23 October 2013
A continuing push to expand capacity and improve efficiency at Morocco's ports has helped sustain an upswing in maritime traffic in recent months. However, while business at the country's primary trans-shipment facility, Tanger-Med I, has seen a double-digit increase year-on-year, poor connectivity within Morocco's fragmented domestic transport system could limit the potential gains.

Expanding operations at Tanger-Med

Strategically positioned at the mouth of the Mediterranean on one of the world's busiest shipping routes, the Tanger-Med complex serves several key shipping lines, including Maersk and CMA CGM, with links to 125 ports worldwide.

The port, which began operating in 2007, was part of a major push by Morocco to improve its trade profile and spur development in the north, which it has done with modest success. Tanger-Med I has a capacity to handle 3.5m twenty-foot equivalent units (TEUs) across four terminals. In 2012 the facility processed 1.83m TEUs, of which more than 95% was accounted for by trans-shipment traffic.

Work on an extension, Tanger-Med II, was launched in 2009 and was 70% complete as of August, according to international media reports. The new facilities will bring the port's total capacity to 8.2m TEUs and serve as a motor for the economic development of the region, as industrial, logistical, and social resources are built around this trans-shipment and external trade hub. Several commercial and industrial free zones are located nearby, including a dedicated automotive industry free zone, where Renault has a factory that produces vehicles, mainly for export to Europe.

Uptick in 2013

According to the government's Exploratory Economic Budget for 2014, traffic through Tanger-Med for the period January to April 2013 was up 10% year-on-year.

This comes as particularly welcome news following a more moderate performance last year. Low levels of international trade meant traffic through Moroccan ports (including imports, exports and trans-shipment) increased by less than 1% in 2012. However, the country should be well-placed to benefit from an anticipated rise in sea traffic as the global economy's recovery gains pace.

To try to boost activity further, both in terms of trans-shipment traffic as well as exports, the government has also begun work on secondary ports throughout the country. A number of these projects are designed to increase capacity in targeted niches. Mohammedia port on the Atlantic coast, for example, is also earmarked for a $277m upgrade. The development includes an LPG station, a second terminal and a multi-purpose chemical facility. Feasibility studies are being conducted with the aim of increasing the port's handling capacity to 21m tonnes annually by 2030.

Improving connectivity across the country

The improved performance of Morocco's ports has helped to underwrite an increase in the value of its transportation sector, which has grown steadily in recent years, from Dh19.6bn (€1.74bn) in 2000 to Dh33.8bn (€3.01bn) in 2011, equivalent to annual increases of around 5%.

The maritime upgrades have been part of a broader initiative to improve overall connectivity, to help reduce the costs of distribution and exports for local manufacturers as well as to capture increased transhipment and transit traffic. Among the other projects on the table are a 1800-km highway network, airport upgrades and a high-speed rail link between Tangiers and the commercial capital of Casablanca, with work expected be completed by 2015.

Earlier in the year, the minister of equipment and transport, Aziz Rabbah, told the Union for the Mediterranean website that improving connectivity across the country was a key focus for the government.

"Morocco has realised important infrastructure projects aiming at regional integration, for example the Mediterranean road that connects the entire Mediterranean coast between Saidia and Tangier... and the launching of work on the first stage of the master plan for the high-speed railway lines (Atlantic axis) between Tangier and Casablanca," he said.

Morocco's government is aware that its transport sector will need to become more dynamic in an increasingly competitive global environment. Reforms, combined with new transport infrastructure linking up more remote areas, will sit well with investors, while paving the way for the sector to up its contribution to national growth.

© Oxford Business Group 2013