“Rotterdam is the natural start and final stage of the Silk Road”

Interviewer: Europe’s leading ports are facing infrastructural changes and planning extensive investments. One reason for this lies in the steadily growing sizes of container ships. Is the Port of Rotterdam prepared for these changes?

Emile Hoogsteden: Thanks to its many deep sea connections combined with excellent intermodal connections within Europe, the port of Rotterdam is the gateway to the European market for more than 500 million consumers. Furthermore, the port is a key transhipment port the many intercontinental cargo flows that converge here. The depth of over 20 meters means that shipping companies are able to make maximum use of their vessels. The Port of Rotterdam is also the first and last port of call for the biggest (over 20,000 TEU) container ships. The recent deepening of the Nieuwe Waterweg (the canal between Rotterdam and the North Sea) is an investment in the accessibility of the Rotterdam Mainport. The deepening will allow the so-called New Panamax and Aframax ships to navigate the Nieuwe Waterweg without any restrictions. In previous times, one large vessel could enter with every tide. Now – in favorable circumstances – this will be three large vessels. That is a big step forward.

Because of those developments, there is a growing number of people calling for a closer cooperation or even a merger between the Port of Hamburg and the German deep water ports of the North Sea. Do you see a potential threat for Rotterdam’s number one status in connection with those calls? 

Rotterdam is Europe’s largest port with excellent connections to the hinterland. That position was built over decades through continuous hard work, investment and innovation. Of course, we take note of initiatives from our competitors, but we prefer to focus on strengthening our own competitive position. At Port of Rotterdam, we strongly believe in our own strength. With regard to cooperation between ports, our motto is: where possible, we are working together with other ports, for example in the area of sustainability or security. But we are competitors in areas where we need to be competitors.”

Your Chief Innovation Officer, Paul Smits, recently stated in an interview that he intends “to transform Rotterdam into an intelligent harbor”. What are your short and long term goals in this regard?

Our ambition is to become the world’s most clever port. The logistics sector is rife with useful data. At the same time, this is a challenge. Each link in the chain yields its own information. We strongly believe that we can achieve the biggest wins by increasing our insight into the entire chain. That means that chain members need to share their data. The Port of Rotterdam Authority creates added value for its partners by facilitating and stimulating the exchange of information within the chain. Examples of digital products and services that bring together chain information include our Port Community System (PCS), our port planning tool Pronto, our online route calculator Navigate and Nextlogic, a collaborative program within, by and for the inland container shipping sector. All this is based on a strong partnership between various sea port terminals, empty depots and barge operators, who are jointly developing the products, systems and processes required for optimizing the chain.

As the world’s leading export nation, China is massively investing in several transport corridors and market opportunities as part of the “New Silk Road” project. Beside upgrading the Trans-Asian railway capacities, China has also bought the Port of Piraeus in Greece and is financing an important railway corridor on the Balkans to the CEE region. Do you view those strong endeavors as a challenge to your own business? Does Rotterdam have a geographical disadvantage?

Rotterdam is the natural start and final stage of the Silk Road. Cargo can be transported from Rotterdam by ship with very frequent services to the United Kingdom and Scandinavia. For companies in Western China it is even attractive to transport goods by train to Rotterdam and then to bring them to the American east coast by ship. The Belt and Road Initiative (BRI) strategy aims to connect China, Europe and the countries in between. As such, it is a strategy that connects with the Dutch position in the world economy and the port of Rotterdam in particular. The Netherlands is a trading nation and a connection between Europe and the rest of the world. China is the largest trading partner for the port of Rotterdam in container logistics. So, the effort made by China to improve the connections with Europe are significant. Over the last two years there was a growth of 12% in container transport from China to Rotterdam.

The Port of Rotterdam noted a minus of 2.2% in the first half of 2018: While the turnover of container loads is steadily increasing, the turnover of coal and oil decreased due to the closing of numerous carbon-based power plants. At the same time, you plan to open the Offshore Center Rotterdam (OCR) next year – a business and logistics park solely dedicated to companies working in the field of offshore wind power plants. What are your plans for the OCR, and do you think that the turnover of carbon-based raw materials will keep shrinking to a marginal amount in the future?

