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Issue 7 2015 - Freight Business Journal


Books balance but China is a concern


Recovery in the Irish economy resulted in tax revenues comfortably exceeding target in the first eight months of this year. Ireland’s deficit was €1.3bn, putting the country well on course to meet its deficit target set by the “troika” - a tripartite committee of the European Commission, European Central Bank and International Monetary Fund which bailed out the governments of Ireland, Greece, Portugal and Cyprus. “There’s a bit more money in


people’s pockets,” says Simon McKeever, chief executive of the Irish Exporters Association (IEA). “We’ve benefited from the pick- up in the US and UK economies. There’s been a 13% drop in the Euro-Sterling exchange rate in 18 months and the dollar is going the right way for us too.” Production of medical


devices, and next-generation drugs based on live cell cultures, are keeping Irish plants busy even as established medicines go out of patent and switch to new manufacturing locations, McKeever says. Some 80% of this trade is with the EU and the US. Ireland’s exports to China have


grown to €2 billion, thanks to beef - it is the only EU country allowed to supply to the Chinese market - as well as pork, shellfish and dairy products such as infant formula. Exporters have managed to move up the value scale to exploit the


///IRELAND


Dublin embarks on biggest ever project


Dublin Port expects to begin work by the end of this year on the biggest infrastructure development project in its history. The Irish planning authority, An


Bord Pleanala, gave the go-ahead in July for the port to redevelop 3km of berths and to deepen the entrance channel to a depth of at least 10 metres. This will allow Dublin to accommodate vessels of up to 3,500teu. The Alexandra Basin


IEA chief executive Simon McKeever at the launch of Supply Chain Ireland with Tom O’Mahony, secretary general of the Department of Transport, Tourism & Sport.


greater spending power of China’s emergent middle class. The IEA earlier this year


launched Supply Chain Ireland (SCI), a network for exporters to interact and exchange information on logistics best practice and the science of the supply chain. “SCI provides a platform to learn


for businesses from


one another and from leading experts in the field,” McKeever says. “We have a lot of embedded knowledge. The philosophy is to ask companies, large or small, what’s bothering you? How can we help?” The repercussions of a slowing


Chinese economy are surely high on exporters’ list of concerns. “Growth in Europe is stagnating because of its export dependence on China, which is making more heavy industrial goods such as power transmission systems,


liſts, rail equipment and so on,” McKeever says. “That takes away export business from France and Germany, so it hurts their economies and indirectly impacts on Irish exports to those countries”. British withdrawal from the EU


(Brexit), if it votes to sever ties in 2017, would be “a massive issue for us,” he believes. Brexit could see both visible and non-visible trade barriers imposed, though “there could be a tiny flip side for us as a gateway hub into Europe if we are the only English-speaking EU member”. In common with FTA Ireland,


the IEA has concerns about increased costs, as a higher minimum wage will trigger pay demands higher up the scale. “We’ve got to do everything to stay competitive and compete for foreign direct investment,” McKeever comments.


Redevelopment (ABR) will cost an estimated €230 million and will


take five years to complete. It is the first major project under Dublin’s 2012-40 master plan, designed to double capacity over the next 25 years. Planning approval came at an


appropriate time, with the port announcing it was on course for a record year. Trade volumes rose by 5.0% in the first half of 2015, with imports growing particularly strongly at 5.6% as the domestic economy improves. The EU last year provided €2.4 million to support Dublin Port in


its preparatory work for the ABR Project, and has now committed a further €22.8 million for the construction phase. Eamonn O’Reilly, chief


executive of Dublin Port Co, says: “Bringing large infrastructure projects through to the construction phase is a long, detailed and careful process. Given our high growth rates, we intend to review our master plan in the first quarter of next year and begin to plan the next major development aſter the ABR Project.”


South drives shipping resurgence


Shipping activity in the Irish Republic rose by 3% in the second quarter of this year compared with Q2 2014, according to figures from the Irish Maritime Development Office (IMDO). Ro-ro freight volumes were up


7% for the quarter at 258,390 units - the tenth successive quarterly increase recorded in this sector. Container traffic meanwhile


increased 10% to 170,108teu. Lo- lo imports have now risen for seven consecutive quarters to reach 95,550teu. Exports reached their highest figure since mid- 2008, rising 9% for the quarter to 74,558teu. IMDO points out that growth


levels were lower in both sectors when measured on an all-Ireland basis. Overall ro-ro volumes grew by 4% in Q2 and lo-lo by 5%, confirming that the Northern Ireland economy is not matching the pace of recovery being seen in the Republic. Bulk traffic saw a 1% increase


in tonnage year over year, driven mainly by liquid bulks and in particular petroleum- based products. Break bulk, largely consisting of imports of construction and project related commodities, registered its ninth


successive quarterly increase with a 14% increase. Only dry bulk, where traffic


levels typically show much greater seasonal fluctuations than other sectors, failed to follow the general upward trend. Declines in animal feed, fertiliser and coal volumes were responsible for a 6% fall in dry bulk movements in Q2, reversing a 6% increase in the previous quarter. IMDO director Liam Lacey says


the Republic’s three “tier one” ports of Dublin, Shannon Foynes and Cork have felt the main benefit of the country’s economic recovery. Some traffic diverted to smaller


ports such as Drogheda and Waterford before the recession when the big three were full to bursting, but as volumes fell, all ports had surplus capacity. “With unfettered access, customers found the path of least resistance,” he says. The focus on the tier one ports


looks set to continue. Lacey notes that in the latest round of EU funding support for key infrastructure projects (via the TEN-T trans-European network programme, aimed at removing transport bottlenecks), almost €45 million was awarded exclusively


IMDO’s Liam Lacey says that Irish ports have prospered along with the economy


to Dublin, Shannon Foynes and Cork. Nine Irish ports in all had applied for funding support. A new role that IMDO took


on in May of this year, advising government on how Ireland can best accommodate future seaborne growth, may clarify the role of tier two and three ports. “We have established


performance measurements to enable us to identify whether we can increase throughput via existing infrastructure,” Lacey says. “Before you add to the footprint of a port, you’ve got to consider if you are using existing capacity efficiently.”


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