Room at the inn
Report finds there will be plenty of space in northern Europe's biggest container ports over next decade.
By Eric Johnson
One of the few benefits of poor demand for containerized goods in 2009 was the positive effect it had on some of the world's busiest container terminals.
Where once there were containers stacked high, trucks backed up and capacity a concern, all of a sudden there was slack in the system.
Demand has rebounded this year, but there is still plenty of capacity in most container terminals, none more so than in northern Europe, where a report this summer by shipping consultant Dynamar showed the region's biggest ports have plenty of space.
The report, Container Throughput & Terminal Capacity in Europe, said the throughput of northern Europe's 10 biggest ports accounted collectively for only 57.5 percent of total terminal capacity in those ports.
Even taking into account that ports run most effectively when they are at 75 percent of design capacity, there is room available for container volumes to grow. The report said the 10 northern Europe ports with capacity for more than 1 million TEUs annually are projected to have throughput of 38.9 million TEUs in 2010, compared to 67.6 million TEUs of capacity.
'The general consensus is that congestion kicks in at 75 percent occupancy,' Dynamar said in its report. 'That said, temporary excess volumes can usually be managed without too many negative consequences. Considering the fact that the increase of box volumes in the forthcoming 10 years will be equal to the increase of container terminal capacity (in terms of growth percentage, not actual volume), overall supply looks like it is bound to remain ample.'
What's more, volume forecasts for those 10 ports in 2020 is 69.6 million TEUs ' in other words, scarcely more volume than those ports are designed to handle today.
Yet the bulk of those ports have massive capacity expansion plans, increasing their collective capacity from 67.6 million TEUs to 108.1 million TEUs in 2020. At the forecast throughput of 69.6 million TEUs in 2020, terminals would see greater usage, at 64.4 percent. But they'll still hardly be full.
Much depends on whether all the projects planned for some of Europe's biggest container terminals actually come to fruition. For instance, Rotterdam, Antwerp and Hamburg, the region's three largest ports, collectively plan to grow from 43.4 million TEUs of capacity to 70.9 million TEUs by 2020. That 63.4 percent growth would be equivalent to adding two ports the size of Hamburg over the next decade.
Dynamar has estimated 5.5 percent annual growth of container volumes from 2011 through 2020. That looks conservative compared to the average 8.3 percent growth from 2000 through 2009, but reflects the theory that demand growth for containerized goods to and from Europe will not match that of the previous decade.
Northern Europe's container terminals have profited from large volumes from Asia, and to a lesser extent on smaller but steadier transatlantic trade. In recent years, north/south trades to South America and Africa have grown in prominence.
In addition, Europe's largest ports have been among the few outside of the Far East capable of handling the world's biggest containerships. That places them at an advantage to lure those vessels with their 8,000- to 13,000-TEU capacities.
The report highlights this development. 'Currently 48 (vessels) ranging between 10,000 TEUs and 15,000 TEUs are operating on routes to/from the Far East. In the next three years they will be accompanied by another 175 units of 12,800-TEU average. The present average capacity of all box vessels sailing between Europe and the Far East is 8,300 TEUs.'
To put this in perspective, all but a few of the largest ports in the United States struggle to even accommodate 8,000-TEU vessels.
By region, the report finds that different areas of northern Europe will experience varying degrees of occupancy over the next decade.
The Northwest region, represented by Dutch, German, Belgian and French ports, is significant for long-haul trades as it is home to the largest ports in Europe (and the world).
'In the Northwest European ports, presently ample capacity will keep pace with growth of demand, obviously with port-by-port variations,' the report said.
Among the notable findings in the report:
' In Antwerp, where Mediterranean Shipping Co. hubs in northern Europe, capacity was fully used at a PSA-MSC joint venture terminal but was 'substantially under-deployed' at other terminals in the port.
Antwerp is Europe's second-largest port, with an estimated volume of 7.9 million TEUs in 2010.
' Bremerhaven is building a new terminal complex, in nearby Wilhelmshaven, due to space constraints and a need to accommodate the largest container vessels in operation today. The project, dubbed JadeWeserPort, will handle transshipment to Baltic nations, but also has the ability to develop as a gateway for the densely populated Rhine/Ruhr region of Germany. The new complex is to open in 2013 and would have an eventual capacity for 2.7 million TEUs.
Bremerhaven, with 2010 estimated throughput of 4.5 million TEUs, is Europe's fourth-biggest container terminal.
' Amsterdam probably doesn't belong on the list of northern Europe's biggest ports since it has lost two key long-haul services in the past year (one from Asia and one from South America). That has left it without any deep sea services, and its projected 2010 volume (200,000 TEUs) is but a fraction of the port's capacity (1.4 million TEUs).
The report, meanwhile, finds that capacity expansion planned for ports in the U.K.-Ireland region could significantly change current congestion problems.
'Should all intended projects in the U.K. be executed by 2020, the current somewhat tight position threatens to turn into quite substantial overcapacity,' Dynamar said.
Indeed, the report projects capacity in the region to more than double to 21.2 million TEUs by 2020, headlined by 42.9 percent expansion at Felixstowe to 6 million TEUs, and the addition of 3.8 million TEUs in container terminal projects near London. Southampton, the region's second-biggest port, is also planning to add 22.2 percent capacity, to 2.2 million TEUs.
Unlike the other regions, the Baltic-Scandinavia region could reach capacity by 2017-2018, the report said. Covering the Danish port of Aarhus, the Swedish port of Gothenburg and the Polish port of Gdnask, the region relies mostly on transshipment from larger ports in the Northwest region.
The report estimates capacity at the three ports will grow 13 percent by 2020 to 3.5 million TEUs, and that throughput will rise to 2.9 million TEUs by that time. Of note, Gothenburg's volumes are projected to rise 70.9 percent in the coming decade, to 1.5 million TEUs.
Getting back to growth projections, the report said that, should overall growth average 6.6 percent instead of the assumed 5.5 percent, occupancy in the selected European ports would reach 90 percent by 2020. That's going by the 75 percent capacity metric, meaning that ports would be 90 percent full at their optimum capacity level of 75 percent.
In the case of 8.5 percent demand, terminals would be at 107 percent of optimum capacity.
'That said, seeing an overhang in capacity versus demand in the form of throughput as originally conjectured, it seems more likely that part of the 55 million-TEU terminal capacity projects presently scheduled to be developed in full during 2011-2020 would be postponed until after 2020,' Dynamar said. 'For the same reason, it is also highly unlikely that any of the additional 21 million TEUs intended for development after 2020 would be called forward to the 2011-2020 period.'