Recent research by Drewry Maritime Advisors shows that Poland’s share of the Asia/Europe trade will accelerate. “Poland was the only EU nation to avoid recession during the financial crisis [2009], and despite its economy cooling a little in 2012-13, it continues to thrive, with the IMF forecasting GDP growth of 3.5% for 2015, versus 1.5% for the euro area,” stated Drewry’s analysis.

 

“Poland’s relative economic strength is evident by its container flows, and while box traffic from Asia to Europe declined 3% in the first four months of this year, Poland registered a fractional increase.”

 

Modal competition

A multitude of ports and transport corridors are available to serve eastern Europe and, given the bullish cargo figures, competition between them is intense.

 

Traditionally, northern European ports, such as Rotterdam and Antwerp in the Benelux region, and the German ports of Bremerhaven and Hamburg, have been dominant. They have been supported by national rail, specialist intermodal and/or combined transport operators.

 

Hamburger Hafen und Logistik AG (HHLA), which controls most of the containers handled in Hamburg, and Eurogate, which has operations in Hamburg, Bremerhaven and Wilhelmshaven, each have managed dedicated intermodal rail companies. While Eurogate Intermodal is focused on running block train services to/from southern Germany and Hungary, HHLA’s Metrans and Polzug subsidiaries operate services to/from Hamburg and Poland, the Czech Republic, Slovakia, Belarus, Ukraine and the Caucasus.

 

Recently, Metrans extended its network to include calls at the Schwarzheide terminal in south eastern Brandenburg. The terminal has a portal crane, six rail tracks for loading/discharge activities and a container storage area for 1,700 containers.

“Schwarzheide is an important addition to the Leipzig and Ústí nad Labem locations, which we already serve,” said Jiri Samek, managing director of Metrans. “It means we can offer our customers regular transportation services for internal European cargo between Schwarzheide and central, eastern and southern Europe, while being able to better reposition empty containers from the Czech and Slovakian depots.”

 

Ports in the Mediterranean basin and especially those located in the Adriatic Sea, have been securing a growing share of the business. Their competitiveness has improved as container handling capacity in the main gateway and transit ports has increased. In addition, better highways and rail tracks have been built to/from the ports, such as Ancona and Trieste
in Italy, Koper in Slovenia and the Croatian port of Rijeka.

 

“At Ancona, we are upgrading our rail infrastructure,” said port authority president Rodolfo Giampiero. “This will allow us to accommodate longer cargo trains and the project will be finished next year.” Clearance work at a “double track tunnel” on the main Adriatic rail line near the town of Cattolica has been completed and this has also raised freight capacity
along the corridor.

Ancona is a key southern node in the EU’s Trans-European Transport Network (TEN-T) project and is earmarked to be one of the main hubs for both the Scandinavian/Mediterranean and Baltic-Adriatic freight corridors.

 

In this respect, expanding the port’s rail offering is viewed as being critical to reducing traffic on highways between Mediterranean ports and southern Germany, Switzerland and Austria. Currently, Ancona handles about 165,000 TEU of containerised traffic, 130,000 trucks and in excess of 2 Mtpa of ro-ro cargo, of which 70% is destined for/originates
from western and central Europe.

 

Enticing operators

 

Even ports as far west in the Mediterranean basin as Marseille-Fos believe opportunities exist. “Our role as a port authority is to entice operators to develop ‘massified’ inland solutions for containers via rail and barge transport services,” said Monica Michel-Bonvalet, commercial director of the Port of Marseille-Fos Authority.

 

“Our strategy is to foster strong relationships with inland ports, develop advantageous customs clearance possibilities with French Customs, invest in major infrastructure projects to improve inland connections, and become a strategic partner [where possible] in EU-sponsored TEN-T corridors.”

 

While rail volumes handled at Marseille-Fos remain modest, totalling just 99,000 TEU in 2014, this was up 14% on the previous year, and Michel-Bonvalet is confident this will rise and that further destinations will be added to the network. Currently, the most easterly destinations served by train from Marseille-Fos are Munich, Buna Werke and Lubeck in Germany. To support this growth, a new combined transport terminal is being developed at Mourepiane.

