The Port of Rotterdam is expecting “no full recovery of volume” this year, with 2020 throughput predicted to be “significantly lower” than last year as the coronavirus disease 2019 (COVID-19) continues to limit consumer demand.
The grim outlook comes as Europe’s busiest container hub reported a 7 percent decline in container volume in the first half of the year, as carriers hit by the demand-curbing effects of COVID-19 cut 20 percent of their services in May and June.
Rotterdam’s falling volume was in contrast to Europe’s second-largest container hub, the nearby Port of Antwerp, which saw a marginal 0.4 percent increase in H1 volume, with a strong first quarter helping to offset a weak second quarter.
Allard Castelein, CEO of the Port of Rotterdam Authority, said the port is dependent on demand for consumer goods in Europe and abroad, both of which have fallen dramatically owing to the economic effects of COVID-19 lockdowns.
“It should therefore come as no surprise that throughput volumes in the past six months were considerably lower than in the same period last year,” Castelein said in a statement. “On the positive side, the throughput volumes in the second quarter turned out to be better than initially expected.”
Rotterdam handled 7 million TEU in the first half, down 529,000 TEU from the same period in 2019. The decline was slightly leaning toward imports, which comprised 52 percent (3.64 million TEU) of the first-half volume.
However, the port noted that the number of empty containers handled in the first half was significantly lower than the same period last year, a development it attributed to falling numbers of import boxes from Asia as exports increased. Data from Container Trades Statistics (CTS) from January to May, the most recent available, show that while Europe’s containerized imports from Asia declined almost 15 percent year over year, exports to Asia fell 7 percent compared with the same period in 2019.
‘Considerable uncertainty’
Rotterdam said a cautious recovery of the global economy was expected over the rest of the year, but there remained “considerable uncertainty” about how long the current recession would last and how strong that recovery would be.
“The recovery of the world economy depends very much on whether there will be a second wave of virus infections,” the statement said. “And another factor is whether the EU and the UK will manage to conclude a post-Brexit trade agreement in the coming months. As a result, volumes in the port will not decline further, but there will probably be no full recovery of volumes.”
With a significant amount of capacity cut from service, a spike in volume could quickly lead to growing space constraints. Tony Cole, head of supply chain services at UK-based forwarder Davies Turner and Co., said volume was recovering on trades out of Asia and space was already tight because of the high level of blank sailings.
Of the 189 blank sailings scheduled for the third quarter in the Asia–Europe trade, 18 have been reactivated in the past few weeks, according to Sea-Intelligence Maritime Analysis, with only two new blank sailings announced in week 29 (July 13–19). That suggests carriers believe volumes will return to levels more closely resembling 2019 in the second half of the year.
“What we can’t see is how strong the market will be in terms of expected volume coming through,” Cole told JOC.com. “Our customers are telling us that they have no major volume plans over the next quarter, so we are not expecting major peaks or troughs, but it is hard to be certain.”
Fewer ships, bigger calls
In its first-half results, Rotterdam highlighted a trend on the Asia–Europe trade that quickly developed once carriers began cutting extensive amounts of capacity to manage the declining volume: fewer ships but greater exchanges of containers.
The port said the decline in throughput in the first half was less pronounced because of increased sizes of vessels calling at Rotterdam. This was also reported by Antwerp, which noted that while the number of vessel calls compared with the same period last year decreased, that was compensated for by larger vessels with a higher average volume being handled per ship. The growth is part of an ongoing trend, with IHS Markit port productivity data showing that in 2019, Mediterranean ports registered a dramatic 13 percent increase in average call sizes during the year, while call sizes in Northern Europe were up nearly 10 percent last year.
The Asia-Europe trade is home to the world’s largest mega-ships, and hubs in both the Mediterranean and northern range ports are regularly reporting call sizes in excess of 10,000 TEU. In June, the world’s largest container ship, the 23,964-TEU HMM Algeciras, made its maiden voyage through Europe’s hubs, exchanging 13,600 TEU at HHLA’s Burchardkai terminal in Hamburg.
According to the latest WPSP-IAPH Economic Impact Barometer report, a weekly survey of major ports, with the majority in Europe, several ports believe that current conditions and reinstated blank sailings will “soon” start to generate similar numbers of overall vessel calls compared with the same period last year.
JOC — 23 Jul 2020