Ring of confidence
Forward-thinking ports should be seriously considering investment in LNG facilities. Credit: Wolfgang Meinhart
Stevie Knight argues that proactive ports will win the next growth battle
You can see the beginnings of it in short sea operations: the reliability of feeder services has grown and this means lines are gaining confidence in the services.
It’s because a growing number of smaller ports are accepting their role as a feeder outport even if it means a dip in their ambitions for grabbing the bigger ships, says Steve Wray of OSC.
So the reliability of feeder services has increased and in some places connections are already ‘seamless’, due in the main to the rising efficiencies of the transhipment hubs and the better frequency of the feeder services.
“In some places, if a box missed a transfer it could have easily been a week before the next feeder came through, which is the kiss of death to perishables. Now the gap is often down to just a day or two before the next available connection,” he explains.
So what you have is the “coherent ring of confidence” where reliability follows volume follows reliability.
It’s the same with a lot of ‘green’ technology. There was a time when, if you asked people about, say, eco-friendly electric handling equipment, they would have said, ‘let’s wait and see’. Now it’s something that many of the global operators routinely invest in, pushing others to do the same.
However, Mark Yong of BMT Asia points out it hasn’t really been about cost savings as running expenses are only a tiny fraction of the purchase amount and as for maintenance, “it is too soon to tell". He explains: “Port entities have made an effort to purchase electrical handling equipment – to be seen as being green.”
Although this “ring of confidence” is a response to the growing green agenda, the actions the ports are taking means that ‘environmental’ has moved from the periphery to the year-end reports.
Liquefied natural gas is, too, going to become part of many ports’ repertoire, says Dr Yong. “Gas - LNG – this will be the future. We have an abundance of LNG, with Exxon Mobil and Shell both beginning to produce more natural gas than oil,” even though at present there are only a handful of facilities.
But LNG has yet to find a foothold in people’s awareness. The problem is that at present, fitting a bunkering facility to the port is extremely expensive and the whole scheme is resting on that supply and demand spiral, a slow process to get off the ground.
However, Dr Yong says, the increase in ships, “will doubtless soon start to produce investors in port facilities, after all, the fuel gives you 100% reduction on sulphur emissions and a massive reduction in other pollutants”.
When, not if, LNG becomes a worthwhile pursuit, he says, you might find something of a market explosion.
The trick for ports will be to look for that ‘tipping point’ where the lines show enough demand to offset the price of the port side technology, and the price has come down enough for more than the most stalwart of clean energy proponents to take it seriously.
Images for this article - click to enlarge