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New study: Hamburg’s port is losing touch

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New study: Hamburg’s port is losing touch

The port of Hamburg was a magnet, a powerhouse, a globally recognized source of inspiration for growth, innovation and technological ingenuity. That was 125 years ago, at the time of globalization in the German Empire. And the port’s last heyday was more than 15 years ago. Since the global financial market crisis of 2008 and 2009, goods throughput in Germany’s largest seaport has more or less stagnated. A new study by the Hamburg School of Business Administration (HSBA) shows how significantly Hamburg is losing ground in the competition between regional ports on the North and Baltic Seas. WELT AM SONNTAG was able to evaluate the 64-page analysis in advance, which was prepared on behalf of the Hamburg Chamber of Commerce.

One of the key statements of the study is: “Container throughput in the port of Hamburg is developing independently of the global trend.” Between 2007 and 2021, container traffic rose by 74 percent worldwide, but in Hamburg it fell by 16.5 percent between 2007 and 2022. For ten years now, container handling in Hamburg has also become decoupled from the continued growth of German foreign trade. And from the increase in sea freight traffic in Northern Europe anyway.

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Jan Ninnemann, professor at the HSBA and head of the consulting company Hanseatic Transport Consultancy, led the study: “The costs are significantly too high, especially in the container segment that is important for Hamburg, and the productivity at the terminals is too low compared to the competition,” says he. “In addition, Hamburg’s geographical location is increasingly turning out to be a hindrance.” The HSBA is looking at the years 2007 to 2023. Last year, however, the port of Hamburg even fell below the 2004 level with a total throughput of 114.3 million tons.

Container throughput in 2023, at around 7.7 million container units (TEU), is between the values ​​of 2004 and 2005. In the medium term, this value in Hamburg will “level off at a level of less than ten million TEU,” according to the HSBA analysis . Current forecasts for the Port of Hamburg by the beginning of the next decade assume 14 to 16 million container units.

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The long-term comparison of the study sheds a harsh light on how dramatic the situation for the Port of Hamburg actually is. For years, no large infrastructure projects have been developed on Hamburg’s quaysides, no new freight terminals have been built or large industrial companies have settled. The existing structures, especially the container terminals, are being modernized too slowly or not at all. Over the past decade, the port has increasingly become a marketplace for disputes: part of urban society wants more urban settlement space on the edge of the port, especially at HafenCity, and more enclosure of the port borders through nature conservation areas. The economy, in turn, is pushing for traffic routes in and around the port to be renewed and for projects such as the development of the central port area on Steinwerder and a new Köhlbrand crossing to finally be implemented so that the port does not completely lose connection.

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“We need space in the Port of Hamburg, we want to write a success story in container handling and the energy industry,” says Chamber of Commerce General Manager Malte Heyne in an interview with Jan Ninnemann in the Hamburg Chamber of Commerce’s current podcast. “That’s why the Hamburg Senate should pay more attention to the Steinwerder area. There, in the middle of the port of Hamburg, there is potential space of well over 100 hectares that would be suitable for a wide range of uses. This could be the nucleus for the ‘new’ port.”

The analysis of container traffic, which is particularly important for the port, shows how far Hamburg has already fallen behind. The port of Rotterdam grew by 47 percent between 2007 and 2022 and Antwerp – recently merged with the port of Zeebrugge – by around 37 percent. Bremerhaven only lost 6.9 percent in this segment, significantly less than Hamburg. In 2007, Hamburg had a market share of 29.3 percent in container traffic on the North Sea – in the so-called North Range – and in 2023 it was still 19.8 percent. Hamburg often – and sometimes rightly so – looks to the federal government for responsibility for the port’s declining business: because there is no effective North German concept for the disposal of sediment from the rivers that flow into the North Sea, because the European import sales tax is not harmonized with German law which puts German ports at a disadvantage. Every year, the federal government only pays the insignificant sum of 38 million euros directly to the port locations. This amount will not be increased as part of the “National Port Strategy” presented this week.

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Brand letter from the economy

Shipping companies have been complaining for years that the port of Hamburg is overall too expensive because of the long journey across the Lower Elbe and the costs at the terminals. One reason for this is the weak competition between container terminals in Hamburg: around 75 percent of container throughput in Hamburg goes through three terminals that belong to the port logistics group HHLA – 70 percent of which is still owned by the city of Hamburg. Around a quarter of Hamburg’s container throughput goes through the terminal of HHLA’s competitor Eurogate. “Hamburg is 20 to 30 percent more expensive than its competitor ports when it comes to terminal handling,” says Jan Ninnemann in the Chamber of Commerce podcast. “This is also due to the issues of productivity, automation and personnel costs. The benchmarks for this are Rotterdam and Antwerp.”

Unlike in Hamburg, the terminals in Rotterdam, Antwerp and partly also in Bremerhaven belong to international operators such as Hutchison, DP World and APMT or to leading shipping companies such as MSC, Cosco and CMA CGM. “Successful locations such as Rotterdam or Antwerp have intense internal port competition with several internationally operating terminal operators,” says the HSBA study. “Local ‘top dogs’ like HHLA have long been a thing of the past at other locations.” In Hamburg, so far there are only minority investments by shipping companies in individual terminals, from Hapag-Lloyd in the HHLA Altenwerder container terminal and the Chinese state shipping company Cosco in the HHLA terminal Tollerort and the Grimaldi shipping company’s participation in the HHLA multi-purpose terminal O’Swaldkai. An exception is the majority share of the Salzgitter steel group in the Hansa Port coal and ore terminal. There, in turn, HHLA holds the minority.

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The red-green Hamburg Senate has recognized the seriousness of the situation and therefore now wants to take a drastic step: the world‘s largest shipping company MSC from Italy – with headquarters in Geneva – is to take over up to 49.9 percent of HHLA as a whole, but without a stake on their real estate. The city should retain a narrow majority of 50.1 percent of HHLA shares. The opposition from the CDU, the Left and the FDP in the Hamburg parliament is running a storm against the Senate plan – together with the dock workers, especially from HHLA. There are fears of a “sell-out” of Hamburg’s interests and the loss of many port jobs.

MSC wants to bring around a million container units of additional cargo to Hamburg by the beginning of the next decade and, together with the city, invest in HHLA and the port – including in the automation of the terminals. In 2002, HHLA opened the Altenwerder terminal as the most modern container handling facility in the world at the time. Hamburg now also has some catching up to do in this area, writes the HSBA: “Hamburg has largely lost its innovative lead in the area of ​​terminal automation.”

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