The Caucasus Business Week (CBW) has investigated enquiring logistics expert on ways of how the Georgian container market could be enlarged by 5 times.
Jaba Tarimanashvili – Business Analyst and Director of Maritime services and Transportation company „Trans Logistic“, advised that the Georgian market has no response nowadays to the demand to handle 2 mln containers.
In a long-term run, a major part of commodities may be containerized and container transportation volumes will increase as compared to shipments of general or bulk cargoes. In response to the question why Georgia’s container market is bound to only 400 000 containers instead of 2 mln. containers, Tarimanashvili said that today the market does not meet these demands.
“Georgia’s container market is circumscribed by 2 small countries: Azerbaijan and Armenia. Therefore, we have limited volumes. We are able to penetrate to huge markets, Central Asian countries, however, nobody emphasize on that.
Government, together with professionals, transporters, container lines, forwarders, port operators should gather and examine existing problems, why we cannot enter the mentioned markets and who limits us with two countries, why we are not admitted to the 2 million market. Finding solutions to those barriers could let us be successful”, Tarimanashvili said.
The free time versus transit time is one of the key reasons why Georgia cannot enter Central Asia markets, he said. “When containerized cargoes are transported, the container line provides certain free days, when the forwarding company should deliver full container to the destination place, unload the cargo and return empty container back to container yard of relevant loading port in Georgia. When the cargo is transported to the direction of Central Asia, we deliver the container to Azerbaijan, then we have to pass the Caspian sea ferry boats, which have various restrictions”, Tarimanashvili said. Restriction of loading ships timely due to weather conditions or throughput capacity is one of the limitations, he said.
Container services and marketing mechanisms should be created, which would enable the transportation companies to return full containers instead of an empty containers and create additional value for container line operators, Tarimanashvili said.
Department of Transport and Logistics at Ministry of Economy is not active. As a result, Georgia does not have a responsible person, who would protect interests and look after Georgian transport industry development, Tarimanashvili noted.
Container transportation coverage zone must be enlarged and this factor would foster development of Anaklia, Batumi and Poti seaports in Georgia, he said. Tarimanashvili also talks about cargo handling tariffs in Poti Seaport and notes that there are one of the highest, and considering opening of BTK (Baku-Tbilisi-Kars) rail line, it is important that present Georgian container terminal operators consider THC of neighboring Turkish ports, which already dispatched several batch of rail platforms to Azerbaijan, and North-South Transport Corridor, which pass from India through Iran and Azerbaijan to Caspian sea countries, or Russia and Europe. Cargoes are actively containerized worldwide.
In terms of logistics it is easier to distribute containers to final consumers. Consequently, seaports try to reduce THC (terminal handling charges) which in general equal or offer lower rates than expenditures for handling bulk cargoes, he noted. The current terminals in Georgia cannot receive big ships because of insufficient depth and length of berths and consequently logistics chain is complicated and more expensive with feeder services.
Because of location of present seaports in city centers and restrictions for further warehousing and storage development, operators are scanty to offer traders optimal and innovating solutions by taking advantage of Georgia’s free trade agreements with Europe (DCFTA), China, CIS countries and USA (GSP). Finally, with no added value, expensive logistics costs are distributed to final consumers. As major part of goods are transported by ships. If we consider this factors in the light of Georgia’s import-dependence, efficient logistics is vitally important for Georgian society and industrial development, Tarimanashvili said.
As to Anaklia Deep Seaport, will be able to receive only a part of big ships, he said. Turkish straits have certain restrictions for enabling ships entering the Black Sea. Big ships may enter the Black Sea, but in this case restrictions apply for LOA (length) and air draft (height from the water surface up to the bridge), he said. Ships have to pass Dardanelles and Bosporus straits to enter the Black Sea from Mediterranean Sea.
As a result, maximal dimensions of ships are defined, Tarimanashvili noted. Ships of about 300 meters in length are let to pass straits without special permissions, while sporadically ships up to 336 meters length have passed after obtaining special permission from Turkish authorities, but the air draft is limited to 57 meters because of bridges from the water surface, and the draft (depth) is restricted to 20 meters, he said.
“I remember end of 2007 a huge amount of containers were stuck in Istanbul transshipment terminal. Owners were trying to lift containers through various modes of transport. Simultaneously Georgia was receiving cargoes by small ships and it was taking much time to lift backlog. There were many ships waiting their turn at Poti anchorage that time, and operators were paying high demurrages. As a solution to the bottleneck, in March 2008, we unloaded first container ship MSC Granada at Batumi container terminal. In that period BICT (Batumi International Container Terminal – ICTSI group company) did not even have shore cranes. Therefore, we unloaded containers by using ship cranes.”, Tarimanashvili noted.
Poti Seaport is able to receive container ships of about 185 meters in length (with safe draft – 8.4 meters), Batumi container berth receives ships of about 175 meters in length (safe draft – 9.8 meters), however we had in practice with special permission discharging vessel with about 205 meter length in Batumi.
As to Anaklia Deep Seaport, it will be able to receive only a part of big ships available on global container market today. “Anaklia seaport management announced that the seaport will receive almost twice bigger vessels, that may arrive to Georgia these days. The seaport representatives frequently mention possibility to accept Panamax (ships of maximal size crossing Panama canal) and post-Panamax container ships. Maximum length of Panamax ships were about 294 meters in the past, however, today capacity of passage and consequently ships dimensions have been enlarged.
But basis general restrictions, ships of about 300 meters in length cross Turkish straits without obtaining special permissions. Therefore, It is questionable whether post-Panamax or New Panamax ships can enter the Black Sea, because their length may vary between 366 to 400 meters. Through which route can these vessels enter the Black sea and Georgian territorial waters?”, Tarimanashvili said.