Supply Chain Struggles Benefit European Breakbulk Ports
BREAKBULK SPECIAL REPORT ON EUROPEAN PORTS AND TERMINALS
By Felicity Landon
If this is a new chapter in the story of shipping, should “decontainerization” be the title? Are container lines, so keen in harder times to spirit away volumes from the multipurpose and breakbulk specialists, now less interested in picking up the awkward cargoes?
Rotterdam has felt the shift first-hand. Breakbulk – steel, forest products and non-ferrous – throughput at the Dutch port is up, more bulk carriers are calling at the port with breakbulk cargoes and there is a higher load factor in breakbulk vessels, according to Twan Romeijn, business manager breakbulk and offshore, Port of Rotterdam.
In 2021, breakbulk volumes through the port grew by 15 percent to 6.9 million tonnes compared with 2020 when 6 million tonnes were handled. “In 2021 we surpassed our latest record year (2019) in which we handled 6.6 million tonnes,” Romeijn said.
While high charter rates, among other factors, led to a slight decrease in shipping activity – from 180 vessels per month to 170 – the load factor increased per vessel.
Steel and non-ferrous – the largest product groups in Rotterdam’s breakbulk portfolio – both contributed to the large increase in 2021. There was a slight increase in the handling of forest products, while heavy-lift and project cargo volumes remained stable over 2021 as compared with previous years.
To align with further expected growth, Rotterdam’s terminals are increasing their capacity to keep up with the demand for breakbulk handling and storage. For example, there’s an initiative between four Rotterdam based breakbulk companies to enlarge their terminals through exchanging existing plots and redeveloping new plots. The companies in what’s known as the “breakbulk carousel” are Broekman Logistics, Metaal Transport, RHB Stevedoring & Warehousing and JC Meijers. Through this initiative a total of roughly 12 hectares will be redeveloped and added for the handling of steel, non-ferrous and heavy-lift and project cargo. (See sidebar, "Cargo Shift Benefits Broekman.")
Antwerp’s ‘Explosive’ Growth
The Port of Antwerp’s stats for 2021 also match the “decontainerization” narrative. Breakbulk volumes grew “explosively” last year, said the port, after a huge downward spiral in 2020 due to the pandemic and global trade wars.
Breakbulk volumes increased by 74 percent to 11.5 million tonnes, excluding roll-on, roll-off. This reflected a dramatic rise in steel import volumes and also a rise in project cargo shipments, due to ongoing projects in renewable energy and the construction of chemical plants.
The sudden growth in breakbulk volumes is putting resources and handling capacity to the test, the port has said. “Breakbulk service providers are doing all they can to cope with any operational disruptions to be able to service the industry through its growth. Many of them are also investing in the expansion of capacity, dedicated warehouses with reinforced floors, heavy-lift cranes and intermodal linked terminals.” Among them, PSA Breakbulk plans to invest €11 million in a new heavy cargo terminal on the Churchill Dock, and packing specialist Deufol is extending its warehousing capacity in Antwerp for the seaworthy packaging of industrial loads.
Ann De Smet, key account manager at the Port of Antwerp, said it is hard to put a specific percentage or figure on what might have come out of containers and returned to breakbulk, but clearly there has been a shift.
“Most container lines do still reserve some space for project cargo – because that is also paying well but of course, containers are paying incredibly well,” she said. Nevertheless, she said, there were many reported issues of shippers not being able to contact the container agencies – “so they try to find a way to ship the cargo, and one of the ways is to take it out of the container and ship it breakbulk.
“We don’t have access to what is in the container so we can’t measure – we can only hear what the customers say, that a lot of cargo is being taken out of containers, mainly on the East-West trade. Then you also have the case of steel, where the Port of Antwerp is the big winner. The main part of our breakbulk is steel and then the main part of steel is coils, which are mainly shipped breakbulk.”
Steel volumes are “completely crazy,” De Smet said. “There are some types of steel that might go in a container but are now coming out. But other cargoes are also coming out – we can see a lot of plywood arriving in breakbulk, and we are also seeing other bulk commodities such as rice that were being put in bags in containers but are now being shipped in a different way.”
Antwerp’s multipurpose terminals are packed, De Smet said. “So for some agents it is really shopping around to find space on the terminal – because vessels are sent without knowing if there is any space for storage. It is the same phenomenon in surrounding ports. It is really about finding the space to put the cargo.”
