Spanish ports adapt to difficult times
Against a downturn in Europe through 2019 and lower domestic sales, Spain maintained production thanks to a resilient export trade, supported by efforts to increase terminal capacity and improve throughput
While sales in Spain showed a 5% decline over 2019, production was maintained at around 2.8m, according to figures from the Spanish automotive manufacturers’ association (Anfac). That was a relatively good result compared with production figures from other European countries, such as Germany (-9%), Italy (-19.6%) and the UK (-14.4%),
Overall vehicle exports from Spain grew 0.2% to 2.3m units, though passenger cars (sedans) were down marginally by 0.3% to 1.8m. Germany and the UK increased the number of vehicles they imported from Spain, with rises of 12.5% and 13.6% respectively, while Italy increased imports from Spain by 1.7%. Together with France, which remained flat, these four countries represent around 65% of vehicle exports from Spain.
According to Anfac, there have also been significant increases in exports to markets beyond Europe, including Japan, South Africa, the United Arab Emirates (UAE), Israel and Morocco (see table).
Volume increase to destinations beyond Europe
Transhipment and export
Barcelona, which had lost ground to Valencia in 2018, recovered its position as the top vehicle handling port in Spain last year, though this was mainly to do with the greater losses sustained by Valencia. Volumes through Barcelona fell 4% compared with the more sizeable drop of nearly 12% at Valencia.
Barcelona port’s commercial manager, Lluís Paris, admits 2019 was not a brilliant year in terms of numbers but believes that is down to the more general situation affecting the sector rather than Barcelona’s performance, and the port has done well in terms of imports and intermodal.
“On one hand we’ve seen the imports remain at the same level, [though] with a nice increase in our Japanese imports by a good 20%, as well as a consolidation of Morocco as a growing import partner,” he says. “On the export side, we detect good behaviour in the UK, and Italy and Greece going back to normal, while Turkey and the Middle East still remaining weak.”
Intermodal traffic has been given a boost by rail shipments to the port from central Europe and the returning trade, on a service provided by DB Schenker.
“So far we are talking about land traffic for domestic distribution and Spanish exports into central Europe, but we are consolidating a long-haul rail connection while contributing to a huge emissions savings,” says Paris.
Losses at Vigo were to some extent helped by higher transhipment volumes (+57% to almost 56,900) but the port also pointed to positive export trade.
“Exports have behaved very positively, mainly because of the large increase in Belgium, Germany and the UK, perhaps to increase their vehicle stock due to the possibility of a hard Brexit in 2019,” a spokesperson for Vigo port authority tells Finished Vehicle Logistics.
The trade in transhipments at Vigo was given a boost by the consolidation of the Tanger-Vigo-Nantes-St Nazaire ‘Motorway of the Sea’, which has increased the movement of vehicle volumes between Morocco and France by water using Vigo as a transit port.
“These two countries account for 50% of vehicle transits, with an increase of more than 200% on traffic in 2018,” says Vigo’s spokesperson.
Historically healthy exports to Turkey have been hit by economic factors in that export market, including the sharp fall in its currency, but Vigo is looking ahead to the manufacture of new models at Groupe PSA’s nearby plant, which according to the port spokesperson bodes well for an increase in export trade, albeit with the proviso that the world economy is not affected long-term by the impact of the coronavirus pandemic.
Groupe PSA has invested around €700m ($785m) in the Vigo plant since 2016 and was planning to start production of a new compact SUV based on the Peugeot 2008 model at the plant this year. It is also planning an electric version of the car.
Meanwhile, at Tarragona it was imports that helped the port to record an increase of more than 8%, the only increase in volumes recorded at a Spanish port, though Tarragona handles lower annual volumes than its rivals.
While northern European ports continue to be hampered by a lack of capacity, with slower throughput a factor, carmakers are looking to Spain as a quicker point of continental entry and exit, something supported by improving hinterland rail and road connections. That trend is leading the ports in Spain to address their own need for more storage.
Last year Barcelona Port Authority moved to make permanent use of a 23-hectare area for the storage of finished vehicles. The area, which was part of the former Tercat container terminal, had been used by incumbent vehicle terminal operators Autoterminal and Setram since 2012, especially as a place to store transhipped vehicles. It can accommodate up to 11,500 units.
“This area is already in use for car traffic by the existing terminals but we hope to be able to manage it under a concession system and define soon the actual purpose of the terminal or terminals to be established there,” says Lluís Paris.
Tarragona vehicle terminals have storage capacity for 47,000 vehicles but can handle more volumes temporarily via the adaptation of other port spaces, which provides a total of 1m sq.m, according to a spokesperson for the port authority. Currently, Tarragona works as a distribution hub for imports from VW Group, Hyundai-Kia, and Ssangyong. The countries of origin are mainly Slovenia and South Korea, whereas most exports (for Opel) go to Italy. In addition to those flows, Tarragona provides and receives cars for the renting agencies in the Balearic Islands.
Tarragona finished vehicle handling in 2019
Vigo port has also been looking for more storage space, since vehicle traffic must be made compatible with other ro-ro equipment. Last year the port recovered 49,000 sq.m for terminal use, which had been previously transferred under concession to the Free Trade Zone Consortium.
Other measures being taken at Vigo include limiting the time spent by vehicles in the terminal awaiting boarding during periods in which there are volume spikes. Vigo aims to reorganise access management and internal traffic circulation, which will allow for greater efficiency in using the available space. A project to achieve this is currently in its final phase and an expansion plan is already in the pipeline, which includes increasing the berthing line and the available surface area.
