Long trading tradition with Amsterdam
Amsterdam has a long trading tradition with CIS countries and the Baltic States. On top of that it has a special and historical relationship with the city of St. Petersburg. The relationship with St. Petersburg and the Netherlands, especially Amsterdam, is obvious. When 300 years ago Peter the Great started to build the beautiful city of St. Petersburg, he took an example to Amsterdam. The cargo flows between the Netherlands and the CIS countries and the Baltic are growing. In 2002 the trade between the Netherlands and these countries represented over 7.5 billion Euro. The most important cargo flows with the port of Amsterdam are oil and oil products followed by agricultural products, minerals and forest products. But there is a growing tendency of cargo movements between the countries of industrial products and consumer goods. Cooperation with the industry and logistic providers in the port of Amsterdam would perfectly fit into the Amsterdam strategy to attract industrial cargo streams.
Stimulating short sea
Short sea between Amsterdam and the Baltic ports is a natural consequence of these industrial cargo streams and the geographic position of Amsterdam, being the most Northern port in the middle of a dense populated consumer area in North West Europe, is a strategic advantage. Because of increasing road congestion and road transport costs the Amsterdam port Authority is stimulating the 'motorways of the seas', and modal shift from road to water. This has their full attention for both commercial and environmental reasons. Also the European Union in Brussels and the Dutch ministery of transport is actively promoting this program. One of the Amsterdam modal shift projects is the development of a regular short sea service on roll on roll off basis between Amsterdam and the Baltic via the port of Kiel. This is a joint project with Amsterdam and Kiel. A ro/ro shuttle will be operating between the two ports whereby in Kiel the existing short sea lines with the Baltic States and Russia will be used. Intermodal transport, with only pre and after carriage by road and the main distance is carried out by rail, inland shipping or shortsea. Ministry of Transport, Division Traffic and Transport. The Netherlands. The change from road transport to intermodal transport is a large barrier for transport companies and shippers. The large difference in speed of an intermodal stretch in relation to road transport demands generally logistical adjustments by shippers and receivers and possibly also in the entire logistical chain. In all calculated transport relations, Intermodal transport has a cost advantage over road transport. The transport costs of the intermodal alternatives differ less between them. The differences in transit times are usually somewhat larger. Hence the chance of price competition between them is greater than price competition between road transport and intermodal. The transport relation Rotterdam – St. Petersburg offers good opportunities for direct shortsea transport, besides rail transport via Belarus. Both shortsea and rail transport take about 60% more time for this distance, while being 50% cheaper than road transport. The alternative whereby rail is used to Lubeck from Rotterdam and onwards with shortsea to St.Petersburg is less attractive in terms of transit time. There also possibilities for intermodal transport on the relation Rotterdam – Copenhagen, but the absolute advantage is limited because of the shorter distance. Road transport takes about one day to Copenhagen, while rail and shortsea transport take respectively 2 and 2,5 days. The costs are about 30% lower. For some logistical chain this alternative might be attractive. The characteristic feature of the transport relation Rotterdam – Llubljana is an extremely fast (about 30 hours), but relatively expense road alternative. As a result the intermodal alternatives will be quickly attractive from a cost perspective. Most attractive alternative is rail transport that covers the same distance in about 48 hours at just over half of the costs of road transport. The shortsea alternatives appear to be more expensive than rail and at the same time largely slower (about 6 days). On the transport relation Rotterdam – Vilnius rail transport and direct shortsea via Klaipeda are an attractive alternative for road transport. It is true, the transit time is longer (more than 3 days compared to 2 days by road), but the transport costs are 60% to 70% lower. Moreover, if with shortsea the distance between Klaipeda and Vilnius is not done by road but by rail, the transport costs are 15% higher and the transit time increases even with 24%. The transport relation Rotterdam – Tallinn shows that intermodal transport alternatives are in a better position to compete. The advantage in speed of road transport remains, but is relatively less than fastest intermodal alternative (direct shortsea, about 40% slower). Shortsea and rail have clearly the cost advantage, which are about 60% cheaper than road. The transport costs and the transit time are almost the same for shortsea and rail. The transport relation Rotterdam – Riga takes a midway position between Tallinn and Vilnius. The most attractive intermodal alternative is rail transport that as far as transit time almost 40% and transport costs 55% is concerned, under the level or road transport is. The shortsea alternative is, with comparable costs and 15% longer transit time comparable with rail and hence competitive with road transport. Finally the relation Rotterdam – Gdansk offers a favourable perspective for rail. This alternative is almost less by half cheaper than road transport and takes about 2 days to cover this distance, compared to 1,5 days by road. Shortsea transport seems hardly an alternative. The transit time is more than 40% longer than rail transport at the same costs.
The effect of LKW Maut
Due to the Maut the costs of road transport stretches increase on average 3%. The increase is between 1,5% for Tallinn and 3,5% for Gdansk. The shifting of costs due to LKW Maut does not result in a change in the competition ratios between road transport and intermodal alternatives. Invariably are the intermodal transport alternatives significant cheaper and have a significant longer transit time than road transport.