At the start of the year, the Competition College of the Belgian Competition Authority, or BMA, approved a merger between the Port of Antwerp and the Port of Zeebrugge. Once the merger process is finalized, the two ports will operate as an
integrated port enterprise — Haven van Antwerpen-Brugge/Port of Antwerp-Bruges. The ports see the merger as an opportunity to strengthen their position within the global supply chain especially as they transition towards a low-carbon economy.
Picking Up Excess Cargo
Amsterdam, meanwhile, is benefitting from spillover traffic from Rotterdam and Antwerp. It reports no container congestion, and still has capacity to receive containers. “There is more and more interest in our terminals in order to cope with the congestion in Rotterdam/Antwerp,” said Daan van Velsen, commercial manager logistics. “With a reliable barge corridor between the Northern Netherlands, Amsterdam and Rotterdam, our port is well connected.”
However, that is not to say that breakbulk and project cargoes are second best, he added – “due to the capacity, we can still offer service to our clients.” Demand for the storage and transshipment of offshore wind projects is a high note for Amsterdam. The port handled project cargo for two large infrastructure projects recently finished: the new IJmuiden sea lock and the Amsterdam bicycle tunnels.
Germany’s Port of Hamburg has seen an overwhelming shift to containerization and consequent dwindling of breakbulk volumes. Fifteen years ago, there were eight breakbulk terminals in Hamburg; now there are three. However, in the current market all of them – Unikai, Wallmann and C. Steinweg – are busy, said Axel Mattern, CEO of Hamburg Port Marketing.
Some of the container lines are “very keen” on project cargo, he said: “But they have this tremendous problem dealing with containers at present and are a little bit more reluctant on breakbulk. Breakbulk shipments are quite complicated on a container ship and eat up a lot of slots. Containers are easy to handle and bring in a lot of money.
That said, a lot of breakbulk cargo has returned to the breakbulk terminals here too. “As long as container shipping is doing as it is now, the breakbulk terminals are very happy about the situation. I don’t see the container prices dropping to where they were before – they might go down a little bit, but I think it will be a quite healthy equalization between containers and breakbulk.”
Project Cargoes ‘Not Second Best’
Project and breakbulk cargoes may have become “second best” for some of the container lines but not in the port, he emphasized. “Usually, breakbulk has a lot of added value services. The container terminals often don’t want to do this because it disrupts container flow. For example, Siemens is producing gas turbines in Berlin, from 200 up to 500 tonnes unit weight. They are brought directly from the factory to Hamburg by barge and stored in a shed – which is a very complex operation when it is a 500-tonne piece.
“They do a lot more added value services. The gas turbine is produced as a ‘standard’ product and adjusted individually for the final client. So, in the Wallmann terminal, there can be 15 or 16 turbines in a shed. Therefore, you need qualified people able to handle the cargo, and sheds that can receive these heavy pieces. We have 99 percent containerization in Hamburg, but you still have things that do not fit in containers – and maybe that 1 percent will increase a little bit.”
He also noted that while in recent years project cargo shipments had been split between modes, there is now a return to more traditional shipping. “We are seeing more projects being shipped together again. In later years you only had the large units – for example one generator – being shipped as project cargo, while all the accessories were shipped in containers. Now we are seeing a generator or transformer together with 3,500 cubic meters of accessories as breakbulk all being shipped together again on charter ships.”
Shipping the complete project together rather than split is generally better for the industrial customer, he said, as it avoids the uncertainty around delivery times and scheduling. Previously, if rates were cheap enough, shippers could decide it was worth risking the potential mismatch. “But as containers are so expensive now, it is so much cheaper to ship in the traditional breakbulk way.”
Capacity to Spare
The Port of Tallinn has seen some impact from the container crisis, but in a different way to the larger ports in Europe. HHLA operates the container terminal and took delivery of two used cranes in 2021, to be deployed on its 17-meter-deep quay. Two more quays are available for containers and there is more than enough capacity, said Margus Vihman, chief commercial officer at the Port of Tallinn.
