Economic outlook for ports Theo Notteboom President and professor, ITMMA - University of Antwerp, Belgium President, International Association of Maritime Economists (IAME)
ESPO 2014- The European Sea Ports Conference Gothenburg, Sweden – 15-16 May 2014
EUROPEAN PORT TRAFFIC: SIGNS OF ECONOMIC RECOVERY?
The fragility of economic recovery
• Global economy’s dependency on exceptionally low interest rates.
• Threat of a bond market crash as the world's central banks try to return monetary policy to a more normal setting.
• Risk of resource conflicts
• Europe’s industrial challenge
• Confidence levels are up
• Eurozone crisis behind us
• Most industries have capacity in place to accommodate growth
• The global/European discussion on climate change creates new opportunities
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
2006 2007 2008 2009 2010 2011 2012 2013 Q1 2014
Pe
rcen
tage
gro
wth
co
mp
ared
to
th
e p
rrev
iou
s ye
ar
Total throughput
GDP growth EU27/EU28
Year-on-year growth in total EU port traffic (basis = ton) and EU GDP
Traffic stagnation in 2013: -0.08% to 3.84 billion tons Moderate growth in Q1 2014: 1.46%
Note: growth figures 2013 and Q1 2014 are estimates based on a sample of about 60 European ports
Traffic peaked in 2008: 4.18 billion tons
EC projections GDP growth: +1.6% in 2014 and 2% in 2015 (Spring forecasts)
75
80
85
90
95
100
105
110
115
2005 2006 2007 2008 2009 2010 2011 2012 2013 Q1 2014
Ind
ex e
volu
tio
n -
20
08
= 1
00
Containers
Liquid bulk
Dry bulk
Conventional general cargo
Roro traffic
Total
Are we back at pre-crisis traffic levels? Index evolution of throughput in the EU port system (2008=100)
Only container volumes managed to get above the
2008 level (+7% in 2008-2013)
Dry bulk and conventional
general cargo on the path of recovery?
Total throughput is still about 7% below the 2008 level
Liquid bulk saw a minor drop in 2009, but
records further traffic decline after 2009
Distribution of cargo flows in the EU port system Increased containerisation and decline of liquid bulk
19.8%
39.6%
24.2%
6.2%
10.3%
2005
Containers
Liquid bulk
Dry bulk
Conventional general cargo
Roro traffic
22.8%
37.5%
23.5%
6.0%
10.2%
2008
Containers
Liquid bulk
Dry bulk
Conventional generalcargo
Roro traffic
26.0%
37.2%
21.3%
5.2%10.3%
2012
Containers
Liquid bulk
Dry bulk
Conventional generalcargo
Roro traffic
26.9%
33.4%
23.9%
5.7%10.2%
Q1 2014
Containers
Liquid bulk
Dry bulk
Conventional generalcargo
Roro traffic
Traffic growth distribution – Q1 2014 (based on number of ports per growth rate)
21%
10%
5%
12%14%
38%
Q1 2014 growth distribution ports - DRY BULK (n = 42)
< - 10%
-5 to -10%
-5% to 0%
0% to 5%
5 to 10%
> 10%
17%
7%
12%
14%14%
36%
Q1 2014 growth distribution ports - RORO (n = 42)
< - 10%
-5 to -10%
-5% to 0%
0% to 5%
5 to 10%
> 10%
24%
13%
22%
14%
8%
19%
Q1 2014 growth distribution ports - LIQUID BULK (n = 37)
< - 10%
-5 to -10%
-5% to 0%
0% to 5%
5 to 10%
> 10%
19%
3%
13%
31%
9%
25%
Q1 2014 growth distribution ports - CONTAINERS TEU (n = 32)
< - 10%
-5 to -10%
-5% to 0%
0% to 5%
5 to 10%
> 10%
EUROPEAN PORT TRAFFIC - OUTLOOK: KEY DRIVERS
Weak oil refining capacity outlook for Europe
• Global refining system: 7.2 mb/d of new crude distillation capacity (to be) added in the period 2012-2016 => virtually no additions in Europe
• Largest proportion of closures – around 1.7 mb/d – has so far occurred in Europe.
• Still, industry will continue to experience a capacity surplus, one that has been
gradually building since 2009.
Distillation capacity additions from existing projects 2012–2016
Source: OPEC, World Oil Outlook
A changing energy mix
• Expected growth renewables and biofuels till 2030: 7.6% per annum
• Tight oil and oil sands: ~13% of global liquid energy supply in 2030 (North America!)
• Shale gas revolution: self-sufficiency for N-America + impact on industry location/coal price
• European gas demand: share of net imports (LNG + pipeline) in total demand will increase from 50% today to around 80% in 2030.
