Recent developments in the world's ports

by Emily Wilson
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Containing the Risk: A proactive stance by U.S.

Customs to screen sea containers will involve ports around the world.

Globally, more than 200 million cargo containers — 90% of the world’s cargo — move between major seaports each year. In 2001, U.S. Customs processed more than 214,000 vessels and 5.7 million sea containers. Containerization accounts for approximately 13% of all grain and oilseed shipments worldwide.

The atrocities of September 11, 2001 forced the United States to take a close look at its security, and it was inevitable that measures would be taken to safeguard this indispensable but vulnerable link in the chain of global trade. By January 2002, the U.S. Customs Service was ready to announce the introduction of its Container Security Initiative.

The CSI consists of four core elements: establishing security criteria to identify high-risk containers; pre-screening containers before they arrive at U.S. ports; using technology to pre-screen high-risk containers; and developing and using smart and secure containers.

The fundamental objective of the CSI was to first engage the ports that send the highest volumes of container traffic into the United States, as well as the governments in these locations, in a way that would facilitate detection of potential problems at the earliest possible opportunity.

Participating ports

Ports of Halifax, Montreal and Vancouver, Canada: Last year, approximately 500,000 containers destined for the U.S. landed at these three Canadian seaports.

Port of Singapore: While Singapore ranks second to Hong Kong in terms of number of cargo containers handled, it ranks as the world’s busiest transshipment/transit port. Last year, roughly 330,000 sea cargo containers entered the U.S. from the Port of Singapore.

Port of Rotterdam, Netherlands: The Port of Rotterdam handles more than 6 million containers annually. Last year, approximately 291,000 sea cargo containers entered the U.S. from Rotterdam.

Port of Antwerp, Belgium: The Port of Antwerp is the third largest container port in Europe. Among the world’s seaports, Antwerp ranks 11th in terms of volume of cargo shipped to the U.S. Last year, approximately 115,000 sea cargo containers entered the U.S. from the Port of Antwerp.

Port of Le Havre, France: The Port of Le Havre handles nearly 70 million tonnes of goods per year. Last year, approximately 108,300 sea cargo containers entered the U.S. from Le Havre.

Ports of Bremerhaven and Hamburg, Germany: Last year, approximately 257,000 sea cargo containers entered the U.S. from Bremerhaven and 103,000 from Hamburg.

Port of Göteborg, Sweden: The direct calls are considered to be of vital importance to the Scandinavian export industry.

Global participation

Implementation of the CSI by the top "mega-ports" is just a starting point and will not be restricted to only these locations. On June 28, 2002, the World Customs Organization unanimously passed a resolution that will enable ports in all 161 of the member nations to begin to develop programs along the CSI model.

Advanced tracking based on military model

Driven and initially funded by industry, "Smart and Secure Tradelanes" (SST), a global container security and tracking system, was launched in July 2002.

Built on existing infrastructure and technologies that are both proven and available for immediate deployment, SST is expected to be operational by year-end, with automated information technology infrastructure linking ports such as Singapore, Rotterdam, and Hong Kong with major U.S. ports such as Seattle/Tacoma, which will be the first domestic port to use SST.

SST is based on battle-tested, real-time response information technology called the Total Asset Visibility (TAV) network, pioneered by the U.S. Department of Defense. Working with shippers, carriers, service providers, foreign and U.S. port terminal operators, containers will be tracked and automatically authenticated from the point of manufacturing, port of loading, transshipment port and to final discharge in the U.S.

SST, which will work in close coordination and consultation with government agencies, will develop and test potential auditable security standards for maintaining secure ports, shipping facilities, and container tracking and security.

Initial port operating companies spearheading Smart and Secure Tradelanes, which together account for 70% of the world’s container port operations, are: Hutchison-Whampoa Ltd., the world’s largest port operating company, managing 30 ports in Asia, Europe, Africa, and the Americas, accounting for 45% to 50% of the total import container traffic to U.S. ports; PSA Corporation Ltd, which handles 25% of the world’s container transshipment volumes and operates 14 container terminals in nine countries, including Singapore, Belgium, Italy, China, India, and South Korea; and P&O Ports, one of the world’s leading port operators with 21 container terminals in 19 countries and 84 ports.

The three companies are also members of the Strategic Council on Security Technology (SCST), a recently formed group that brings together port operators, logistics providers, technology providers, and military and government officials to discuss supply chain security.


Industrial action and drought hamper Canadian grain exports

Industrial disputes have crippled grain movements at British Columbia ports this harvest. Prairie grain destined for the Vancouver export terminal was diverted by the Canadian Wheat Board to Prince Rupert on the northern B.C. coast, after more than 600 Port of Vancouver grain workers were locked out.

At Prince Rupert, it took a court injunction to halt picketing. At time of press, an appeal was considered to be probable.

The backlog of unloaded grain was reported to be small but there were six vessels in Prince Rupert waiting for grain and around 150,000 tonnes of grain due to arrive by rail with similar amounts expected over the following weeks. There was a potential for seven million tonnes to move through the port this year.

The Canadian Wheat Board said it plans to ask the government to amend section 87(7) of the Canada Labour Code.

