This month, we will take you to the port of Valencia, located at the east coast of Spain. Due to its strategic location, strength of its hinterland, extensive network of maritime connections and quality as well as reliability of its services, the port of Valencia can be seen as one of the leading ports in the Mediterranean. Let’s have a closer look at this port!
ESPO: Can you briefly tell us about Valenciaport? What are its main characteristics and challenges?
Valenciaport: Valenciaport is a core port of the EU TEN-T Mediterranean Corridor, located at the east coast of the Iberian Peninsula in the south of Europe. According to the figures of 2015, it ranks 9th among EU ports in terms of total cargo throughput. It specialises in general cargo, accounting for over 90% of cargo volumes, and in particular containerised cargo which positions Valenciaport as the 5th Container port in Europe and the first in the Mediterranean. November 2016 closed with a total cargo volume of 65.4 million tons, 1.46% more than in 2015, and 4.33 million TEU container traffic, 1.81% more than 2015. We expect record figures by the end of this year, reaching 71 million tons and 4.7 M. TEU, respectively.
Valenciaport is thus a major gateway to Europe in Spain and plays also a significant role as a redistribution centre in the western Mediterranean area since some 53% of its containerised cargo is transshipment. The main regional and national industrial sectors benefiting of the facilities and services offered by Valenciaport include car and equipment manufacturing, building materials, agricultural products, consumer goods, energy products, iron and steel products and chemical products. Valenciaport is the main gateway in Spain for trade with China (Asia), the USA (America) and Algeria (Africa), among many other countries.
Valenciaport builds its leadership on its privileged location, the strength of its hinterland that is made up of more than 40,000 companies experiencing its performance, the extensive network of maritime connections served with frequent regular services by major shipping lines and alliances, and the quality and reliability of their services, based on modern adapted infrastructures and facilities run by a Port Community committed to meet client’s needs.
Our main challenges are related to adapting to a rapidly changing environment, characterised by an increasing uncertainty on the evolution of trade patterns, the impact of the technological revolution that we are experiencing and that is led by the fast development of the Information and Communication Technologies, the growing demand for green energy sources to abate climate change, and the consequences of the long-lasting global economic crisis that started in 2008 and the derived political unrest located in various world countries, that have hit especially Spain, Europe and some neighbouring regions.
As a result, the focus of our strategy concentrates on market orientation, service efficiency, intermodal and logistic integration, and economic, environmental and social sustainability, supported by a timely incorporation of new technologies.
ESPO: Valenciaport is Spain’s largest container port. How is the business evolving? What are the main challenges?
Valenciaport: As a deep-sea container port, we are facing lower container trade growth rates than in the past and we are experiencing the consequences of overcapacity in maritime transport, due to the extensive introduction of ultra large container vessels. This leads to a continuous change in the shipping lines scenario and putting enormous pressure on the provision of port services.
Therefore, our main challenge is to remain competitive, adapting facilities to the new market requirements, increasing productivity and reducing port costs. Thus, we are working actively in cooperation with our Port Community service providers in a Competitiveness Plan aiming at improving service quality while reducing port costs by 15%.
ESPO: What are the main areas of competition that you face from competing EU ports? Are you experiencing a lot of competition of non-EU ports?
Valenciaport: Maritime transport is in a context of increasing competition. As noted above, the market is concentrating (shipping lines mergers and alliances) and demand is weak. In this context, the Mediterranean port competition is becoming fierce, as the contracting demand asks for fewer ports of call and the need to adapt to ultra large container vessels.
As a mix hub-gateway port, we are affected by the hinterland competition and the evolution of the transshipment market in the western Mediterranean. In fact, as a port sharing the MED basin with a number of non-European ports, we are facing increasing competition of these ports and the lack of a level playing field in the area.
ESPO: A good access to the hinterland is indispensable to get goods to the desired destinations. Could you briefly tell us how the port is connected with the hinterland? Are you planning new projects to facilitate these connections?
