The newly inaugurated Khalifa Bin Salman Port in Hidd, which currently has a surplus throughput capacity of more than 750,000 teu, will likely reduce that surplus to some extent in 2010 when transshipment services begin.

APM Terminals, managers of the port, said it was in talks with several shipping lines and was hopeful of an early breakthrough.

'I am confident we will see more cargo hubbing over Bahrain within the first quarter of 2010 basically through transshipments,' said APM Terminals' commercial manager for Bahrain Iain Rawlinson.

The port now gets bits and pieces coming through as transshipment cargo and no major volumes at any time.

Throughput capacity with the current cargo handling equipment is 1.1million teu but the captive market in Bahrain is 280,000 teu, leaving a surplus of more than 750,000 teu. The company operates four cranes but can have up to 12 should the market need that many.

'As the market grows we will buy more cranes. We've invested to a level that will support the current market and medium-term growth. Long-term growth can be handled by scaling up on capacity by buying more cranes,' the official said.

'Historically, during the past 10 years, growth in Bahrain has stayed between 7 and 10 per cent per year, but in 2009, unsurprisingly there was a flat volume - no growth and no decline - which in today's context is good news,' Rawlinson said.

As the global economy picks up, Bahrain's will pick up too. The Upper Gulf region, for which the new port has been dubbed the Bahrain Gateway, is a market of around 4 million teu, which means there is potential for Khalifa Bin Salman Port, one that will have to be met by a transshipment service and a scaling up of handling capacity.

Bahrain has developed a number of business hubs including the Bahrain Logistics Zone, the Bahrain Investment Wharf and the Bahrain International Investment Park and some companies have begun operations there. As business develops, logistic companies will need connectivity between Bahrain and the rest of the world.

'I am very optimistic that once the transshipment service starts we'll see companies becoming more enthusiastic about establishing hubs in Bahrain for their businesses,' said Rawlinson. He sees the port handling traffic of 290,000 teu in 2010 against 270,000 to 280,000 in 2009.

Projects to make the port more competitive are ongoing. Alongside the yard and turning basin the depth is 15 m. The channel is mostly 15 m deep with some areas at 14 m. By the end of 2010 there will be a depth of 15 m everywhere. The port has relaid one part of the channel, smoothing out areas where the navigation was awkward and thereby making it easy to navigate.

The Bahrain port now uses around 25 per cent of yard capacity. As one gets to 60 per cent or more, port efficiency is impacted negatively. The yard is sufficiently large to handle 2.5 million teu at Khalifa Bin Salman Port but only if there is adequate handling capacity.

More or less, all of the port’s business is now Bahraini cargo coming in and going out. Nine shipping lines use the port - APL, Maersk, MSC, UASC, CMA CGM, Evergreen, Hanjin, OEL and Simatech. All except APL are feeder vessels.

The presence of Khalifa Bin Salman Port will still see vessels calling at Jebel Ali Port simply because the UAE market is strong. But the new hub will open up opportunities for both traders and shipping lines because of its proximity to flourishing and potentially high-growth markets in the Upper Gulf.

Ports of call

One of the regional ports that a Bahrain feeder service could call at is the Iranian Gulf port of Assaluyeh, which is near Bushehr port and close to the South Pars gas fields. The Assaluyeh area is gaining in importance as a petrochemicals production centre.

Bandar Imam Khomeimi is also a target port. Other important calls in the feeder network are Iraq, whose markets are fast developing, Kuwait and Iraq, which have strong, vibrant markets, and nearby Saudi Arabia, the Gulf's biggest market.

APM Terminals is in talks with shipping lines to have them start transshipment services

'Because we are right at the centre of the Upper Gulf market we can offer low-cost feeder connections with savings in time and fuel,' said Rawlinson. 'The more time you save on your voyage and the more time you save in your hub port you will have more time in the less efficient ports, which means it is possible to handle more cargo in the less efficient ports and yet maintain service integrity - manage a weekly schedule which will enable you to be more competitive.'

Rawlinson said Bahrain's port was the most modern and efficient in the Upper Gulf, consistently averaging 30 moves per crane while other ports came nowhere near that level.

While making its pitch to shipping lines, APM Terminals is stressing on the savings that can accrue for vessels calling at Bahrain, particularly at a time when there is surplus capacity in the shipping market. There would be savings if say a six-vessel service from China to Jebel Ali went onwards to Bahrain, adding two days. By adding a seventh vessel and lowering speed, the service could still save on fuel, thereby saving money. Similarly, the feeder ships could realise savings, Rawlinson explained.