European capacity question resurfaces

The opening of Maasvlakte 2 will have a significant competitive impact, according to Netherlands-based Policy Research Corp
In sharp contrast to the fears just a few years back that north European ports were heading for a capacity crunch, today’s concern is that there will be too much capacity flooding onto the market too soon.

The well-documented position of the UK one

example but the other prominent example in this respect is the port of Rotterdam where the new Rotterdam World Gateway Terminal and APMT2 Terminal are expected to open for business in 2014.

Practically speaking, this will raise port capacity by 5m teu to 18m teu by 2017. And allied to this, according to a report commissioned by ECT, one of the existing terminal operators, and undertaken by the Netherlands-based Policy Research Corp, the opening of Maasvlakte 2 will have a significant competitive impact.

Those impacts include five container lines that are currently being handled at Maasvlakte 1 shifting their volumes to Massvlakte 2 because they own shares in the new terminals; and by 2017, over-capacity on Maasvlakte 1 in the order of 2.6m teu resulting from the move of volumes to Maasvlakte 2. This level of capacity, the report underlines, is roughly equivalent to that offered by one of the two new terminals.


Another impact identified by the report is the potential major downward pressure on revenue earning capability at the ECT and APMT1 terminals due to both a fall in volume and prices.

The overall implication is that there will be too much new container capacity too soon.

The Port of Rotterdam Authority has calculated that it expects the container market to grow by 7% annually up to 2020 at which time existing capacity will be exhausted.

Despite annual container throughput climbing by 12% in 2010 and by 9% in the first in the first nine months of 2011, ECT in particular fears a dissipating market situation in Rotterdam in the near future. Any sustained downturn in the Euro zone’s economic fortunes would obviously serve to strengthen this view.

The Port of Rotterdam Authority declined to join ECT in the commissioning of its study but has recently commissioned a new study from McKinsey into the potential effects of Euro zone problems – clearly there is a recognition that we are in uncertain times.

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