Hamburg's Port Sees Fruits of German Upturn


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8 Nov 2010

container_port2321424242424.pngThe economic crisis turned Hamburg's port into a ghost town. Now that things are picking up, the container terminals at Germany's most important shipping hub are buzzing with life again

In the evening, when the at-times inhospitable northern German weather
allows it, Klaus-Dieter Peters swaps his suit and tie for casual
clothes and rides his bicycle from his home in the upmarket Hamburg
neighborhood of Othmarschen to the beach along the edge of the city's
Elbe River. There, the 57-year-old executive, who is the CEO of Hamburg
Harbor and Logistics AG (HHLA), sits on the sand and enjoys a beer and
a cigar. And he watches the Burchardkai container terminal on the other
side of river, one of the three container terminals that HHLA operates
in the Port of Hamburg.

For months, the scene resembled a still life with cranes. The container
cranes' arms were raised into the sky, as if they had capitulated in
the face of the economic downturn. Occasionally, but only occasionally,
a ship passed by the bleak silhouette of the terminal. The port, which
usually buzzes with life around the clock, was almost silent.

Last year, Hamburg's dream of an eternal boom and its ambitions to
become Europe's top logistical hub seemed to have come to an end. The
port's container throughput fell by 28 percent in 2009 as a result of
the economic crisis. In the competition to be Europe's most important
container port, Hamburg lagged in third place behind Rotterdam and
Antwerp. And in the global league tables, the German port found itself
in the no-man's-land of the middle rankings -- a place which did not
correspond to the self-image of the proud Hanseatic city.

The Red Blood Cells of Globalization

After a decade of euphoric growth, the crash hit HHLA, Hamburg's
largest terminal operator -- which is also owned by the city --
particularly hard. "For us, 2009 was a bad year of unprecedented
proportions," Peters says. But he emphasizes that that unpleasant
chapter is now over. "In the last couple of months things have been
taking off again," he adds quickly. Indeed, the numbers are looking up.
The container throughput in the Port of Hamburg increased by 4 percent
in the first half of 2010, while HHLA's terminals even saw throughput
rise by nearly 9 percent.

Ever since the low point of the global crisis passed, the economic
recovery has been felt with full force in ports all around the world.
Containers are the red blood cells of globalization, carrying oxygen
around the global economy. Most of the goods being moved in
international trade are transported in containers, which are generally
12 meters (40 feet) long and 2.4 meters (8 feet) in width and height.
They hold everything from Australian wine to Chinese-made PlayStations
to German wind turbines.

According to one rule of thumb, when the global economy grows by 1
percent, container traffic increases by 2.5 percent. That increase is
being felt in Hamburg, which is by far Germany's most important port.
HHLA CEO Peters can observe the renaissance of his business empire in
the evenings, when he watches the harbor from the other side of the
Elbe. He can also see it in his company's flagship project, the
Altenwerder container terminal, which is buzzing once again.

Picking Up Again

Carsten Pohl, 36, who works as a vessel planner in Altenwerder, has
also noticed the upturn. His job is to make sure that the giant
container ships that moor in Altenwerder, one of the world's most
efficient container hubs, are optimally loaded. The ships tend to call
at several European ports as part of their route between, say, Asia and
Europe, and are therefore not completely loaded or unloaded in Hamburg.

Back in 2008, Pohl had 19 colleagues, all working to make sure the
containers found their proper place, and working overtime was common.
Last year, there were far fewer people, and none of them worked longer
than their regular hours. HHLA even put some 2,000 of its 5,000
employees onto a government "short time" working program, whereby they
worked shorter hours and the state made up for part of their lost wages
in benefit payments. Nowadays, the number of vessel planners working in
Altenwerder is almost back up to its pre-crisis level, and only a few
HHLA employees are still on short time.

"Admittedly, things are still not quite as busy as before the crisis,
but it's picking up more and more," says Pohl. The view from his office
is enough to show that's true. Up to four giant container ships of the
latest generation can moor along the 1.4 kilometer-long (0.9 miles)
quay wall at the same time, and more than 30,000 containers can be
stored at the terminal.

For a long time, the container terminal looked pretty empty. Now, tens
of thousands of containers are stacked up again in endless rows,
waiting for their onward journey by smaller ship, truck or train. About
one-third of the goods that arrive here have the Hamburg area as their
destination, one-third go on to other German and Eastern European
destinations and the other third are bound for ports in the Baltic Sea.

Deeper and Deeper

The rebirth of the port is also noticeable elsewhere. A few weeks ago
the large container shipping companies CMA-CGM and Maersk began
operating a new service between Asia and Hamburg. As part of that
service, the companies are sending the largest ships that are currently
available to Hamburg's port. These mega-freighters can hold up to
14,000 containers. It takes 8,000 trucks to transport the goods from a
single ship.

While HHLA is naturally pleased to be handling the prestigious new
service, the trend toward larger vessels also poses challenges for
Hamburg. For ports, accessibility is key, both by sea and by land.
While the expansion of roads and rails usually fails because of lack of
money, the Elbe River also poses natural limits. Although the river
will be deepened by 1 meter in 2011 so that it can handle vessels with
a draft of up to 14.5 meters (47.57 feet), it is doubtful whether the
river will be deepened further in the future. Next year's deepening
comes after a bitter years-long conflict over the project, which was
opposed by environmentalists.

And so it's looking likely that, in the future, it will be
shipbuilders, rather than fluctuations in the economy, that will
determine how things go with Hamburg's port. At the end of the 1990s, a
ship that had a draft of 14 meters and which could hold 8,000
containers was still seen as something of a sensation. These days,
cargo ships are being designed that have a draft of more than 16 meters
and a capacity of up to 15,000 containers.

Risk of Demotion

"Hamburg can take solace in the fact that it makes little economic
sense to keep building ever-larger ships with ever-bigger drafts," says
Burkhard Lemper from the Institute of Shipping Economics and Logistics
in Bremen. Other industry experts, however, are pessimistic about the
city's prospects. "Because the ships keep getting larger, Hamburg faces
the threat of being demoted to a regional port in the medium term,"
says a source at one Hamburg-based shipping company, who preferred to
remain anonymous.

No matter how big the ships of the future might be, the days of the
"bigger is better" euphoria in Hamburg seem finally to be at an end. A
few years ago, it was still all about expanding the harbor as fast as
possible and the question of how the port would cope with a permanent
two-digit growth rate. Nowadays, nobody worries any more about future
congestion problems at the port's terminals.

The pre-crisis target of a throughput of 10 million containers, which
Hamburg once expected to see in 2009, is still a few years away.
According to current estimates, the annual number of standard
containers passing through the port in 2020 will be more like 15
million than the once-estimated 25 million. If the currently existing
facilities were expanded to maximum capacity, the port could easily
handle more than 20 million containers a year. Hence it will be some
time before an expansion of the harbor is necessary.

Source: Spiegel


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