Alf Baird: Container port could yet put Scotland centre stage

SOME people consider the Highlands and Islands of Scotland to be remote, but this really depends on where your starting point is, and your definition of remote. In fact, when you survey the North Atlantic Ocean, and the Great Circle trade route for shipping, the Highlands and Islands are rather central. The challenge of independence is to realise the economic advantages of that central position in world trade – at last.

Twenty years ago, I was asked by the global ports association (IAPH) to predict what size the next generation of container ships might be, and what the main constraints in ports might be as those vessels grew steadily larger. Industry insiders were surprised to learn that within a decade, the largest container ship was expected to quadruple in size – carrying 24,000 containers, not “just” 6000.

What also became evident in my research was that such “megaships” were not well suited to traditional congested city-ports situated along narrow, shallow rivers distant from ocean trade routes. A rapid trend was emerging – towards new, deep-water container terminals situated close to the open sea, many located on islands. Also evident was a focus on increased trans-shipment of containers from megaships at “offshore” hubs where goods could be transferred to/from feeder vessels for onward transit. There are many examples of islands used as “offshore” trans-shipment hubs – Freeport in the Bahamas, Colombo in Sri Lanka, Kingston in Jamaica and former naval bases such as Singapore and Malta.

Key factors for these terminals include natural deep-water, minimal deviation from ocean trade lanes and low average feeder distances to/from cargo destinations/origins.

But in northern Europe there have been few similar proposals. Existing city-ports continue to plan for ever-larger ships along shallow estuaries of the North Sea Basin in what’s known as the Le Havre-Hamburg port range. This means expensive dredging in rivers and reclaiming large areas of the seabed to create mega terminals within already congested city-ports. It also means worsening environmental impacts and ever-increasing costs. With many vessels unable to find a berth on arrival, large ship-queueing anchorages are now the norm outside the main hubs of Antwerp, Rotterdam, Hamburg and Bremerhaven.

Back in 2007-8, studies were well advanced to develop a European offshore trans-shipment hub at Scapa Flow in the Orkney Isles. The Flow is widely acknowledged to be one of Europe’s finest and largest natural deep-water anchorages, offering 25m+ depth and easily capable of handling megaships without dredging. The former naval base at Lyness on Hoy was considered the ideal site for a new container terminal and engineering studies proved it could be modified easily and quickly to create a modest container port capable of handling any size of ship – including the 20-plus large container ships passing through the Pentland Firth every week.

Analysis of operating costs showed that savings of well over US$100 per container were easily achievable by diverting operations to Scapa Flow – saving companies hundreds of millions of dollars, doubling the value of Scottish international trade as the port handled a million containers a year.

A Scapa Flow container port would create significant environmental savings through reduced fuel consumption, lower emissions, no river dredging and next to no landside traffic congestion. Further benefits would include lower container handling charges and faster crane productivity rates and the end of congestion-related delays associated with city-ports’ dependence on land transport for hinterland access.

After this research was made public, the Scapa Flow port authority received interest from an international container terminal operator who wanted to lease the new terminal. Funding for the infrastructure was expected to come initially from the public sector and the EU, with superstructure (cranes, systems, etc) supplied by the operator. A 30-year concession would ensure the operator repaid the public sector’s initial investment. The port authority and Orkney Islands Council were expected to gain significantly through port charges levied on ships, plus towage and pilotage fees – that’s how Orkney and Shetland councils have built up their considerable oil-wealth funds already. They would also put in place effective anti-pollution measures.

A new container trans-shipment port in Orkney would provide an economic stimulus to the Highlands, thanks to global, low-cost transport connections being on the doorstep. Instead of the region being stuck at the end of an expensive and congested UK supply chain, made worse by Brexit, the Highlands would suddenly be in pole position.

So, what happened?

Well, civil servants in Edinburgh opted to fall in line with UK transport policy, which prioritised the south-east of England for future container port developments. And instead of recruiting an experienced container terminal manager to develop Scapa Flow (an ex-Maersk Line senior executive was ready and available), Highlands and Islands Enterprise and Orkney Council used their cash on “renewables” projects instead. The former naval base site at Lyness was handed over to the Scottish Government-owned European Marine Energy Centre to “test” the Pelamis wave energy machine, which eventually went bust with £50 million of public money.

Maybe it seemed like the right decision at the time.

But instead of having a modern, international container trans-shipment terminal to benefit the Highlands and Scotland, and a massive jump in European trade, all that remains at Lyness today is a broken experimental wave machine. Such is Scotland’s lack of vision within a domineering UK union and a culture which serves only to haud-doun oor nation.

Could the Scapa Flow container port project still go ahead? With the lengthening queues of large container ships in the North Sea Basin, increasing transport costs and the expected opening of Trans-Arctic shipping routes as well, its viability seems obvious. But perhaps the jolt of independence is what’s needed to make real progress, creating a parliament and government that’s 100% focused on the big ideas needed to enhance Scotland’s international competitiveness.

Alf Baird started his working life as a shipping clerk in Leith in the 1970s. He is now Professor of Maritime Transport and director of the Maritime Research Group at Edinburgh Napier University. He has a PhD in Strategic Management in the Global Container Shipping Industry and was previously adviser to Orkney Islands Council’s Department of Harbours