Cold rush – Port Strategy
03 Oct 2016
Close proximity: the waterway ports of K?ping and V?ster?s are within a 150km radius of half Sweden’s population
The competition in Scandinavia is no longer content to live in Sweden’s shadow. Stevie Knight reports The big story in Scandinavia is Sweden: forging ahead with a 3.5% growth rate, it is driving regional growth, much more so than little sisters Denmark or Norway, with its oil-related woes.
However, the whole area has been some time in joining the dots. Gothenburg, the largest port in the region, has been able to attract about half of Sweden’s containers but the fact remains that, for many, its westerly position put it on the wrong coastline. “Most vessels with Scandinavian cargo only reach up as far as Hamburg or Rotterdam,” explains Jesper Harder of Niras. In his view, the depth restrictions around the Baltic inevitably limit direct calls with the result that cargo relies on a mixture of train and feeder ships.
The crowded city of Stockholm itself is on the east coast and the port has been consigned to feeder operations. As Henrik Widerst?hl, the port’s deputy managing director, says: “At the present the only ships able to get in are really very small, 1,500 teu.” However, there’s been a recent collective a sigh of relief as the city port is now within sight of kicking off its restrictions as the spadework has begun on the new Norvik terminal, around 60 km outside the congested city. Norvik’s taken over a decade to jump through the extensive environmental hoops and things have now changed. “What we thought would happen, happened a lot quicker… volumes are increasing and ship sizes have been going up fast,” says Mr Widerst?hl.
Fortunately, the terminal’s natural 16m depth is capacious enough for the big box ships, although he says there’s been some discussions about “adding a bit” to the present 400m quay design before it opens in 2020 “with a first step of 300,000 teu capacity”. More, the rise of local, Baltic or European ro-ro has likewise “been dramatic”. One significant driver has been ro-ro construction material pulled in by the city’s explosive growth, he explains, so along with a new facility at Norvik there’s another ro-ro terminal at Kapellskar that’s having its capacity upped by half again.
But Mr Widerst?hl is clearly interested in pursuing the international boxes and he makes little of the ‘Baltic bottleneck’, pointing out that taking a northerly route around Denmark avoids the Kiel Canal and Gdansk has already seen 18,000 teu vessels coming in. Making moves However, that sigh of relief might be a little preemptive.
While Norvik has been kept out of the ring, other facilities have been ramping up their offerings. For example, APM Terminals in Gothenburg has a “master plan” that will see a rise in capacity to 2m teu with a tripling of the yard space and the creation of a logistics hub. G?vle too is eyeing up the potential: Yilport has recently gained full control of what is at present the largest container terminal on Sweden’s east coast, and Robert Yuksel Yildirim says Yilport Holdings intends to make use of “possibilities that others have not seen”.
So, it’s bringing together the Baltic Sea Gateway (BSG) service, the North Stockholm intermodal terminal and G?vle in order to present a “seamless” logistics offering – useful especially as G?vle also provides energy, bulk and paper products outlets. However other, more fundamental, changes may win the day. “On a national level the greatest challenge in Sweden is that we already know that we don’t have either the economic capability or the land to go on just using rail and roads for both passenger and freight traffic and meet the needs of the growing population,” says Carola Alz?n, chief executive of M?larhamnar AB, which runs twin M?laren ports of K?ping and V?ster?s.
She has a point, while Sweden will have around 11.5m people, over a million will be in Stockholm itself. “We simply can’t build the capacity… the studies have been done – it isn’t possible,” she says. “So, it’s a question of using what we already have, better… the smart answer is use the rails and road for passengers and move more freight onto the waterways.” She points out that while “no transport starts or ends in a port; we need rails and roads for freight traffic”, the sensible answer is to make that component as short as possible. It has resulted in what Ms Alz?n calls “Sweden’s biggest water development since the 17th Century”.
But could it really help drive the cargo? Hinterland help Ms Alz?n believes so. “If you draw a circle 150 km wide around us, we have half the population of the country living here and the best harbour is the one that is closest to your customers.” Therefore the M?larhamnarproject, costing a cool EUR160m will open up the entrances, is smoothing out a few kinks and bring down the depths of the lock – the biggest bottleneck at present – to 7 m, beam 18 m to 23 m and take the length up from 124 m to 160 m.
However, she’s clear both the ports themselves and the infrastructure behind them will also need upgrading if the area is to keep its eyes on the prize. At present there are load pressure restrictions on several quays and the walls need to be strengthened before the dredging of the V?ster?s and K?ping port basins can start. Faster and more efficient loading, unloading and storage is also called for and furthermore, she adds that some of the connecting roads and railways will need attention in order to keep pace.
Admittedly the box traffic at V?ster?s is still only a trickle and Ms Alz?n prefers to talk in terms of incoming vessels handling “around 300 lorry loads” but she adds “after the investment the containership sizes could easily reach a capacity of 1,000 lorry loads, matching the average that’s now coming through Gothenburg”. However it will need political will to change present policy. Ms Alz?n argues that high fairway and pilot fees have undermined use of the waterways and the charges needs to be dropped.
She’s also clear it needs ‘stick’ as well as carrot: Swedish trucks don’t pay road tax and more, the waterways are largely unsubsidised unlike the road and rail network. According to her, this element needs to change to level the playing field. She says though it may be unpopular in some quarters “we need to plan the future”.
Given all this Stockholm might find it has a fight on its hands, says Mr Harder, who adds that many of the larger industries are still located on the west, despite the East Side story. “At some point you have to start wondering about the competition. A number of ports claim that there is already enough capacity in Sweden and there’s no reason to look for larger projects.
Whether the arguments are justified or not, new developments will probably just spread the cargo around between two or three facilities and then that means you don’t get the volumes you need at any of them.” However the issue for Mr Harder, is that much of Scandinavia is caught in endless prevarication when it comes to big port projects, and the decade long environmental tribunal that held up Norvik is rather more the rule than the exception: “There have been plans to build a really big hub terminal on the south coast of Denmark for quite a number of years,” he says. “It will never fly because the competition is not Gothenburg or Stockholm but places like the port of Hamburg in Germany. By the time we’ve made a decision it’s already history – because Hamburg has just gone ahead and done something about it.”
SCI-FI SOLUTION FOR CARGO FLOWS
Despite all the regular port developments in Scandinavia, a high tech solution could shake everything up: the Hyperloop. This ‘suction tube travel’ skates capsules through a low pressure environment at 875 km per hour. It sounds like sci-fi but since the first demo took place in the US earlier this year the idea’s been gaining solid interest: DP World has already signed an MoU with Hyperloop One to explore moving boxes between its big Jebel Ali facility and an inland container depot.
More, Russia and China are even considering the potential for a link.
However Scandinavia could see the very first international Hyperloop connection: both freight and passengers in Helsinki could be 300 miles away in Stockholm in less than half an hour.
According to a KPMG study, it could attract 43m passengers a year and despite the big US£21bn outlay (which includes one of the world’s longest marine tunnels) the cost per mile actually works out cheaper than other big rail projects and could haul in no less than US£1.1bn per year in ticket sales.