The still before the storm
Congestion at Europe’s vehicle handling ports was a problem long before the coronavirus hit automotive outbound supply chains. The reasons vary across the different regions, but none of them is related to an increase in vehicle production
Last year passenger car sales in the EU grew for the sixth year in a row and reached 15.3m units, an increase of 1.2% on the previous year, but the rate of increase has been dropping since 2015. Vehicle output in the EU was sustained but has actually dropped by 5.4% down to 15.8m, according to figures from the International Organisation of Motor Vehicle Manufacturers (OICA).
Looking at figures from the top ten continental European vehicle handling ports, both imports and exports are down, and while some of that is because of lower sales, vehicle terminals remain full thanks to longer dwell times. That is being exacerbated by the fact that some carmakers are pushing volumes from the factories to the ports and only then assessing cost-benefits for onward multimodal options. This has impacted throughput rates.
The vehicles being transported are getting bigger and more diverse in their mix. They are being loaded and unloaded onto bigger vessels as operators look for greater efficiency in response to the squeeze on rates and the search for lower emissions per unit in the wake of new sulphur emissions regulations mandated by the International Maritime Organization.
Vehicle terminals are also carrying out more sophisticated pre-delivery services at the ports, increasing dwell times, and as electric vehicle (EV) sales increase there are additional requirements for charging and safety checks. Other factors include workforce availability, shift planning, berth availability and hinterland connectivity.
In 2019 political protest also played its part in arresting throughput at certain ports in France and Spain.
What is clear from activity in 2019, however, is that port authorities and vehicle terminal operators are working hard to add capacity and use the latest digital technology to improve volume throughput. That is something that will now be put to the test as vehicle manufacturing tentatively restarts following the shutdowns caused by coronavirus.
Belgium and Germany
Europe’s biggest vehicle-handling port, Zeebrugge, has been working on a number of infrastructure projects to add capacity and speed up processing. In terms of IT, work continued in 2019 on the rollout of Zeebrugge’s RX/Seaport data-sharing platform and rollout of its 5G network, which is designed to be used by a range of port-based companies for dispatching and track-and-trace systems (see the article on Zeebrugge for more detail).
One of the biggest developments that got underway in 2019 involved talks between Zeebrugge and the neighbouring port of Antwerp, continental Europe’s fourth-biggest port. The ports already collaborate on certain projects but established competition is seen to have held back a stronger alliance that could bring benefits for vehicle and container throughput in the future.
Numbers were slightly down at the main German vehicle handling ports of Bremerhaven and Emden, though Emden reported a significant 14% rise in imports. Emden is reliant on VW Group volumes, which continue to be impacted by fallout from the OEM’s diesel scandal and the consequent introduction of the Worldwide Harmonised Light Vehicle Test Procedure (WLTP). It is also making preparations to handle more EVs as VW converts its Emden and Hannover plants to focus on these vehicles from 2022.
BLG Logistics, which operates Europe’s second-biggest vehicle-handling port, Bremerhaven, has also been working to support VW and in 2019 converted a former truck facility at Dodendorf in central Germany into a storage facility for VW volumes on route to the port. While inland, the 75,000 sq.m will be used as a buffer zone for VW volumes coming from the carmaker’s facilities in Germany that are destined for export from Bremerhaven.
“If the parking spaces at the seaport are occupied, the car manufacturer can conveniently park their vehicles in Dodendorf,” said the company in its most recent annual report. “The location [is supported] with its own rail link and convenient location between the VW plants in Wolfsburg and Zwickau.”
At Cuxhaven, there were headaches caused by fluctuations in throughput caused by the UK’s departure from the EU being delayed twice, meaning that volumes and delivery schedules changed enormously (see the following focus on Zeebrugge for more detail).
Spain and France
As can be seen from our focus on the Spanish ports in this supplement, while northern European ports continued to be hampered by a lack of capacity, with slower throughput a factor, carmakers were looking to Spain as a quicker point of continental entry and exit, in 2019, something supported by improving hinterland rail and road connections. At the same time, Spain maintained production thanks to a resilient export trade, supported by efforts to increase terminal capacity and improve throughput. Overall vehicle exports from Spain grew 0.2% to 2.3m units, though passenger cars (sedans) were down marginally by 0.3% to 1.8m.
Top 10 European FV ports
Meanwhile, in France the port of Le Havre dealt with its own capacity constraints with investment and redevelopment. Haropa ports, which runs Le Havre and the Seine axis ports of Rouen and Paris is reorganising storage capacity to gain 7,000 storage spaces and is extending operating space to the east of the ro-ro terminal, which will eventually provide a further 10,000 vehicle parking spaces. Furthermore, it is also re-opening the old container terminal for parking cars in long-term storage and currently looking at the potential for a multi-storey car park (see the article on Le Havre – Stronger connections for a competitive future).
