Approximately 53.5 million inhabitants of the Baltic Sea region constitute a significant source of consumer and investment demand. Enterprises and institutions operating in the region provide jobs for about 25.6 million people. The region generates an annual GDP of approximately 1,400 billion euros. The rapidly growing demand from Scandinavian and Baltic countries was slowed down in 2008 as a result of the global financial crisis. This does not change the fact, however, that more and more is being consumed in the region, largely consisting of imported goods. Additional cargo flows are generated by investments undertaken as a result of the inflow of financial resources from the European Union.
At the beginning of this century, a clear trend of rapid inflow of containerized cargo and ro-ro transport emerged. New container terminals are being built in ports located on the Baltic Sea, and further ro-ro handling berths are being launched and planned. The number of shipping connections is also growing, with larger and faster vessels being introduced on them.
Increasing competition in the global and regional dimension and changes in cargo supply require the modernization of port marketing strategies. One of the conditions for strengthening the competitive position in logistics networks is the development of port organizations towards the expansion of logistics functions.
The crisis in the global financial market triggered an economic recession. As a result, there was a decline in demand for consumer and industrial goods, which caused the growth trend of containerized cargo and ro-ro transport in the shipping and port market to collapse. The period of prosperity had sparked great optimism in the maritime transport market regarding the planning of maritime transport assets and the infrastructure necessary for handling the dynamically growing supply of containerized goods. The frequency of connections on intercontinental routes and feeder connections was also growing rapidly. Shipowners were ordering increasingly larger container ships and more modern ro-ro vessels, and ports were increasing their handling capacity in container and ro-ro terminals. However, the construction and modernization of terminals were no longer sufficient to handle the increased volume of goods transported in containers and via the ro-ro system.
Increasing competition in the global and regional dimension and changes in cargo supply require the modernization of port marketing strategies. One of the directions for increasing the competitive position in land-sea transport networks is developing ports by expanding their logistics functions.
Prospects for changes in production and international trade
In March 2010, analysts from the International Monetary Fund (IMF) revised their pessimistic forecasts from November 2009 and predicted that global production in the United States, after a 1.6% collapse last year, should grow by 2.4% in 2010 (almost half a year earlier it was assumed that it would be less than 1.6%), global production in 2010 will grow by 3.9%, and in 2011 by 4.3%. In the Eurozone, after a 3.9% decline in 2009, production growth of 1% and 1.6% respectively is assumed. However, IMF analysts make such a scenario dependent on the active macroeconomic policy of the G-20 governments. The economies of developing countries, where production is expected to grow by 6% this year and 6.3% next year, will have a significant impact on the improvement in the global market. At a meeting in Seoul on February 27, 2010, G-20 experts assumed that in China this growth would reach as much as 10% and 9.7%. There is therefore a chance to emerge from the recession and increase activity in international trade. The decline in general cargo transport in maritime shipping by about 20% was clearly felt by liner shipowners serving oceanic container connections and feeder services, who ended 2009 with multi-billion losses. Already after 9 months of 2009, it was estimated that the 22 largest container fleet operators would record losses of 11 billion USD. Drewry Shipping Consultants estimates that for 2009, container fleet operators will suffer total losses of 20 billion USD. Financial reports of leading shipowners already after the first half of last year gave no hope that it would be possible to maintain revenues similar to those in 2008, when profits of 5.3 billion USD were achieved. The biggest losses were suffered by the leaders of the container market. Mediterranean Shipping Co., CMA CGM, Orient Overseas International Ltd., Hamburg Sud, United Arab Shipping, and Pacific International Line, despite reducing their fleets by over 10% and making savings on liner connections, suffered losses of 2 billion USD. The turnover of the 16 largest shipowners who published their results, including Maersk Line, Hapag-Lloyd, China Shipping, “K” Line, and NYK Line, reported a decrease in revenue in the 3 quarters of 2009 by 40%, from 94 billion USD in 2008 to 56 billion USD in 2009 (according to calculations by Alphaliner analysts). Growth in production therefore represents an opportunity for an improvement in the economic climate and the profitability of shipping connections and handling terminals.
The article comes from the magazine “Logistyka” 3/2010.