Containerization is underway

Black Sea ports demonstrated a positive dynamics of container turnover in 2018. Novorossiysk slowed down its growth rates after a breakthrough of 2017 but continues containerization of more cargoes ensuring a higher flexibility for cargo owners and shippers. When speaking at the XV International Transport Forum YugTrans 2019, Aleksey Garmash, General Director of Novomorsnab LLC, told about the key trends in this segment.

Uneven recovery

According to the expert, container transshipment in the Black Sea region (Russia, Bulgaria, Georgia, Romania excluding Turkey mainly focused on the Mediterranean ports) grew in 2018.  The number of loaded containers grew by 8.7% to 2.188 million TEUs while the number of empty containers declined by 0.1% to 739,000 TEUs.  

“Transshipment od empty containers has slightly decreased in the region which is a good trend since the loading of vessels has grown and the region economy continues the recovery after the recent crisis”, explained Aleksey Garmash. 

He emphasized that import of containers in 2018 increased by 13% to 1.239 million TEUs, export – by 3% to 949,000 TEUs.

However, the cargo flow distribution between countries was not even. In the segment of loaded containers the highest growth was demonstrated by Ukraine which continues recovering container turnover after a plunge in 2014-2015. Container throughput of Ukrainian ports on the Black Sea grew by 19% to 691,000 TEUs. Meanwhile, the expert notes that the ports of Ukraine are underloaded due to shifting of some flows from Russia and to reduced production and exports from Ukraine.

Container throughput of Georgian terminals grew by 15% to 263,000 TEUs driven by the economic growth in Georgia and increased transit of cargo bound for Armenia, explained the expert.

Other market players showed a moderate growth. Container throughput of Bulgarian ports climbed by 5% to 187,000 TEUs, Russia’s southern ports – by 4% to 565,000 TEUs, Romanian ports – by 0.5% to 482,000 TEUs.

Russian leader

In 2017, seaport of Novorossiysk reached its historical maximum of container throughput having exceeded the level of 2014 and neared 90% loading of its key terminals. However, the year of 2018 was not so impressive.

According to Aleksey Garmash, there is a number of reasons behind it. First of all, export growth rates have decreased. Secondly, imports saw a recovery but failed to reach the pre-crisis level of 2014. A side effect of this trend was the fall of empty containers evacuation after import cargo unloading (mostly refrigerated containers).

“The recent 4 years have seen transshipment of export cargo to overtake that of import cargo and we actually see the deficit of empty containers in Novorossiysk, both 20-foot as it used to be 5-10 years ago and 40-foot containers. The bulk of evacuation is reefer containers and partially cargo unclaimed due to unbalanced flow”, said General Director of Novomorsnab LLC adding that stable growth of empty containers supply is observed. 

Key export cargoes

According to the expert, the analyses of cargo mix lets explain the slowdown of growth rates. In 2018, grain accounted for the bulk of container exports. Restrictions on import f pulses introduced in India in 2018 had a detrimental impact on container turnover of Novorossiysk.

The second largest type of export cargo is timber, mostly sawn timber and plywood bound for Egypt. Due to unstable economy of Egypt supplies fell in 2018 and the 2019 outlook is negative.

Among the crucial trends Aleksey Garmash named the increase of other cargoes in the export cargo mix: “the process of containerization is underway with more and more cargo being loaded into containers. The most notable example is dry bulk and liquid bulk cargo in containers. As of today, half of port terminals is loaded with anthracite which is carried in containers to the ports of South-East Asia”. He explained that total cost of such deliveries is comparable to transportation by 70,000 – 80,000 dry bulk carriers. However, containers are more convenient for shippers due to a flexibility in terms of ship load and frequency of shipments. 

At the same time, shipment of liquid bulk cargo in containers is on the rise. These are mostly sunflower oil, vegetable oil and base oils. “They are on the rise mainly due to application of flexible tank technology when Flexitank is installed in a standard container”, explained the expert.

The slowdown of exports growth should also be attributed to the fall in the market of organic chemicals – polymers and caoutchouc amid the growing demand for them in the domestic market. Besides, part of non-ferrous metal flows shifted to the Far East.

All quiet on the lines

No systemic changes have been seen in the market of container lines although the list of leaders has changed a little. Having lost 2% in the Black Sea region Maersk has retained the first place with MSC remaining the second. COSCO replaced Arkas on the third place with ZIM staying in the fifth position.

The lines’ positions at the port of Novorossiysk are slightly different from the regional pattern. “80% of our imports are held by the “big four”: Maersk, MSC, ZIM and Arkas”, said Aleksey Garmash adding that redistribution of the market shares is possible in 2019 after NUTEP launches its new berth and new services are redistributed. 

He emphasized that Hapag Lloyd almost doubled its volume in 2018.

“I think these redistribution trends will continue which is to a great extent depends on the policy of terminals and lines”, added he expert. 

Ports reach after cargoes

DPW in Constanta retained its leading position among the port terminals in the Black Sea region despite a slight loss of volumes. The second place is still occupied by APM in Poti. Odessa based HPC raised to the third place having pushed the NUTEP down to the fourth position. Brooklyn-Kiev Port in Odessa has replaced Novoroslesexport (NLE) in the fifth position. 

NUTEP is building up its turnover in Novorossiysk through developing its client services and infrastructure. NCSP terminal has remained at the level of 2017. NLE has seen a slight decrease with shifting of some flows of NUTEP.

Aleksey Garmash has highlighted the development project of Container Terminal NUTEP LLC.  On 1 July 2019 the company is to put into operation its new berth, No 38, that will let accommodate ocean-going container carriers of up to 10,000 TEU in capacity, so called Bosphorus-Max ships. The next phase foresees modernization of logistics infrastructure, replacement of reachstacker technology with the RTG technology allowing to handle 700,000 TEU per year by 2021. 

“The project implementation meets the schedule so far. Hopefully, upon completion of NUTEP modernization we can expect Novorossiysk to handle more than 1 million TEUs per year by 2021, - emphasized the expert. – The outlook is quite positive. The main thing is the absence of economic unsteadiness and other major forces”. 

Elena Tkacheva