Adriatic ports are the main gateways for the Balkan region, encompassing Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Kosovo, Macedonia, Montenegro, Serbia and Slovenia. Their objective, however, is to reach further into Europe.

In particular, the stated objective of the North Adriatic Ports Association (NAPA – Koper, Rijeka, Trieste and Venice) is “to become a multi-port gateway for the trade between Asia, central and eastern Europe and the northern Balkans”.

 

NAPA is driven by a general shift in economic activity in Europe from the north and west to the south and east, and to rising political and corporate pressure for transport providers to offer greener and more sustainable supply chain solutions.

 

Ports in NAPA, for instance, are up to 2,000 miles nearer to the Far East than Benelux/German ports and can save between seven and 10 days on transit times to key central and eastern European cities.

The Slovenian port of Koper has been one of the main success stories in this sector, and in H1 2015 its box traffic was up over 18% on the same period of 2014. The 393,655 TEU handled compared with 303,203 TEU the previous year.

“The company’s performance in the first half of the year has been very encouraging and can be attributed to our investment in increasing capacity at our container terminal,” explained Dragomir Matić, president of the port’s management board. “We will further this objective in the future, starting by seabed dredging the basin down to 15m, which will be completed by the end of summer. In addition, documentation is being prepared for the extension of Pier I and additional handling and storage facilities, in order to prevent a possible lack of capacity due to the current growth in the volume of containers and cars.”

 

Carving a slice

The Greek ports of Piraeus and Thessaloniki, have also carved out market shares, as has Constantza in Romania. Meanwhile, the latter port is keen to exploit opportunities via the Danube river corridor into Hungary, Austria, Switzerland and southern Germany.

 

The planned privatisation of the Piraeus Port Authority, for which revised terms and conditions are due to be announced in September 2015, is likely to raise its competitiveness in Europe’s interior transit trade.

 

Future developments at the port include Cosco Pacific-controlled Piraeus Container Terminal expanding the box capacity of its Pier 2 and 3 facilities to 6.2M TEU, up from about 4M TEU currently. The country’s rail network to/from Austria, Hungary, the Czech Republic and Slovakia is also to be modernised, with new transit services planned by several companies.

Cosco Pacific fully supports the Chinese government’s Maritime Silk Road project, a key objective of which is the use of a key transit hub in the Mediterranean, from which cargo can be distributed to and picked up from a full range of destinations and origins in southeastern Europe.

 

Elsewhere, the port of Adria-Bar in Montenegro, which is located in a free trade zone, is being upgraded, and a wider hinterland targeted. Its success on this front will be determined by improvements to the region’s road and rail networks. In the case of the latter, approximately US$200M is being spent on relaying and repairing over 200 km of track on the line linking Belgrade and Adria-Bar, so that faster and heavier trains can be operated. It is envisaged that by 2017, the average speed of freight trains on the line will have more than doubled to between 80 and 100 km/h, compared with 40 km/h currently.

Meanwhile, earlier this year an agreement in principle was concluded between the governments of China, Serbia and Hungary to build a new 370 km rail line between Belgrade and Budapest. While funding for the project has to be finalised it is hoped that the new track will be commissioned before the end of 2017.

The high-speed rail link would help boost the discretionary cargo opportunities of many ports in the region, including Thessaloniki and Piraeus in Greece and a string of Adriatic ports, stretching from Vlore in Albania to Rijeka in Croatia.

The past 12 months have seen noticeable changes take place at Adria-Bar as Container Terminal and General Cargo JSC-Bar implemented a two-year, €13.5M capital expansion and modernisation programme. This follows Turkeybased Global Port Holdings’ (GPH) purchase of a 64.5% stake in JSC-Bar in 2013, and its decision to buy new equipment, overhaul  existing facilities and streamline operations.

This strategy appears to be working and container traffic jumped more than 18% in 2014 to 39,000 TEU. Overall, the port handled 800,000t of cargo.

 

Polish players

More recently, Polish ports have become bigger players in the eastern and central Europe transit trade. Gdansk, in particular, has benefited from Maersk Line’s decision to use the port’s DCT Gdansk facility as a sub-regional hub. The G6 alliance also recently started calling at the terminal and cited its location and facilities as one reason for doing this (see p24).

