Ups, downs and Brexit
Ports in Northern Europe are looking for new opportunities, reports Felicity Landon
The highly competitive nature of the Northern European ports sector means that all those involved are used to ups and downs, wins and losses.
This year started well for the Port of Hamburg, for example, with Hapag Lloyd's decision to switch its US services from Bremerhaven, a move expected to deliver about 550,000 teu additional throughput for Hamburg.
Zeebrugge, meanwhile, is expecting a significant increase in containers this year as a consequence of COSCO taking over the former APM Terminals’ terminal at the port; Zeebrugge is now on two of the Ocean Alliance's East-West loops.
But there is one overwhelming force that has the potential to add volumes or undermine them – and that is Brexit. For mainland European ports handling large volumes of UK trade, the continuing impasse and uncertainty relating to the UK's departure from the European Union is a common thread and a major frustration.
Zeebrugge has taken a number of steps in response, says chief executive Joachim Coens: “Mostly it has been about creating awareness among exporters and production companies that exporting to a 'third country', not an EU country, is totally different, so they [can] prepare themselves.
“The second thing is that the government has created some additional customs controls and veterinary food controls. There is also a whole mobility plan in place in case of congestion due to checks and controls, and we have created some extra parking space.”
However, he says, the most important move has been the creation of a digital platform which could cope with customs and other controls if needed. Zeebrugge has set up a data-sharing platform called RX/Seaport to deal with the expected increase in customs and other administrative formalities arising from Brexit; the port authority says it expects import and export declarations to increase by 14% and 47% respectively.
“We have also talked to the UK government and the EU authorities at various levels to avoid an uncontrolled [hard] Brexit.”
Frustration isn't far beneath the calm exterior, however. “At least we should know in advance what game we are playing – and that is still not the case. The only thing that happened is they all agreed that a hard Brexit would not make sense. But it still isn't clear what will happen and when.”
Mr Coens reports that in the first three months of 2019, Zeebrugge saw a huge increase in volumes as shippers filled the UK's warehouses in case of a 'no deal' exit from the EU. Then volumes dropped dramatically in April. And after that – will it all happen again in the run-up to an (at present) October deadline?
“Possibly, although if there is a feeling that there will be a kind of agreement, then it would be smooth. With a possible 'no deal', people are concerned about shortages of products.”
As to volumes post-Brexit, he says: “If the UK is leaving the EU and the Customs Union, that creates additional barriers and that is not in favour of trade. At least what we expect in the beginning is some disturbance in trade. Any import duties would make EU products more expensive in the UK and if confidence is lower in the UK, there is a reduction of buying power. Of course, we have seen that in the last year – car sales in the UK dropped 10%-12% and that means fewer cars to be transported to the UK.”
The Port of Zeebrugge had a good year in 2018, with volumes rising 8% to reach 40.1m tonnes. “This came after a few years of volumes going down, due to the decrease in the container sector,” says Mr Coens. “Containers were not yet back last year but they are coming this year with COSCO.”
The CSP (COSCO Shipping Ports) Zeebrugge terminal was using 37% of its available capacity at the start of the year and that is set to increase.
Liquid bulk volumes grew 63% to 6.7m last year, due to LNG volumes rising 257% to 3.5m tonnes. LNG deliveries from Sabetta started in 2018 and volumes from Qatar rose after recent decreases. Zeebrugge also supplies LNG bunkering via a vessel in the port, in an agreement with Fluxys.
“We have UECC car carriers already powered by LNG and this will grow in the coming years; we know more newbuilds using LNG are coming, including car carriers, container ships, cruise vessels and tugs.”
The port is also a landing point for a large amount of offshore wind generated energy; it is looking into the possibility of using some of this power to create hydrogen from seawater. “We have LNG as a ship fuel for the next few years but the hydrogen idea is for the future.”
The Port of Hamburg is expecting a 5%-6% increase in container volumes this year thanks to Hapag Lloyd's shifting of US volumes to the port.
“This is quite significant,” says Axel Mattern, chief executive of Hamburg Port Marketing. “All the cargoes are for the hinterland, not for transhipment; this is very important for Hamburg as our hinterland system is very sophisticated and getting better and better.”
The really major development, however, is that the deepening of the Elbe is finally going ahead after a saga lasting around 18 years.
“The first work is happening – creating the passing places so that the big ships can pass each other within the navigational channel,” he says. “This will be finished by the end of this year, giving the possibility to handle twice as many ships of the largest size as we were able to do up to now. The additional depth will be finished in 2021 and involves a lot of construction works throughout the river.”
The focus is inevitably on attracting more cargo to Hamburg, especially heavy cargo which can be difficult to handle with the current draft restrictions.
There is plenty of interest in the future possibilities, says Mr Mattern – especially from the chemical industry, keen to have this option as an alternative to the usual Antwerp/Rotterdam. “They would like to have the possibility to send cargo by train to Hamburg – this is heavy chemicals in bulk containers,” he says.
Digitalisation continues to be a key focus for Hamburg, which started out early to establish itself as a smart port and is presently a test area for 5G. “5G is installed already and now we need practical examples to be handled in the port,” says Mr Mattern. “We need to see what really can be done in terms of logistics solutions – for example, with drones being used in the port for maintenance, checking bridges and locks, and underwater ROVs checking the river bed, quay walls and even ships' hulls. In order to be able to do this they need this 5G because they need transmission of heavy volumes of data in a very smart and fast way.”
The Port of Antwerp, in a first quarter where total volumes fell by 3%, reported that March was its strongest month ever in container volumes. Extra MSC traffic from April is expected to continue pushing box throughput higher in the coming months.
