Bernard Arkas, Executive Vice-President, Arkas Holding: Interview

Interview: Bernard Arkas

In what ways has maritime shipping in the Mediterranean Sea evolved in recent years?

BERNARD ARKAS: Global shipping activity is going through what is probably one of its worst crises ever. This is affecting main maritime routes such as Far East-Mediterranean, Trans-Pacific and Trans-Atlantic. It also has repercussions on other secondary trades or niche markets. Several famous and well-established shipping lines have disappeared, and we are seeing the market restructure itself.

Due to the crisis, the Intra-Mediterranean market has become more attractive. The biggest shipping lines are more aggressive because this market is now more profitable, compared to the main routes, which have become a loss-making activity. This concentration has increased competition and forced sea-shipping companies to adapt their strategy and cost-management process.

How can infrastructure improvements enhance the performance of the maritime sector?

ARKAS: Algerian Customs are aware of the weaknesses of the infrastructure and a lot has been done since the election of President Abdelaziz Bouteflika. It is a national priority, and huge investments have been made in developing it. That being said, investments focused on sea transport infrastructure are still needed to enable carriers to be more efficient. Most Algerian ports are located in city centres and exist from pre-colonial periods. For this reason, the state has commissioned the construction of a new and modern terminal located at Hamdania, 100 km west of Algiers. An important port located outside big cities is clearly needed.

Beside this new terminal, existing ports have to adapt themselves to accommodate larger container vessels, which would enable shipping companies to take advantage of economies of scale. This can be done through the construction of linear quays, dredging operations and an investment in modern mobile harbour cranes, or even gantry cranes, to reduce the stay period at the port.

What are the specific challenges with regards to maritime transportation in Algeria?

ARKAS: Maritime transport in Algeria is a competitive market. The main global companies are well established and very competitive. Since the decrease of prices in the oil and gas sector, a reduction of import volumes is expected in Algeria. The best alternative to the Algerian economy would be a substitution of imports volumes with exports. Algeria is a resourceful country in terms of population, energy and access to the European market. After an economic transition period, the country has all the benefits to become a major exporting country.

In terms of regulation, some major evolutions were implemented in December 2015. For example, the practice of slot exchange – the possibility for a shipping line to use space on another shipping line’s vessel – is now recognised and has contributed to the development of the sector.

What else could Algeria be doing to become a hub for landlocked African countries?

ARKAS: International transit to landlocked countries has been forbidden since 1982. However, if this regulation were to be amended, the practice could represent a very good potential to increase transit volumes to and from Algeria.

The transit through Algerian ports could be an alternative to the Abidjan, Lomé and Cotonou hubs, serving countries like Mali and Niger, which can be directly reachable through existing road infrastructures. The National Company for Rail Transport could also play a role by connecting railways to ports and investing into new power locomotives to enhance the whole cargo-transport capacity of Algeria.