Port of Rotterdam sees changes in transport flows

Step by step, freight by freight, trade with Russia will come to an end in the port of Rotterdam. Tankers from Russia still arrive in Europe’s largest port and cargo ships still depart from Rotterdam to Russian ports. But the Western sanctions for the invasion of Ukraine are increasingly being felt.

Container traffic with Russia has come to a standstill – there are still 85 blocked containers somewhere in the port – and companies are already taking an advance on upcoming import bans on coal, crude oil and oil products. However, the shrinking trade with Russia has not yet led to less transhipment in Rotterdam. This is evident from the half-year figures the Port of Rotterdam Authority published on Friday.

From January to June 2022, the port handled 233 million tons of goods, from iron ore and wheat to containers and liquefied natural gas (liquefied natural gas, LNG). Despite ‘Ukraine’, supply and export together were almost 1 percent higher than in the first half of 2021.

Director Allard Castelein of the Port of Rotterdam Authority was positive about the results on Friday during the presentation on the seventeenth floor of the World Port Center. But he also expressed concerns about Europe’s dependence on Russian energy. “The current geopolitical situation makes Europe very vulnerable.”

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He was also pleased with the ‘concrete steps’ that had been taken in making the energy supply more sustainable and increasing energy independence. He pointed to Shell, which is going to build the largest hydrogen factory in Europe in the port area, and the Finnish energy company nest, that wants to build a large factory for biofuels here. This is to provide Schiphol with biokerosene from 2030. In total, companies have pledged to invest 3 billion euros in the energy transition.

Transport flows change

It marks the unprecedented shift that the port of Rotterdam is going through. Transport flows are changing – and this development seems stronger than Rotterdam has seen in decades.

Many energy carriers were always imported from Russia via the port of Rotterdam – last year 30 percent of the crude oil came from Russia, 25 percent of the LNG and 20 percent of the oil products. But those shares are now declining. In the first half of the year, Russia-related throughput fell by 22 percent.

More oil is now coming from Iraq and Brazil. From December, a European ban on the import of oil from Russia will apply. Coal now comes more from Colombia – Russian coal will no longer be allowed to be imported in August. The supply of coal to the German steel industry has fallen due to high inflation and declining demand from, among others, the car industry. Most coal in Rotterdam is destined for power stations. And the LNG ships with their distinctive spherical tanks now bring more liquefied natural gas from Norway, the US and Spain into Rotterdam (thanks to pipelines from Algeria and Morocco).

Meanwhile, Russian crude oil no longer goes to Western refineries via Rotterdam, but to refineries in India. And less scrap is transported from Rotterdam to Turkey; Turkish factories can now source cheap steel from Russia.

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containers

Container transport to and from Russia has come to a standstill, the Port Authority reports. On 1 July, 1,465 containers with Russian cargo were still stuck in the port of Rotterdam; 1,380 containers have now been released by customs, 85 have been blocked because they contain goods that fall under the sanctions. The released containers can be picked up. “But I doubt that that will ever happen again,” Castelein said.

The ongoing problems in global container transport are causing delays and congestion at the Rotterdam terminals. “There is no longer a ship on schedule,” Castelein said on Friday.

In order to make up for time, large container ships now often delete ports from their sailing schedule. Rotterdam therefore had 9.4 percent fewer ‘calls’ from container ships than before the corona crisis. They also unload more containers per call. This leads to peak loads at the terminals, busy quays and delays.

It is unclear how long the congestion in container transport will last. Freight rates are falling – partly because the first new ships ordered by shipowners are now being delivered. Some time ago, transport from Asia to Rotterdam cost 18,000 euros per container; now it is 10,000 to 12,000 euros.

Castelein emphasized again on Friday that nitrogen is a major bottleneck for the port. According to him, at least 35 major projects, including in the field of the energy transition, are being delayed because three years after the nitrogen ruling by the Council of State, there is still a lot of uncertainty in this file. Industry in the port accounts for 1 percent of nitrogen emissions in the Netherlands (agriculture: 43.9 percent; road traffic: 6.7 percent – ​​source RIVM).

Castelein mainly discussed the Porthos project. Twenty kilometers off the coast of Hoek van Holland, Shell and ExxonMobil and hydrogen producers Air Liquide and Air Products want to store carbon dioxide. It was intended that this installation would be operational from 2024, but whether that will be successful is still open to question.

The nitrogen problem makes the arrival of Porthos uncertain. This has to do with the so-called ‘construction exemption’. This stipulates that builders, for example of the Porthos project, may temporarily emit (more) nitrogen, as long as those emissions stop when the work is finished.

A case is currently pending with the Council of State against the Ministry of Economic Affairs because of the ‘construction exemption’. The Council will probably make a decision in October.

Loaders and loaders

Finally, Castelein drew attention to the staff shortages in the port. According to him, there are more than 8,000 vacancies. “Many people think that work in the port is always hard and dirty,” says Castelein. “Wrongly. Moreover, unskilled work in the port often pays better than, for example, at Schiphol.”

By way of comparison: at the airport, the unions are fighting for an hourly wage of 14 euros for luggage porters and ramp employees (that does not include the summer bonus). In Rotterdam, lashers who secure containers and general cargo on seagoing vessels receive 37 euros per hour. Lashing containers is, however, heavy work.