A review of Benelux ports highlights six reasons for optimism in Europe’s leading port region.

First, transhipment activity at the region’s two leading ports, Rotterdam and Antwerp, has  increased.

Second, transit cargo to/from Germany and central/eastern Europe has also increased.

Third, there is growing evidence to suggest that semi and fully automated terminals in the ports are delivering the consistency of service expected, and this is giving carriers the  confidence to route more cargo through them.

Fourth, intense competition between terminals means keen pricing regimes and efficiency drives on the part of operators. This is something ocean carriers also like, especially at those  times when they are fiscally challenged.

Fifth, the main port authorities and their various stakeholders continue to invest, revamp and re-energise their services and facilities.

Sixth, and perhaps most significant of all, the new alliance structure in the core transatlantic and Asia/Europe/Asia trades has generally been kind to the region’s ports. While Rotterdam  has gained some new service strings, Antwerp has not suffered huge losses, and Zeebrugge has actually regained an Asia/Europe link.

It all adds up to what many observers in the industry believe will be a very positive year for ports in the Benelux region, and this was confirmed by trading results posted by Rotterdam and Antwerp for Q1 2017. Although some caution needs to be exercised, as these results covered the period before 2M, the Ocean Alliance and THE Alliance started their new schedules, they demonstrated clear growth signals were apparent in the market.

Off to a flyer

At Rotterdam, Q1 2017 volumes jumped by 8.8% to 3.3M TEU, a record result for the Rotterdam Port Authority (HbR). Allard Castelein, CEO, attributed the strong performance to “the  new terminals at Maasvlakte 2 operating efficiently, and to considerably more transhipment cargoes being handled”.

He elaborated: “For containers, this was the best quarter ever for us, and March was a record month. The Rotterdam container companies have performed strongly in a market  experiencing only limited growth. We shouldn’t rejoice too soon, but, with the new sailing schedules which are favourable to Rotterdam taking effect this month, this looks set to be a  good container year for us.”

In other cargo sectors, the volume of general cargo and ro-ro traffic moved also grew, with the latter increasing 6.5% to 5.7 Mt. In particular, new services launched between the port  and the UK in late 2016 established market positions very quickly and reported very strong growth in traffic levels in Q1 2017. Overall, the port’s tonnage totalled 119.3 Mt in Q1 2017,  up 2% on the corresponding period of the previous year.

At Antwerp, which has been among the fastest growing ports in Northern Europe over the past decade, total tonnage handled in Q1 2017 edged up by just 1.5% to 54.3 Mt. In the  port’s all-important container sector, volumes rose by 2% in weight terms (to 29.8 Mt), but by only 0.7% in TEU terms, with 2.5M TEU processed.

Like Rotterdam, this was a quarterly record when it came to the volume of boxes handled, but the growth rate was much smaller than that of its Dutch rival, the first time that has  happened in several years.

Indeed, regarding container traffic, Antwerp has relentlessly closed the gap between it and Rotterdam, and in 2015 it overtook Hamburg to become Europe’s second largest box port. A  part of the reason for this growth has been the close relationships it has fostered with global terminal operators, such as PSA International and DP World, and, of course, with the world’s second largest shipping line, MSC.

It is understood that MSC accounts for more than 60% of Antwerp’s total container traffic, with the carrier using the port as its main hub and logistics centre in Northern Europe.

Jacques Vandermeiren, CEO of the Port of Antwerp, was satisfied with the result, stressing that Antwerp needed to keep adding container handling capacity to meet that growing  demand. However, there was also a hint of caution in his statement that accompanied the figures.

“Since the first half of last year experienced a better performance than the second half, it is important to see the volumes continuing to steadily increase in the container segment,” he  said.

Hope for Zeebrugge

In contrast to Antwerp’s strong trading performance, Zeebrugge has struggled, particularly when it comes to handling containers. In 2016, the loss of several Asia/Europe strings led to  more than 33% slide in its box traffic.

But Q1 2017 has been better, and prospects for the remainder of the year look promising. In the first three months of the year, Zeebrugge handled 8.7 Mt of cargo, which was 7.8%  lower than in the corresponding period of 2016. Principally, this decline was attributable to falls of 35.2% and 8.9% in the liquid bulk and container sectors, respectively.

In sharp contrast, Zeebrugge’s strong showing in the vehicles handling and ro-ro cargo businesses continued, with volumes increasing by 10.4% (up to 714,361 units) and 4.6% (up to 3.6 Mt), respectively. In the latter sector, several new services have been secured in the past six months, and another strong performance is expected in 2017 (see box story, p47).

Despite the sharp downturn in the port’s container handling activity in recent years, developments since the end of Q1 2017 suggest that this year could turn out to be much better. To  recap, the past 18-24 months have been extremely challenging, with PSA International (PSAI) withdrawing from all container handling operations in the port.

In late 2015, PSA closed its 1.1M TEU-capacity Container Handling Zeebrugge, having decided to stop handling boxes and focus on breakbulk cargo at its Zeebrugge International Port operation. Reportedly, this facility had the capacity to handle 800,000 TEU a year.

