Traffic Decline in Container Ports: the New Normal?

By Theo Notteboom

Recently, Hamburg announced that container throughput in the Elbe port saw a decline of 6.8 percent in the first half of 2015 compared to the same period last year, mainly caused by a sharp decrease in the trade volumes with Russia and China. 

The container business is generally considered as a growth sector. Over the past decades, ports around the world have become used to welcoming traffic growth year after year. A decline in container traffic is considered as unusual. But how often have ports reported cargo losses over the past decades?

The top graph shows the situation for some of the main container ports in North Europe for a 30-year period between 1985 and the first half of 2015. In nearly all ports the crisis year 2009 ends at the top of the list when it comes to the largest traffic losses ever recorded in one year. 

In Le Havre, only 1992 brought a bigger volume drop. The outlier was Zeebrugge with a healthy growth of 5.4 percent in 2009. Four out of six ports saw a container throughput decline in 2012, while 2008 and 2013 turned out negative for half of the container load centers. The growth figures in the first half of 2015 point to traffic losses in Hamburg, Bremerhaven and especially Zeebrugge. Le Havre stays status quo (+0.8 percent), while Rotterdam (+3.7 percent) and particularly Antwerp (+9.5 percent) are reporting healthy growth figures. 

If the second half of the year would not bring any major changes then 2015 will become a year with the third lowest annual growth rate for the Hamburg-Le Havre range as a whole. Only 2009 and 2012 proved to be even poorer.

In the past thirty years, the Belgian coastal port of Zeebrugge had to deal the most with a reduction of container flows, i.e. nine times. At the same time it is a port with some of the highest annual growth rates: 19.8 percent in 1998, 20.5 percent in 1989, 22.2 percent in 2007, 24.3 percent in 1994 and even 72.9 percent in 1992. 

The bottom table in the image above shows that in 10 of the 30 years growth figures were in excess of 15 percent, pointing to the highest traffic volatility of all load centers considered. Le Havre is in a somewhat similar situation (eight years with cargo losses) but percentages in the growth years are overall lower than in Zeebrugge. 

Antwerp and Hamburg saw a volume drop in only four of the 30 years. For the Scheldt port only 2009 represented a serious traffic decline. For the Elbe port all four cases relate to the period after 2008. Rotterdam faced minor volume losses in six of the 30 years, counterbalanced by eight years with more than 10 percent growth. Only 2009 meant a major setback for the Dutch mainport.

Traffic volatility in individual ports is likely to increase in the coming years. First there is the general economic situation which still does not point to a healthy and sustained growth path for container flows. Second, China - the engine behind the global containerization boom of the 2000s - shows clear signs of entering a phase of more moderate growth, while Brazil and Russia have had wide-ranging impacts on container volumes over the past ten years. 

Next, there is the impact of the changes in the alliance formation among carriers which tends to add to the observed volatility. Then there is the competition for transhipment cargo which can seriously affect the annual results. The commercial rivalry among ports is likely to further intensify as a result of the large-scale capacity additions in Rotterdam (Maasvlakte 2), the arrival of JadeWeserPort and London Gateway on the container scene and the growing competition coming from Baltic ports such as Gdansk and Med ports. 

And finally, the combination of scale increases in vessel size and less services on the Europe-Far East trade leads to larger call sizes. When one weekly service switches from one port to another, the annual container throughput in both ports can be seriously affected. The future will most likely bring more years with volume drops in a number of individual ports, but also more years with exceptionally high growth figures in Europe's container ports.

Dr. Theo Notteboom  is a professor at Dalian Maritime University in China.

Source: PortEconomics