Improvements at Koper
At the Slovenian port of Koper, numbers were down but the port operator, Luka Koper, has been busy putting in infrastructure to support an increase in throughput going forward. The company is building a new ro-ro berth for car carriers that it said would significantly shorten the internal transport routes, something that would benefit damage ratios and make loading and unloading more efficient.
In November last year Luka Koper started work on a new parking garage that will have capacity for 6,000 vehicles, which will be able to support an increase in annual throughput of around 162,000 units (last year it handled nearly 706,000).
“The construction of the garage will meet the increasing demand of customers for covered storage areas, while increasing the unique storage capacity and improving the internal logistics of car transhipment,” says the company.
The new garage will also support the specific requirements of moving and storing EVs, according to the port.
The company is also running rail tracks to the north-east of the port, which is the only part that currently lacks a rail connection. That move is designed to speed up loading and unloading of finished vehicles from the railway wagons calling at the port.
Luka Koper is building four 700-metre-long parallel railway tracks with hydraulic lifting ramps placed at the end of each track. That railway access, along with the ro-ro berth, is expected to be completed this year.
At the Greek port of Pireaus, meanwhile, throughput at the car terminals in 2019 decreased by 5.9% because of the reduction in transhipment cargo, though Piraeus Port Authority notes that for the domestic market volumes increased by 3.5%. The 9.4% drop in transhipment cargo was a result of both reduced demand from the main markets in the eastern Mediterranean, in particular Turkey and Egypt, and reduced sales in Europe.
As with port authorities and terminal operators across Europe, those in the UK have been preoccupied with the impact of coronavirus on volume vehicle movements. For the UK, this unprecedented situation comes on top of a problematic four years (and counting) dealing with Brexit. The reluctance of major UK port operators such as ABP and GBA to contribute to this year’s Finished Vehicle Logistics ports survey may therefore be understandable.
At the port of Bristol, however, it can at least be said that while numbers are down there have been some notable gains with established and new customers, partly thanks to its investment in space and technology, as is covered in the final article in this magazine.
More capacity and customers at Rhenus Cuxport
In 2019 Cuxhaven port in Germany processed just over 391,000 vehicles. That volume was divided between two terminals: BLG AutoTerminal Cuxhaven and Rhenus Cuxport. Rhenus Cuxport handled around 143,000 units, mainly for BMW, Daimler, JLR, GM and Toyota.
In September last year, Rhenus Cuxport exported its two millionth BMW to the UK, and while Brexit uncertainty is a challenge, Rhenus’ management believes that Cuxhaven port is well placed to grow volumes. Oliver Fuhljahn, head of automotive logistics at Rhenus Cuxport, talks to Finished Vehicle Logistics about the challenges and achievements at its terminal.
What have been the positive developments or drivers of finished vehicle business at the port over the past year?
The inauguration of berth number four in 2018 means Cuxport now operates an additional 85,000 sq.m of the terminal area. This put Cuxport into a much more comfortable position to accept additional automobile business in 2019. New customers have been invited to use Cuxport, for example, for the imports of new vehicles coming from Spain and the UK, and for some pre-delivery inspection (PDI) actions for various OEMs. Those new imports have been loaded onto incoming railway wagons with export cargo. New balanced traffic to the South of Germany and Austria has also been established.
By contrast, what have been the more negative or challenging factors for finished vehicle business?
Due to the Brexit negotiations and the two possible hard Brexit dates during the last year, volumes and delivery schedules have changed enormously, which has taken us away from a lean and constant flow of volumes.
We cannot say that there was any kind of business as usual due to that fluctuation and fear. Most of the dispatching plans have changed a lot, but we were able to manage them with a high grade of flexibility.
Given the announcements made by the UK government that barriers to trade will exist when the UK leaves the EU, what could this mean for BMW exports from Cuxport to the UK?
We can say that all major tasks, such as linking customs, OEM and Cuxport, as well as shipping lines, have already been implemented during the past year and will allow all parties to manage customs-related jobs on time and without any restriction. Thus, Cuxhaven and its partners in the supply chain are prepared to manage business with the UK like any other third-country business.
What, if any, investments or improvements is the port undergoing to improve storage, throughput or transport links?
Cuxhaven and the State of Lower Saxony are going to invest in additional rail infrastructure. The expansion of the rail network by up to four blocktrain long tracks at Cuxhaven station is going to push forward.
With this project, the port of Cuxhaven is being put in a much better position to receive and dispatch additional trains to the European hinterland throughout the day. Either via the connection to Hamburg Maschen or via Bremen/Bremerhaven station and vice versa.
Has the port seen any notable investment in technology that might assist in tracking, communicating and optimising vehicle flows?
Currently, the city of Cuxhaven is planning to launch a 5G network project. Therefore, it invited the terminals to become part of the project and sent them applications for subsidies. 5G provides a very fast mobile internet, enables near real-time data transmission and higher network availability.
Top 10 European FV ports
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