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Barcelona: Challenging for the Mediterranean Logistics Crown

Barcelona, traditionally an important cultural centre and a major tourist destination, has fast evolved into a key logistics player in the Mediterranean and Southern Europe, thanks, in part, to its strategic geographic location. Hong Kong logistics players are now poised to benefit from the city’s success in challenging for the region’s logistics crown.

Growing relevance of the Port of Barcelona

While it is true that the northern European ports, such as Rotterdam, Antwerp, Hamburg, Amsterdam and Bremerhaven, still account for the lion’s share of Europe-Asia cargo flow, handling more than 75% of the traffic or more than 19 million TEUs annually, southern Mediterranean ports, such as Barcelona, are steadily coming to play a more significant role in international maritime logistics. This is largely due to their access to the Mediterranean through the Suez Channel and their improving intermodal transport infrastructure.

It is estimated that, currently, about one-quarter of the cargo flows between Europe and Asia pass through the Suez Canal and various southern European ports, notably Marseille (France), Genoa (Italy), Valencia (Spain), Algeciras (Spain), Barcelona (Spain) and Sines (Portugal). This trend is set to boost the growth of long haul shipping routes from Asia to the East Coast of the US via the Suez Canal, as well as the popularity of short sea shipping[1] among the Mediterranean ports.

That said, since 2008, the Port of Barcelona has seen a gradual rebalancing in the ratio of its incoming (imports) and outgoing (exports) cargo throughput, with a continued increase in the importance of outgoing cargo movement. This trend is basically in line with the country’s shrinking imports during the European crisis and the ensuing export-led economic restructuring. The reduction in the share of incoming cargo in the Port’s overall goods traffic, from 61% in 2008 to 51% in 2013, serves as a clear indicator of how the Port and the country are transforming from an importer into an exporter.

The Port of Barcelona, through its connections with some 850 ports and 450 regular consolidated sea lines worldwide, handles more than one-fifth of Spain’s maritime trade. In 2013, cargo throughput in the Port of Barcelona was more than 41 million tonnes and 1.7 million TEUs. The Port is also one of Spain’s most important assets in terms of national and regional tourism development, receiving 2.6 million pleasure cruise passengers in 2013. Having seen passenger traffic grow by 25% between 2008 and 2013, the Port has developed into one of the most popular - if not the most popular -pleasure cruise destinations in Europe.

 

Photo: The Port of Barcelona
The Port of Barcelona is increasingly popular among international shipping lines and pleasure cruises (1)

 

Photo: The Port of Barcelona
The Port of Barcelona is increasingly popular among international shipping lines and pleasure cruises (2)

 

Despite a mild dip in total cargo throughput in 2013 (down 2.2% in TEUs and down 0.3% in tonnes), the growing maritime flows between Europe and Asia saw China-bound containerised cargo from the Port of Barcelona grow by 12% in terms of TEUs and 4% in terms of tonnage last year. Accounting respectively for 12% and 22% of the cargo loaded and unloaded at the Port of Barcelona, China was by far the biggest user of the Port’s containerised cargo operations in 2013.

Instead of competing for high-volume cargo operations with other major container transshipment ports in Spain - such as Algeciras (a Western Mediterranean hub for Maersk and Korean shipper Hanjin) and Valencia (where Mediterranean Shipping Company [MSC] has its own terminal) - Barcelona, located far to the north of the major Asia-Europe trade lane, has positioned itself as ideal for handling value-added goods, particularly automobiles, machinery and spare parts, electronics and various types of consumer goods. To this end, the Port of Barcelona has proved successful in capturing a market share of more than one-third of Europe-Asia cargo traffic and nearly 40% of Sino-Spanish shipment.

To foster its role as a major Mediterranean logistics hub and the southern gateway to Europe (covering the hinterland in the Iberian peninsula and southern France, as well as North Africa and Latin America), the Port of Barcelona has teamed up with the ports of Marseilles and Genoa in a joint marketing effort - the Intermed – in a bid to promote their potential for helping Asian exporters to achieve substantial savings in time and carbon dioxide (CO2) emissions  compared with shipments to northern ports.

As a real alternative to the northern European ports, according to Intermed’s estimates, Mediterranean ports can help reduce the increase in CO2 emissions from Europe-Asia traffic over the next decade from 199% to 47% by cutting the travelling distance. For instance, by channelling via the Port of Barcelona, a container shipped from Asia destined for Lyon in France can cut off up to 1,900-miles travelling distance compared to transiting via the Port of Antwerp in Belgium.

Hong Kong logistics players giving Barcelona new resonance in Europe-Asia trade

In fact, many forward-looking Asian port operators such as the world’s second  largest container terminal operator, Hong Kong-based Hutchison Whampoa (through its subsidiary, Hutchison Port Holdings or HPH), have long appreciated the significance of the Mediterranean ports in terms of global logistics and have, therefore, deployed extensive port investment across the region. At the same time, a number of Asian logistics service providers, such as Hong Kong-listed Kerry Logistics Network (a major logistics player in Spain since 2005), have strengthened their business presences in various strategic port cities.

 

Picture: Major seaports in Spain
 

 

With the opening of the group’s first semi-automated deepwater container terminal – Barcelona Europe South Terminal (BEST) in September 2012, for example, HPH (under its Spanish subsidiary, Terminal Catalunya [TERCAT]) is looking to profit from the traffic rebalancing between northern and southern European ports. This move is complementary to the Trans-European Transport Network (TEN-T) initiative adopted in November 2013 by the European Commission in order to strengthen the pan-European transport infrastructure and reduce logistics and environmental costs in Europe.

 

Photo: BEST is the first semi-automated terminal in the HPH Group
BEST is the first semi-automated terminal in the HPH Group and the most technologically-advanced port development project in Spain

 

In order to accommodate the trend toward bigger container vessels (such as Maersk Line’s Triple-E class ships that can carry up to 18,000 TEUs, 2,500 more than the current largest ship, the Emma Maersk), many of the Mediterranean ports, including the Port of Barcelona, have carried out related expansion work. When BEST’s expansion is completed (provisionally in the first half of 2015), it will be the only port in the region capable of handling the four biggest vessels simultaneously with 27 automated blocks, 11 gantry cranes and a 1,500 metre-long dock with a depth of at least 16 metres along the whole berth line. BEST, with its eight-track railway facility, also has the biggest on-dock rail terminal in the Mediterranean. High-speed rail connections with Toulouse, Lyon and Paris have been running since December 2013.

Following in the footsteps of BEST and the Kerry Logistics Network, Hong Kong logistics players can consider adding Barcelona to their service packages, while expanding their operations in the Mediterranean and southern Europe. They can then look to capitalise on city’s port and rail facilities in order to benefit from the growing Europe-Asia trade flows.


[1] Short sea shipping (SSS) refers to maritime transport services which do not involve an ocean crossing.

Content provided by Picture: Louis Chan
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