Docking stations: Port developments will help boost capacity and handling efficiency

While Algeria has made significant improvements to key elements of its transport infrastructure, a rise in international cargo flows in recent years has put pressure on the country’s ports. Despite experiencing a minor slowdown in maritime traffic in 2008, national port traffic increased from 117.9m tonnes in 2010 to 118.1m tonnes in 2011, according to M’hamed Boudouma, the CEO of the Laboratory for Maritime Studies, an organisation responsible for conducting engineering studies for state maritime projects. This growth in cargo traffic has created congestion, which in turn has lengthened ship waiting times and delayed deliveries. The increase in traffic has also underscored the limited capacity of marine infrastructure, with ports often unable to berth larger ships.

CHALLENGES: A shortage of space is one major obstacle to the expansion of maritime transport. In the absence of larger, more modern facilities, “merchandise vessels may wait in the Bay of Algiers for three to four days and spend a week to 10 days to leave the port, if all is working well. This is a problem that hurts importers and exporters,” Boudouma told OBG. The challenge, however, is not easily addressed, particularly in areas where there is little room for expansion, as is the case for the Port of Algiers. Moreover, inadequate space is often compounded by other issues, such as the mismanagement of ports, inadequate work hours that do not normally include evenings and weekends, and an absence of new investments in key machinery like cranes, Khaled Hamidi, a general manager for Wilhelmsen Ships Service, a global maritime services provider, told OBG. Finally, rigid Customs regulations further delay timely delivery of cargo. It takes on average 27 days to clear incoming cargo at Algerian airports, with a similar figure estimated for maritime ports.

These factors affect businesses and consumers in several ways. First, because Algerian ports cannot receive large ships, importers are unable to take advantage of economies of scale and therefore incur higher freight costs. For example, according to Boudouma, the cost of transporting a container from Asia to Algeria is around $3000, while this figure stands at about $1500 for shipments between Asia and larger European ports. A second consequence is larger demurrage fees, i.e., the payment that a charterer pays to a shipowner for use of the vessel beyond the period normally allowed to load and unload cargo. These payments can amount to a significant sum of money, funds that could otherwise be invested in more productive activities. These additional costs are often borne by Algerian consumers.

NEW INVESTMENTS: But challenges such as inadequate capacity certainly do not represent insurmountable barriers, particularly in a country like Algeria, which possesses the natural benefits of a strategic location and a 1200-km coastline. To maximise these opportunities, the state is investing AD660bn (€6.3bn) in the development of commercial ports through 2025, constructing new facilities and renovating existing infrastructure to expand the capacity of Algerian harbours. For the port at Djen Djen, the government has committed AD30bn (€288m) to transform the facility into a deepwater port, with plans to extend the jetties and build a new terminal with an area of 80 ha and a transshipment capacity of 2m twenty-foot equivalent units. Another AD5bn (€48m) has been earmarked for an additional 24-ha container terminal at Oran’s port.

Government priorities stretch beyond the expansion of current facilities, envisioning a more cohesive and organised system of importation and exportation. Efforts have already been made to divert the importation of certain types of traffic, notably automobiles, from the busy Port of Algiers to neighbouring facilities like Djen Djen, while new ports are being constructed to receive additional activity from Algiers. The state has also encouraged the privatisation of management at key ports like Algiers, Djen Djen and Bejaïa, resulting in improved cargo processing times. With these efforts and additional developments under way, Algerian ports are expected to enjoy notable efficiency gains in the near future and stimulate overall economic growth.