“We have a lot of overcapacity as we used to be the main port for Russian exports. Last year we handled just over 22 million tonnes – and we could easily service 40 million to 45 million tonnes,” he said. “Where there is a problem it’s the shortage of containers. Estonian exports are typically not very high value – wooden products, wood pellets, some chemicals, peat. If there is a shortage of containers, the operators know that the more expensive the goods to be transported, the more they can charge the client.
While there is a lot of high-value import cargo coming to Estonia, containers are not kept at the port for exports. “We talk to the container lines about this and of course we are worried,” Vihman said.
Without naming names, he said one global container line had said most of the containers would be taken to Poland or Germany “and they are cutting all the cheap stuff out,” Vihman said. “That is something that is going to affect us during this year.”
On the other hand, he said, a market has opened for smaller operators looking to gain market share where the large operators have lost interest, and exporters are willing to pay a higher price – knowing that everyone is facing the same increase.
Breakbulk volumes through Tallinn were almost 5 million tonnes last year. “We used to have very few terminals specialized in breakbulk. Now we have one in Paldiski and four in Muuga [both part of Port of Tallinn] and there is some competition between them. This is bringing good results,” Vihman said. (See sidebar, "Containers Provide Lucrative Sideline.")
Project Boom Expected
Project cargoes include the export of modular, prefabricated wooden houses, and the import of mining and production equipment from Europe and North America, for onward transport by rail to central Asia. This trade is growing steadily, Vihman said.
With €100 billion planned investment in wind power in the Baltic area, other renewable energy developments, and the upcoming Rail Baltica construction, Tallinn is confident of higher project cargo volumes to come. Especially because the Rail Baltica Muuga Multimodal freight terminal will be located inside the harbor area, providing station yard and connection tracks to different terminals.
“The main point for us is how we differ from the big ports in Europe – and even the smaller ones,” Vihman said.
“We have invested a lot into our landside and quays and have areas where we can build new quays. If you look at the older European ports, they are struggling to find space. Our point is – if you are willing to look a little bit to the edge of Europe, we have quays and space available here with all European standards, quality and environmental rules. We are 67 percent state-owned, 33 percent freely traded and offer a very safe haven with zero political influence.”
The question, of course, is what happens next. If the breakbulk terminals are “making hay,” is the sun going to disappear at some point? Antwerp’s De Smet noted that many multipurpose terminals had started to diversity over the last couple of years because breakbulk volumes were waning. They invested in container freight stations, stuffing, stripping containers, barge transport, and other value-add services on their terminals.
“Of course, handling breakbulk cargo is their first priority, so it is normal that they want to help the customer now. However, it is such a volatile business – they take what they can get, and they do not know how long it will last.”
She added that as nobody has a crystal ball, nobody knows exactly what will happen next, although it’s accepted that much will depend on the container business. “Everyone agrees the prices will not go down to where they were, because they were going in a direction where nobody earned any money. That is the only positive thing that came out of this crisis.”
Rotterdam, meanwhile, said that making predictions is difficult as the current market situation is heavily influenced by multiple external factors, not the least of which is the impact of the Russia/Ukraine conflict. The port spokesperson noted that Russia accounts for roughly 15 percent of the total volume being shipped through Rotterdam, so the war could have serious consequences for Rotterdam. From a breakbulk perspective this mainly impact raw materials being shipped, including steel, non-ferrous, zinc and copper.
And of course, Covid-19 has not gone away with the threat of new variants still there, added the port. But despite the unknowns, Europe ports appear confident that they can maintain steady breakbulk volumes in 2022.
Felicity Landon is an award-winning freelance journalist specializing in the ports, shipping, transport and logistics sectors.
Photo 1: Rotterdam’s breakbulk volumes grew by 15 percent in 2021 to 6.9 million tonnes. CREDIT: SHUTTERSTOCK
Photo 2: Demand for the storage and transshipment of offshore wind projects is high. CREDIT: PORT OF ANTWERP
Photo 3: Alex Mattern, CEO, Hamburg Port Marketing
Photo 4: Breakbulk volumes at Antwerp increased 74 percent to 11.5 million tonnes in 2021. CREDIT: PORT OF ANTWERP
Photo 5: Margus Vilman, chief commercial officer, Port of Tallinn
Photo 6: Tallinn has capacity to sparefor additional breakbulk volumes.CREDIT: PORT OF TALLINN