The position of shortsea
Shortsea in the direction of the Baltic area is in most cases the most favourable alternative. The land bridge Rotterdam – Rostock by rail is a strong competitor on the stretch. We can conclude, however, based on transport costs and transport times that direct shortsea transport from Rotterdam to the Baltic ports has a good competitive position. But under the condition that there is sufficient cargo, on a regular basis offered on this distance.
Companies operating on the territory of the Port of Amsterdam satisfy the demands of the dynamically-growing transport market.
George Schooten general manager, VOPAK AGENCIES AMSTERDAM BV VOPAK provides independent tank terminal capacity over the whole world to the chemical and oil industries for the storage of liquid chemical products and oil products. Besides that, we also provide various logistics services and act in the field of maritime and transport insurance. VOPAK operates a network of 70 tank terminals – each suited for a particular area and satisfies demand which makes it the biggest in the world. One of the reasons for VOPAK's success is the fact that our company invests a lot of money and a great deal of attention into improving levels of security and environmental control. Our terminals correspond to all the latest standards, including the ISPS code, which is being implemented now.
GERBER MATROOS, general manager, VCK LOGISTICS B.V. VCK is a logistics company based in the Netherlands, which represents and handles the vessels of a number of shipping companies, takes care of distribution activities, offers an integrated package of shipping, brokerage and stevedoring services. VCK's specializes in short sea traffic, which mainly involves transport to and from Scandinavia. Import cargoes constitute about 80% of the handled cargoes. The total cargo turnover at the terminals is around 1.5 million tons.
Rene J. Finson, director, WATERLAND TERMINAL B.V. The company was founded in 1947 and it is located in the Westport in the port of Amsterdam. At that time we were a stevedoring company with a conventional terminal: we had some sheds, cranes, open quays. Later on we developed a plan to build a very large covered terminal that would operate in any weather. The authorities of the port of Amsterdam accepted the project and provided our company with a loan for its realization. We built the covered quay and all the other facilities in just 6 months. The covered berth for short-sea vessels was 80 meters long, 24 meters wide and 13 high. That space is enough to house vessels of 4000–4500 tonnage. There is one forty-ton gantry crane inside the berth. The sheds that we use for the storage of steel products are humidity controlled.
At the moment the percentage of what is moved from our terminal by different means of transport is as follows: 65% – by barge, 30% – by truck and 5% – by railway. For the Amsterdam port as a whole the percentage is a bit different: 45% – by barge, 50% – by truck and 5% – by rail. We expect to increase the rail constituent, as the railway system gets more sophisticated. Last year we operated 422 vessels with a total tonnage of 1.1 million ton. Nowadays we do not only work with timber and steel cargoes, we also process a lot of metals – aluminum from Norway, zinc from Finland. We also hope to receive more steel cargoes from the Baltic States. A lot of cargoes come from Spain. We reload vessels, which are unloading cars in Amsterdam, with general RO-RO cargo and palletized milk cargo bound to the Middle East. Since last year we also process bodies and upper structures of excavators.
The new terminal soon proved its efficiency. The first year we had our new terminal we immediately started working with a new client – a big manufacturer from Spain. However, almost as soon as we finished the terminal many countries started to renew their barge fleets. They started using barges of 2000–3000 tonnage. But the bigger the barge, the wider it is. This was the first impulse for us to build a second fully covered terminal, 4 meters wider and 5 meters higher. To cope with the congestion still existing in the terminal we plan the construction of a third terminal: wider and bigger, probably capable of handling ocean going vessels. Terminals are being constantly improved. For instance, last year we built a roof over the area where the trucks bound for loading are kept. The covered part extends to the railway terminal as well, so if it is raining we can load wagons under a cover. Besides handling cargoes independently of the weather conditions, we use powerful forty-ton gantry cranes, which provide for loading and discharging operations simultaneously. It makes the vessel operation considerably faster.
Yke G. Vermeiden, managing director, OIL TANKING Amsterdam OIL TANKING GmbH in Hamburg is one of the world's largest terminal service companies, with a storage capacity exceeding 10 million cubic meters. The company operates terminals in 22 countries all over the world. The annual throughput amounted to more than 250 million tons of crude oil and oil products and chemicals. Last year OIL TANKING Amsterdam processed around 8.5 million tons of liquid cargoes. Most of that came to the Amsterdam terminal by barges (3 000 to 4 000) and sea-going vessels (500-600). Only little volumes of cargo arrived on trucks. Besides receiving and loading oil we also provide for blending and treatment of oil in our terminals. There is a pipeline, which leads to the Amsterdam airport providing it with more than a half of the oil it needs. We also receive crude oil directly by a pipeline connection between several oil platforms at sea.
