BELGIAN PORTS BATTLE EACH OTHER FOR SHARE OF CONTAINER CARGO

BELGIAN PORTS BATTLE EACH OTHER FOR SHARE OF CONTAINER CARGO

The Port of Zeebrugge's bid to break into the big time container league has rattled its giant neighbor, the Port of Antwerp, and unnerved rival ports in northwest Europe.

Zeebrugge, long the poor cousin in the Le Havre-Hamburg port range, shed its second-class status 18 months ago when it announced plans to build a large container terminal aimed at luring shipping lines from the Port of Rotterdam and Antwerp.The turning point in Zeebrugge's fortunes came in November 1986 when Sea- Land Service Inc., the leading U.S. container shipping line, invited MBZ, the Zeebrugge port authority, to join Rotterdam and Antwerp in bidding for a 20-year contract to serve as its North European hub.

MBZ Executives Unfazed

Sea-Land's decision to stay with Rotterdam didn't faze MBZ executives. The fact that the U.S. carrier had asked them to submit proposals along with Europe's top two container ports has boosted their confidence that at last they are being treated seriously by shipowners.

Zeebrugge's credibility rating received another boost last summer when Seaport-Katoen Natie, the fastest-growing stevedore company in Antwerp, joined in the port's attempt to wrest the Sea-Land contract from Rotterdam.

Failure to lure Sea-Land has not dented Zeebrugge's optimism. Rotterdam was always the obvious choice, but the negotiations with Sea-Land have heightened our profile, says Fernand Traen, president of MBZ.

Container Terminal Project

That optimism was underlined by the decision to start work in the fall on a container terminal costing 2.4 billion Belgian francs ($70 million) with a capacity of some 400,000 TEUs (20-foot equivalent units) a year.

The terminal was never planned on the basis of getting the Sea-Land contract, insists Mr. Traen.

Rival ports, especially Antwerp, were stunned by Zeebrugge's ambitious

plans to transform itself from a largely short-sea ferry port into a major European container terminus.

Antwerp politicians and port executives at first poured scorn on Zeebrugge's plans, but following Seaport-Katoen Natie's move into enemy territory, they have grown increasingly alarmed that the upstart could eventually capture some of their lucrative container business.

Rotterdam and the Port of le Havre, which also are building new container facilities, are worried that Zeebrugge's emergence on the glutted North European container terminal market will trigger a sales war and sharply lower rates.

Critics Sniping

Zeebrugge's critics are continuously sniping at its bid to break into the market. They question the need for a new terminal when the current container facility is running at less than 50 percent of its capacity. They claim Zeebrugge is being bankrolled by lavish state subsidies, that the cost of its planned new terminal has been understated, that its port charges are artificially low and that it is dumping rates in an attempt to steal customers.

Mr. Traen dismisses all these charges. Rotterdam and Antwerp are a duopoly. They just don't like a third challenger, he claims.

Antwerp is rattled because it fears Zeebrugge's new terminal will only siphon off traffic from other Belgian ports, leaving Rotterdam unscathed by the battle for market share.

Main Rival: Rotterdam

Not so, claims Daniel Dubois, a former shipping executive who is advising the MBZ on its marketing strategy. He insists that Zeebrugge's main rival will be Rotterdam: about 80 percent of the carriers that have expressed very, very serious interest in Zeebrugge are currently using Rotterdam, he says.

However, industry observers claim that with Rotterdam retaining the 400,000 containers-a-year Sea-Land contract - Zeebrugge and Antwerp will become natural rivals when their new facilities come on stream.

Zeebrugge still has a long way to go to confound the skeptics. Its existing deep-sea terminal is handling only 60,000 containers a year, barely half its capacity, and the port's short-sea container throughput fell by some 40,000 20-foot container units after the Ford Motor Co. switched its British traffic from containers to high cube trailers.

Lost Customers in Past

Zeebrugge also has lost customers in the past, including Johnson Scanstar and Merzario, both of which switched to Antwerp. It was unable to retain Westwood Shipping in 1986 when the line quit Rotterdam during an outbreak of wildcat strikes.

But Mr. Traen thinks the time is ripe for Zeebrugge to loosen the stranglehold of the major ports.

He says Antwerp and Hamburg grew rapidly because they were the favorites of the shippers and forwarders who have dominated transport flows over the past 10 years. He perceives the major shipping lines, such as Sea-Land, Maersk and Evergreen Line, , reasserting their control through door-to-door operations, integration of agencies and the use of a small number of hub ports.

Mr. Traen claims this development will benefit Zeebrugge, which will increasingly be seen as an alternative to Rotterdam as a hub port for the major carriers.

Rotterdam remains the obvious choice, but in Belgium the natural alternative will be Zeebrugge, not Antwerp, he says.

Geography an Asset

Mr. Traen's confidence is based on simple geography. Zeebrugge is a coastal port lying astride the world's busiest container shipping lanes. Antwerp is some eight hours sailing time through the locks of the River Scheldt.

Back-of-the-envelope calculations underline the substantial savings shipowners can reap by diverting their vessels to Zeebrugge. MBZ officials claim a ship can save $10,000 a trip by calling at their port because it is on the coast and because its dues, pilot and mooring charges are much lower than Antwerp's.

The minimum 16 hours sailing up and down the Scheldt adds up to two round trips a year on the North Atlantic or the equivalent of off-loading 300 containers a voyage.

Antwerp's position will improve when a new 500,000-TEUs-a-year container terminal outside the main lock system comes on stream in the early 1990s. However, Zeebrugge will retain a competitive edge as time savings become ever more important to lines operating to and from base ports.

Deep-Sea Traffic Needed

Zeebrugge sorely needs to attract deep-sea container traffic to lessen its dependence on short-sea trades, which account for 60 percent of its container business. The port's short-sea operations, largely based on the 30 ships that sail daily to and from the U.K., also face an uncertain future when the Cross- Channel Tunnel opens in the mid-1990s.

However, Mr. Traen claims the Tunnel will create more opportunities than losses for Zeebrugge. Cross-channel ferries will be able to compete with the tunnel, he says, so there will be no loss, only a slowdown in the growth of business.

On the upside, the tunnel will create a new European transport axis that will benefit Zeebrugge and Dunkirk, the closest ports on the European side of the link. Zeebrugge is thus a natural hub port for deep-sea container lines wanting to off-load their cargoes onto the block trains and trucks moving North to the U.K. or to south to continental Europe, Mr Traen reasons.

However, Zeebrugge faces a tough task enticing shipping lines from other ports and has to overcome the disadvantage of not being linked to inland waterways off the River Rhine.

Companies Hedge Bets

But Mr. Traen thinks it can be done, and so do an increasing number of Antwerp companies that are hedging their bets by setting up operations in Zeebrugge. Antwerp-based Compagnie Maritime Belge (CMB), Belgium's national shipping line, for example, is interested in getting involved in container terminal operations at Zeebrugge.

Meanwhile, Antwerp is becoming increasingly irritated by Zeebrugge's cocky claims about its rosy future. Jan Devroe, the alderman for the Port of Antwerp, last week accused Zeebrugge of dumping rates in an unsuccessful bid to land a contract with Toyota, the Japanese car manufacturer. He described Zeebrugge's claims that it is Belgium's natural container port as incredible and charged the Belgian railway was offering Zeebrugge preferential tariffs for West German traffic.

Zeebrugge has become a reality, declared Mr. Devroe. That's a compliment to Mr. Traen, but the hard work of attracting containerships is only now getting under way.