Liner services

The reason for management’s optimism is Zeebrugge’s success in securing two new liner services, including a string on the all-important Asia/Europe/Asia trade. These new services  comprise:

• Seatrade’s new round-the-worldcontainer service connecting New Zealand, South America and the US with Europe. Called the Meridian service, Zeebrugge is scheduled as the first  inbound port of call in Europe, with this being used as one of the carrier’s main distribution centres for fruit and other perishable cargoes. The service uses Seatrade’s four new Colour-class ships, which are cellular in design and can load 2,200 TEU. They are installed with 700 plugs for reefer containers.
• Ocean Alliance’s (CMA CGM,  China Cosco Shipping Corp, Evergreen Line and OOCL) Europe/Asia/Europe NEU4 string. The service is the successor of O3’s FAL 1 service, and its  first ship called in mid-May.

In the case of Amsterdam, cargo statistics were only available for the full year 2016 period, and total tonnage handled was practically the same as the previous year, with the 79.2 Mt  processed comparing with 78.6 Mt in 2015. This was equivalent to a rise of just 0.9%.

Amsterdam handles mainly dry and liquid bulk cargoes, and this will remain the focus. In particular, management sees opportunities in both the fossil fuel and renewable energy  sectors, and will develop facilities and explore deals with companies engaged in these businesses.

Moving on

But developing new facilities in the region’s ports is becoming more challenging, and Antwerp, which is located closer to the city and residential districts than Rotterdam, arguably has  the bigger issues to confront.

Antwerp Port Authority (APA) is evaluating eight sites for future development, with three located in the Saeftinghe area, which is its favoured site. However, plans to build a new tidal  dock on 1,000-ha of land in this area is attracting considerable opposition from many groups, including environmentalists, and its target date of opening phase 1 in 2021 appears ambitious.

Stage one of the planned project would entail expenditure in excess of US$750M and involve the construction of 1,400m of quay line, associated yard areas and equipment to handle about 5M TEU a year.

It is not only delivering new developments and capital projects that are challenging Benelux ports’ management teams. In fact, it is dealing with current and far-reaching changes in  the global shipping markets, the changing face of cargoes being moved, and fundamental revamps by beneficial cargo owners (BCOs) of their traditional supply chains that will determine how successful and sustainable these ports are in the future.

Action required

This is because action is needed now. In the container shipping sector, the creation of larger shipping alliances and increased merger and acquisition activity mean greater volumes  being handled by fewer companies.

Partly because of the above and the need for carriers to reduce costs, much larger vessels have been ordered and phased into service. On several trades, including that linking Asia and Europe, it has meant fewer weekly service calls, but with much higher cargo exchanges per vessel that does call, and lines wanting ships turned around in the same time.

These moves alone call into question whether the region’s existing container terminals and their operations are relevant to today’s needs, let alone tomorrow’s.

On the cargo front, less coal, mineral ores and general cargoes are being moved. By contrast, there are increasing shipments of grains/cereals, containerised (particularly perishable)  cargo, and chemical products.

On the logistics front, BCOs are shipping/receiving cargoes in smaller lots, but more regularly, and the massive expansion of online and e-retailing ventures is accelerating this  development. There is also considerable debate about whether more or less consolidation and value-added processing of cargo should take place within ports or inland.

Rotterdam and Antwerp, in particular, have to address these issues, but Amsterdam, which handles mainly bulk cargoes, and Zeebrugge, which is one of the biggest ports handling cars in Europe, cannot ignore them.

Essentially, it means the port authorities having to:

• Revamp their facilities more regularly.
• Accept shorter life spans for them.
• Negotiate tenancy agreements, which are often difficult, more frequently.

In all cases, it means more intensive use of capital and management time, and probably means lower returns on capital employed and smaller operating profits in the future.

Finding tenants

APA is already facing up to challenges of this nature. After months of talks with Energy Recovery Systems Company Ltd regarding the development of a waste-to-chemicals plant at the  Churchill industrial zone, the two parties have agreed to cancel the option. The 88-ha site at the Churchill Dock was vacated by General Motor’s European car manufacturing arm, Opel,  in 2015, and APA has been looking for a new tenant since then. APA will now work on issuing a new international Request for Proposals document for the site.

Elsewhere in the port, APA has successfully negotiated deals with local stevedoring/terminal management entity SEA-Invest group for the development of tank storage facilities and a  container terminal within the Delwaide Dock complex.

Robotic route

While improvements have taken place in productivity levels at the automated terminals, such as APM Terminals’ Maasvlakte II and the DP World-managed Rotterdam World Gateway  (RWG), both are still ‘works in progress’. The high 30/low 40 container moves per crane hour promised by these operators are still not being realised, while in the early months of  operations, consistency was also a problem.

At least the latter has improved significantly, and Maersk is routing more ships and cargo through Maasvlakte II. But the line still makes extensive use of APMT’s facility at Maasvlakte I,  where efficiency levels are known to be much higher. Consequently, Maersk has not realised the network benefits and cost-savings it had expected to achieve by this time. Maasvlakte II opened in March 2015.

