The recession is over but still a long way home - diagnose for the Baltic ports

Although Baltic area is heavily affected by the downturn there are positive sings for the Baltic Sea region begin to shyly appear, but there is still slow recovery ahead. More than 80 Baltic Sea Region and other representatives debated on how global economic slow-down can impact shipping and ports sectors. Everything during the XII Baltic Ports Conference that was held on 3-4th September 2009 in Aarhus, Denmark. The event was organized by the Baltic Ports Organization in cooperation with Port of Aarhus which was the host of the event.


The official opening of the conference was made by a host Bjarne Mathiesen, Director of Port of Aarhus and Julian Skelnik, the BPO Chairman. Among other opening speakers were Nicolai Wamen, Mayor of the City of Aarhus and V. Schoenmakers, ESPO Chairman who focused on the co-operation between ESPO and BPO. He underlined that BPO is the only port organization that has Russian ports as members.

The conference has begun from discussion about perspectives for the Baltic Sea Ports for 2010 and current economic downturn and its impact. Antii Saurama from the Centre of Maritime Studies presented the latest Baltic Port Barometer report, which survey was conducted both by CMS and the BPO. It univocally shows that there are some positive sings for Baltic ports that shyly appears, but there is still slow recovery ahead. Majority of the ports expect that in 2010 there will be strong or some growth in cargo volumes. The highest increase in 2010 is expected in segment of containers.

Helge Pedersen, Chief Economist from Nordea Bank agreed on that slightly better times are coming for ports. This assumption comes from the fact that manufacturing sector is improving: PMI factor is increasing in US, Eurozone and Japan and there are first signs that world trade started to recover. Helge Pedersen explained that “the recession is over, but still a long way home”. One of the main risk that will appear is the government debt problems. Another one is an increasing unemployment that may cause the lower consumption. Commodity prices are also the area of concern.

Philip Damas from Drewry explained that shipping companies, shippers, forwarders and ports have conflicting short term goals during the recession. He also said that second stage of recession and recovery will lead to more structural approach to cost actions. Ports status are  changing. Ports are no longer just a modal transfer point, they use more and more logistics potentials – he concluded. Staffan Herlin from Finnlines explained that unitised cargo modes increase and combined intermodal transports will gain more and more foothold. He also added that volumes will concentrate to HUB-ports with good and diverse connections to production and market areas.
The second day of the conference raised the subject of deep crisis in container shipping industry. As Baltic area is heavily affected by the downturn, the future for the Baltic hub is still uncertain. To leave it all behind network must constantly be maintained and expanded and commercial feeders need to show flexibility in cooperation options. Jesper Kristensen, CEO of Unifeeder, explained that “Baltic ports must realize that the visions for a hub in the Baltic has de facto been postponed”.

The activities, which are more and more attractive for the ports, are placing ports in the logistics chain of windmills. It is a new, niche segment for the port business but has very high potential for development – said Army Pedersen from Siemens Wind Power.  

During General Assembly of BPO Julian Skelnik was re-elected as a BPO Chairman and Additionally there were minor changes in the BPO Board panel – Mrs. Christel Wiman left the Board leaving the place for Mr. Henrik Widerstahl, vice-managing director at Ports of Stockholm. Moreover a new BPO strategy was approved. New strategy focuses on the initiatives promoting “Baltic maritime highway” as the way to move the cargo and passengers from/to the world through the Baltic ports. BPO should support entrepreneurs, ideas, visions, initiatives, that contribute to the overall transport developments in the Baltic Sea Region; promote environmental management in the ports and take active role the international dialog when environment is concern. BPO will support and take initiative in research and science that would lead to better understanding of the transport sector in the region, to study future challenges.

 

Next Baltic Ports Conference will be held on 9-10 September in Tallinn, Estonia.