The largest port in a ~50 million people country

 

 

 

 The port of Valencia is the biggest and most important in all Spain if you measure it by container traffic, it is ranked top 30 worldwide and Europe’s top 5 only behind the likes of Rotterdam, Antwerp, Hamburg and Piraeus.

Despite being pretty big, the port will be enlarged in the upcoming years, boosting even more its actual position; it is already planified and approved by the pertinent authorities, the construction process hasn't started yet, but it is a matter of time.

Thanks to the enlargement the port will climb up some positions in the rankings, both global and European.

It has a traffic above 5 million containers each year and the numbers show it will keep growing. It has a lot of container traffic coming from China thanks to the Suez Canal.

They have the Mediterranean port leadership based on:

Its privileged location: this provides various advantages, it is the the closest commercial port to Suez Canal which is the main route for interoceanic shipping lines. Also has a high capacity for concentrating and distributing traffic in the Mediterranean.

After the cargo arrives at the port it has to be moved by land transport, Valenciaport provides a reduced land transport time and well conexions to distribute goods to and from all areas of the Iberian Peninsula.

Its location is close to southern European and north African countries. These countries are becoming more and more relevant lately and they are expected to continue in that way. So it will keep growing.

It has good roads and railways connections, because of that it is considered the “natural” port of Madrid and an essential platform for the peninsula itself.

Another important thing are the regular shipping lines, they provide a regular container traffic and an extensive network for goods transportation.

The port guarantees quality services thanks to the infrastructure and high efficiency activities it offers.

Valenciaport has a strategic plan developed for the years coming up, it has new challenges and new economic situations. It is important to promote the competitiveness of the port, but we shouldn’t forget about the environment, that is the reason for the planned economic and social sustainability, environmental sustainability and the alignment with the european transport policies.

The infrastructure around the port is going to be improved, the railway remodeling is already financed, the port itself spent about 230 millions in order to build new train tracks all the way to the north of Spain, so it can transport the goods faster. Also, the train transport reduces the contamination due to the use of electricity, that’s why the port is promoting intermodal transport.

 

The air quality is being improved at the same time the noise levels are getting reduced more and more, by now, it is planned to be self-funded.

The actual position of Valencia port is a mix in between local export and import, and being a logistic hub, so the port doesn’t lay all its eggs in one basket, if we look at Valenciaport's monetary situation, it can be seen from the annual accounts that more and more traffic is coming in, even if we look at the year 2020.

The port plays a fundamental role in the modernisation and growth of the Valencian Community and partially of Spain, offering thousands of jobs (around 37,000) on the east coast of the country, from the port of Gandía, through Valencia to Sagunto.

It employs a multitude of trades: stevedores, businessmen, customs agents, shipping agents, freight forwarders...

The economic impact it produces varies depending on the sector and the situation, it can be a direct impact, thus affecting the population, indirect, providing wealth in general to the country or related to the economic sector, improving the goods and services that people can receive.

 

In addition to all of the above, the port of Valencia has a multitude of projects underway, of all types.

• Greenberth: This is a project directly related to a reduction in the port's energy consumption and an increase in the use of renewable energies.

• Contain: Financed by the European Union, it is part of a set of projects by many ports in Europe to improve container control.

• Susports: Like "Greenberth", it aims for an environmentally sustainable port, financed by the European Union.

• B2MOS: This project is particularly interesting as it proposes a growth in port activity thanks to the facilitation of communication between the companies located in the port and the main maritime routes.

• e-Mar: It plans to make use of technologies to support a common virtual market in the European Union.

• Futuremed: Seeks to improve the competitiveness of the port of Valencia through the use of new technologies, procedures, machinery, etc.

• Monalisa 2.0: Aimed at promoting different initiatives financed by the European Commission.

• Sea Terminals: Programme designed to improve port terminals and make them more efficient in terms of both energy and working speed.

• Mednet: The aim of this project is to improve the network of port authorities, to get experienced staff and to simplify the lifting of goods.

• Capacity 4 Rail: By 2050 at the latest, a modernisation of railways is planned throughout Europe. This will make rail freight transit more accessible, cost-effective and useful.

As for the expansion of Valenciaport, it is planned to specialise in transoceanic container traffic, as mentioned above it has to be done in a sustainable way.

Valenciaport has set up five main actions to make the port more environmentally friendly and less polluting.

- Water Quality -

The Valencia Port Authority monitors and controls the quality of the water in its ports.

- Air Quality -

Valencia monitors air quality through an Air Quality Control Network.

