Port of Rotterdam expects 10-20 pct drop in annual volumes due to coronavirus
- Ports & Logistics
The Dutch Port of Rotterdam is anticipating a throughput drop of up to 20 per cent this year following a volume decline in Q1 2020 caused by the coronavirus pandemic.
As explained, the COVID-19 pandemic led to “highly exceptional conditions” in the first quarter of 2020, with severe worldwide disruption of production processes and logistical chains.
This unprecedented situation and its consequences are affecting the Port of Rotterdam as well.
Throughput in the first quarter stood at 112.4 million tonnes, down by 9.3 per cent compared to 123.9 million tonnes recorded in the same period last year.
“We are facing unprecedented disruptions and the port of Rotterdam, as a vital process, intends to continue contributing to society. The impact of a decline in demand due to the corona crisis will become clear from April onwards,” Allard Castelein, CEO of the Port of Rotterdam Authority, commented.
“A 10 to 20 per cent drop in throughput volume on an annual basis would seem to be very likely. This will depend on how long the measures remain in place and on how quickly production and world trade recover.”
Throughput in Q1 2020
Falling throughput was seen mainly in the coal, crude oil and oil products segments. On the other hand, volumes in container handling, liquefied natural gas (LNG) and biofuels during the first quarter of 2019 were at record highs.
The throughput of dry bulk in the first quarter amounted to 16.7 million tonnes. That is 14 per cent less than 19.4 million tonnes seen in the same period in 2019.
In wet bulk, the throughput of oil products fell by 32.8 per cent. Once again, there was a sharp fall in the trading of fuel oil between Russia and Singapore, for which Rotterdam has been the throughput location in recent years.
Container throughput in tonnes was almost the same as in the same period last year – which was a record quarter for containers at the time. There was a rise in deep-sea and feeder containers, while short sea fell off by 4.5 per cent.
According to the port authority, the underlying causes were the weaker economy in Europe during the last six months and stagnating world trade due to trade conflicts. The impact of the corona crisis was apparent to only a limited extent in late March as a fall in goods flows from China after the partial lockdown there in February. Seagoing vessels take four to five weeks to complete the journey, which means that the effect in Rotterdam is not felt until later. The volume of containers from Asia was 2.8% lower than in the first quarter of 2019.
Furthermore, roll-on/roll-off (RoRo) throughput dropped by 7.3 per cent year over year. As a result of the coronavirus outbreak, fewer people and goods were transported between the United Kingdom and Rotterdam in March 2020. Last year, throughput in March was at a record level due to hoarding in the run-up to Brexit, which seemed imminent at the time.
The sharp downturn in the global economy caused by the corona pandemic will also have a major impact on the Port of Rotterdam. As the CEO of the Port of Rotterdam Authority said, the impact of a decline in demand due to the corona crisis will become clear from April onwards.
In the container segment, capacity between Asia and Europe is being cut by approximately 25 per cent in response to the reduction in demand for transport. This will also be clearly seen in the port of Rotterdam in the coming quarter.
RoRo traffic is directly affected by a decline in economic activity in Europe and volumes will be significantly lower in this segment has long as the lockdown in various countries continues, the port added.
The flow of iron ore and coal to the German steel industry will decrease in response to falling demand from the automotive and construction industries.
In addition, the decline in the use of oil products for transport will reduce the need for crude oil supplies. However, volatility in the oil market can lead to higher trade flows, the port concluded.