INTERVIEW: Stephen Ogden, director of operations at KCT
A comparison with Jebel Ali is what springs easily to mind when thinking about Khorfakkan Container Terminal, it is after all the second-busiest container port in the UAE and the third busiest in the Middle East after Jeddah in Saudi Arabia. Yet, when looking at the port from above it seems an unfair comparison, because it is so much smaller, and yet handles just under a third as much cargo. How is this possible, and what challenges have the port operators Gulftainer had to overcome to not only achieve such a feat, but do so with great efficiency?
According to Stephen Ogden, group director of operations at Khorfakkan Container Terminal, it comes down to efficient use of the yard, as well as deployment of the latest IT technologies. “You have to carefully examine yard utilisation and layout,” says Ogden. “Containers have a dwell time of no more than seven days because of the weekly rotations of these vessels, so you need to make sure you can service your feeder vessels to get containers out of the port.”
Working with fairly limited space, KCT is managing to accommodate not only mainliners, but ever-growing feeder vessels as well, because of its reputation as a transhipment hub for container traffic. The feeder vessels are growing because of the cascading of tonnage as mainliners grow in size.
“These new mega container vessels mean there is a cascading down of tonnage for the other vessels, so feeder vessels are getting larger,” explains Ogden. “Whereas the average used to be 1,200 to 1,600-teu for feeder vessels, now we’re seeing feeder vessels of more than 3,000-teu.” The challenge is put into better perspective when one considers that around a decade ago, a 4000-teu ship was considered a decent-sized mainliner.
“We used to operate primarily with top loaders and reach stackers, but now we have a fleet of RTGs that allow us to utilise the space on the terminal to greater effect,” says Ogden, adding in response to our question that KCT uses RTGs as the backbone of the terminal yard operations because they’re more flexible than RMGs. “We’ve also built an in-house terminal operating system to assist us in using the port infrastructure to full effect.”
Gulftainer’s IT system were recently upgraded by Cisco Network Infrastructure and Support Services to deliver maximum uptime, high redundancy, high throughput, rapid deployment, enhanced access, and automated operations, according to Osama Zakaria Eissa, area sales manager for Cisco UAE. What that means is that Gulftainer is able to improve response rates to customers and increase productivity.
The importance of a world-class IT network is underscored by Ogden’s simplified example of how the dynamics of international shipping are changing due to the emergence of the shipping alliances. With more than 85% of container traffic coming into KCT bound for transhipment, a shipping alliance such as the O3 (CMA CGM, UASC and CSCL) complicated the logistics of the port significantly.
“If each shipping line in an alliance is serving ten destinations and there are three members of the alliance, such as O3, then a single ship call might be unloading cargo for three times as many destinations,” says Ogden. “That’s a simplistic view, but it shows how complicated the logistics of stacking containers becomes.” In fact, port operators on the West Coast of the United States have pointed to the shipping alliances as the cause of much of the chronic port congestion in recent months because their logistics models are out of date.
The alliances are also leading to larger container ships being deployed on transhipment loops – CMA CGM’s new 17,000-teu monster CMA CGM Kerguelen in early June broke all records for container handling at KCT. Ogden says that, at present, the terminal is easily able to accommodate such vessels. “We have twin lift and tandem lift STS cranes, it saves times and that’s what the client relies on us to do. We’re able to maintain 200 moves an hour.”
KCT will in the future need to install upgraded STS cranes, though because as vessels get larger, they’re getting wider rather than longer and the cycle time for the crane working in and out of the ship gets longer. “To maintain these performance numbers, we have to make sure our cranes can perform, and we also have to make sure we have the space to prevent congestion and ensure we’re able to service the ULCSs as well as the feeders.”
Khorfakkan Container Terminal is planning to spend several hundred million dollars expanding the entire terminal to accommodate larger mainliners, and more of them. Three possible scenarios for expansion are being considered: the first involves lengthening the entire terminal by 200m, with a diagonal top end to ensure that navigation through the basin isn’t affected, or the moving of the general cargo terminal elsewhere to make more room for container handling. The third scenario would see an additional terminal developed on the breakwater itself.
“When the time is right, also bearing in mind how long it will take to do, and when our clients can give us a commitment for volumes once the alliances are settled, then we’ll make a decision regarding which of the three expansion plans is best,” Ogden confirms. Maritime & Ports has covered in detail the expansion of port facilities in the region, leading to the inevitable question: are these major expansion plans throughout the region feasible, especially given the recent collapse of the Asia-Europe freight rates?
“What we do is look at our volume increases and speak with the shipping lines on a regular basis,” says Ogden, adding that the current state of the shipping industry has led to Gulftainer meeting more regularly with clients. “Whereas back in the day we might have been meeting with them annually to discuss plans for next year, now we’re meeting every two or three months because the dynamics of the industry have changed so much.”
The Asia-Europe trade is just one part of a larger puzzle, however, because KCT is also looking at the dynamics of the market in the final destinations: the sub-continent, Africa and the upper Gulf, because of its position as a transhipment terminal. “Iraq, for example, is seeing phenomenal growth in traffic through Gulftainer’s Iraq Container Terminal at Umm Qasr Port, so we’re seeing steady growth in transhipment cargoes through KCT,” says Ogden.
With KCT considering major expansion plans, Maritime & Ports wondered what Gulftainer’s plans were regarding automation, especially in light of Jebel Ali Port’s clear move toward the technology with Terminal 3. “Automation will undoubtedly continue to see growing interest, but there is an incredible capital expenditure needed to make a terminal fully automated,” says Ogden. “It is something we’re considering and we’re watching the advances in this technology, but the benefit in terms of increased productivity needs to clearly outweigh the expense and it remains to be seen if that is the case.”