An earlier contribution in Port Technology International titled ‘Recent traffic dynamics in the European container port system’ [issue 58] discussed the impact of the crisis on the port hierarchy in the European container system. The focus was mainly on the evolving traffic position in twenty-foot equivalent units (TEU) of specific multi-port container gateway regions in Europe. In this contribution we analyse the recent changes in the total cargo volumes in European ports as well as in specific cargo groups. We also discuss the relevance of focusing on port throughput as an indicator of a port’s success. This contribution is largely based
on the author’s keynote presentation delivered during the annual conference of the European Sea Ports Organisation (ESPO) in Varna, Bulgaria at the end of May 2013.
European port traffic and GDP growth
With a total throughput of an estimated 3.79 million tonnes in 2012, the European port system ranks among the busiest port systems in the world. Growth was particularly strong in the pre-crisis period between 2000 and 2008, partly driven by fast growing container throughput, ie. an average annual growth rate of 10.5 percent in the period 2005-2008 and 7.7 percent in the period 2000-2005. The economic crisis which started to have its full effect in late 2008 brought an end to the healthy volume growth in the European seaport system. Total cargo volumes handled by European ports decreased 12.2 percent in 2009 corresponding to a decline from 4.18 billion tonnes in 2008 to 3.67 million tonnes in 2009. The throughput figures somewhat bounced back in 2010 to 3.84
billion tonnes (up 4.5 percent compared to 2009), but more recent years did not bring further throughput recovery to precrisis levels (see Figure 1). In 2011 growth was merely 0.8 percent and in 2012 the European port system recorded a mild drop of 2.0 percent in cargo handlings. The first quarter of 2013 brought an additional decline of 1.7 percent compared
to figures of quarter one in 2012. A comparison of the year-on-year growth figures in the European port system with the GDP growth figures for the EU27 reveals that ports continue to overreact to swings in economic growth. When the economy booms, seaports typically show high to very high growth figures; however, an economic crisis has a very pronounced negative effect on cargo volumes in seaports.
The relation between GDP and port throughput has always attracted academic scholars, international organisations and maritime consultancy firms. Traditionally, GDP forecasts form one of the pillars in many port traffic forecasts. In one of its weekly newsletters, Alphaliner argues that the global GDP multiplier, ie. the ratio between world TEU growth and world GDP growth, is no longer stable. Alphaliner’s findings show that the global GDP multiplier fell from an average of
3.5 in the 1990s to an average of 2.7 in the 2000s and 2.1 in the last few years. [Alphaliner: vol. 2013, issue 17, April 2013]. Figure 2 presents the GDP multiplier for the European container port system based on our calculations. The trend in Europe seems to be opposite to the global trend described by Alphaliner: the European GDP multiplier is on the rise, partly because of the recent trend toward lower GDP growth rates in the EU.
The evolution in the European GDP multiplier is another demonstration of the complex relationship between port traffic and economic growth. On the one hand, the nature of economic activities in more mature economic regions in Europe is increasingly oriented toward the services
sector, with agriculture and industrial/ production activities (both strong port traffic generators) facing increasing pressure from international competition. On the other hand, the cargo base of many seaports has been greatly affected by the changing logistics function of seaports as turntables in global supply chains, but also by the setting of (European) distribution systems, the emergence of extensive intermodal transport systems/corridors and the growth of hub-feeder networks
in liner shipping. These trends have made the relation between port volume and the economic situation in the immediate hinterland of the port more diffuse, particularly when considering the larger main ports and transhipment hubs.
Traffic evolution per cargo group
Figures 3 and 4 provide more detail on the traffic evolution for five cargo groups: liquid bulk (mainly oil and oil products), dry bulk (major bulks such as iron ore, coal and grain, but also minor bulks such as minerals and fertilisers), containers, roll-on/ roll-off (RORO) cargo and conventional general cargo (steel, forest products, heavy lift, etc.). The latter two cargo groups were initially affected the most by the crisis with a volume drop of nearly 20 percent in 2009. The recovery in 2010 was too weak to undo the 2009 effect. The year 2012 brought
volume losses, after a stagnation in 2011. Container traffic was also heavily affected in 2009, but since 2010 the European container port system shows some growth again, be it at a much lower rate than before.
Liquid bulk volumes initially recorded a rather modest decline in 2009, but growth figures have remained negative ever since. The differences between the growth paths of the respective cargo groups changed the cargo type distribution in the European port system (see Figure 5). Liquid bulk still accounts for the largest share, but its relative importance has dropped from about 40 percent in 2005 to 36.4 percent in 2012. Also dry bulk and conventional general cargo flows could not hold on to their respective shares. The position of RORO traffic in total European port throughput remained fairly stable. Containerisation is still on the rise despite the observation that the crisis has lowered the ‘container fetish’ of many European seaports. Indeed, the modest growth figures in containerised trade in the past few years have given incentives to port authorities, market players and investors to rebalance their commercial interests to include a range of promising non-containerised commodity flows.