Tarragona also made investments in 2019 to speed processing. The port has developed an intermodal terminal with direct rail access. It features 4,750m loading/unloading platforms and four shunting tracks prepared to handle both standard and Iberian gauges.
That is in preparation of the forthcoming rail connection to Europe through the sixth rail freight corridor (Med corridor) of the Trans-European Transport Network (Ten-T) network, estimated to be complete by 2022, though the port already has significant overland traffic, with vehicles entering by rail and being distributed by road, equal to around 78,500 units in 2019. Overall, Tarragona is showcasing its potential to reach a wider hinterland.
The port’s terminal operators, Berge-Gefco and Noatum Terminals have also enhanced the services available, providing workshop areas and pre-delivery inspection (PDI) facilities, which provide paint and body shop services. The port is already providing bonded customs clearance.
Vigo has streamlined the vehicle boarding process with a new electronic communication system connecting users and Customs, which removes the need to present physical documents.
The port authority of Valencia, meanwhile, has introduced a new tracking tool called Scale Times to provide information on the time a vessel spends in port, both operating and idle time, as well as the degree of satisfaction in the different port services offered.
Busiest vehicle handling ports in Spain (2019)
“The level of efficiency of the ports must be measured by the times of call,” said Aurelio Martínez, president of the port authority at a meeting in November last year, when the tool was unveiled. “It is a key indicator to articulate the rotation times of ships and, therefore, affects the programming of shipping companies. But, in addition, it directly influences both direct costs, fees, and indirect costs and is vital in the decarbonisation processes of ports.”
Tarragona has also been working on greater transparency and introduced monitoring technology on terminal entrances. It is now executing full traceability of the cargoes processed through the terminals using OCR (optical character recognition) systems and code bars. OCR systems digitalise documents for faster management of the information contained.
Going forward into 2020, vehicle throughput at the Spanish ports has been badly affected by the impact of the coronavirus pandemic, as is the case for the rest of Europe. Plant closures and the halt of vehicle distribution and marketing since March 16 has knocked two-thirds off the sale of passenger cars and light commercial vehicles. According to Anfac, passenger car deliveries have gone from an average of 4,500 a day to some occasions when only 200 vehicles are delivered. A 2.9% increase in production for February this year – with exports rising nearly 7% to 216,650 – was followed in March by a drop in production of 69% to fewer than 37,644 compared with March 2018.
However, following a drop-off in the rate of infection in Spain as of the third week of April, the country announced that it would cautiously recommence manufacturing subject to health and safety guidelines.
Greater efficiency is being driven into vehicle processing across the Spanish ports and 2019 saw a number of advances.
Barcelona is aiming to have a comprehensive 5G network fully operational by 2023 to support the movement of autonomous vehicles. While the port authority does not intervene in its terminal operators business, Paris did acknowledge the progress that was being made in digital technology.
“We are glad to see how our terminals and operators are increasingly getting into digitalisation projects and applying solutions based on active and passive RFID tags on a regular basis, as well as software solutions which allow them to fulfill their customers’ needs,” he notes.
Political issues in Barcelona
Political protests in the Catalan region of Spain in October last year disrupted logistics activity in the region. Spain’s Supreme Court’s dealt out prison sentences for nine Catalan separatist leaders for their part in the 2017 attempt to break away from Spain after an independence referendum that was ruled illegal, an event that had its own repercussions for car production in the area.
Thousands of Catalan citizens took to the streets following the announcement and a general strike was called by two pro-independence trade unions – Intersindical-CSC and IAC – shortly before the sentences were announced.
According to Barcelona port’s commercial manager, Lluís Paris, this had a limited impact on vehicle handling at the port and, in fact, for October the port registered a 13% increase in vehicle traffic for the month compared to 2018.
“As a matter of fact, the port was closed one day and there was not internal unrest at all, while operations were performed as usual,” says Paris.
Carmaker Seat’s plant in Martorell was affected by the protests. Seat management and unions agreed to halt five production shifts after verifying the high risk that demonstrations posed to the mobility of employees in the Barcelona area, and the delivery of material.
A more pressing political issue affecting all of the ports in Spain relates to how they are managed.
“The prices we are practicing, as all the rest of Spanish ports do, are not commercial prices but taxes, [meaning] we need a law to make any changes,” explains Paris. “Of course, the current allows us to make some rebates and adaptations, but it’s a long way from a real commercial policy or us being able to negotiate to get business that would bring more prosperity to our environment; many times we are forced by law to act as a landlord, even if we try to be an active one.”
On one hand we’ve seen the imports remain at the same level, [though] with a nice increase in our Japanese imports by a good 20%, as well as a consolidation of Morocco as a growing import partner
Lluís Paris, Barcelona port
Volume increase to destinations beyond Europe
South Africa 24.9%
*figures from Anfac based on total export increase on 2018 of 20k
Exports have behaved very positively, mainly because of the large increase in Belgium, Germany and the UK, perhaps [in the last case] to increase their vehicle stock due to the possibility of a hard Brexit in 2019
Spokesperson, Vigo Port Authority
Tarragona finished vehicle handling in 2019
Hyundai-Kia, VW Group, SsangYong, Opel
Terminal operators: Berge-Gefco, Noatum Terminals
*See top ten ports in the supplement overview for Barcelona, Santander, Valencia and Vigo
The workforce in Tarragona, both terminal staff and stevedoring gangs, are recognised for their professionalism and specialisation in [finished vehicle] traffic, resulting in almost non-existent cargo damage
Spokesperson, Tarragona port
Busiest vehicle handling ports in Spain 2019
[Morocco and France] account for 50% of vehicle transits, with an increase of more than 200% on traffic in 2018
Spokesperson, Vigo port