01 MAY 2002

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Heavy competition in Med. Port sector

Competition in the Mediterranean shipping industry has become increasingly stiff, as major shipping lines continually search for the best deals to be had in the cut-throat industry. Currently the Malta Freeport is facing off against the southern Italian Gioia Tauro port and the fledgling Sardenian port in Cagliari in a bid to retain and win over new lines for their Mediterranean hubbing activities.

One of the biggest blows to the Malta Freeport of late is the news that Grand Alliance shipping consortium is to switch its Mediterranean hub from the Malta Freeport to Mediterranean rival Gioia Tauro, with the consortium expected to put some 200,000 teu a year through the southern Italian port.

The Grand Alliance comprises PO Nedlloyd, Hapag-Lloyd, Orient Overseas Container Line, Nippon Yusen Kaisha and Malaysia International Shipping Corp.

According to the Lloyds List yesterday, shipping lines involved in the Alliance have made little secret of their dissatisfaction with Malta over recent months, and the recent departure of the Evergreen line from Gioia Tauro had created a new opportunity at the southern Italian port. "We had very good reports about Gioia Tauro's operation," commented PO Nedlloyd director Tom Boardley. "It made us a very attractive offer."

Despite competition from Malta, which Lloyd’s says is struggling to retain its hub port status, and the new facility at Cagliari in Sardinia, which has failed to attract regular calls, Gioia Tauro has been successful in attracting other prestigious accounts, as carriers in the Europe-Asia trades find it necessary to adjust their schedules in the face of depressed market conditions.

New World Alliance members APL, MOL and Hyundai Merchant Marine have also bypassed the Malta Freeport by selecting Gioia Tauro as their Mediterranean hub, after terminating their service between the Far East and Mediterranean and serving the region by feeder from southern Italy instead.

Gioia Tauro's feeder connections, together with price, were the deciding factors in opting for Gioia Tauro, a director of one of the lines said. China Shipping Container Line is another that will be calling at Gioia Tauro after absorbing its Asia-Mediterranean connection into a direct service to northern Europe and providing transhipment services instead through an arrangement with Israel's Zim Line.

However, despite missing out on custom to Gioia Tauro, the Malta Freeport recently sealed a deal with an international consortium made up of K Line and Yang Ming Line, which is to use Malta as a hub for the eastern and western Mediterranean. The Freeport is expecting a significant volume of work as a result of the deal.

The Malta Freeport expects the new deal to gradually make up for the loss of Grand Alliance and as such expects this year’s projections to remain unchanged.


Copyright © Network Publications Malta.
Editor: Saviour Balzan
The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07, Malta
Tel: (356) 21382741-3, 21382745-6 | Fax: (356) 21385075 | e-mail: editorial@networkpublications.com.mt