Upstream container ports in northern Europe: alive and kicking

antwerp port

by Theo Notteboom

One could think that the days for upstream ports are counted given a growing demand for a good nautical accessibility and a fast turnaround time for the ever larger container vessels. A closer look at Antwerp and Hamburg, two of the largest upstream container ports in the world, urges us to think again.

In the past few decades the large upstream ports in the Hamburg-Le Havre range have gradually gained market share at the expense of large coastal ports. In the late 1970s, Antwerp on the river Scheldt and Hamburg on the river Elbe had a combined market share of about 25% in the total container throughput in the Hamburg-Le Havre range. In 2003 the share of the two large upstream ports reached an elevated 45%. Between 2003 and 2008 no further market share gains were realized, mainly due to the rise of Zeebrugge, the modest revival of Le Havre and a regained growth path in Rotterdam after several years of traffic stagnation. In 2009, the combined market share of the two large river ports even fell to 42% mainly as a result of a steep decline in sea-sea transhipment cargo in Hamburg. The port of Antwerp was able to maintain its market share in 2009 and even overtook Hamburg to become Europe's second largest container port for a short while. Since the dip in 2009, the combined share of Antwerp and Hamburg has been gradually increasing again to reach about 45% last year, despite scale increases in vessel size.

The decades old discussion on coastal vs. upstream ports continues to attract the attention from policy-makers in Belgium and Germany. Although this discussion cannot be generalized on a global scale, upstream ports in northern Europe clearly continue to be competitive, and maybe in some way complementary to coastal ports. First of all, there is a growing gap between inland transport costs and maritime freight costs. The price difference per FEU-km (Forty foot Equivalent Units) between inland transport and long-haul liner shipping ranges from a factor 5 to a factor 30. Shipping rates typically range between 0.05 and 0.19 euro per FEU-km. The price for inland haulage per truck from north European ports usually ranges from 1.5 to 4 euro per FEU-km depending on distance and weight. By barge the price ranges between 0.5 and 1.5 euro per FEU-km (excluding handling costs and pre- and end haul by truck). This price gap supports direct calls at an upstream port, certainly if the port's immediate hinterland has a strong cargo-generating power (as is the case for Antwerp and Hamburg) and in case the upstream port succeeds in outperforming downstream ports in terms of terminal productivity, prices and integrated value-added services, all this in order to compensate for the extra sailing time.

Draft limitations remain the worst threat to the position of upstream ports, particularly on the Europe-Far East trade. But in essence this is also true for a large number of coastal ports. Both Antwerp and Hamburg have responded to the realities in the liner shipping market by engaging in extensive dredging programs to guarantee access for the largest generation of post-Panamax vessels. The River Scheldt has been deepened in 2010 resulting in an improved tide-independent draft and wider tidal windows for the largest container vessels. The Elbe deepening program is planned and a fast realization will certainly be welcomed by shipping lines. Next to pure dredging works, the ports have also made advances in vessel traffic management allowing longer, wider and deeper vessels to safely reach the terminals. The nautical access for new generations of container vessels is first being tested in a virtual environment through simulation exercises. Nautical authorities will only give clearance to the real vessels if safety can be guaranteed. Both Antwerp and Hamburg have already received +18,000 TEU vessels and the number of +10,000 TEU vessels visiting each year is increasing fast.

The future outlook for upstream ports will largely depend on the balance of power between the 'cargo follows ship' principle and the 'ship follows cargo' principle, and the willingness of port authorities and terminal operators in these ports to make the necessary investments in view of accommodating ever larger vessels. The 'cargo is king' argument remains a strong reality in Northern Europe. Shipping lines are still massively prepared to call at upstream ports Antwerp and Hamburg in large part because of their high cargo generating performance and the savings they can make in onward inland transportation distances. However, upstream ports will continue to face fierce competition from existing coastal ports such as Rotterdam, Bremerhaven, Le Havre and Zeebrugge, but also from newcomers such as JadeWeserPort in Wilhelmshaven.

Note: Large coastal ports include Le Havre, Zeebrugge, Rotterdam and Bremerhaven. The small and medium-sized container ports include Rouen, Dunkirk, Ghent, Flushing, Amsterdam, Cuxhaven, Wilhelmshaven (for now still small volumes despite the large JadeWeserPort terminal) and Emden.


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