“The port is doing very well,” says Luc Arnouts, vice president, international relations and networks. “Ineos, which is already present in the port, is to invest €3bn in two new factories and that is a very strong sign. We love cargo flows and even better is, of course, to attract investment that anchors cargo flows to the port. Together with other projects such as Borealis [the petrochemical company is to build a propane dehydrogenation (PDH) plant on its existing site in the port area], a total of €5bn is being invested in the chemical cluster at Antwerp, so we are particularly optimistic for the future.”
Alongside cargo handling, ports and port authorities must take up their responsibilities when it comes to topics such as climate change, energy transition and innovation, says Mr Arnouts.
Antwerp Port Authority has recently formed a consortium of five companies which will develop a demonstrator for an energy to methanol project. This is seen as taking the next step in the transition to alternative energy sources and a carbon-neutral port.
“We have a lot of green energy in the port – mainly wind, and some solar,” says Mr Arnouts. “There is the potential to store the excess in batteries but this has its limitations. So the idea is to use this green energy to make hydrogen from water through electrolysis. That hydrogen can be combined with CO2 – of which we have a lot in our chemical clusters – to create methanol. It is a way of storing energy in a chemical component which can be used in two ways – as a source of energy or in the chemical cluster, where a lot of processes are using methanol which is now imported.”
The port authority is also involved in the SAFIR consortium set up to demonstrate integrated drone traffic management. SAFIR will carry out studies and demonstrations which will include surveillance flights in the Port of Antwerp. “For one full day in June, we will make the whole port area available as a test zone for companies developing drone technology, for simultaneous testing,” says Mr Arnouts. “In allowing the port area to be used as a real-life testbed, Antwerp Port Authority is doing more than just loading and unloading goods. This is a role we are picking up more and more as an innovation port.”
POLAND STEPS UP ITS GAME
Major investment plans at the Polish Seaports of Szczecin and Świnoujście include the construction of a new liquefied natural gas (LNG) loading quay and a new container terminal, creating completely new port operations on the Ostrów Grabowski Peninsula, and extending and upgrading bulk handling, general cargo and ferry operations.
The twin ports handled record volumes last year, with cargo increasing 12.5% to 28.6m tonnes. Coal imports and exports rose 61% to 3.4m tonnes, while ore was up by 30% and fuel by 18%. However, container handling was down by 13%, described by Szczecin and Świnoujście Seaports Authority as a big surprise.
Dariusz Słaboszewski, president of the authority, says: “The figures are very encouraging to continue the development of the ports of Szczecin and Świnoujście. They are the result of creating the best possible conditions for business in the ports and implementing a robust and far-reaching plan focused on the development of port infrastructure.”
Szczecin and Świnoujście form a port complex that can handle virtually any kind of cargo, says Mr Słaboszewski. “The high quality of services provided has been appreciated by shipowners who listed the two ports as the best ones in handling dry bulk in the 2018 BIMCO Report. The ports enjoy an excellent geographic location with access to environmentally friendly modes of transport, including sea, inland and rail. We have good road transportation links to the hinterland, while the Świnoujście ferry terminal is the leader in the south Baltic Sea regarding services to Sweden. Almost every hour, a ferry leaves Świnoujście heading to ports of Ystad or Trelleborg. Additionally, Świnoujście operates an LNG terminal.”
Plans for the next two years include building a new 300-metre Norweskie quay and modernising two others, with increased depth alongside of 12.5 metres; widening the Debicki Canal to 200 metres and deepening to 12.5 metres to increase general cargo capacity; and land reclamation of the unused Notecki Basin using material from dredging the Kaszubski Basin, to extend bulk cargo handling facilities.
At the ferry terminal, berths 5 and 6 are being combined into one longer berth for vessels up to 270 metres. New yard areas and a flyover are being built, as well as rail facilities to allow intermodal transport.
Further ahead are plans to build an LNG loading quay in the external port in Świnoujście to enable the distribution of LNG within the Baltic Sea region as well as for bunkering, and a container terminal to the east of the outer port in Świnoujście to be operational by 2023.
On the Ostrów Grabowski Peninsula, three new quays are planned for containers, conventional cargo and heavy lift, and three more for bulk cargoes, while the 25-hectare central part of the peninsula would provide for logistics and port-related activities.
BOLD AIMS OF INLAND PORTS
The three Dutch inland ports of Zwolle, Kampen and Meppel have seen container volumes climb steadily since they signed an agreement five years ago to work together.
In 2014, the ports, which share the same network of inland waterways, handled 35,000 teu; last year the figure was 138,000 teu. That may sound small compared with giant neighbours such as Rotterdam but Jeroen van den Ende, managing director of Zwolle since 2016, has his eyes on something far bigger.
At present, the focus is on getting containers off the roads and on to the waterways by transporting them by barge to and from the ports of Rotterdam, Antwerp and Amsterdam, supporting the logistics of major manufacturers in the region.
However, the ports have been lobbying hard for investment in the upgrade of the Konwerderzand lock, which would improve access to the IJsselmeer and effectively make them 'inland sea ports' with the possibility of handling shortsea shipping, says Mr van den Ende.
“Together, we form quite a big inland port, handling 138,000 teu and 7m of dry and liquid bulks in 2018. The widening and upgrading of the locks would give a tremendous economic boost for the region and would make Zwolle a shortsea port. The decision hasn't been made by the government – we wait for that. But in the meantime, it is unique that three cities and two provinces are working together in one port community, and we will do more to handle our administration and tariffs as one port.
“We have close co-operation with Rotterdam, Amsterdam and Antwerp, and we have regular container services, daily to and from these ports. We think container numbers will grow again this year as companies recognise that cargo handled by water is more sustainable than by roads.”
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