By Brian Dunn
Several North American and European cities have developed economic clusters for various reasons. In Georgia, for example, Port of Savannah was unable to accommodate further terminal growth, which caused it to develop satellite terminal facilities and inland distribution. Adjacent to the port are two dock terminals, one owned by CSX (Tremont) and the other by Norfolk Southern (Savannah Intermodal Container Transfer Facility), which moved 314,623 containers (or approximately 563,000 TEUs), in fiscal 2013, a 4,600-container increase over fiscal 2012, itself a record year. Rail traffic constituted 19 per cent of the Port of Savannah’s total container volume.
The Port Authority has been particularly active in the development of logistic zones in the port’s periphery, implying the development of port-centric logistics zones. About 10 km from the port terminals are two large logistics zones; the Crossroads Business Park owned by Savannah Economic Development Agency and the Savannah River International Trade Park owned by Georgia Port Authority (GPA). They both replicate the revenue-generation landlord model where facilities are leased to tenants for various time periods. Some occupants have purchased land, however, and built their own facilities, such as retailer Target that completed a 2.1 million square foot distribution centre (DC) in 2007, and Ikea. “We began marketing the Savannah River International Trade Park in 2000 as a way to boost our import traffic,” explained Edward Fulford, Manager of Communications, GPA. “At the time, our trade balance was heavily in favour of exports. Since then, we have achieved a much better balance of 53 per cent export, 47 percent import, by containerized tonnage.”
The point of attracting DCs in proximity to the Port was to generate vessel calls to serve those DCs, he added. In turn, the vessel calls helped to guarantee the availability of a greater number of empty containers which support Savannah’s export market. Another reason why GPA took the step of developing the trade park was that, at the time, there was not enough private investor interest in financing DCs. This trend has now been reversed.
“Now, the Port forms a DC hub with more than four million square feet of available warehousing space, with an occupancy rate greater than 88 per cent. There are 102 DCs across Georgia that are 500,000 square feet or larger. Although the Port is unable to accommodate further expansion on its original land, Savannah is one of the few port cities with a wealth of available land in proximity to the port and to immediate interstate access (North-South on I-95 and East-West on I-16). The area is also served by two Class I railroads: CSX and Norfolk Southern,” said Mr. Fulford.
Since the mid-2000s, the Port has garnered greater interest among national 3PL (third party logistics) providers, both as big box retailers located distribution centres in Georgia (bringing their 3PLs with them) and as national 3PLs sought greater efficiency in serving their clients, explained Mr. Fulford. “Adding to that momentum was a change in the business model of the large retailers. Because they wanted to concentrate on their core business of marketing and retailing, many of the big box retailers outsourced their logistics operations. The impact of this was two-fold. First, it created a boom in Savannah’s 3PL market and it gave GPA an entree into the clients served by the 3PLs in other cities.
“Sometimes, however, 3PLs have chosen Savannah and brought their major clients with them. Two recent wins for Savannah include national logistics providers Kenco and OHL, which brought their clients Haier (appliances) and Dukal (medical supplies), respectively. Also, the national company Matson Logistics recently contracted for 65,000 square feet, with the ability to increase to 125,000 square feet. The move follows an earlier expansion to its Bryan County, Ga., operation, which added 237,600 square feet to its previous 135,000 square-foot facility.”
Virginia Port Authority (VPA) owns and operates several marine cargo terminals, although it’s not clear a cluster has been developed around them deliberately, according to VPA spokesperson Joe Harris. “Still, there are a lot of businesses located throughout the Commonwealth of Virginia because of the Port, many of which made the conscious decision to be here. VPA does have an economic development department that is focused on attracting port users and helping them find the best locations within the Commonwealth of Virginia. We’ll work closely with the Virginia Economic Development Partnership and local government to find the best fit.” Mr. Harris also noted that within the Hampton Roads Harbor, there are over 70 terminals with different focuses, including repair yards, grain/bulk terminals and coal piers, to name a few. “I would point out the fact that Norfolk is home to the world’s largest U.S. Navy base. And finally, Hampton Roads Harbor dates back to the Civil War, so there is a lot of maritime history here. Combined, all of these things are major contributors to this port cluster….”
