

Building euro-zone competitiveness

Ports in the storm

Portugal needs to privatise its ports to reap the full benefits of its location. The latest in our series on reforming Europe’s economies

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Readers' comments



Portugal and the Portuguese should stop being shy, and realise that the idea we're being sold that we're peripheral is relative, like everything else in this World.

We are the westernmost country in the European continent, with privileged routes to South and North America, the Mediterranean, and the African coast.

Not that many countries have that.

Obviously the potential benifits of this privileged location aren't being fully reaped.

I agree with this article, and would be much more pleased if the government privatised the ports rather than other planned privatisations, which I deem unnecessary.


To Andover Chick, A

t first I thought of giving you a harsh reply for your condescending ways, but what for. But then I realised your posts certainly result from ignorance, and I decided to change my ways.

I'll leave you to these three items:

a) What do you know of revenues from the Casa da Música in Porto?
b) Teatro Nacional S. Carlos is waht, 200 years old
c) there was investment in ports, namely in Leixões, and in Sines.

So digest these three facts very slowly. Vomit if you will.

We shall be here to help and provide you with the best Portuguese hospitality you can ever get.

Auf wiedrsehn

former player

Josh_US Lux is right about the problem of overland transport costs. But there are still considerable economic advantages to investment in Portuguese ports: it will help bring down the costs of imports and exports in the Portuguese market, and there is the possibility of creating a transhipment hub for north/south European cargoes being consolidated for transport across the Atlantic.

A few years ago a Port Services Directive was proposed by the EU: it failed to get adopted following lobbying of the European Parliament by the European dock workers' federation, but it was poorly concieved in any case.

The UK model for harbours is an interesting one which has been in place for at least 200 years: privately owned ports have the right to charge for cargoes and passengers moving through their ports as long as they comply with a statutory "open port duty": everyone is entitled to bring their ships into the port and load and unload their goods. As long as the dock workers and other port service providers can't impose their own monopoly on top of this system, it provides an excellent balance between private and public interests, and plenty of investment where appropriate, such as at Felixstowe and the new London Gateway.

Andover Chick

Huh, Portugal needs to invest??

It seems maybe, just maybe, instead of building opera houses and other foolishness during the credit bubble, the Portuguese could have been investing in their ports? Instead, they built places where they could enjoy a glass of wine or frolic around in a costume. This shows the priorities of the PIIGS and why the rest of the world should not bear the burden of their incompetence.

kaffka in reply to Andover Chick

Andover Chick, obviously you don't know what you are talking about. Portugal doesn't have a opera house, unless you're talking about the music house in Oporto! But even saying that permit me to say bullshit, this "foolish house", using your own words, shows a great capability of attracting foreign tourists.

Just look at the last ranking that talks about the best cities to visit in Europe... You will find Oporto among that places as well as Lisbon. So, don't talk about something you don't fully know. If you were talking about the extensive number of highways we constructed to satisfy places virtually with no one I would sheer you up but on that issue just forget about it! To finish just let me give you a little advice: do the homework and don't believe about everything you listen or see. By the way, the only harbour we have that shares somehow the same place with coffee shops and bars is the Lisbon docks, which has a remarkable and well succeed business model.

Andover Chick in reply to kaffka

No opera house? Oh, lets see São João National Theatre, Teatro Diogo Bernardes, Teatro Nacional de São Carlos, etc. The Casa da Música (Porto) is an example of a big project which will never generate enough tourism revenue to justify its 4 year extravagant build.

Before you use profanity please check your facts.

WTAMBuEdrJ in reply to Andover Chick

Andover Chick, pay a bit of attention please. São João National Theatre, Teatro Diogo Bernardes, Teatro Nacional de São Carlos are THEATERS and not opera houses. Anyway, being opera houses or not, all these examples are from a time way before the credit bubbles. There are much better examples to illustrate the mismanagemnt of the PIIGS, like you call them.

Andover Chick in reply to WTAMBuEdrJ

"Teatro Nacional de São Carlos is an opera house in Lisbon, Portugal." This in the first sentence on the Wikipedia page for this OPERA HOUSE. Take a look before responding and WASTING OUR TIME!

More to the point, the Casa da Musica. Which by the way can host concert opera was well as symphonic or chamber works, cost $120 million dollars to build over 4 years. Given that the great majority of the worlds population, listen to popular music, not classical or chamber varieties, this is a perfect illustration of the waste and incompetence of the PIIGS.

