Container volumes at Port of Rotterdam are expected to remain subdued for the rest of the year as the drag from high inflation, a vulnerable global economy, and the ongoing decline in Russian traffic continue to hit its performance.

Hans Nagtegaal, director of containers at the Port of Rotterdam, said in the first quarter, Europe’s busiest port saw container throughput drop 11.5% by weight to 31.5 million tonnes and 11.6% by volume to 3.2 million 20-foot equivalent units (TEUs) – a decline that began in 2022 as the ongoing war in Ukraine impacted trade flows.

“As expected, 2023 started with a slight decline in throughput. Especially in the container segment, we faced a decline in volumes due to high inflation and a weakening economy,” Nagtegaal told Asia Cargo News.

“This decline had already started during 2022 due to the elimination of volumes to and from Russia.”

He noted that these volumes previously accounted for 8% of the total container throughput at the Port of Rotterdam. The port also saw a decline in imports from Asia (-14.2% in TEUs) due to lower demand for physical goods due to accumulated stocks.

Nagtegaal added that inflation was reflected in the throughput figures. No transhipment has also been recovered yet in the first quarter despite the strong improvement in chain performance, as these volumes moved to smaller ports due to congestion during the pandemic.

He added that the results in the other segments “mainly show growth and confirm that dependence on Russian energy flows has been further reduced in line with the sanctions.”

“For the remainder of the year, we expect a limited decline in throughput volumes due to the uncertainties posed by the current geopolitical situation and high inflation,” said Nagtegaal.

Nonetheless, he noted that normalization appears to be underway despite lingering market challenges post-pandemic and the continued impact of the ongoing conflict in Ukraine and global economic uncertainties.

“We have noticed a strong improvement in port and chain performance over the last months due to increased schedule reliability in combination with lower demand for physical goods from shippers in Europe due to accumulated stocks and inflation,” added Nagtegaal.

“This leads to a smooth port operation at the terminals and releases pressure on the hinterland modalities.”

There are also “no major shifts so far in trade lanes or type of cargo” passing through the Port of Rotterdam.

Meanwhile, the Port of Rotterdam is making headway in its sustainability efforts as it seeks to help reduce the shipping industry’s carbon footprint. It has forged several initiatives and partnerships to bolster green shipping, including establishing a green and digital shipping corridor with Singapore.

“The realization of net-zero transport requires huge changes in the global supply chain. That is why Rotterdam and Singapore are bringing together parties from across the entire supply chain in this project to realize zero- and low-carbon shipping on this important trade route,” said Nagtegaal.

“We are working on a digital transformation to increase efficiency and a fuel switch to realize the first sustainable vessels sailing on the route by 2027 and ultimately achieve net zero by 2050.”

According to Nagtegaal, the “ultimate goal” of the green and digital corridor is to enable zero-carbon shipping at a global level.

“To achieve this, it is important to make the first concrete steps on specific routes, such as the Singapore-Rotterdam corridor, to tackle specific challenges together,” he continued.

“This includes addressing the technical, regulatory and economic feasibility of the fuels on this trade lane together with the entire value chain. We should also address the expected pricing gap between fossil fuels and their more sustainable alternatives.”

As one of the largest bunkering ports in the world, the Port of Rotterdam is said to be considering all types of sustainable fuels to further bolster its green shipping initiatives.

Nagtegaal said they aim for a no-regret approach that “anticipates a multi-fuel future and addresses the major challenges of today related to the different fuel timelines to have an impact on the long term.” This includes bio-fuels and synthetic fuels, like methanol, ammonia and hydrogen.

He also noted that the Port of Rotterdam, together with other ports and the International Association of Ports and Harbors, is also leading the development of a port readiness framework, wherein ports around the world can use to assess and communicate how far they are exactly in facilitating the bunkering of new, sustainable fuels.

In April, the Port of Rotterdam reported that CO2 emissions from industry and power plants in the gateway were reduced by 1 Mtonne (4.2%) in 2022 compared to 2021.

By Charlee C. Delavin

Asia Cargo News | Hong Kong