Power demand 1990-2030 (Source: BP, Energy Outlook 2030)
Changing energy mix: LNG as a bunker fuel
• LNG demand for bunker fuel - main recent forecasts (Source: based on GDF Suez analysis)
• Global demand of LNG as a fuel for maritime shipping: 20-30 mtpa between 2025-2030
• Logistics are costly, slim margins because LNG is in competition with HFO + scrubbers
• Progressive spread of ECAs vs a limited renewal rate of the world fleet
• Role PAs in overcoming ‘chicken and egg’ problem
The steel industry
Source: SMRL and BHP Billiton
Stainless steel consumption to 2028 (kg per capita)
Steel Use, finished steel
Source: World Steel Association (2014)
The rising importance of traders in directing cargo
flows
Source: Meersman, Rechtsteiner and Sharp (2013)
Traders become more asset-based (also terminals)
Traders’ game: example of impact of blending
decisions on port activity
Distribution based on RDCs Distribution based on one EDC
Distribution based on tiered system (EDC+RDCs)
Towards new waves in distribution networks?
24h rule Double and triple EDC
DC bypass Impact e-business, 3D printing
THE CONTAINER MARKET
Regional shares in total TEU of the European container port system
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Sh
are
in
to
tal co
nta
iner
thro
ug
hp
ut
Hamburg-Le Havre range
Mediterranean range
UK range
Atlantic range
Baltic
Black Sea
Source: Notteboom - ITMMA
Growth TEU Q1 2014
0.94%
18.48%
5.81%
1.51%
3.35%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Hamburg-Le Havre range (8 ports)
Atlantic (4 ports)
Med (14 ports)
Baltic (7 ports)
TOTAL
Growth Q1 2014
Source: Rapid Exchange System (RES) data
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26%
1. Rhine-Scheldt Delta
2. North Germany
3. Seine Estuary
4. Portugese Range
5. Spanish Med range
6. Ligurian Range
7. North Adriatic
8. UK Southeast Coast
9. Gdansk Bay
10. Black Sea West
11. South Finland
12. Kattegat/The Sound
Stand-alone gateways
West Med hubs
200820122013
Shares of multi-port gateway regions, pure transhipment hubs and stand-alone gateways in
the European container port system
Source: Notteboom - ITMMA
Shares of multi-port gateway regions in European container port system
Comparison of total TEU and gateway TEU (excl. T/S)
Source: Notteboom - ITMMA
24.1%
15.8%
2.6%
1.8%
6.7%
4.1%
1.9%
6.4%
1.7%
0.9%
1.4%
1.7%
11.7%
10.7%
23.9%
14.8%
3.1%
2.0%
5.5%
5.6%
2.7%
8.6%
1.6%
1.1%
2.0%
2.5%
13.1%
1.1%
00% 05% 10% 15% 20% 25% 30%
1. Rhine-Scheldt Delta
2. North Germany
3. Seine Estuary
4. Portugese Range
5. Spanish Med range
6. Ligurian Range
7. North Adriatic
8. UK Southeast Coast
9. Gdansk Bay
10. Black Sea West
11. South Finland
12. Kattegat/The Sound
Stand-alone gateways
West Med hubs
SHARE IN TOTAL GATEWAY TEU (2012)
SHARE IN TOTAL TEU (2012)
Transhipment incidence in ranges of European port system
0% 10% 20% 30% 40% 50% 60% 70%
Hamburg-Le Havre range
Atlantic range
Mediterranean range (EU)
UK
Baltic
Black Sea (EU)
TOTAL EU
Transhipment incidence (%)
2004
2008
2012
The adaptive power of ports? Ports able to receive ultra large container vessels of 15,000 -18,000 TEU (DNV, 2014)
Mary Maersk (18,000 TEU) and Evelyn Maersk (15,000 TEU) at Deurganckdock – Antwerp - 19 October 2013
Dynamics in alliances (G6, P3, ..) • Not all eggs in one basket • Access to markets is key • Involvement in and reconfiguration of terminals
The intermodal challenge
• Hinterland coverage:
- Advances in intermodal solutions for local/regional hinterland (extended gates, etc..)
- Going beyond the ‘comfort zone’ remains difficult
• Trunk lines to gateway ports: large scale co-modality is concentrated
- More than half of total European container traffic by rail is concentrated in 6 ports
- About 90% of European container traffic by barge is linked to Antwerp and Rotterdam
- Overcoming the critical mass challenge by bundling cargo from multiple ports in inland centres
Conclusions
• EU port traffic volumes are still below 2008 levels (except for containers), although big differences exist between ports
• 2013: zero growth -> decline in liquid bulk offset by moderate growth in other traffic categories
• Forecast 2014: overall growth in European port system of 1.8% to 2% - Containers (tons): +3% to +3.5%, liquid bulk: -2.5 to -3%, other categories: +3 à +6%
• European port system is still somewhat fragmented + co-modality challenges
LINKING TO PORTOPIA PORT TRAFFIC INDICATORS AND MUCH MORE
Warm invitation to join the (new) Rapid Exchange System
00%10%20%30%40%50%60%70%80%90%
100%
Total Solid bulk Liquidbulk
Generalcargo(total)
Containers(ton)
Containers(TEU)
Representativeness of sample of ports in RES - year 2012(% in total European port traffic)
Share
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