How the pendulum swings for the Mediterranean’s swing ports By George Lauriat, Editor-in-Chief, AJOT According to a European Union report, container throughput for Mediterranean box ports grew at 7%-8% last year, a little less than the double digit growth experienced in the North Europe port range. However, the growth in container traffic is a little misleading. Many port officials in the region expected 2003 volumes to slip or remain stagnant with the combination of the conflict in Iraq and the economic slowdown n Europe and the US. Added to the worldwide socio-economic woes was the ongoing process of the Mediterranean ports redefining their roles in the overall global transportation scheme. Strangely, war and the accompanying regional uncertainty have both played second fiddle to the continued flow of Chinese and Asian goods to Europe and the US East Coast. Business is looking up in 2004 and for the near term for the Mediterranean Swing ports. The Mediterranean’s large boxports fit very roughly into three categories: swing ports, hubs and regional centers. Mediterranean Swing Ports ports such as Gioa Tauro (Italy) and Valetta (Malta), sit astride the box ship routes utilizing the Suez Canal. They act as great transshipment centers for distributing cargo throughout the Mediterranean and into Europe. Other ports like Genoa or Marseilles/Fos also serve to connect Europe and their own markets with the world at large. A new generation of ports have been added to this mix to take advantage of the Mediterranean’s unique geography. Ports such as Sines, Lisbon (Portugal), Algerciras (Spain), and Alexandria/Daimmata (Egypt) try to take advantage of being at the extreme ends of a trade route that is eventually pinched at the Straits of Gibraltar and the Suez Canal. The Mediterranean’s swing port hubs are critical to knitting mega carrier services with regional trade. With the consolidation of steamship lines, the growth of alliances and slot charter agreements and increased size of boxships, the transshipment hubs on major routes are critical to vessel schedules and profitability. It is estimated that swing ports like Gioa Tauro, Malta (Valettta), Algerciras and Daimetta, transship anywhere from 60% on the low side to virtually a 100% (Gioa Tauro) of their throughput. This phenomena of transshipment on a massive scale is relatively new and is still evolving. Trade from the Far East to Europe is growing and the ability to use the Mediterranean ports as a balancing mechanism for a variety of different types of vessel strings opens up endless possibilities. One key factor driving change is the US East Coast. As more all-water services to and from the US East Coast ports to the Far East via the Suez Canal are introduced, the need to mix and match ports in the Mediterranean becomes more critical. The performance of these ports is also of paramount importance as there is often very little flexibility built into the shipping schedules. Valletta/Freeport in Malta literally straddles the main trans-Mediterranean shipping routes. It lies in the crosshairs of the central Mediterranean, a mere 93 km South of Sicily and 290 km North of Africa, at the western entrance to the Strait of Sicily, one of the busiest waterways in Europe. The port handles around one million teus annually, competing with Gioa Tauro (Italy) and Limassol (Cyrpus) for the mid-Med transshipment business. Malta’s unquestioned geographic advantages are somewhat tempered by the lack of land and by virtue of being an island, the lack of direct rail connections to the European market. On October 5, 2004 The Government of Malta signed an agreement with the CMA-CGM Group granting the French steamship line a 30-year concession to operate and develop Malta Freeport. As a result of the agreement, the Maltese Government has sold all its shares in Malta Freeport Terminals Limited and entered into an agreement to lease the port facilities and to grant a licence for the operation of the Port. For the duration of the agreement, the Government remains the own