As highlighted page 1 of this edition of WorldCargo News, RWG now has two strings from THE Alliance and is approaching 85-90% capacity. The decision on whether to proceed with the Phase II expansion will be an important marker in judging the performance of terminal automation.

Also of strategic importance has been HbR’s decision to take control of PortShuttle Rotterdam, the company that offers rail connections between the main container terminals in the port.
This was a defensive move, aimed at ensuring continuity of the company’s daily rail container shuttle connecting all Maasvlakte I and II deepsea terminals with Rail Service Center  Rotterdam (RSC) in the Waalhaven, the port’s major hub for intermodal trains.

PortShuttle was facing closure, as its previous owner Eric van Wijngaarden and his company De Boomgroep have failed to achieve black figures since start-up in 2015. The takeover  includes PortShuttle 2, a six-weekly container train between the Maasvlakte and the Dutch town of Tilburg, operated jointly with Tilburg-based GVT Group.

Traction for PortShuttle’s container trains, previously provided by De Boomgroep’s own locos, is temporarily being offered by Captrain Netherlands, although a public tender will be  called, in accordance with EU rules for public body services.

“Conditions and tariffs remain unchanged,” said HbR. “PortShuttle enhances the service level in the port, similar to truck parking facilities, the Portbase EDI hub, buoys and mooring  dolphins. They are all instrumental to ensure Rotterdam’s competitiveness.”

Also at Rotterdam, Sharon Dijksma, the state secretary for infrastructure and the environment, has just approved the HbR’s plans to reroute 4.5 km of the Betuwe rail line so that it no longer uses the vertical lift Caland Bridge.

The new route will use a raised viaduct and cross the Rozenburgse Sluis via Theemsweg. It will mean additional rail capacity being made available to the port’s high-volume and most modern container terminals located in the Europoort and Maasvlakte areas of the port, as there will be no interruptions due to the bridge opening and closing to allow ships to pass.

The new route is scheduled to become operational in 2021 when the Caland Bridge reaches the end of its technical life.

Round the clock

Earlier this year, the port of Antwerp extended opening hours for container handling facilities located in the Deurganckdok area of the port, which includes MSC PSA European Terminal (MPET) and DP World Antwerp Gateway (DPWA) terminals. Since late March, these facilities have been operating for 24 hours on weekdays and until 05:30 hours on Saturday  mornings.

The move by the port authority and terminal operators has been supported by various warehousing and logistics companies. They have extended the opening hours of their premises,  which means containers/cargo can be accepted straight away and drivers are not kept waiting. This has avoided queuing elsewhere in the system.

The main objectives of the initiative are to spread out truck movements over a longer period of time, thus reducing the risk of bottlenecks at the gate, and improving service levels for  customers. Potentially, the move also raises the handling capacity of the terminals, as more boxes can be evacuated on a daily basis.

According to the APA, MPET currently processes approximately 2,600 trucks each day, while an estimated 1,700 trucks arrive and/or leave DPWA’s complex on a daily basis.

HbR continues to encourage more rail services to/from the port, with a recent development being the launch by Contargo of the Koblenz Multimodal Express service. It runs twice a  week to/from the German city of Koblenz, with trains departing Rotterdam on Mondays and Thursdays. In the return direction, trains are dispatched on Tuesdays and Fridays.

According to Arndt Puderbach, director of Contargo’s Koblenz terminal, the service is almost as fast as trucking, but much less expensive and far more environmentally friendly. It also supports the company’s existing barge services.

He explained: “Our Koblenz Multimodal Express is the ideal complement to combined transport by barge, since for urgent containers it is speed that counts, and when water levels are  low in the river, it means we have easier access to additional transport capacities.”

APA is also keen to expand the scope and capacity of its rail connections, particularly on heavy freight corridors linking Benelux ports with the Rhine-Ruhr and Rhine-Main regions in  Germany. Late last year, APA issued a request for proposal documents asking companies to submit their plans to operate services on these routes.

To date, APA has offered financial support to intermodal rail and barge services group H&S Container Line. In return, this group has launched a second service each week between  Andernach and the rail yards serving the port’s quays 1700 and 1742 at Deurganckdok.

“The subsidy from the port authority enables us to offer a sustainable rail product, both for customers in Antwerp and for those based in the Rhine region, and this supplements our  already well-developed barge services,” explained Heiko Brückner, CEO of H&S Container Line.

Commenting on the development, a port spokesperson said: “A significant proportion of the cargo between Antwerp and the German hinterland will also have to be carried by rail in the  future, and as a port authority we want to support all projects that contribute to this essential modal shift.”

In 2016, APA was instrumental in supporting rail connections linking Antwerp with Austria, the Czech Republic and Poland, and further developments are expected. These markets are  becoming increasingly fought over as Benelux ports vie with those in Germany, Poland, the Adriatic and Black Sea (notably Constantza, Romania) for a slice of what are the fastest  growing cargo markets in Europe. 

Read this item in full
This complete item is approximately 3000 words in length, and appeared in the May 2017 issue of WorldCargo News, on page 45. To access this issue download the PDF here.