“Poland will inevitably increase its share of the Asia-Europe container trade, and attract more deepsea services as its economy outpaces other EU nations,” said Drewry. “New infrastructure improvements such as DCT Gdansk T2 will help the country become a major rival to German and Benelux ports as a transhipment hub for central Europe and beyond.”

Polish ports and their terminal operating companies also see opportunities in the Baltic Adriatic corridor as, potentially, cargo routed this way to/from destinations/origins east of the  Suez Canal can save shippers/consignees seven days or more in transit time.

The option has also become more cost-competitive for a wider range of goods since the imposition of the Sulphur Emissions Control Area (SECA) in the English Channel, North Sea and Baltic Sea on 1 January 2015.

Manila-based ICTSI, which manages container handling facilities in both Rijeka (Adriatic Gateway Terminal) and Gdynia (Baltic Container Terminal) is very keen on the idea and is actively promoting it.

 

Infrastructure woes

But infrastructure improvements are needed, especially when it comes to local road and rail access issues along the corridor and at the ports. Recent meetings in Gdynia between the port authority and Kurt Bodewig, the European Coordinator of the Baltic-Adriatic Corridor project, resulted in considerable progress being made on the specific needs of the Polish port.

Service levels also need to be improved if the corridor is to become a viable option to traditional and established routings through northern European gateways.

 

“Southern gateways,” said MichelBonvalet, “will improve the efficiency and fluidity of Europe’s transport network, while offering customers more competitive service options.”

 

But the service options do not always involve ports, and when it comes to the Asia/Europe/Asia trade, the past three/four years have seen the launch of a number of high profile rail services. While these links have, to date, focused on the western China/Germany sector, considerable opportunities exist in eastern Europe, especially Poland, Hungary and the Czech Republic, and particularly as higher value and/or time-sensitive goods, including auto parts, aerospace equipment, certain fashion items and perishable products, are traded on a more regular basis.

 

DHL Global Forwarding, DB Schenker, KTZ Express (Kazakhstan), UTi Worldwide and Geodis are among the forwarding companies involved in current projects, with BMW, Mercedes Benz, Siemens and various pharmaceutical companies some of the main shippers using the services.

 

Local ports are also investing as they seek improvements in their efficiency and productivity ratios. In June 2015, ACT Burgas, which operates the container terminal in the namesake Bulgarian port, replaced its in-house TOS with Navis’s N4 suite of products.

 

Jan Nowak, director of ACT, said that the company had been motivated by the need “to cut paper-based transactions, implement additional digital processes, improve customer interfaces and accommodate efficiently the expected increase in the facility’s box traffic”.

He elaborated: “The implementation of Navis N4 at our terminal represents a milestone on our way to becoming a 21st century container terminal. It opens up a range of new opportunities for all port stakeholders and will help us to become the main gateway terminal for Bulgaria, and perhaps a transhipment terminal for the Black Sea region.”

Nowak hopes that the new TOS will allow ACT to raise its productivity rate from 11 container moves per hour per crane to at least 18, thus quickening ships’ turnaround times.

Danube capacity

 

In Romania, considerable efforts are being made to expand capacity along the River Danube and to exploit its opportunities as both a bulk (mainly grain) and containerised freight corridor. By investing in the river’s ports, barges and associated infrastructure, it is hoped that Constantza, which is located at the mouth of the delta, can evolve as the Black Sea hub of choice for eastern and central Europe.

 

The river ports being modernised and expanded include Giurgiu, Bechet and Corabia, with each of them receiving just over €5M for their respective projects. The largest of the three ports is Giurgiu, which has an established container terminal that handles about 30,000 TEU a year. This will be expanded in a work programme that is expected to be finished in mid-2016.

The other ports are considerably smaller, with Corabia and Bechet, respectively, processing 100,000t and 50,000t of cargo a year. It is hoped that work on upgrading their berths and yards will be completed during 2017. Funding for the various projects is being provided by Romania’s Ministry of Transport and private investors.

With eastern and central European economies continuing to lead the way when it comes to Europe’s economic growth, the options serving these markets are bound to increase further. 

 

Read this item in full
This complete item is approximately 2000 words in length, and appeared in the August 2015 issue of WorldCargo News, on page 22. To access this issue download the PDF here.