The dredging industry and the European port system

The dredging industry and the European port system: challenges and opportunities Prof. Dr. Theo Notteboom President, ITMMA - University of Antwerp Part-time professor in Maritime Transport - Antwerp Maritime Academy CEDA Dredging Days Antwerp, 1 -3 October 2008 1

CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom Dredging companies have been involved in major portrelated projects in Europe, but its seems the center of activity is shifting to elsewhere 2

Some relevant questions to the dredging industry CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom n What about the growth path for European port activities ? In what sectors ? n Where are the growth markets for port development in Europe ? n Do upstream river ports have a future ? What about transhipment ? n n Are we slowly approaching the end of an era of large port infrastructure works in Europe ? What role for the dredging industry in sustainable port development ? 3

CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom n General observations European ports find themselves embedded in ever-changing economic and logistics systems. n The European port industry overall is a healthy industry n A blend of different port types and sizes n No lack of port competition in Europe 4

1. CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom General observations European port traffic - 2005 5

For more details on European port volumes CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom ESPO/ITMMA reports (www. espo. be) 6

Port competition is changing CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom Cargo concentration … but more ports 7

Gateway port Transhipment/interlining port (transhipment incidence >75%) CEDA - Antwerp – Gateway 2 Oct 2008 port also handling Prof. Dr. T. Notteboom substantial transhipment flows Logistics core region Multi-port gateway regions 1. Rhine-Scheldt Delta 2. Helgoland Bay 3. UK SE Coast 4. Spanish Med 5. Ligurian Range 6. Seine Estuary 7. Black Sea West 8. South Finland 9. Portugese Range 10. North Adriatic 11. Gdansk Bay 8 Inland corridor Main shipping route 11 2 3 1 Americas 6 Americas 7 10 5 9 4 Main shipping route Middle East – Far East 8

The challenge of the periphery Evolution of the share of the market leader in each gateway region CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom (in %) 9

Port competition is changing CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom Port regionalization is unfolding Source: Notteboom & Rodrigue (2005) 11

Port dynamics in the Med CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom Med ports going north ? . . . . Trieste Koper Venice Ravenna Genoa La Spezia Fos Leghorn Ancona Bar Civitavecchia Barcelona Naples Taranto Salerno Valencia Cagliari Gioia Tauro . Main shipping lane Algeciras . Malta . . . Odessa Ilyichevsk Constanza Varna Haydarpasa Armaport Kumport Thessaloniki. Gemlik . . . Izmir Piraeus . . Mersin Lattakia Limassol Tartous Beirut Haifa Ashod Damietta Alessandria Port Said 12 12

Transhipment hubs under scrutiny and its impact on inland freight distribution CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom The market shares of ports in the West Mediterranean. Ports grouped according to the diversion distance from the main shipping route (1975 -2007) 13

Port competition and the role of upstream ports CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom Evolution of the market shares in the Le Havre-Hamburg range 14

Ports live in a turbulent world CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom 15

CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom The environment is changing n Fear for impact of economic downturn n Impact of high fuel costs n Pressure on (infrastructural) capacity n Environmental and security issues are omnipresent 16

CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom World Container Traffic, 1980 -2008. Reaching Peak Growth? 17

CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom Rising bunker prices Bunker price for CST 380 in Rotterdam ($ per ton) Source: based on data Clarksons Research Services Ltd 18

CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom New large port infrastructure projects are still coming on stream, but it takes much longer than expected and less projects make it to the finish Development of initial plans Le Havre ‘Port 2000’ – France Antwerp – Deurganck Dock - Belgium Rotterdam – Euromax Terminal – the Netherlands Rotterdam – Maasvlakte II – the Netherlands Deepening Westerscheldt -the Netherlands/Belgium Wilhelmshaven/Jade. Weser. Port Germany Cuxhaven - Germany Dibden Bay – UK London Gateway – UK Felixstowe South – UK Hull Quay 2000/2005 1994 1995 2000 Proposed date for start operations (first phase) 2003 2001 2004 Date for start terminal operations 1991 2002 2013/2014 1998 2003 2008 NA 2006 2010/2011 NA NA NA 2006 2000 Never 2013 2008 2011 2006 2005 2008 19

Realising terminals takes (more) time CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom n n Environmental considerations are prominent in port planning: balancing of economic, social and environmental values Emancipation process and local rationality (cf. NIMBY) of pressure groups (Pitfalls in) regulations and procedures slow down decision-making process Port managers spend a lot of time in embedding the port in local community 20

Securing port capacity CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom 1. 2. 3. 4. 5. 6. Notwithstanding new capacity will come on stream in the coming years, delays due to port congestion could become a structural problem in the longer term: Limitations to terminal productivity increases Public support for port development is lacking Rules and procedures Governments’ retreat in the funding of ports Investment climate Weak support for ‘port co-opetition’-model n The battle for securing port capacity will continue n 21

Sustainability is key to allow further port development CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom n n The sustainability objective has given rise to important spin-off activities for the dredging industry. Environmental impact of port projects not only onesided negative: port projects can be instigator of environmental initiatives that would otherwise not develop. 22

Sustainability is key to allow further port development CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom Harmonizing ecology and economy: the Antwerp co-habitation model (compensation: 6 -7% of total cost price!) Source: Port of Antwerp 23

development CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom n The dredging industry plays a key role: n Technological innovation to secure port expansion; n n Disposal of dredged material (e. g. La Spezia, Antwerp) Assist in environmental planning linked to port expansion projects; Coordinate with port authorities, terminal operators, government departments and organisations (e. g. Ecoports/Green Ports) to help legislators in setting realistic environmental targets; Share best practices to help develop environmental standards taking into account the unique nature of each port and each dredging project 24

CEDA - Antwerp – 2 Oct 2008 Prof. Dr. T. Notteboom 25