São Carlos was built in 1793, when Portugal was wealthy enough to built several of those and sill throw some money to the american revolutions,in spanish, french, dutch and english colonies.
From all your pathetic exemples, full of unfounded prejudice, the only one that fits in the Portuguese "bubble" (that actually never existed), is Casa da Musica, and since Porto was the "European Capital of Culture" in 2001, the european funds destined to it had to be mantatorily spent in it.
So, not only you failed miserably to present an example of your prejudice, as you failed to learn about EU fund rules and portuguese recent economy, and that my dear, "is the perfect ilustration of the ... incompetence of..." yourself.

PS: I like a good classical ochestra, and every single time i see one, São Carlos is teeming. I guess portuguese people are not quite americanized as you think. Yet!


Don't listen to this crap!

Look at the map, the Germans will buy out your ports and destroy them.

The Germans will never privatise their shipyards and ports. The Germans haven't privatised anything. The Germans won't close their pollutiongenic mines, steel mills, shipyards and ports.

Joe Hiney

Two points of interest. First you describe the landlord model as an intermediate position. Many would argue, such as in the USA, that public ownership and private operation is the best model for ports. For container ports over the last few decades many have adopted the landlord model with significant success. The issue is less about ownership and far more about competition.

Second you name three countries where they have sold ports. The UK I understand but I am not clear on where else countries have sold their ports. Perhaps we are looking at asset sales in different ways?

Josh_US Lux

Dear author,

the idea is good in theory, but in theory only.

If you look at the map you provide you will see that the major part of Europe's maitime trade is turned over in ports close to Europe's industrial heartland in the north-west (Germany, BenNeLux, northern France, England), and not at locations at greater proximty to overseas destinations such as notably Portugal.

The reason for this phenomenon is simple: Maritime shipment is by far less expensive than shipment by rail or road. The cost of shipping 1 TEU from Shanghai to Hamburg, for example, is LESS expensive than shipping it from Hamburg to Berlin by rail or road.

So even if Portugal was better connected to the those regions of Europe doing the largest part of trade with overseas regions than it actually is, the cost of shipping cargo from Lisbon and Porto to other destinations in Europe would be prohibitive.

So that idea won't fly, I am afraid.

Portugal should instead make the best of its overseas links by promoting itself as the gateway to Europe for Brazilian companies.

WTAMBuEdrJ in reply to Josh_US Lux

Josh, what you say makes sense but we need to think bigger. The idea of stimulating and optimising ports in Portugal should not bear in mind only to serve Europe's industrial heartland in the north-west. Instead this could be a long-term opportunity to stimulate industrial growth in the Western regions of Europe like the Iberic peninsula itself. New industries could be established and international companies could change production/processing sites to be closer to these ports. These ports are the closest point in Europe to North and South America and Western African countries like Angola! The idea should fly, otherwise it is another missed opportunity that should have been in place already many decades ago...

WTAMBuEdrJ in reply to Josh_US Lux


Josh_US Lux in reply to Forlana

Hi Forlana,

your proposal sounds good, but won't work at closer inspection IMHO:

1) In maritime trade - as in any other trade - the idea is to find the cheapest possible connection between the producer and the costumer. What matters is hence the entire distance a product has to travel from the production site to the consumer, and not just one part of it - and the trans-oceanic shipment is actually the cheapest part of the entire journey, if calculated on a USD per TEU per mileage basis. It makes therefore sense to cover as much of the entire distance by trans-oceanic shipment, and as little by other means of transportation, from "smaller vessels" to inland waterway transport to rail and road. And that is precisely how it is done these days.

2) As in airline traffic, some maritime ports serves as hubs, and the others as feeders. If you look at the map, all main European ports lie at the mouth of major rivers connecting them to regions of major production. (That also applies to Hamburg, which is the hub for the Baltic Sea - trans-oceanic container ships don't serve Baltic ports directly.)
All that is needed is thefore ONE trunover from trans-oceanic container ship to inland barge. Since barges operating on inland waterways are unfit for the open seas (having no keel, they lack draft), a second turnover would be needed in your proposal (one in Portugal just to do the Portuguese a favor, a second in e.g. Rotterdam to an inland barge), and that won't happen. It's all about efficiency... .

