half of this year, and a full market recovery - not until 2011. In connection with this, in 2010, we will be working in a very competitive environment,"  the NCC press service said.

    As Finam Management’s expert Dmitry Baranov comments restoration of the market in an interview with PortNews the growth of container volumes in the first half could be explained by to economic recovery and the associated increase in freight traffic. "It is important to note that increased not only the transit of containers, such as the Asia – Europe services, but also in domestic traffic," Dmitry Baranov was quoted as saying.

    According to the analyst, cargo shipments in containers became widespread among Russian shippers - another factor that influenced the half-year container traffic trend in the first half. Those who had sent their goods in covered railcars, gradually switch to containers, since such transportation are more convenient.

    "According to optimistic forecast of the cargo turnover growth, the pre-crises volume might be reached by the end of this year, to a pessimistic one, if the pace of economic recovery slows down, these indicators can be achieved in the first half of 2011," the expert said.

    Encouraged investments

    There is no container shortage as yet, but the market is growing quite rapidly. This encourages investors to fund the projects for building new port’s container facilities and related logistics infrastructure.

    According to Dmitry Baranov, so far the Russian ports have coped with container throughput and one can say that the current demand corresponds to the proposal. "However, it is quite possible that if the internal infrastructure of the container traffic continues to grow, we might face a shortage of capacity and, consequently, a decrease in income from this activity", the expert believes.

    The container market poses two risks, he says. On the one hand, this is the risk of new economic shocks, resulting in further decline in container volumes, as in transit, and internal services. On the other - the risk of too rapid growth of container traffic, leading to excessive overload of the container shipment market that could turn a brake on the development of container transportation in the country.

    "We have still a lot of places in the country, where there are neither cranes for lifting containers, nor grounds for container storage and handling, etc., etc. Therefore, in order not to hinder the development of container transport within the country investments into the domestic infrastructure are needed. And those who is engaged in transit container shipments should not rest on the oars, because with the increase in container volume, the current capacity will no longer cope with the freight flow, and they could face a risk of losing the customer with a decrease in income. So it’s worth of starting investing in their own development ",  said Dmitry Baranov.

    Ust-Luga

    Obviously, the investors perfectly understand that. In particular, the new NCC’s container terminal construction at the port of Ust-Luga has been under way of the new NCC (Ust-Luga container terminal, ULKT). The works at the terminal were frozen last year following disagreements between the former stockholders of NCC - First Quantum and Fesco (Far Eastern Shipping). In particular, Fesco management doubted over the feasibility of the project implementation in the crises environment. Recently, Fesco has announced it is selling its stake in NCC to First Quantum.
     
    As the NCC told in an interview with PortNews, the container terminal launch has been scheduled for 2011, when the first-phase should be completed. At this stage the terminal investors expect to have the berths № 3,4 and their rear area built. The births will be 440-m-long. The first-phase project means also dredging of the canal to make the depth at births to 13,5 meters. Roads and railways will be commissioned, delivery of handling equipment (4 STS, 1911 RTG, RMG 2). That would allow the terminal to handle 400,000 TEUs annually.

    The second phase would boost the terminal capacity to 1.55 million TEUs. It involves the construction of berths № 5,6 with length of 660 meters, dredging births depths up to 16,5 m, the acquisition of additional cargo handling equipment (7 STS cranes). The completion of the 2nd phase project is schedule for 2015.

    In 2020 the project investors expect to have berths № 7,8 completed with overall length of 660 meters and the acquisition of five STS cranes. The phase 3 completion would increase annual container throughput of Ust-Luga terminal to 2.85 million TEUs.

    In addition to the container terminal, containers can be transshipped at YUG-2 (Ust-Luga JSC), the second stage of which is scheduled to start shortly. To read more details on the YUG-2 complex, see PortNews’ Relevant Topic, July 23rd.
    Big Port of St. Petersburg

    There are several investors that are expanding its terminal facilities at the Big Port of St. Petersburg, including NCC, a group of Sea Port of St. Petersburg (part of Universal Cargo Logistic Holding) and a group of N-Trans. Besides, Maersk Line’s ECUBEX ocean container line has already started operating here.

    The project for the First Container Terminal (FCT, NCC) means the formation of a new territory, construction of new 205-m-long birth, in the future - relocation of support facilities and railways outside of the territory of the terminal. Current FCT’s capacity is 1.1 million TEUs, with further expansion to 1.6 million TEUs.

    In addition, the NCC intends to develop Logistics Terminal with throughput at 200,000 TEUs, based in St. Petersburg’s Shushary. The terminal project includes building warehouses (88,000 square meters) and wholesale trade center (115,34 sq.m.). Distance to the FCT from Logistics Terminal is 17 km. To ULCT - 161 km.

    Sea Port of St. Petersburg JSC is implementing the construction project of a container terminal on the territory of the Fourth Stevedoring Company (part of the Group). The last shipment of STS-Konecranes for the new terminal was delivered on July 21st.
    The first-phase container terminal project (4th Stevedoring Company) of annual capacity of 345,000 TEUs started in 2008. The first two STS-cranes and 10 RTG-cranes with lifting capacity 50 tons were delivered n November 2009.

    Besides, Petrolesport and Moby Dick Group Global Ports are also engaged in container handling at the Big Port of St. Petersburg. According to previously announced plans, the first-phase project would boost the capacity of the Petrolesport’s container terminal to 1,2 mln TEUs, and by 2015 - up to 1,8 mln TEUs.

    All these plans having being accomplished would boost the capacity of the Big Port of St. Petersburg to 4 million TEUs a year, making it one of the largest global container ports.

    Novorossiysk

    National Container Company is also considering a container terminal expansion project in Novorossiysk. Thus, in the development plan of NUTEP it has been scheduled to increase rear area, build-up of the existing pier and construction of a new 320-m-long quay. It is also projected to have the railroad facilities and road overpass built in the near future. The current capacity of the terminal is 215,000 TEUs a year, expandable to 550,000 TEUs a year.

    Vitaly Chernov.