Limassol port as an engine of economic growth

Limassol port as an engine of economic growth

Date: 04/05/2020

Limassol port as an engine of economic growth

Keeping the country’s ports operational and cross-border trade flowing
during the pandemic, is crucial for the country’s economy

By Nawaf Abdulla*

The pandemic forced factory closures across China starting in January, with ripple effects throughout the global economy. A wide range of sectors have been affected, some to a greater degree than others.

The ports industry undertakes a vital role in the Cyprus economy, facilitating trade, fuel, energy, construction, recreation and tourism. The health of the shipping industry and the wider economy is inherently linked to the prosperity of a port. The total impact of this pandemic is yet to be seen, but ports are already under intense pressure, from a downturn in customer activity, and volumes of goods handled through a port.

During these challenging times, our top priority is without a doubt, the protection of health and safety of staff and society, and at the same time, the minimisation of social and economic disruption. To this end, the role of ports in trade facilitation is crucial, considering that without ports activity, the world’s food, energy, raw materials and vital medical supplies cannot be transported where they are required.

As a company managing critical port infrastructure of vital importance to the Cyprus economy, DP World Limassol, has implemented robust business continuity plans in order to ensure stability and limit disruption across its activities, while taking all the necessary protective measures. Currently, all trade enabling activities and quayside operations are being carried out as normal. With the Limassol port being a frontline economic growth engine, we believe that keeping Cyprus’ global gateways open is crucial so that the supply chains of the country’s economy aren’t disrupted, especially since many sectors of the economy are heavily dependent on the port’s smooth operation.

At the same time, DP World Limassol has, from the very beginning, taken steps to ensure the safety and wellbeing of its employees, and especially those on the frontlines, while also protecting its customers and the wider port community. Specifically, all entities based and operating at the terminal under DP World Limassol’s administration are required to fully adhere to government guidelines. The Company has also taken additional measures, in order to reinforce safe behaviour in all office spaces and has introduced remote working arrangements where possible. In addition, in an effort to reduce unnecessary exposure during the global COVID-19 pandemic, DP World Limassol unveiled recently a new digital payment solution, allowing for convenient and secure digital transactions for all customers and partners.

While it is still rather early to assess the full impact of the coronavirus, experts believe that the shipping industry will face significant challenges this year. There is, however, a glimmer of hope. In times of crisis, shipping is usually among the first sectors to recover. In fact, the global trading system is slowly getting back into gear, as the weekly number of container ship journeys originating in China have started to recover.

Most importantly, this crisis offers the opportunity for business introspection. Being flexible and adaptable meant that at DP World Limassol, we were able ,in a short period of time, to adjust our behaviour to effectively cope with this new and unfamiliar situation. We will draw lessons from this and improve the way we conduct operations, by driving further efficiencies at our ports and becoming more resilient. While we have already embraced automation to a large extent, the outbreak and the new realities it has created have forced us to go even further. This crisis can also serve as a catalyst for digitisation across the port industry. Further investment in freight technologies, data analysis, digital solutions and Artificial Intelligence, will improve decision making from the compiled information. The end product will be better trade and connectivity across global supply chains which will help transform the communities we operate in.

I am confident that by working together, we can overcome the current challenges we face.

* CEO, DP World Limassol

Cruise holidays have been steadily growing in popularity for decades. In fact, this year alone, 27.2 million passengers are expected to take to the seas on a cruise holiday, up from 25.8 million in 2017, according to the CLIA.

The cruise industry is also bucking trends and challenging negative connotations by attracting an increasingly younger customer base. The average age of passengers is down from 56 in 2002 to around 46 years old, according the latest industry forecast from the CLIA.

The growing demand for cruise holidays, among people of all ages, has been sustained by the both the improvement in the comfort and facilities provided on cruise liners, as well as the growing variety of choice provided to seasoned cruisers. The growth of the cruise liner has rapidly accelerated over the past two decades. In 1999, MS Voyager of the Seas, operated by Royal Caribbean International, set off on its maiden voyage at the largest cruise liner in the world, boasting a gross tonnage of 137,236 and amenities such as the obligatory casino, a wedding chapel and FlowRider surf simulator.

Fast forward to the year 2018 and MS Symphony of the Seas - an Oasis-class cruise ship operated by Royal Caribbean International - is carving up the ocean’s waves with a gross tonnage of 228,081 and the capacity to hold 6,680 passengers, as well as 2,200 staff. This behemoth houses an ice-rink, a 43-foot rock climbing wall and a ‘central park’ that contains over 20,000 tropical plants.The economic impact of the cruise industry echoes the vastness of the ships. In 2016, the industry employed an estimated 1,021,681 people and created a total economic output global output of €103 billion.With these trends showing no sign of tapering off, it’s no surprise that port terminals are climbing over one another to accommodate the ocean’s gigantic liners. However, not all ports will be able to do so, as cruise ship terminals require the specific factors of being close by to popular routes, as well as nearby international airports for onwards travel. This narrows down the scope of viable cruise terminals and makes some locations more attractive than others, such as Cyprus.

The island of Cyprus is the third largest island in the Mediterranean Sea, (both in terms of area and population) and it is located in the eastern part of the Mediterranean(north of Egypt and west of Lebanon and Israel).

The island’s geographical location, it’s ample pool of labour and the two international airports it boasts give it a particular fecundity for becoming a successful cruise liner one-stop shop.

On the southern fringe of Cyprus, grazing the warm waters of the Mediterranean, lies the ancient city of Limassol, where DP World have a 25-year concession to exclusively operate the multi-purpose terminal. DP World Limassol is designed to accommodate the largest operating cruise vessels with a tide-free draft of up to 11 meters and three 400-meter berths that can accommodate multiple cruise vessels. As one of the three terminals that DP World operates globally that can accommodate cruise vessels, DP World Limassol is able to welcome cruise passengers leaving the Suez Canal and entering the Mediterranean, as well as offering onward travel via its international airports and providing local adventure with copious tourist activities on the island itself.

According to the OTIE, the impacts of cruise terminals on Mediterranean islands are slightly differentiated from that of mainland destinations. For example, islands’ organizational and economic structure tend to be emphasised by the prevalence of small enterprises. The regular and predictable flows of tourists provided by some cruise liners at ports, such as DP World Limassol, typically benefits those involved in these businesses most. Moreover, the cruise terminal can also be utilised as a venue space, even while cruise ships are berthing, drawing both local and foreign visitors, and emphasising DP World’s ongoing commitment to local communities throughout the world.

Mediterranean destinations are leading the worldwide growth of cruise holidays, recording extraordinary results with 8% more international arrivals than in 2016. The aforementioned CLIA report projects stronger growth for the cruise industry in 2018, with 27.2 million passengers expected to go on a cruise to in 2018. Limassol will be at the center of this growth, offering cruise ships and their passengers a stellar service.

With the demand for cruise holidays only going in one direction, and technological advances making bigger ships both possible and economically viable, port operations need to better understand the implications of accommodating ocean liners. For those operators who have the capacity to accommodate cruise liners, as well as access to increasingly popular cruise routes, the potential is as immense as the ships.

Read the 'Cyprus: Cruising into tomorrow' infographic