The port of Rotterdam bounces back from the corona dive
In the first six months of 2021, throughput in the port of Rotterdam was 231.6 million tonnes, an increase of 5.8% compared to the same period last year. Despite this increase, flow volume has yet to recover from last year’s corona dip. In the first half of the year, there was mainly an increase in the inflow and outflow of iron ore, coal and containers. The financial results of the Port Authority were good.
Highlights of the first half of the year
- Total throughput: 231.6 million tonnes (+ 5.8%).
- Considerable increase in throughput of iron ore (+ 34.4%), coal (+ 35.8%), bulk (+ 10.1%) and containers (+ 8.7% in TEU); drop in agricultural bulk flow (-8.9%) and LNG (-4.7%).
- Successful management of post-Suez shipments blockage.
- Concrete progress in the energy transition, thanks in particular to financial support (SDE ++) for companies wishing to capture and store CO2 with Porthos, and additional biodiesel production capacities.
- Increase in Port Authority revenue by 7.5% to € 387.6 million; operating income up 16.4% to € 174.9 million.
Allard Castelein, CEO of the Rotterdam Port Authority: “It is encouraging to see that the total throughput volume is increasing quarter over quarter. However, that doesn’t mean that the Port of Rotterdam has already fully compensated for last year’s crown dip. The financial results of the Port Authority are satisfactory. They allow us to continue to invest in the port of the future, in the transition to cleaner energy and in good accessibility so that we can help our customers to bring more freight to Rotterdam. We believe that our investments have a significant impact on jobs, sustainability and society.
Changes by freight throughput category
The dry bulk throughput amounted to 37.7 million tonnes, an increase of 22.5% compared to the first half of 2020. In particular, the resumption of German steel production led to an increase in the demand for iron ore and scrap (+ 34.4%). The demand for cokes for blast furnaces has also been higher as a result. There was also much more demand for energetic coal for power generation during this period. This was linked to the rebound in the economy and disappointing wind power generation.
High gas prices meant that coal-fired power generation was competitive despite the higher prices for carbon emission allowances. Total coal throughput increased 35.8% in the first half of the year. It should be noted that the volume of coal has been declining over several years, falling by 44% between 2015 and 2020.
Agricultural bulk throughput fell 8.9%. Last year, the throughput of grains, oilseeds and animal feed was high despite the corona crisis. At the time, uncertainty about possible disruptions in the food supply led traders and importers to purchase large quantities of agricultural bulk. However, from October of last year, production slowed down as large stocks, especially of soybeans and corn, had accumulated during the year.
In the most important throughput category – liquid bulk – growth was less exuberant than for dry bulk. Total liquid bulk throughput increased 1.1% to 100.9 million tonnes. There were slight increases in the flow of petroleum products (+ 3.7%) and crude oil (+ 0.4%). LNG, meanwhile, is down slightly (-4.7%).
One factor in the crude oil market is that from the start of the second quarter, refining activity in the Netherlands and Germany has returned to a higher level than in 2020. Last year saw a trend declining with the onset of the COVID-19 crisis. .
The throughput of petroleum products was higher in the first quarter than in 2020 and lower in the second quarter, resulting in an increase in throughput overall. This increase is mainly attributable to inflows of fuel oil and naphtha. More fuel oil arrived in Rotterdam from Russia, mainly due to the decrease in direct exports from Russia to the United States. Naphtha is a typical import product. In this case, increased demand from the chemical industry led to increased imports.
Imports of diesel / diesel were lower and exports higher. For example, others were transported to the United States, in part because of the extreme cold there. The flow of kerosene has fallen sharply due to low demand. In the Other Bulk Liquids category, there was an increase in biofuels and a slight decrease in the flow of chemicals.
Containers and bulk
Container throughput in tonnes increased by 4.4% and no less than 8.7% in TEU. Never before have so many containers been shipped via Rotterdam in six months. There are two reasons for the difference between tonnes and TEUs. On the one hand, more empty containers were handled, especially in the first quarter, than in the same period in 2020. The second cause is that there has been a downward trend for some time in the average weight of full containers. .
