News/Report in “Fairplay International Shipping Weekly” dated November 1, 2007
Moving mountains at Gulftainer
| Souks, mosques, lagoons, resorts and towers have ended up jumbled around the port during the uneven expansion of Sharjah in the United Arab Emirates. For companies such as the UAE-based box terminal operator Gulftainer, this results in increasing emphasis on Khorfakkan, where there is room for growth, rather than Sharjah, the better-known sister port.
"That's where we filled in the traditional dhow harbour for more space," Peter Richards, Director and General Manager of Gulftainer, tells Fairplay, jumping up from behind his desk to gesture at pictures of Khorfakkan on the wall and pointing at a curiously curved section of the port, now occupied with boxes, cranes and trucks. "And then when we expanded here, we chopped down the mountain," he enthuses, making slicing gestures with his hands. "Business is good, it's going well and our customers are happy," says Richards, adding that throughput is up at both Sharjah and Khorfakkan terminals. Richards has been in the region with Gulftainer for some years now. His passion shows for the place and the company. Today the Khorfakkan quay looks like a giant 'L'. That soon will become a standard rectangle when another 460m of quay is built, protected by an 800m breakwater. The box terminal will then have more than 1,900m of quay with six new ship-to-shore gantries.
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| That's a lot of development: Richards explains why: "Customers have all indicated to us that they will be increasing their vessel sizes. One customer is talking about going up to 11,000TEU. And we're not just looking to satisfy current customers, we're looking to new ones," he adds.
In addition, inflation is vicious in the Middle East, while its ports have no pricing power. "If you approach a shipping line and say 'our costs have gone up', he'll hand you his bill and say 'so you have mine!'" laughs Richards. "we're a port so we can't move location, we're a private-sector company so there's always more ways to tighten the screw, and so our policy is to increase volume." "We looked at the costs, decided that steel and cement are never going to go down, then we had discussions with our shareholders and we decided to go ahead anyway." A pool of cold cash It's one thing to build, another to compete. The competition is hotting up even as Gulf atmospheric temperatures finally drop as winter approaches. A deep and liquid pool of cold cash is filling up, thanks to the high oil price. That kind of liquidity makes a lot of projects possible. And there are a lot of port projects in the Middle East. Among the many, and apart from the developments at Khorfakkan, there is Port Khalifa in AbuDhabi emirate, A1 Duqm in Oman and Dammam. |
"Are we reaching a peak, I wonder?" Richards asks. "It doesn't scare me, but it will make the competition tougher."
He's not scared because he's in charge of an efficient machine. Khorfakkan is probably the fastest port in the East/West trades. The terminal hit a record 245 box moves/hour in the second quarter of this year, using four super post-Panamax cranes. That smashed its earlier previous best of 237 moves, set just weeks before. At its best, Khorfakkan does 6l box moves/hour per crane; during normal operations it does 50 an hour - against an industry standard of just 25-30 moves/hour. Speedy Khorfakkan saves time. For ships burning 250 tonnes of bunkers a day at $440 a tonne, that time is precious. "And that's why I'm confident that, even with increased competition, we can still outperform," Richard asserts.
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