3) Finally: Ships carrying goods from e.g. China don't return empty, so for shipping companies, unloading e.g. Chinese goods in ports close to the main European production sites makes more sense than doing so in places where there isn't much industry to talk of. It is no coincidence that the three main European ports (Rotterdam, Hamburg, Antwerp) are in or near the two main EU exporters, Germany and the Netherlands (more German trade goes thru Rotterdam than thru Hamburg, as it connects to the Rhine).

Josh_US Lux in reply to WTAMBuEdrJ

When people use all the buzz words of a keynesianism run amok - "growth stimulation" etc. - I know they haven't learned one bit from the recent crisis in Southern Europe.

Yours is precisely the old approach that has characterized EU fundig in e.g. Portugal for nearly 30 years: Just have the EU built a formidable infrastructure, and industry will start blossoming.

In Portugal, that did not happen – quite to the contrary.

27 years of EU funding have endowed Portugal with a very good infrastructure, but the country has deindustrialized even further (from an already very low level).

The Portuguese need to "think bigger", yes - but in terms of creating products that they can sell to the world, not in justifying infrastructure projects the EU can finance but that will never pay off.

Paulo Sérgio in reply to Josh_US Lux

That's incredible. I think a similar situation is the Ngqura/Coega port in Port Elizabeth, Eastern Cape, South Africa. It appears that the government wants to begin coal exports from there, instead of moving a shorter distance/cheaper route within the country to the current coal export terminal at Saldanha, Western Cape. Ngqura may compete for automobile exports from the older port in East London, also in the Eastern Cape - also a further distance from the manufacturing plants. I'll check my story, but the interior shipping costs certainly lend some idea to private industry concern about the prospects of Ngqura.

WTAMBuEdrJ in reply to Josh_US Lux

Dear Josh, nobody mentioned Keynes. But if over the last 30 years the South of Europe would at least have implemented keynesianism measures that would not have been so bad. The problem is that over the last 30 years the approach has been reckless unsmart spending and return of funds that could not even be used due to lack of initiative, all associated to the lack of competitiveness. Now, if you think that all of a sudden the South of Europe will recover the lost decades by developing hi-tech products you can just wait sitting. I am not saying I do not like the idea, but the best chance for the South is first to optimise the resources and products they already have.

Josh_US Lux in reply to Forlana

Forlana, you have a knack for finding great German sources - first that Prussian field marshal, now this pic! Very "graphic", so to speak. LOL

I agree with the principle, by the way. But there are probably limits to how flexible the main trade routes can be diverted, and those ports that today serve as hubs in part simply got lucky because of their excellent locations.

Baltic ports: I think they will profit tremendously if Danemark should ever be devoured by the seas, as it would give them free access to the North Sea;-)... . Since cicumnavigating DK adds some 500 or so kms to the route, and since the Kiel canal is too narrow for big ships, Hamburg takes a lot of the traffic that would otherwise go straight to the Baltic ports. I don't think there's any German city which has profited as much from Eastern enlargement as Hamburg.

I hope they've already named some docks in your honor;-).

PPP Lusofonia

Port investments are not so much about capacity, but about traffic, traffic risk, and who is taking it, very often the taxpayers.

Expanding the hinterland to Spain and increasing trans-shipment of containers would help to generate more traffic. Bring it on.


The key word is unions,tackling them is easier said then done, there is an underworld element to these shipping ports,with lots of politcal influcence.
But the frustration in general with Portugal it has loads of potential but full of corruption, ask any citizen here they will same the same thing.
It's very sad what is happening to Portugal it is my country but sadly it might never reach it's full potential.

Carlos Collaco

A well researched piece of writing highlighting Portugal's potential strengths and current constraints weighing on its ports.
Geography is a natural key factor but as noticed it is simply not enough.

A lot of investment on capacity expansion and modernization has taken place over the years.
Costs and the overall efficiency of operations still need to improve, more likely the former than the latter.
Driving down costs as part of a strategy to make Sines a transshipment hub calls for managerial best practices too.

Given Portugal's economic size the only way to bolster traffic volumes significantly is by turning one or its three major ports into platforms feeding other ports around Europe, North Africa and neighbouring Spain overland by rail.

Very striking is the large container traffic imbalance in exchanges between East and West.
China, HK and Taiwan included, has become an overwhelming trading powerhouse sending millions of TEU's across the seas.


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