An overview of new container terminal developments in Northern Europe
When the first super post-panamax vessels entered the world trade lanes in the late 90’s, a lot of speculation started on how this would eventually shape the industry. A new round of economies of scale improvements began. This generated a lot of discussion on what the ceiling in vessel size would be. From an engineering point of view, the propulsion was the main restriction, while economists raised the point that economies of scale gained in one part of the system would be offset by diseconomies in another part.
Since early 2004, the latter has become more evident. Present terminal capacity in some parts of the world proved not to be sufficient to deal with the large volumes of cargo originating from Asia. Large scale investments in so called “greenfield” terminal projects were delayed due to extensive consultation processes dealing with environmental and social economic issues. For a number of projects in Northern Europe, like Dibden Bay and Westerscheldt Container Terminal in Flushing, these consultation processes resulted in either project cancellations or renewed investigations on their ecological impact. Other projects, like the Antwerp Deurganck Dock could only start after very serious delays. This article addresses how container terminal investments in Northern Europe are developing and how the balance between the supply of and demand for terminal capacity in this geographical area will look like in 2010.
The drivers behind the usage of terminal capacity
Since early 2004, all ports in the North European range faced a more than average growth pattern triggered by high volumes of cargo arriving from Asia. Despite the attention given by terminal operators, it transpired that certain ports had more difficulties to deal with this growth than others had. Not only the availability of terminal capacity played a role, but also how it was utilised. In general, a container terminal starts getting congested when its utilisation exceeds 70%. Utilisation is the ratio between the actual throughput and the designed capacity of a terminal. One of the key drivers behind utilisation is, therefore, throughput and as such, rising container volumes carried on larger vessels lifted the utilisation in certain ports considerably. Apart from this, non-adherence to berthing windows due to delays or congestion encountered in previous ports and last minute coastal rotation changes to offset these delays caused further pressure on the available terminal capacity in certain ports.
It is clear that if the 70% utilisation level is taken as benchmark nearly all North Continental load centres entered the area of congestion. Terminal performance is not only affected by a disrupted arrival pattern of vessels, but also by how swiftly containers are removed from a terminal. Increasing dwell times put pressure on spatial yard capacity and landside delivery, and collection peaks create disruptions in the workload planning at terminals. Captured between these land and sea side activities, container terminals try to stretch existing resources to the maximum in order to deliver the required performance. From the demand side it is interesting to note that the delivery of very large container vessels in the next three years will have a further impact on available berthing windows and terminal capacity.
The deployment of these large vessels is fundamentally restricted to two trade lanes: Transpacific and Europe – Asia. In order to launch an additional service on the Transpacific, five vessels are required, while a Europe – Asia service needs eight. Under the assumption that no serious scrapping of older tonnage will take place in the next years and that the new tonnage will be equally distributed over respective trade lanes, the consequences will be rather large. The 7,000+ TEU new build range alone is sufficient for nearly 13 weekly additional loops on both the Transpacific and Europe – Asia trade lanes. When evenly spread over the week, the main North Continental load centres will receive two additional 7,000+ TEU vessels every day by 2009.