The port of Rotterdam, the largest in Europe, itself is part of an even larger cluster of huge seaports located nearby in Antwerp, Le Havre and Amsterdam and is not far from Bremerhaven and Hamburg in Germany. All of these ports are located at the end of the industrial export transportation pipeline from Central Europe to the rest of the world, and at the mouths of those rivers or other transportation systems that facilitate the transportation of goods to European industries and consumers. In addition, particularly Rotterdam and Antwerp have developed huge interconnected petrochemical complexes that import, process and export a wide variety of petrochemical products. While the ports of Shanghai and Singapore are now busier than the port of Rotterdam, the Dutch port is still experiencing growth rates of approximately five per cent a year.
Rotterdam has a port cluster association, Deltalinqs, representing more than 600 companies in the area, as well as the Rotterdam Port Promotion Council with 250 members and Port Infolink working for the enhancement of information and communication technologies at the port. Over 3,550 companies are located in the cluster of the Port of Rotterdam and 87 per cent of these companies are categorised as being involved in cargo handling, transportation and logistics. The huge size of the Port of Rotterdam cluster also means that it attracts numerous companies whose primary activity is not transportation and logistics but some other business which connects well with the transport and logistics sector. As a result, Port of Rotterdam hosts a cluster of energy and chemical companies which presently account for more than 50 per cent of the revenue of the Port.
In fact, Rotterdam is home to Europe’s largest petrochemical complex. In order to maintain its position and to compete successfully with industrial clusters in other parts of the world, the Rotterdam complex will have to change in a number of areas as part of its Port Vision 2030, including a transition to sustainable energy generation and bio-based chemicals, which is in full swing.
However, there is a downside to Rotterdam’s success. Demand for land is high and congestion is increasing. For example, logistics company Waalhaven Group B.V. has relocated 200 km outside of Rotterdam because of lower land prices, more space and better access to infrastructure. The move has also attracted new customers to the company.
Antwerp is the second largest port in Europe and an important link in international trade. Its important advantages such as its multimodal access and its central location enable it to distinguish itself from other ports. However, competition is fierce and the growing volume of world trade demands constant development of the logistics chain, including ports. To remain internationally competitive, Antwerp must not only maintain its advantages, but also develop and expand them further.
Alfaport Antwerp is the strategic partner in this process at the local, Flemish and federal level, collaborating in the sustainable development of the port and the creation of a secure, investor-friendly climate for businesses. It is made up of five industry associations which between them have more than 400 members employing over 22,000 directly and thousands more indirectly. The five associations are the Antwerp Stevedores Association, the Antwerp Shipping Federation, the Royal Belgian Association of Shipowners, the Royal Association of Trafficflow Controllers and the Association for Fowarding, Logistics and Freight Interests in Antwerp.
Alfaport’s policymakers and member associations keep a close tab on changes in regulations that may have an impact on the port. It keeps its members informed through its website, press releases, newsletters and various publications such as the quarterly magazine Portaal, annual report and e-newsletters. Alfaport also reports on progress in various projects that it monitors on behalf of the port community, in addition to organizing networking events such as port lunches seminars and political debates, often in collaboration with other partners such as Antwerp Port Authority and rail operators. “We provide a variety of services to our port community besides lobbying and representation towards government or third parties,” said Alfaport spokesperson Laurens de Buck. “We have our Antwerp port community system for electronic communications and exchange of data between different actors in the port of Antwerp (B2B, B2G, G2G). We provide specialized training for the port community, customs information and services, environmental expertise and best practice tools, information concerning licenses, regulation, general information and so on, and we just launched a new newspaper with port, trade, shipping and logistics news.”