- Waste Control -

Correct management of waste generated by the activity of concessionary companies and ships in the port facilities.

- Noise Quality -

The Port Authority of Valencia monitors and controls noise emissions from the port environment.

- Waste Management -

The APV has an Internal Emergency Plan and a Contingency Plan, in addition to the respective Emergency Plans of the various port concessions, for the fight against pollution caused by hydrocarbon spills.

Also, there are three main ongoing projects:

CORE LNG AS HIVE PROJECT

The objective of the project is the development of an integrated, safe and efficient logistics chain for the supply of liquefied natural gas, LNG (small scale and bunkering) as a fuel in the transport sector, especially maritime, in the Iberian Peninsula.

SBE H2PORTS PROJECT

The project will take into account transversal issues such as the human factor, regulation, the future roll out of the technology on a fully commercial basis and the raise of awareness of the potential of hydrogen adoption as an alternative fuel in port equipment.

PROJECT ECCLIPSE

ECCLIPSE focuses on analyzing the impact of climate change on seaports, developing prevention and action strategies that can minimize its effects.

 

 

To conclude this analysis, we will discuss the rate of containerised freight transport in Valencia since this is a topic that is globally rather unknown but is data which must be processed and which can therefore gain greater recognition.

To begin with, and therefore to put ourselves in context, the VCFI (Valencia Containerised Freight Index), is the index developed by the Port Authority of Valencia in order to reflect the evolution of the market rates for the export of containers by sea. Such an index will therefore be of great use to hauliers the Commission will be able to use it to predict the evolution of the freight rates that will be charged on the basis of the area of interest to them as such data are determinant for the cost of export operations.

In the infographic, we can see the evolution of the index as discussed in the previous section; evolution from 2018 to 2021 and this is a growing trend, reaching its highest peak on 10/2021.

On the other hand, for the year 2019, the VCFI index, the monthly variation and, the Cumulative Variation, the Valencia Container Freight Index, has seen a growth of 4.23% in November to stand at 3,902.15 points, but, at the end of the month, a it is worth noting that in recent months, specifically since August, growth figures have been lower than in previous months.

 

 

 

In addition, the most notable increases have been on the East Coast of Africa, with an increase of 8.6%, Central America and the Caribbean, with an increase of 11%. In addition to this, fuel prices have fallen.

If we look at the index from a demand perspective, there has been a fall in demand across the board, with a steeper fall for automotive products and electronic components, but in terms of overall container traffic, growth has varied, but has been maintained since April.

However, the supply of this market remains high and, therefore, shipping lines use all available vessels, with the commercially inactive fleet remaining at minimum levels and therefore recording the following data: 

 

• November: 57 inactive vessels (164,540 TEU), which indicates 0.7% of the active fleet,

• October: 143,530 TEUs, with a share of 0.6% of the active fleet.

As we can see, in November there was an increase compared to October, since in that month there is a higher volume of demand.

Although November saw an increase in fleet utilization compared to October, the price fell by 2.39%:

• October price: $83.54

• November price: $81.54 

Having commented on this, with respect to the Western Mediterranean sub-index, in November, a drop of 1.78% was detected with respect to October.

As far as Valenciaport's traffic is concerned, there is a continuous growth towards Morocco, therefore, above the levels reached both in 2019 and 2020.

In addition, export traffic concerning Tunisia has increased in recent months, although we have been below the 2020 rate, we have exceeded the 2020 rate.

We consider this to be a point of interest because, as we said at the beginning of this article,At the global level, people do not know this data, and it is also interesting to know the levels of exports and where they are going.

Finally, as far as the Far East is concerned, in November, freight fell by 1.31%. This is quite a high percentage compared to the same month of the previous year. In addition to this fall, Valenciaport export flow to China also decreased and this is all the more worrying given that China is the most important market.

Also, on a positive note, the heavy congestion in the port of China, what we know as the Bottleneck, has decreased, which automatically leads to increased availability of vessel capacity.

This is not to say that such congestion no longer exists, as this is still the order of the day and therefore shipping times remain unreliable.

This is something of which we should all be aware, as the fact that this congestion exists, is quite negative at the global level due to the fact that, as mentioned above, China is currently the most important market and therefore the congestion in the port (bottleneck) leads to a delay in all shipments and therefore to an increase in the cost of the products. 

We hope you have found this information of interest, as this is something that affects us all globally, even if we do not realize it directly.

 

-Miguel Agudo   

  

-Natalia Poyato