Pulling truckers to sea

Despite the economic downturn hitting Spain and Portugal hard, Grimaldi has increased its ferry, shortsea and car carrier capacity serving the Iberian peninsula.

In February, the operator launched a new service between Barcelona and Porto Torres in Sardinia, linking into its service to Civitavecchia in Italy for ro-ro and passengers, deploying newer and larger tonnage.

The port of Ferrol is planning to launch two new ferry routes with EU financial support

The acquisition of Minoan Lines has also allowed Grimaldi to introduce through-ticketing between Barcelona and Patras/Igoumenitsa.

“Although prices are under pressure, we believe competition on service quality is critical when convincing truckers to choose a ferry crossing, rather than an all-road route,” says Grimaldi spokesman, Paul Kyprianou.

He adds: “The new ships between Civitavecchia and Barcelona offer a 70% increase in capacity but only a 10% increase in costs, due to more economical fuel consumption. Being able to carry 70% more freight means we can offer very competitive freight rates.”

Meanwhile, Grimaldi’s Euro-Aegean has increased car-carrying capacity for north-west Europe via Setubal in Portugal and Valencia in Spain to Italy, and the Aegean, with new onward links to Cyprus, Lebanon, Syria, Egypt and Turkey, tapping into enduring demand in the Middle East for finished vehicles.

“With the Euro-Aegean Service, things have been slow in late 2008 and so far this year,” Kyprianou says. “But we believe that there will be a recovery in the second half of the year, boosted by governments’ efforts to help and support Europe’s car makers. And companies such as Fiat have been doing relatively well.”

EU moves to find alternatives to road transport are also opening new opportunities.

GLD Lines, owned by Louis Dreyfus Armateurs and Grimaldi, will launch a ro-ro service between the Port of Gijon in Asturias and Nantes-Saint Nazaire at the end of the year.

The project is financed under the Atlantic Motorway of the Sea programme by the governments of Spain and France. The two governments will fund a second Motorway of the Sea between Le Havre, Nantes-Saint Nazaire and Vigo operated by Transmediterranea. This will be expanded later to Algeciras.

Aimed at reducing trucking across the Pyrenees, these new services are targetted to remove 100,000 lorries a year from the roads.

Meanwhile, the Port Authority of Ferrol and San Cibrao is also seeking EU backing for two additional Motorways of the Sea out of Galicia.

“We are looking at two potential ferry routes,” commercial manager Julio Hernández Sanmamed says. “One will connect Ireland and the UK west coast with Ferrol’s inner harbour, which could potentially win €2.5m [US$3.4m] of EU funding.

“The second would link Ferrol with the Benelux countries and northern France, potentially attracting €4m.”

While some operators are trying to avoid laying up tonnage, Spanish ferry operator Trasmediterranea, is planning to sell seven of its 27 ferries. Analysts also believe the ferry company itself could be sold.

The vessel sell-off is part of a restructuring process after a 10% drop in cargo volumes last year.

In April, its parent company Acciona increased its stake in Trasmediterranea to 80% in a bid to re-assure the banks. But analysts believe the ferry company could yet be sold, with mounting losses of €100m over the last two years, due to falling demand and soaring fuel costs.

Ports

Algeciras is not only fast approaching capacity, but also faces competition from nearby Valencia as well as the two new Tanger-Med terminals in Morocco, which are keen to gain western Mediterranean market share.

But a recent deal with unions and a new container terminal could put it back into top spot.

Last year, Valencia overtook Algeciras as the largest hub port in the Mediterranean, using canny pricing and a rebate for repositioning empty boxes to increase its throughput by more than 18% to 3.6m teu. Last year, Algeciras handled 3.4m teu.

APM Terminals’ total capacity at the port stands at 3.6m teu and in December, it negotiated a 10-year deal with labour unions to improve productivity.

Additionally, next year will see Hanjin Shipping open a 1.8m teu container terminal at Isla Verde in Algeciras. Opening next summer, it will increase Algeciras’ total capacity to 4.2m teu. Tenders have been issued for a second 1.8m teu terminal at the site.

Hanjin’s subsidiary Total Terminal International Algeciras is developing Isla Verde as a gateway for southern Europe to relieve pressure on the north-west European range ports. Plans are underway to upgrade the port’s rail infrastructure and improve its shortsea and feeder network.

A state-owned holding company is to invest €11m (US$15m) in positioning Algeciras as a regional gateway hub.

The port also aims to increase its finished vehicle movements. Two local car distributors are planning a distribution centre handling Volkswagen and Audi units.