Rotterdam revises down estimates on throughput growth as volumes slump in 2H08

NEAR stagnant growth in container volumes in the second half of 2008 have led the authorities at port of Rotterdam to scale down estimates for last year's annual growth to as low as four per cent.

Mr Emile Hoogsteden, director of containers and general cargo for the Rotterdam Port Authority told The Container Shipping Manager, "the first half-year was very good as we had eight per cent growth at the port of Rotterdam, but we see the growth flattening now."

However this was not inimical to the port's survival, as container traffic constituted only 25 per cent of the port's traffic.

If you are only a container port, you will go through a rough time, Mr Hoogsteden said. But a 'diverse spread of business' is likely to mitigate the adverse impact of the slowdown in container traffic, he said.

According to him while container volumes at the port had been hit by recession in European countries, bulk shipping was still flourishing as demand for coal from power plants in countries such as Germany was on the rise due to the closure of local mines. This was beneficial for the port of Rotterdam, as it is the biggest transit point for coal to Germany.

The port director however did not rule out the eventual impact of the global slowdown on the bulk and the commodity market. Though the growth in the port's oil, coal and steel business was expected to remain positive in 2009, market conditions could change overtime.

The current downcycle in the shipping industry and the global economy at large, according to Mr Hoogsteden, was the result of panic and loss of market confidence that spread after the financial crisis in the US. Fearing defaults and liquidity loss, banks refused to issue letter of credits. This has created a vicious cycle of difficulties in the shipping industry. While shippers have been defaulting on payments, carriers have been postponing investments on newer vessels. Shipyards that were on a building spree in the recent years are facing closure as carriers are either defaulting on payments or cancelling orders. Companies looking to venture into ports and terminals have stalled investment decisions.

Expansions plans in progress at the port of Rotterdam however are unlikely to be stalled as funds had been acquired before the onset of the financial crunch.

A key ongoing expansion at Rotterdam is the construction of the new harbour area, Maasvlakte II, being built at the cost of three billion euro. The facility, which will be built on more than 2000 hectares, will increase the total capacity of the Rotterdam port from 14 million TEU to 34 million TEU. It is expected to be fully operational by 2033. Reportedly space has already been assigned to terminal operators such as APMT and Dubai Ports World. 

 

Source:Schednet