Rotterdam drive to double port size continues

When plans were made a decade ago to double the capacity of Rotterdam port, container shipping was growing at 10 percent a year. Since then, a global recession has battered the shipping industry, and, while traffic is creeping back, shipping analysts don't expect growth to top six percent a year for the next decade.

Yet Rotterdam's US$4.1 billion Maasvlakte 2 expansion is steaming ahead, with enormous cranes swinging whale-size blocks into place and dredging ships creating land where the North Sea once churned, reported The Wall Street Journal.

"There's never been a Plan B," says Sjaak Poppe, a spokesman for the port.

Risks aside -- and there are several -- Rotterdam officials are confident that the key to taking advantage of even a slow rebound in global trade is to get bigger. In a world where austerity is the norm, shipping firms are seeking economies of scale more than ever. That, port officials reason, requires huge deep-water ports like Rotterdam.

Rotterdam is already the biggest container port in Europe, processing the equivalent of 9.7 million containers last year, putting it ahead of Antwerp, Belgium, which processed 7.3 million, and Hamburg, at seven million.

Maasvlakte 2, which port officials say is the world's largest land-reclamation project, is crucial to maintaining business from companies like Neste Oil Oyj and shipping company DP World.
The four kilometers of extra docks at Maasvlakte will allow ships to land 8.5 million more 20-foot containers a year. The expansion is part of a plan to "double or triple" container traffic within 20 years, Poppe says.

Construction began two years ago, and the first docks should be ready in 2013, although the project won't be finished until 20 years later. When the expansion is complete, the port will be the size of 2,800 football fields.

The project does carry risks. With global trade slumping 12 percent last year, shipping companies lost an estimated $20 billion. And while global container volume has returned to 2008 levels, much of it is within Asia or between Asia and Latin America.

"Europe and America are slow-moving giants," says Philip Damas of London-based Drewry Shipping Consultants Ltd. A port like Rotterdam, he adds, "risks becoming marginalised" if European purchases of Asia's consumer goods slow.

Rotterdam faces competition from Antwerp and Hamburg, with which it competes to service the German industrial heartland and the consumer belt of northwestern Europe. Rotterdam "will grow if the global economy grows, not because it will take away market share," says Eddy Bruyninckx, the Port of Antwerp's chief executive.

Rotterdam's location on the sea makes it vulnerable to storms. But it also gives it deep water, "which means you can go straight out to the ocean," says Kim Fejfer, CEO of APM Terminals, a unit of Denmark's A.P. Moller-Maersk. "And the shipping lines are putting in bigger and bigger vessels." APM has already leased space on the coming docks.

The trend toward bigger vessels is key. Analysts figure the number of ships on the seas that can carry 15,000 20-foot steel containers -- double the capacity of most container ships -- will quintuple by 2013.

Maersk is part of a group of companies, led by Dubai's DP World, that are spending $8.3 billion to build warehouses, docks and refineries, in addition to the $4.1 billion the port is spending to build the land. The ability to dock superlarge ships is what drew the companies, says a spokeswoman for France's CMA-CGM, the No. 2 container line by volume, behind Maersk.
 

Source: Cargonews Asia