Valenciaport: Valenciaport’s hinterland integrates in a 350 km radius more than half of the Spanish population and 55% of the domestic GDP. We are connected to all major cities and industrial areas by high-capacity highways. The rail connection with the Madrid region in central Spain, the centre of gravity of economic activity in the country, is quite competitive since 30% of cargo volumes with the Madrid area as origin/destination is moved by rail. However, we are working to improve our rail connections with other areas in the hinterland.
It should be noted that the Aragón region is quite a strategic one for us since it hosts PLAZA (Plataforma Logistica de Zaragoza), one the major logistic platforms in the country and it is the bridge to connect the central Mediterranean regions with the Cantabria regions in the north-west of Spain. The actual rail corridor is very poor, so we have recently decided to invest 50 million euro to improve the rail freight line between Valencia and Zaragoza, taking advantage of the Spanish Port Land Accessibility Financing Fund. This figure is on top of other already planned investments, worth 13 million euro to enlarge sidings along the line to allow circulation of 750 m long trains, worth 34 million euro for the last mile rail connection and support station to the Sagunto port basin (run by Valenciaport). In summary, it is planned to invest some 100 million euro to improve our rail connections.
Other important investments planned at present are related to the adaptation of rail facilities inside the port areas to the European rail gauge system that is being implemented along the Spanish section of the Mediterranean Corridor, so as to make the development of rail freight services competitive.
ESPO: The cruise and ferry business is an important activity in your port. What are the main challenges? Do you foresee a bright future for the cruise and ferry business in your port?
Valenciaport: Passenger movement in the Port of Valencia has grown significantly in 2016, estimating that we will overcome a total figure of 900,000 passengers, which accounts for more than 21% more than the figures of 2015.
This growth is mainly the result of two new ferry services connecting Valencia and Mostaganem (Algeria) that became operational in mid-2016 and have opened international ferry services at Valenciaport in the so-called Straight Pass Operation. Ferry passenger figures have jumped to some 500,000, an increase of about 33% in comparison to the 2015 figures. This trend is expected to consolidate in 2017.
Cruise services are estimated to be reaching some 181 calls in 2016, 7 more than during the previous year, with a movement of more than 405,000 cruise passengers, some 9% more than in 2015. In 2017, we expect an increase of cruise calls up to 215 calls with 29 cruise line services moving more than 450,000 cruise passengers.
These good prospects, both for cruise and ferry business, have encouraged Valenciaport, firstly, to launch in 2017 the procurement of a new cruise terminal to support the passenger movement in the three cruise quays for large cruise vessels located in the new north-east basin in the Port of Valencia. Secondly, to plan a new international terminal for ferry services to be launched as soon as possible, to support the consolidation of the Straight Pass Operation, that is expected to keep growing steadily during the coming years as a result of economic development in northern Africa.
On top of that, Valenciaport is working together with municipal, regional and national authorities to provide better facilities and services to cruise and ferry passengers visiting the city, reinforcing the comfortability and security conditions during their port access, stay and passage.
ESPO: How is Valenciaport engaging itself to foster innovation? Is Valenciaport actively involved in R&D projects to improve the competitiveness of the port?
Valenciaport: Innovation is one of the key values of our strategic development and of the current 2020 Strategic Plan. Consequently, we devote important resources and efforts to enhance knowledge and capacity of our personnel and of the Port Community, on the one hand, and to develop Research and Development projects to implement innovative and enhanced services, on the other hand.
The main R&D lines we concentrate on are: intermodality, with a focus on maritime-rail developments, maritime and port operations, intelligent logistics, security, sustainability and energy, and port-city integration.
