In this issue...

Interview
	Michael Drayton
State of the market
	Tanker update
	BIMCO update
	Dry bulk
	S&P
FFAs & FSA
	A new angle on FFAs?
	Oxford Analytica
Ice Class
	The ice ship cometh Will shipping’s ice age start to thaw, asks Clive Woodbridge
	Class societies Providing training for companies – and even competitors – is becoming a way of expanding services and winning new business
Cargo focus
	In short supply Oil demand growth is not enough to allay short-term tanker fears
	Doing business in the United Arab Emirates A thriving economy and well-regulation commercial environment make the United Arab Emirates an increasing popular choice for business
Regional focus
	South America The fast-developing oil and biofuel industries are driving the renewal of South America’s shipbuilding industry, but ports need to keep apace
Port focus
	Rotterdam Construction delays on the Maasvlakte expansion programme have finally been overcome. But will it be enough?
IT
	Getting into the flow A new computer application aims to streamline short sea supply chains and cut congestion throughout Europe
Maritime City
	Dublin Vision Coordination, determination and ambition will ensure Dublin’s success
Insurance news
	Insurance parlance ITIC
	Ship valuations
Out to lunch
	On the river The Baltic watches the Master Shipbroker take on the Thames Waterman in The port of London Challenge

Rotterdam expands - into the sea

Construction delays on the Maasvlakte expansion programme have finally been overcome. But will it be enough?

Space is at a premium in Rotterdam

The Port of Rotterdam has been to a certain extent a victim of its own success. While it remains Europe’s busiest port, throughput increase has been slow recently compared with the fast-growing giants of Asia and the Middle East. In 2006, total throughput was some 378 million tonnes, of which 176 million tonnes were liquid bulk and 87 million were dry bulk. Container throughput was 9.69 million teu.

Rotterdam’s position at the top of the container ports table is increasingly being challenged by nearby competitors such as Antwerp and Hamburg – over the last four years, for example, Rotterdam’s container throughput has increased by 36 per cent, while Hamburg’s went up by 44 per cent. The reason for Rotterdam’s slower rate of other growth is not for lack of cargo – it is simply that they are being diverted elsewhere.

The problem is that Rotterdam is running out of room. In February this year, the APM terminal at Rotterdam put a temporary ban on empty containers after stacks filled up: the knock-on effects hit ports across the region as containers piled up in Southampton and Hamburg, creating a box jam across northwest Europe. Liquid bulk terminals have a similar problem: queues at the Vopak fuel oil terminal have become a familiar site this summer, for example, with barges having to wait two or three days to load. This in turn has slowed down bunkering operations, having an effect on port movements as a whole.

Maasvlakte II

The solution: expansion. But when the port is hemmed in by a city, or has already filled all the space available to it, there is only one place to go. Rotterdam is expanding into the sea. Whilst the congestion problem has been exacerbated in recent years by the increase of business with Asia, and China in particular, the present situation was not unexpected. In fact, port management was aware of the need to expand the port as far back as the mid 80s. A first expansion, Maasvlakte I was carried out and planning for the second, Maasvlakte II, begun in the early 90s, although construction has been delayed. The new port will include facilities for containers and liquid bulk, though no expansion of dry bulk facilities is planned. The new section of the port will be accessed through the existing Yangtzehaven, which will be deepened to 20 metres and extended to provide access to post-panamax containerships. In order to avoid congestion from rapidly becoming an issue here, too, all terminals in the new port area will be required to have barge and rail links in addition to facilities for trucks.

Construction is expected to begin by the beginning of 2008. The first containership quays are scheduled to open by 2013, with completion of the project scheduled for 2020. The project will add additional capacity of some 16 million teu per annum, and will expand port capacity by approximately 20 per cent. In addition, the existing port areas will be reorganised to maximise efficiency, according to Rotterdam’s “Port Vision 2020” plan.

Environmental question-mark

However, development of this much-needed second expansion has been considerably delayed. Construction of the port was finally approved by the Dutch parliament in 2006, after the original proposal for the port expansion was rejected by the Council of State on environmental grounds. The project was subsequently altered to take these objections into account. Promotional literature for the Maasvlakte II port extension makes much of the measures that have been taken to ensure that the facilities will be environmentally friendly, and the project includes a wildlife reserve and recreation area.

However, the project hit a new snag in mid- June this year in the form of a legal challenge from environmental group Milieudefensie, the Netherlands branch of Friends of the Earth. In particular, the group is concerned with the problem of emissions from the port itself and the ships that call there, claiming that the air quality in the region is already the worst in the Netherlands. An increase in road traffic to and from the port is also a concern. The group says it is considering challenging the scheme in the Supreme Court. However, a survey carried out by Lloyd’s Register earlier this year shows that only three per cent of air pollution in Rotterdam is directly attributable to the port and shipping industries, with most of it coming from the refining and chemical industries that make up a large part of the city’s economic infrastructure.

It seems unlikely that the challenge will be successful in halting construction at this late stage, but some of the permits necessary for construction have not been granted yet, and it is this process that Milieudefensie hopes to challenge. Speaking at the Ports of the Future conference organised by GE and the Port of Rotterdam, port authority ceo Hans Smits said that the long-drawn out process of port approval resulted in a “temporary state of despair”, over the amount of time and energy needed to get the project under way.

Traffic control

Construction of Maasvlakte II will, eventually, take the pressure off some of Rotterdam’s existing terminals. However, the increase in traffic will not slow during construction, and Rotterdam is already close to capacity, meaning that the port must find a way to deal with this extra throughput in the meantime The most effective way of dealing with this growth is through traffic control before goods even reach the port.

Storage and transport is an ongoing problem

Currently, only 14 per cent of containers travelling through Rotterdam are transhipped by rail, and traffic jams on port approaches have been a major concern, in addition to the buildup of containers at the port itself. The official opening last month of the “Betuwe route” freight train, connecting Rotterdam with the hinterland through to the German border, will be the first step in reducing the level of road traffic that currently results in traffic jams of up to 20km on roads heading into port. Initially, five trains a day will run on the route, increasing to 80 by the end of the year, and with a potential capacity of 160 trains per day by 2012. The rail link allows direct access for cargo from as far away as Hungary, although some cargo may be transhipped to barges in Duisburg.

Another potential jam buster is the introduction of a “delivery slot” system for the loading of goods, based on a system used in airports, where trucks have a set time within which to enter the port, load or unload, and leave again. In addition, Smits has a six-point plan that, he hopes, will enable Rotterdam to cope with traffic growth more effectively. The plan involves:

• Increasing efficiency by implementing IT systems for traffic management;
• Reducing container “downtime” waiting or in storage at terminals;
• Expand traffic management beyond the port itself;
• Expand the port management system into the hinterland – possibly as far away as Duisberg;
• Increase port manning levels – get a new generation involved in the port;
• Increase social support for port developments.

It seems likely that imports – and therefore the need for ever larger, more efficient – ports will continue to grow. Increasingly, ports throughout Europe will be facing the same challenges as Rotterdam. Hopefully, Maasvlakte II will have both the efficiency and the growth figures to serve as a model, rather than as a cautionary tale.

 

 

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