Upside Risk As Algeciras Prepares For 18,000TEU Role

Ports are getting ready for the June 2013 launch of Maersk Line's Triple E-Type 18,000TEU capacity vessel, which will be the largest container ship afloat. APM Terminals (APMT), Maersk Line's sister company, which operates at Spain's port of Algeciras, is investing in shore side infrastructure to ensure that the facility is ready to play its role as a Mediterranean hub for the ship, with BMI highlighting the upside risk to our throughput forecasts for this port in light of its position as a port of call for this new mega vessel.

The port of Algeciras is already a major Mediterranean hub port ranked sixth in terms of container throughput, according to 2011 throughput figures (latest available). Box operations at the facility are operated by APMT, highlighting the benefits of a global port operator having connections with a container line (APMT is Maersk Line's sister company, with both firms coming under the A.P. Moller Maersk umbrella). The benefit for Maersk Line is that its terminal operating sister can ensure that it gets priority and in the case of Algeciras is upgraded to handle the line's latest ships. The benefit for the port is that in Maersk Line it has a constant client.

One Of The Chosen Few
Planned Maersk Line 18,000TEU Asia-Europe Ports of Call

The port of Algeciras was announced as a chosen port of call on Maersk Line's 18,000TEU route, when the development of the ships was first announced. The Asia-Europe route which the 18,000TEU ships will operate on to begin with is a rotation of Shanghai, Ningbo, Xiamen, Yantian, Hong Kong, Algeciras, Rotterdam, Bremerhaven and Felixstowe. Other calls are expected to be added later, for example, the new UK port development of London Gateway is set to be a likely candidate, with the facility being developed to handle 18,000TEU capacity ships.

APMT is investing US$57mn in developing eight cranes at the port of Algeciras so that they are able to cater for 18,000TEU ships. Four new purpose-built quayside gantry cranes have been ordered from the Chinese builder ZPMC and the other four cranes will be modified existing cranes, which will have their total height raised by five metres so that they can unload and load the Triple E-Type ships.

The choice of Algeciras to function as the primary Mediterranean port for Maersk Line's 18,000TEU ships is a considerable coup for the facility, especially as its main rival Tanger Med, which is also operated by APMT, has so far been left off the planned rotation. The Moroccan terminal, which is just across the bay from Algeciras, can potentially handle the 18,000TEU ships, but with limitations. Ander Kjeldsen, head of APMT in western Mediterranean, is reported as stating that the company has not yet decided whether to also equip Tanger Med with new cranes.

Risk To The Upside
Port of Algeciras Container throughput, 2007-2017 (TEUs & % chg y-o-y)

Maersk Line's planned patronage of Algeciras with its 18,000TEU ships offers upside risk to BMI's container throughput for the port. We project the port to continue its double digit y-o-y growth with BMI forecasting a 20% increase y-o-y in container throughput in 2013. This projection will take the port's total throughput to a projected 5.2mn TEUs, with BMI estimating that the facility handled 4.4mn TEUs in 2012 based on port recording a 20.68% y-o-y increase in container throughput in the first nine months of 2012.

This article is tagged to:
Sector: Freight Transport, Shipping
Geography: Spain, Morocco