To foster innovation, on top of the higher port authority management commitment, we have set up a non-profit organisation, the Valenciaport Foundation (VF). It is chaired by the President of the port and integrates various regional institutions, two public universities and various leading members of the Port Community. The VF acts as a think tank for the Valencia Port Community and has become a recognised European Port Cluster Research & Innovation Centre in the region leading and collaborating in numerous transnational R&D projects, taking advantage of EU funded programmes. It runs now for over 10 years and has participated in more than 200 projects with more than 420 partners, having organised more than 290 training courses with some 29,000 lecture hours attended by more than 7,300 students. In 2016, VF has promoted and participated in projects worth over 14.6 million euro, assigning 12.3 million euro projects to Valenciaport cluster members.
ESPO: Could you describe the added value of Valenciaport to the city and the wider region?
Valenciaport: Valenciaport has a firm commitment to serve general public interest, economy and society, being a key player for the main regional and national industrial sectors, both in terms of import and exports, helping companies to trade abroad and be more competitive.
As a result, Valenciaport handles 11% of the total Spanish foreign trade (18% of exports & 8% of imports) and 40% of containers. As an example of its penetration in the hinterland, Valenciaport has a share of more than 60% of container movements in the Madrid area.
But, further to this, Valenciaport generates a huge added value to the local economy, accounting for an estimated 1.65% of the Regional GDP and generating around 19,000 employments. Valenciaport initiatives, like the cruise traffic promotion, provide the city and the region with competitive advantages (in this case, to the tourism industry, one of the biggest in the region).
ESPO: Valenciaport has already achieved four times the Port Environmental Review System (PERS) certification (2003, 2006, 2013, and 2015), which is the only port-sector specific environmental management standard. In view of this, could you briefly describe the port’s environmental policies?
Valenciaport: Valenciaport has been committing itself for over 30 years to environmental protection and sustainability of all activities around the port area. This commitment led in the late 90’s to the adoption of its own port environmental management system, labeled ECOPORT.
As a result, a first policy statement was adopted in the year 2000, which has been revised twice, the last time in 2016. The statement inspires the efficient use of resources and the adoption of plans and programmes to evaluate, prevent, control or correct environmental effects of port activities using the best technologies available. In addition, it commits the port authority to develop awareness and training activities and to communicate our environmental performance to the society. The revisions have introduced mandates to support involvement of port community members in adopting environmental management programmes and to focus on the use of energy.
Valenciaport has participated in many national and international projects to improve its environmental performance and has become a reference at European level in port environmental management, leading various cooperation projects, such as Ecoport II, Climeport, Greencranes and Greenberth.
Valenciaport has been a pioneer in verifying its Carbon Footprint under ISO 14,064-1:2012 by Lloyds. It has reduced the Carbon Footprint of the whole port area with 17.31% since 2008, when it was first measured, down to 2.58 kg CO2 equivalent per cargo ton in 2014, in a period in which cargo volumes grew more than 14%.
The commitment with environmental sustainability has also allowed Valenciaport to a 25% energy efficiency improvement in the six-year period mentioned above, moving down from 8.76 to 6.60 kWh per cargo ton, which has allowed us recently to get our energy management system ISO-50,001 certified.
ESPO: ESPO is a partner of PORTOPIA, an FP7 project that aims to measure port performance. What is Valencia’s approach for measuring the port’s performance?
Valenciaport: Valencia is aware of the importance of measuring port performance as a way to assure the quality of the services provided to its customers and to evaluate the impact of the strategies developed to improve it. Even if we were not direct partners of the PORTOPIA Project, we have followed its work carefully and eventually we contributed with information and advice when required for the previous PPRISM Project and other related initiatives.
Internally, we have developed our own Balanced Scorecard, where we pay special attention to the operational (and thus performance) objectives and indicators. In this way, a set of those indicators are consistently gathered and evaluated and any deviation from the goals previously defined is carefully analysed. Valencia is also actively contributing with its experience to the UN initiative in the development of a common Port Performance Scorecard within the framework of the UNCTAD’s Trainfortrade Port Management Program.
Additionally, the Port of Valencia publishes annually a Sustainability Report including a wide range of sustainability indicators, covering economic, social and environmental issues affecting the port, in order to share them with our stakeholders.