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Wednesday, Jan 15, 2025

Tanger's Ascent: How Maersk's Strategic Rerouting Bypassed Algeciras

Tanger's Ascent: How Maersk's Strategic Rerouting Bypassed Algeciras

In a move reshaping Mediterranean logistics, Maersk opts for Tanger as a key stop on its revamped India-US route, sidelining Algeciras amid infrastructure and environmental speculations.
In a decision that has reverberated through economic corridors on both sides of the Strait of Gibraltar, Maersk, the global shipping giant, announced it will re-route its Mediterranean layover from Algeciras to Tanger for its newly revamped India-US route slated to commence in February.

This shift has raised eyebrows among port authorities and government officials in Spain, with some suggesting reasons range from logistical hurdles to environmental regulations.

Carolina España, spokesperson for the Junta de Andalucía and Minister of Economy and Finance, urged a deeper investigation during a press conference, questioning whether issues with Spain's national policies might have influenced Maersk's decision.

In response, Maersk clarified on Tuesday that alterations such as these are commonplace in the shipping industry due to commercial strategy adjustments.

Tanger, it argued, proves to be a more suitable choice given its substantial increase in capacity and productivity records over recent years.

This decision did not come as a complete surprise.

Back in June, Maersk flagged the "congestion" at Algeciras, compounded by ongoing crane repairs expected to stretch until November.

Meanwhile, Tanger has been experiencing a meteoric rise.

In 2023, the Moroccan port surpassed its traffic targets by four years, handling 8.6 million containers, an increase of 13.4% from the previous year, and reaching 95% of its nominal capacity.

Tanger Med's ascent can be attributed to the stellar performance of its Maersk/APM-run terminals and continuous development undertakings at other facilities.

The port's expansion is leaps and bounds, aiming to solidify its status as the Mediterranean's leader by transcending 9 million containers.

Ambitions include broadening its industrial area from 2,500 to 5,000 hectares to allure higher-value investments, expanding its passenger and truck terminals' capacities, and modernizing import zones.

This developmental surge is supported by a €650 million investment, with substantial backing from global financial entities like the World Bank’s International Finance Corporation and an international bank consortium led by JP Morgan.

The repositioning of Tanger aligns closely with the unveiling of Maersk's new cooperation with Hapag-Lloyd, an initiative heralded as Gemini.

This marks a pivotal realignment in maritime transport, leading both companies to dissolve long-standing alliances—with Maersk parting from MSC and Hapag-Lloyd exiting The Alliance.

Gemini is set to streamline operations by reducing network complexities, opting for single-operator loops, and minimizing port stops, thus improving productivity and efficiency.

Maersk’s decision to omit an Algeciras stop on the westbound segment of its India-US route in favor of Mundra aims to cut the journey by five days.

Nevertheless, the company maintains a significant presence in Algeciras, with Gemini encompassing vital Asia-Europe routes involving ships of up to 20,000 container capacity, underscoring its investment commitment to the Andalusian port.

As the Andalusian port contemplates its trajectory over the medium and long term, its role remains uncertain amidst Tanger’s rapid ascendancy.

Despite the strategic realignment, both Algeciras and Tanger offer optional stops given their proximity and shared shipping lanes through the crucial Strait of Gibraltar.

The potential environmental undertones of Maersk’s decision have sparked further intrigue.

Southern European ports have sounded alarms about possible traffic and client diversions borne from the European Union's new carbon emissions levy on vessels (ETS).

Maersk has staunchly denied any environmentally motivated agenda, affirming its ongoing support for regional ecological initiatives, including the ETS.

The company emphasizes its commitment to sustainable practices, evidenced by its collaboration with Cepsa to establish Europe's largest green methanol plant in Huelva.

As the dust settles on this significant move, stakeholders in Algeciras continue to analyze the implications, with the local logistics sector bracing for potential reverberations from Tanger's burgeoning prominence.

Whether environmental concerns or strategic alignment drivers precipitated this outcome, Maersk’s rerouting undeniably signals a pivotal reshaping in Mediterranean maritime logistics.
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