No silver bullet for Rotterdam port's barge woes

No silver bullet for Rotterdam port's barge woes

The huge gantries at Maasvlakte in the Port of Rotterdam are designed to handle the world's mega-ships. Photo credit: APM Terminals.

When a mega-ship calls at a port, it creates a whirlwind of feeder, barge, road, and rail activity needed to shift the huge exchange of containers moving on and off the vessel, which puts into perspective the struggle Europe’s busiest container hubs are facing as they try to solve persistent barge congestion.

Carriers on Asia-North Europe trades deploy the largest mega-ships in their fleet, and with Rotterdam as the first port of call on many of the services it is not uncommon to have six ships of 18,000 to 21,000 TEU in port at the same time, said Emile Hoogsteden, vice president containers, breakbulk, and logistics at the Port of Rotterdam.

He gave a breakdown of the activity generated by a single mega-ship call. An 18,000 TEU vessel discharges about 10,000 TEU, and to transport the cargo onward the ship requires an average of 10 feeder vessels, 19 trains, 1,560 trucks, and 32 barges. If six mega-ships are in port at the same time, that means at the quays will be as much as 60 feeder vessels and more than 190 barges, all floating around collecting boxes.

“There is a huge peak and feeder demand because Rotterdam is such a big transhipment port. This puts enormous pressure on the quay with the barges being an important element in the port for inland transportation,” Hoogsteden told JOC.com.

As the continent's container trade continues to grow, it is straining Europe's gateways and its inland logistics networks. Figures from the IHS Markit Orderbook show that by mid-April 2018, 10 vessels in the 18,000-to-25,000-TEU size range had entered service on the Asia-Europe trade this year, all discharging large container volume at the hub ports of Rotterdam and Antwerp.

The strong growth in demand that began in the second half of 2016 continued through the following year with Rotterdam's container throughput rising to 13.7 million TEU in 2017, up 11 percent year over year as the big shipping alliances channeled their Asia-North Europe services through the Dutch hub. In the first quarter of 2018, the volume rose by 6 percent to 3.5 million TEU.

After a record 2017, Antwerp has just reported its best ever quarter with container volume in the first three months of 2018 growing by 10.7 percent to 2.7 million TEU. March set a new monthly record with 980,000 TEU.

While Rotterdam has terminals perfectly capable of handling the mega-ships, Hoogsteden said the port calls of these vessels were concentrated on certain days. “Yes, we have bigger vessels, and yes, we have higher volumes, but if it was spread more evenly over the week there would be no issues,” he said. “Most of the volume comes together at a certain point during the week and everything gets to be pushed through those days. This is difficult as you cannot set up your port for the big volumes.”

The result has been congestion, acutely felt in the barge sector, that transports about 3 million TEU to and from the inland terminals every year. Hundreds of barges operate in the waterways around Rotterdam, many picking up only five to 10 TEU at one time and calling at five terminals in the port while they tie up next to the big vessels undergoing exchanges of 10,000 TEU.

Belgium’s Port of Antwerp is experiencing the same challenges, which Hoogsteden said confirmed to him that the barge congestion was a system problem rather than purely a barge issue.

Rotterdam/Antwerp congestion problem — many players, not sharing information

“It is not so much putting in more cranes or more feeder ships and requires the help of all players in the supply chain,” he said. “There are a lot of processes involved and we need to exchange information and improve planning so one party can know what the other party is bringing, and what the other party can handle. There is not one silver bullet and one solution.”

Complicating the barge-handling operation are the number of players in the port’s container supply chain. Hoogsteden said there were so many parties involved in one shipment with everyone holding only a piece of the information. “No party has all the information, or the right set of parties is not getting the right information at the right time. So, there is still too much waste in the system and digitalization will play a role in helping to share information and ensure planning between the various parties,” he said.

A dashboard will be created to give all parties information on the status of barge handling at any time, but it does mean that various parties have to share information with each other. “That, of course, is a step that each party must be willing to take, and it is difficult because it requires trust between each party that may not be that willing to share their information,” Hoogsteden said.

Getting the small barge operators to share information will not be easy, but Rotterdam is working on the planning tool, Nextlogic, that should be operational by the end of the year and allows barges to input information on the terminals they need to call at and the number of containers to be picked up, and terminals enter the capacity they have available to handle barges. The planning tool directs barges in a particular order in real time so when there is a delay, the barge calls will be rerouted or rescheduled.

Rotterdam is also investing €175 million ($215 million) in an internal road system, or container exchange route, that will connect the five deepsea terminals at the Maasvlakte area. It means containers moving between the terminals will not need to move outside the gate requiring customs documentation, so if a barge has to pick up one or two TEU from a terminal, the containers can be transported by the internal road to an area where bundling of the volume could take place.

This consolidating of barge volume is crucial to cutting down the port traffic and reducing bottlenecks. Fewer but larger barges with point-to-point connections will call at one terminal with maybe 100 to 200 TEU, meaning fewer small exchanges and fewer vessels to manage.

Thijs van den Heuvel, operations director for Combi Terminal Twente, an inland terminal in the Netherlands that handles about 330,000 TEU a year, said about 150,000 different shippers in Belgium, the Netherlands, and Germany combined, all use Rotterdam and send information about cargo to and from the different shipping lines, forwarders, and terminals. There are also eight deepsea terminals with several operators and 600 barges with 150 different owners.

The many deepsea and inland terminals have the effect of fragmenting container volume on both sides and adding to the incredible layer of complexity involved in managing the barge transport. “This is partially because of the rapid growth in the last year that surprised everyone, but at the same time there is a lack of contracts between the deepsea terminal operator and the inland terminal. In the Netherlands and Germany, you pay your terminal handling charges and that takes care of every container coming in to the port, including the move out of the deepsea terminal inland.”

Many shippers have built their Asia-Europe supply chains around the major gateways and shifting ports is often not a very attractive, or cheap, option. The China-based transport and logistics director for a European retailer said if a shipper was stuck with the same port, the only alternative in times of congestion was to build in additional lead time.

“It depends on what is inside the box and how urgent it is. Barge to truck is one of the simpler solutions. Shifting from barge to road basically doubles the cost. The cost is painful when it happens, but sometimes it is worse not having the products in store,” he told JOC.com.

The Port of Antwerp also recently unveiled measures to tackle the problem of barge congestion with rising container volume continuing to create regular delays for the 2.6 million TEU that are transported to and from its inland terminals.

Luc Arnouts, director of international relations at the Port of Antwerp, told JOC.com that longer waiting times for barges has developed in tandem with rapidly growing volume and the larger sizes of seagoing ships calling at the port with the big alliances, combined with labor shortages that create peak loads at terminals and long wait times for container barges.

To tackle the problem, each of the deepsea terminals in Antwerp will make a certain number of dedicated barge berths available with dedicated barge gangs to handle the volume. Barges will have central planning to manage schedules, with the three large terminals (PSA, MPET, and DP World) carrying out a large-scale trial to deal with barge scheduling on a portwide basis, which is aimed at simplifying and streamlining the entire scheduling process for all parties. A pilot project will be tested from September onward, and if the results are positive it will be continued.

Antwerp's deepsea terminals will also not handle barges with fewer than 30 moves in a trial period that begins in October. The idea is to set up consolidation centers away from the port at inland terminals, and the Port of Antwerp has pledged to offer financial support at the inland terminals where that consolidation takes place.

Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler.