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Rotterdam Russia Event

8 May 2014, 18:36 / SeaNews / Rating: 5448

                 

March 2014, the Port of Rotterdam Authority and SeaNews held the Russia Container and Breakbulk Event in Rotterdam. The Russian delegation was represented by over 80 high level delegates, among them state officials, a group of Russian Railways representatives, top managers of shipping lines and container terminals, customs businesses, breakbulk operators, shippers from Moscow, St. Petersburg, Ust-Luga and Kaliningrad.

The Dutch business demonstrated considerable interest in meeting the Russian shipping and trade delegation, as the evening networking reception was attended by more than 300 guests. Allard Castelein, President and CEO of the Port of Rotterdam Authority, Jeannette Baljeu, Vice Mayor of Rotterdam, and Klaas Huisman, Deputy Consul General of the Kingdom of the Netherlands in St. Petersburg, welcomed the audience.

The first day of the High Level Russia Container and Breakbulk Event was a conference dedicated to presentations and discussions focusing on market trends and development prospects, as well as principles of operations and cooperation in the Port of Rotterdam.

Cooperation is the key word in the Port of Rotterdam’s success story, its main strength and competitive advantage. This is a conclusion we drew from the presentations made during the Rotterdam Russia Event. All the companies active in the port cooperate on all levels to optimize their business processes, cut time and financial losses, and minimize environmental and other risks. By 2030, the Port of Rotterdam is to become the global hub for containers, fuel and energy, and leading hub for intra-European cargo.

Rotterdam Container and Breakbulk Port

Emile Hoogsteden, Vice President Containers, Breakbulk and Logistics, Port of Rotterdam Authority

Emile Hoogsteden made a presentation about the main trends in cargo transportation and on how the Port Authority supports business. Shipping market conditions are changing. Lines have to cut costs, which leads to creating mega alliances, allowing member operators to increase the number of vessels and cover a larger network. Lines also increase vessel size, now 18,000 TEU vessels are already sailing. This means customers will require more efficient container handling at ports.

Also distances from port to consignees are growing longer, hinterland connections are actively developing, which means, rail services should be developed. The new port area Maasvlakte 2 with modern terminals and state of the art infrastructure is the answer to these challenges.

Cooperation in the supply chain leads to more active data exchange between different companies. And in Rotterdam it is the Port Authority that provides a platform for such data exchange via the Portbase system.

Customs is also an important port function in Rotterdam. According to Emile Hoogsteden, the Rotterdam Customs is the most efficient and professional in the Netherlands, they don’t just point out problems, but work to solve them. It is interesting that every company has a specialist in the customs assigned to work with this company.

Customs

From the Customs’ point of view, the main aim of cooperation is ensuring more efficient control. According to Arno de Koning, Senior policy advisor, Customs Administration of the Netherlands, there used to be a lot of functional duplication between different departments. To optimize the situation, a ‘Single Window’ system was developed and implemented, and now companies need to present all the documents only once.

Since 2007 the integrated border management system Rainbow is implemented in the Netherlands. All the law enforcement and control bodies are connected to this system, they cooperate on defining risk profiles and developing measures to minimize these risks.

The Customs receives information on cargo from the Portbase system.

The Customs can communicate with shippers via Portbase, a customs officer can, for example, tell the owner of a container falling under a risk profile that the container is subject to inspection, while the ship is still at sea, so the owner has time to organize scanning and have the container shipped on board the same vessel. Other containers, which do not fall under customs risk profiles, are unloaded immediately, the Customs does not hinder handling operations.

Portbase

Portbase Information System is the tool providing reliable communication between companies in the Port of Rotterdam.

The system consists of several modules. A company operating in the port can choose the modules it wants to subscribe for, told the audience Iwan van der Wolf, Portbase CEO.

Portbase has already over 2,700 subscribers every month some 40 new companies subscribe, now there are about 12,000 system users. Both official bodies and private companies work with the system. Using the system, a company can submit a customs declaration or inform about a port call. Or, if at a certain terminal unloading was started without submitting the necessary documents, the system will immediately notify the authorities.

Ben Vree, APM Terminals Europe Region CEO

Ben Vree, CEO APM Terminals Europe Region, spoke of the major trends in the global container market. He noted that containers are being used more widely, and at this point there are no more commodities that could be containerized. As a result, the container market growth rate is decreasing. As per APMT estimation, the global growth rate in 2012-2017 will make 6.7% on the average.

At present, there are three groups of regions depending on their growth rate – low growth countries (these are developed countries of North, South and West Europe, as well as the US), medium growth countries (such as China, Latin America, South Africa and South Asia), and countries with high growth potential (East and West Africa, Central and East Europe, and the Persian Gulf).

For Europe, APMT does not foresee high container growth this year, however, there is restored growth ahead. Importantly, growth in North Europe will be above that in South Europe.

As for Russia, there is a general slowdown now but we are still optimistic long
term for its growth potential – with the largest territory in the world, the country rates the 8th in terms of exports and the 15th in terms of imports, and it ports handle only
 4.7 mn TEUs, and Russia’s largest container port St. Petersburg rates only the 55th in the world.

Roy Cummins, Global Ports, CCO

Global Ports CCO Roy Cummins spoke on the Russian market in more detail. Notably, this was the first official public presentation the company’s representative made after closing the deal on acquiring their competitor NCC.

R.Cummins stated that in recent years the Russian market grew faster than the global average. Containerization in Russia started only in the 1990s, much later than in other countries, which started getting containerized in the 70s and 80s. As a result, Russia remains undercontainerized, with a container penetration level twice as low as in Turkey and four times lower than in Europe.

One of the most attractive Russian projects according to R.Cummins is Ust-Luga. However, Global Ports does not view Ust-Luga as a substitute for St. Petersburg. Ust-Luga has a high growth potential, but it will need time to develop and adjust all the business processes.

Container Lines

Containerships

Wim van de Polder, Managing Director of Region West, spoke about the main trends in the Short Sea market. According to him, Short Sea has a significant potential, as vessels can deliver much higher volumes than trucks. Besides, in winter it is complicated to deliver cargo to Russia by trailer. He also emphasized that of course there might be issues with shipping by sea in winter time, too, however Containerships’ liner service is very stable and reliable during the whole year: The sailing schedule is Containerships’ “Bible”.

Containerships considers the Port of Rotterdam as one of the key hubs – in 2013 the line carried 87,000 TEU via this port.

Speaking about the main advantage of the Port of Rotterdam for short sea shipping lines, in the first turn he highlighted its good location, as well as the well-developed hinterland infrastructure that allows the Port of Rotterdam to be a hub for European countries. The well-developed road, barge and railway network also contributes to this.

Rotterdam Rail Port

Wouter van Dijk, Director Logistics, Port of Rotterdam Authority, told the conference delegates of the rail service development in Rotterdam. He said, some 500 trains leave and arrive at Rotterdam weekly.

He told about the ‘rail incubator’ established in the Port of Rotterdam to stimulate rail transportation. The Port of Rotterdam completed research to find out the reasons for a low demand for rail services. And the market players gave their reasons: lack of resources, services and people.

Now the Port Authority is investing to develop new intermodal connections, and many operators are willing to participate in the process.

Russian delegates were interested to know how much in advance the customer should apply to get cargo carried from Rotterdam by rail. The answer was, 12 hours before the departure.

Bunker Adjustment Factors

Ankie Janssen, a representative of the Port of Rotterdam Authority, spoke about the bunker market issues and prospects. In 2013, 10 mn tons of bunker fuel was sold in Rotterdam, and 70% of this volume was supplied to container ships.

The new more stringent rules limiting the maximum allowed content of sulphur in fuel, which are being introduced worldwide, are a concern not only for ship owners, but for the port as well. By 2020, consumers will have to somehow solve the problem with using heavy fuel oils by either switching to LNG or using chemicals to rectify exhaust gasses.

According to Ankie Janssen, the Port of Rotterdam Authority concentrates on developing LNG infrastructure. LNG bunkering operations started in Rotterdam back in 2011. To stimulate those ship owners and operators who use this type of fuel the Port Authority is developing a system of incentives and planning changes into the Port Rules.

Port Tour

The second day the delegates of the Rotterdam Russia Container and Breakbulk Event spent in the port, on Maasvlakte 2, at the new APMT terminal to be launched this year and at Broekman Group’s existing general cargo terminal.

First, they attended the presentation about Maasvlakte 2 in FutureLand.

The territory of Maasvlakte 2 covers 2,000 hectares, some 1,000 hectares of this is useful area, the rest is water basin, rail, roads, dunes, and protective seawall. Out of the 1,000 hectares of the utility area, 600 hectares are assigned for containers, 100 hectares for distribution centers, and 300 hectares for chemical industry.

The audience were especially interested in the construction costs. The overall budget allocated for the project was 2.9 bn euro, including 1.7 bn for Stage 1, 1 bn for Stage 2, and 200 mn as a reserve fund. However, due to the economic slowdown many companies offered lower prices, so most of the reserve fund, namely 150 mn euro, was saved. This is not a typical situation, according to the Port Authority, as normally actual costs exceed the budget.

After this introduction, the delegates proceeded to the new port area. Exclusively for the Rotterdam Russia Container and Breakbulk Event participants the Port of Rotterdam Authority organized a tour of Maasvlakte 2, including a visit to the most advanced container terminal in the world built by APMT, which features the world’s largest container cranes and will handle Triple E vessels. After visiting the APMT terminal the delegates continued their tour on board a boat to see the infrastructure from the seaside. The Breakbulk delegation joined the boat trip after an excursion to the Broekman Group terminal.

The third day… is something we all missed. Next time we plan the event in an extended format and will add a third day to the program for visits to customers and B2B.

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