The CWB said it believed employers and unions directly involved in the grain trade — such as grain handlers — should also be included under the legislation to ensure farmers do not bear the brunt of port labor disputes and to protect Canada’s reputation as a reliable supplier of top-quality grain. Under the current legislation, only third parties, such as longshoremen and railway workers, are deemed necessary to the movement of grain from Canadian ports.

Meanwhile, the Port of Thunder Bay grain terminals, located at the head of the Great Lakes/St. Lawrence Seaway System, have continued to experience overcapacity and declining grain handlings during the first nine months of this calendar year and, according to the CWB, this trend is not likely to change soon.

Statistics supplied by the port show that grain shipments for the month of September declined from 222,189 tonnes last year to 80,667 tonnes for the same month this year. On a cumulative basis, grain handlings at the Lakehead to the end of August were 3,650,868 tonnes compared to 4,070,016 in 2001.

Over a 40-year period, grain handlings at the Lakehead have ranged from a high of 17,679,719 tonnes in 1983 to 7,059,393 tonnes in 2000.

Louise Waldman, spokesperson for the Canadian Wheat Board, said wheat, durum and malting barley shipments through the port will "most definitely" be affected by drought conditions and wet harvesting conditions on the Prairies this summer. "We’re projecting our export programs to decrease by 40% this year, and that will affect shipments through all ports," she said.

Recently the wheat board announced that it had withdrawn from world markets until it could better assess the Canadian crop and assure its largest customers — Mexico, U.S., Iran and Japan — that supplies would be available.

Paul Graham, spokesperson for the Canadian Grain Commission, said there has been a trend towards less grain moving through the Port of Thunder Bay in recent years and this has been based "primarily on where the markets are and where customers want to take delivery of their grain.

"There was a time in the early 1980’s when about two-thirds of the grain that was exported (from Canada) went through Thunder Bay," he said. ‘Since then it has shifted to the West Coast and, in particular, to Vancouver."


Arkady Feeds to build major port grain store

A giant 250,000-square-foot (23,100-square-meter) warehouse is under construction at the Port of Liverpool’s Seaforth Dock for long-term use by Arkady Feed (UK) Limited, part of the Archer Daniels Midland Group.

The new facility will further strengthen Liverpool’s position as the UK’s leading gateway for imports of grain and animal feed.

At 220 meters long and 105 meter wide, the steel frame store will be able to hold 75,000 tonnes of up to six different products. A fully enclosed 460-meter overhead conveyor will be able to transfer animal feed from large Panamax ships to the warehouse at up to 800 tonnes per hour. All loading of road distribution trucks will be undertaken in a 15-meter wide roadway inside the giant store.Arkady Feed (UK) Ltd., has been increasing the volume of animal feed it moves through Liverpool since it first started using the port in 1989.

Tilbury ships first British wheat to U.S.

The Port of Tilbury has seen the first ever shipment of U.K. feed wheat to the U.S. The Grainfarmers/Louis Dreyfus International Marketing Alliance sale reflects the "very strong domestic price levels" now prevailing in the U.S.

"We originally intended to load the first cargo of feed wheat at our facility in Southampton, but as the wheat crop in southern England is mainly of biscuit quality, we now expect that the cargo will be shipped from Tilbury," said Tim Pollock, managing director of Grainfarmers plc, the U.K.’s largest farmer-owned grain business. "The Alliance has, to date, only contracted a few cargoes, which will be shipped in September, but current prices would point to continued potential demand."

Pollock noted that prospects for U.K. feed wheat exports to other E.U. countries were challenging, with competition from the Black Sea. But he said demand for milling quality wheat should keep the Southampton export facility busy.


Deep sea port set to proceed

An extensive industry review to determine the optimal site for a new deep-sea port facility for South Australia has concluded that Outer Harbor near Port Adelaide offers the greatest potential benefit to the state. 

"The proposed improvements at Outer Harbor are the least-cost option and provide the maximum benefit for the state’s grain growers and the state’s other major export industries," said John Murray, managing director of AusBulk, South Australia’s leading grain business.

"The issue of deep sea ports for South Australia has been examined exhaustively over the past few years and the last report, the Deep Sea Ports report, which represented all the grain industry players, including the South Australian Farmers’ Federation, the AWB and the ABB, concluded that Port Adelaide was the best option," Murray said.

Other potential South Australian ports were explored by that committee, and its independent report ruled out Myponie Point on Yorke Peninsula and Port Stanvac because of problems relating to lack of infrastructure. 

"After completion, the new facility will be capable of handling Panamax vessels and will be one of the top four grain shipping facilities in Australia. Indeed, with Port Lincoln, the state would have two of the top four shipping facilities. "It will enhance Port Adelaide’s overall shipping capabilities and the opportunity to develop the container and other export businesses," he said.


Latin America’s biggest grain terminal under construction

The largest grain terminal in Latin America is to be constructed at the Port of Santos, Brazil. The US$58 million, Guaruja Grain Terminal (TGG) will serve Brazillian Midwest producers and will have the capacity to handle 10 million tonnes of grain a year upon completion. The first phase of construction, which will be completed in 2004, will have the capacity to move 3.5 million tonnes of grain a year; by 2008, it will reach 7.5 million tonnes a year.

The Andre Maggi group and Bunge Alimentos are the principal partners in the venture but it will be open for use by other companies.