Safi Port, the private company that has been running the Turkish port of Derince since March this year, has announced it has revised its ro-ro handling prices at the request of its customers. It has also revealed plans to increase the operational area at the port, including ambitious plans for finished vehicle handling. [sam_ad id=6 codes='true']
“As per the request of our customers, we have revised our ro-ro handling prices and decreased the number of vehicle categories from eight to four,” a spokesperson for the company said.
Safi has merged previous categories, such as SUVs, passenger vehicles and machinery, which were classified separately under previous tariffs. Now they have been brought together under the revised pricing, according to the company.
“The new prices, which take into account customer satisfaction and the competitive nature of the market, have pleased our clients,” added the spokesperson.
As previously reported, Safi Ports takeover at Derince has not been without controversy. Safi won the bid to take over the port from the Turkish State Railways Administration with a $543m bid in June last year. The 450% increase in handling fees following that led a number of ro-ro operators to look for alternative ports for finished vehicle handling.
Safi Ports countered that the increase in port charges covered services that were previously paid for separately or were delayed in their application by the Turkish State Railways Administration ahead of the tender. The sizable fees increase also takes into account overtime fees, according to the company (read more about the debate here).
Now, however, the company appears to have made efforts to placate those ro-ro operators with a reduction and simplified tariff structure, which Safi said was available to shippers and operators (figures were not made available to Automotive Logistics).
Revised rates or not, according to one of the bodies representing the finished vehicle operators affected, Safi may have burned its bridges.
“Our understanding is that this is a case of ‘too little, too late’ and that the majority of ro-ro business has made alternative arrangements in Turkey," said Mike Sturgeon, executive director of the Association of European Vehicle Logistics (ECG). "Safi’s refusal to discuss or negotiate with their clients earlier on left the industry with little choice but to seek new routes, and their high-handed approach to the application of new tariffs has destroyed some long-term relationships with the port. I think it is extremely unlikely that the changes offered now will bring anyone back to the negotiating table.”
Multi-million dollar expansion plans
Whether or not it can attract those operators back with revised handling fees, Safi Ports is progressing with development plans at the Derince. It said it was increasing the operational area at the port from 450,000sq.m to 1.2m sq.m. This includes additional berths the company said the amount of enclosed temporary storage space would be expanded to 4,500sq.m. Safi also said it will build a multi-storey car park with capacity to accommodate 1.5m vehicles per year.
The company said the current investment in the expansion is estimated to be between $350m-$450m and it has engaged a leading UK design firm to draw up the master plan for the development.
The expansion at the port is projected to increase annual container capacity to 2.5m TEUs. Dry bulk handling is set to increase to 10m tons per year.
“Our efforts towards becoming Turkey’s biggest international port continue,” said Safi Holding’s board director, Hakan Safi. “Work will soon begin on our biggest investment. The construction is expected to conclude without disrupting port operations.”
Safi said that it projects the expansion resulting from the redesign will maximise operations quality, and this increase in volume will make Safi Port Derince the focal point of the logistics sector in the Marmara Region. It added that it intended the port to be the largest international seaport in Turkey.