Rising demand for consumer goods, coupled with disruptions in supply chains (including the blockade of the Suez Canal, the corona outbreak and the lockdown of the Shenzhen port) has caused global delays and tariffs. high freight rates. The management of container flows went fairly smoothly in Rotterdam.
RORO throughput recovered well in the second quarter after a sharp drop just after Brexit at the start of 2021. The second quarter is even up slightly compared to 2019. Volumes are significantly (+ 8.8%) up compared to 2019. to 2020. It should be noted here that the last half year volumes of the year were hit hard by the first corona lock in the second quarter. Other general cargo throughput increased 14.7%, mainly due to higher non-ferrous metals and steel.
Healthy financial result for the Rotterdam Port Authority
The financial results of the Rotterdam Port Authority have been good in the last half of the year. Revenue increased 7.5% to 387.6 million euros (H1 2020: 360.4 million euros). Revenues from site rental contracts increased, mainly because some existing contracts were brought into line with the current market price. Revenue from seaport fees increased due to increased throughput volume. Operating expenses were down 4% from the first half of last year, mainly due to lower expenses during the COVID-19 pandemic and strong cost awareness.
The operating profit on ordinary activities before tax increased to 153.1 million euros (H1 2020: 128.4 million euros).
Profit after tax amounted to 116.7 million euros (H1 2020: 98.1 million euros). Gross investments for the first half of the year amounted to 97.6 million euros (H1 2020: 136.4 million euros). Total investments for 2021 are expected to be in line with last year’s investment level (2020: € 265.7 million).
Advances in energy transition
Once again, significant progress was made in the energy transition during the past semester. For example, it was announced in May that the Dutch government had allocated around € 2 billion to the four companies that want to capture and store CO₂ for the Porthos project. From 2024, carbon dioxide will be stored in this project for the first time in the Netherlands on a large scale in empty gas fields under the North Sea. This represents a substantial contribution to the achievement of the Dutch climate objectives.
Another important theme of the energy transition is hydrogen. A series of projects are underway relating to large-scale local production, overseas hydrogen imports and application in transport and industry. Steps are underway for an investment decision for the construction of a hydrogen pipeline in the port area. Studies are underway for the construction of pipelines between Rotterdam, Chemelot and North Rhine-Westphalia for various substances, including hydrogen and CO₂.
This type of infrastructure is a prerequisite for many industries if they are to switch from fossil fuels to clean hydrogen.
Progress in port digitization
The fact that Brexit did not cause major logistical problems in Rotterdam demonstrates the quality of Portbase’s systems and indicates that these systems provide good support to both the transport sector and the government. It also shows how important digitization is. Over the past year, we have therefore continued to work on digitizing a series of activities. For example, a series of processes for maritime transport have been further digitized, including notifications for pilots, and the digitization of maritime health declarations has started. Each year, the Port Coordination Center receives more than 30,000 such declarations for ship crews.
During the last semester, the 100th company has also been connected to Routescanner, a platform that provides a global picture of container transport routes based on data from container operators. In this way, Routescanner improves logistics transparency. In addition to the intelligent exchange and use of this type of information, the Port Authority is also increasingly equipping its physical infrastructure with sensors. The first smart terminal is now installed. The data from these sensors allow the Port Authority to deploy and maintain its assets optimally.
The economy is recovering, as is world trade. These are positive drivers for a continued recovery in throughput volume in the port of Rotterdam. At the same time, there are challenges and uncertainties, especially regarding the future course of the pandemic. Overall, we expect throughput volume growth to continue in the second half of 2021.
The Rotterdam Port Authority is keen to help the Dutch government meet climate targets. In this regard, the new government will have to help facilitate major investments in infrastructure. The port of Rotterdam also needs more latitude in the short term in the context of the regulations applicable to nitrogen emissions to implement a series of projects in the field of energy transition. If this does not materialize, our ambitions cannot be achieved in time and the process of sustaining the industry will stagnate.
Source: Port of Rotterdam