Market Potential of the Baltic Sea region. Experts' point of view. Market Tendencies in Europe
Y. G. Vermeiden: – The oil flows very freely between Eastern and Western Europe. One of the tendencies is that a lot of oil loaded in the Baltic ports does not go to Western Europe any more, but directly to the United States. This happens because the USA, and the whole of North America in general, are short of oil products, in particular gasoline, whereas Eastern Europe is one of the most important exporting countries of oil and oil products. Another growing tendency is that Eastern businesses are getting closer to Western consumer. More companies from Russia and the Eastern Europe have managed to establish a direct connection with their customers in the West. Until recently it was mostly the western trading companies doing sales for companies from Eastern Europe. Many eastern European companies now have their own representatives in London and Geneva. They have managed to cut out the middleman and consequently cut their expenses
Lack of free market scares off potential investors
I think that as yet there is no real free enterprise in the Baltic. If a foreign company wants to operate in Baltic ports it takes a lot of time to get all the necessary permissions, buy land and build facilities. I think when your countries join the EU it should be one of the main priorities for you to liberate the market. Lack of free market hampers development because it scares potential investors away. Local businesses turn out to be more favored than foreign ones. For a company like ours it is particularly important to feel secure about being equally treated without coming across the situation that the authorities grant special benefits to local entrepreneurs. Our industry needs security and equal rights, because we are going to invest lots of money. So free enterprise and equal competition are regarded as one of the top priorities for the Baltic States. The European Community is feeding money into the new member-states, but this money has to be wisely spent. The new EU countries have to grow, develop and adhere to the European laws and regulations. Many things like customs system, fiscal system, labor laws and many others have to be revised.
Excessive protectionism is an obstacle to development
OIL TANKING can enter any market, provided the law of free enterprise is in place. Although in theory a market is liberated and 'free', in practice it often turns out that it is not true. For example, we tried very hard to get a foothold in Poland. We had spent a lot of time and money to obtain all the required permissions and set up marketing there, but then it became clear that the Polish would rather do it themselves. Some countries really do not want intruders. They are very defensive. But this protectionism is not just characteristic for eastern European countries. Spain, for instance, is also not a very open country. It is very difficult to enter the Spanish market and a lot of big international oil companies are having a hard time trying to get a foothold there. The market is to a great extent controlled by local entities. R. J. Finson: – WATERLAND TERMINAL B.V. is trying to establish contacts with Baltic and Russian companies. I think short-sea shipping has a bright future. At the moment there are urgent trucking problems in our part of Europe, so it is a burning issue to shift traffic from roads to short-sea transport. Transport by barge is emerging, and those German companies that have a railway connection resort to it more often than before. Another stimulus to consider barge transportation is the introduction of road tolls in Germany and Austria. G. Matroos: – To compare with the past, in 10 years time the situation has changed considerably in the Baltic States and Russia. Now it is easier to set up trade ventures and safer to store goods there. Our clients producing plywood in Finland are going to face a very strong competition from the Baltic countries, which have a big capacity for forest production and comparatively low labor costs. This might result in transfer of the Finnish production units from Scandinavia to the Baltics. As to transportation mode – container transportation may soon substitute road haulage to Scandinavia. It gets unprofitable mainly due to low prices for returned cargoes. There is a great business-bound potential in the Baltic States. For instance, there are a lot of trucking companies with well-educated managers and very skilled drivers, while in European countries there is a shortage of them. I see a cooperation possibility in this respect and some of these issues were already discussed with transport companies during recent visit in Riga.
Somewhat politically bound
Y. G. Vermeiden: – Doing business with Russia – politics should be left aside In Russia big companies like LUKOIL and JUKOS dominate in the market. These market giants define to a large extent where the export oil will go. In Eastern Europe commerce and trade depend a lot on politics. That is an important factor in this market, so having a good relationship with the authorities is very important. The Russian Ministry of Transport has a declared policy to favor national ports. As a consequence thereof Baltic ports and the Ukrainian ports suffer from volume shortages. At present a lot more oil is exported through the ports of Primorsk and St Petersburg. I think this process is not going to stop, however in the short term the Russians lack capacity to handle all their exports in their own ports. G. Schooten: – VOPAK has Russian-speaking staff and that might help in developing connections with companies from Russia and the Baltic. I think the Baltic market is highly competitive and offers a lot of opportunities. The only problem about investing money into the market is that it is not secure enough. Everything in the transport business makes a cycle. Import and export continues to grow on the Baltic market, but the situation may get complicated, since Russia is building and developing its own facilities for the oil export rather than utilizes available facilities of the Baltic States. This policy is partly enforced by the high rates for the transportation of oil to Baltic terminals by railway. However, the flow of oil and oil products to Baltic ports remains quite strong due to the ports’ favorable position. Russia is developing fast its oil terminals in Primorsk although there is a shortage of vessels to reach the ports because of the ice. So now a lot of ship owners order specialized ships to be built that would be able to cut through the ice and reach the Russian oil. These problems may cause the situation in Baltic ports to change for the better. However, it is impossible to predict what will happen in a year's time, and that is why European companies are reluctant to invest. In three years' time the Baltic States will have a common currency with the rest of Europe. This will make it much easier for Western companies to operate in the Baltic and to invest, but we all ask ourselves and wonder: what will happen when the new currency arrives in the Baltic? The fact is that goods and services will all of a sudden become much more expensive.