The Port of Rotterdam achieved a throughput of 232.8 million t in the first six months of 2018. That is 2.2% less than in the first six months of 2017. By contrast, container throughput, one of the strategic priorities of the Port Authority, rose by 5.9% (in metric tons, 6.2% in TEU) by comparison with the first six months of 2017, including a new throughput record in May. Also, the market share of Rotterdam by comparison with the other ports in the Hamburg-Le Havre range increased from 30.9% (Q1/2017) to 31.2% (Q1/2018). The decline in bulk goods was mainly seen in the throughput of coal, crude oil and mineral oil products such as fuel oil. Striking growth segments were LNG and biomass, which more than doubled by comparison with throughput volumes in the same period last year. Going forward, we anticipate changes in underlying cargo flows, meaning less coal and more container throughput.

With regard to offshore, the Port of Rotterdam Authority is offering space for the development of offshore activities in the western section of Maasvlakte 2. We are focusing on various offshore market activities, including decommissioning of oil and gas platforms, facilitating construction of offshore wind farms, the establishment of a large-scale manufacturing and assembly industry, as well as conversion projects and mobilization and demobilization projects.

Rotterdam is believed to be Great Britain’s most important deep water port, where the biggest container ships are able to dock, and the most vital transshipment hub for goods crossing the English channel. Until now, goods got unloaded and immediately shipped to the UK without time-consuming customs clearance processes. Against the backdrop of the sluggish negotiations regarding the upcoming Brexit, there is the risk of a “hard Brexit” causing delays in existing supply chains. How is the Port Authority preparing for such an unfortunate event?

With regard to Brexit, the Port of Rotterdam is hoping for the best but is preparing for the worst, the worst meaning a no deal hard Brexit. The United Kingdom, after Russia, is the second country of origin for Rotterdam in terms of volume for goods shipped. After Germany, Belgium and Russia, the United Kingdom is fourth in terms of total throughput with a 40 million t (8.5% of the Rotterdam total throughput). British import from Rotterdam consists mainly of Roll-on / Roll-off (RoRo) cargo, containers and liquid bulk. The British export to the Netherlands consists mainly of liquid bulk (especially North Sea oil) and shortsea and RoRo cargo.

As a result of the Brexit, maintaining the quality and capacity of customs will be the highest priority for the Port of Rotterdam. According to the Dutch customs authorities, as of March 30, 2019 more than a hundred well-trained extra customs officers will be required in the Rotterdam Rijnmond area. In addition to this, extra inspections and inspection points for the Dutch food and consumer product safety authority (NVWA) are needed. Furthermore, the necessary additional veterinarians to execute the inspections will be a major challenge as well. Customs declarations may increase waiting times, subsequently increasing costs for freight forwarders, operators and terminal operators and create additional congestion in the port area. Short sea and RoRo terminals expect available waiting space for trucks to be limited. This will be one of the major challenges for the Rotterdam Port Authority to facilitate. It’s merely 100 days until the Brexit. Nevertheless, only a very small share of the businesses currently trading with the UK have so far made serious preparations for the change. This is hardly responsible, because there’s quite a lot at stake – and definitely for the Netherlands, since the UK is one of our most important trading partners. We urgently call on both the private sector and government – at the national and European level – to make serious preparation for Brexit. The clock is ticking.

Do you see the long maritime heritage of the Netherlands as the first globally operating trading nation as an advantage in leading your enterprise?

Driven by world-class seaports and airports, an extensive network of roads and rail, a 100% digital telecommunications network, the Netherlands’ infrastructure offers reach, speed and reliability. With access to 500 million consumers within 24 hours of Rotterdam, companies that choose the Netherlands have the perfect springboard into the European market. It should therefore come as no surprise that the Netherlands is perceived as the gateway to Europe. This was recently recognized by the Global Logistics Guide which evaluated the supply chains and logistics networks of countries worldwide and rewarded the Netherlands with a perfect score (10 out of 10) as part of the Inbound Logistics 2018 survey, for its sound infrastructure and positive business climate, calling it ‘the model for European logistics excellence’.