Continental ports - such as Rotterdam, in the Netherlands, Marseille, France, Barcelona Spain, and Germany’s Hamburg - are in demand now more than ever. Plans are in place to improve facilities throughout Europe as congestion, planning restrictions and management issues make distribution of fresh produce throughout Europe into the UK problematic.
European ports have been instrumental in taking the pressure off ports within the UK, according to the Freight Transport Association’s (FTA) head of global supply chain policy Christopher Snelling. “Continental ports are of significant importance to the UK fresh produce supply chain and are becoming more so as container ports become full in the UK,” he explains. “We will definitely have to use continental containers in the future. At the moment, a lot of imports into the UK are brought to a continental port in deep-sea vessels, and the cargo is then transported onto feeder ships for the journey to the UK, because UK imports are so congested. The efficiency of continental ports is becoming increasingly important to the UK supply chain.”
Fruit and vegetable importer Agrexco UK brings in approximately 80,000 pallets of fresh flowers, herbs, salad, fruit and vegetables into the UK a year through either direct shipments to Felixstowe port or indirectly through the company’s distribution facilities at both Marseille, and Koper, in Slovenia.
“We have our own charter vessels that deliver into the Port of Marseille from Israel about twice a week,” says Agrexco’s import controller Tom Black. “We also have a facility in Koper in order to distribute to the eastern European market. Sometimes it is easier to go to a continental port and then truck the produce to its destination, as direct journeys from Israel to the UK are via container vessels that can cause more delays.”
Fresh produce importers such as Agrexco rely on continental ports to maintain an efficient supply chain. “We need to have a programme set up with UK supermarkets,” explains Black. “The supermarkets then base their weekly distribution programmes on us, so we need an efficient system, which means keeping the lines of communication open with ports.”
But many in the seafreight industry are concerned that the continental port network will not hold up to the pressure.
“Congestion is an issue across Europe and in the UK but, even though continental ports are generally much larger than the ones in the UK, they still experience the same kind of problems,” says Snelling. “This has a knock-on effect on the UK and makes the business unpredictable at times. Continental ports work at a percentage of capacity that is too high, so when things go wrong, it causes unpredictability - couple that with products that have a limited shelf life like fruit and vegetables, and that is a huge problem.”
Bengt van Beuningen, director of communications at the Hamburg Port Authority, agrees. “The whole distribution network across Europe has to improve for ports to be effective,” he says. “We need more rail tracks and better motorways for the ports to do their jobs properly, but this is a universal problem and it is not down to the ports to improve the situation single-handedly.”
Black believes many different things cause congestion and that the changeable weather is one of the main culprits. “Bad weather is always a problem, as well as labour strikes, which mean we have to divert our ships for however long,” he says.
The size of containers used to distribute cargo is also having an impact on the running of the continental ports, with many vessels taking longer than others to manoeuvre within a port and therefore holding up the system. “For us, the main problem is the delay caused by congestion,” says Black. “If there is a delay for two or three days it turns into a problem that continues right down the supply chain. It is all about timing - if we know there is going to be a delay in advance sometimes we can do something about it, such as airfreight produce over.
“Communication is the key to working with ports; the main thing is knowing what delay is coming and having the time to sort it out.”
The Port of Rotterdam exports approximately five million tonnes of fresh fruit and vegetables a year, with 20 per cent of that going to the UK. Ard van Eck, business manager of fresh business for the Port of Rotterdam, maintains that problems are the same all over Europe. “Issues are the same all over north-west Europe; mainly traffic congestion and space. All the ports want to extend because of globalisation exploding,” he says. “The amount of fresh produce the Port of Rotterdam exports has remained static for the last couple of years, but the general activity within the port has increased, with use of the port increasing by six per cent this year compared to last year.
“I think globalisation is the main reason why the Port of Rotterdam is doing well. Countries like China and Brazil are becoming more involved with the fresh produce market and exotic fruits are becoming more popular all over Europe.
“The running of the Port of Rotterdam mostly goes quite smoothly, as it is served by ferries that generally travel small distances. We have a problem with road traffic coming in and out of the port, but it is not specific to fresh produce lorries,” he adds.
Patrick Verhoeven, secretary general for the European Sea Ports Organisation (ESPO), says that increasing the capacity of continental ports is the way forward. “Railways to ports and the capacity of ports, as well as the routes out of them, are all obstacles,” he says. “Mainly this is creating delays and affects the efficiency of the supply chain. The quality of fresh produce will be affected, as the time factor is very important. Invest to improve productivity is the main message the ESPO is sending out.”
But investment is not easy as, unlike in the UK, most of the ports on the continent are government-owned, and are having issues obtaining planning permission or consent for extension projects. “The procedure has become quite bureaucratic and has created uncertainty,” says Verhoeven. “You never know when planning will come through and that is the main headache at the moment.”
The ESPO is working with the European Commission in order to speed up planning permission for ports and make all related procedures more efficient. The organisation is in the process of preparing a set of guidelines to help national and local governments to implement EU legislation that has an impact on ports. This is the result of a new EU ports policy launched in October last year. “The guidelines are being discussed by various working groups, and they aim to clarify the key concepts in the policy, as well as find working solutions to how you can go through planning in an efficient way, without having a detrimental effect on the environment.”
Continental ports did not imitate the mass privatisation of the UK ports in the 1980s and, as a result, the issue of management is now on the cards. “Most often, the case is that the government is involved in a continental port,” explains Verhoeven. “But private businesses are beginning to take an interest. Continental ports are in the process of corporatisation and, mainly, governments have devolved the ports into limited companies, while ownership is still with the local or national government.”
Verhoeven is for corporatisation and believes it is key to the future success of continental ports. “When private companies take over, ports become more business-like in approach and things happen quicker,” he says. “You need a port authority to be much more flexible.”
Competition from other modes of distribution is also a problem for continental ports. They have to compete with internal trade by road within Europe, but if road costs continue to rise, van Beuningen believes that this may increase activities at continental ports. “The truck is the best and fastest mode of transport in European producing countries, because it is direct and guarantees quality. But if toll and fuel costs continue to rise, we may see further expansion and that will bring changes.”
The fruit terminal at the port of Koper is strengthening its position due to more fresh produce shipments coming from the eastern Mediterranean. Containerised volumes of fresh produce into the port from Israel are increasing year on year. The fresh produce is then distributed by reefer trucks mainly to the Netherlands and Germany, as well as the UK and Poland.
Fruit terminal project manager Milena Jerman says the port sends approximately 160-200 trucks a year to the UK and that more customers are becoming willing to serve the UK via Koper. “We are receiving more requests for immediate delivery, like supplying supermarkets on a Monday morning,” she says. “Koper needs good shipping connections with container lines offering short transit times to distribute fresh produce efficiently.”
As the European fresh produce market expands due to the increased activities of eastern European countries such as Poland and Russia, continental ports must expand to cope with the extra pressure. The Port of Hamburg only exports a small amount of fresh produce directly to the UK, and its major markets have become Russia, Poland and the Czech Republic.
“We do export a small amount of produce to the UK, but we concentrate on working with eastern European countries,” says van Beuningen. “We send apples, plums, and potatoes to the UK from the farming area in northern Germany, but mostly this kind of produce goes by truck. Geographically, we are too far in the east for it to make economic sense, when Rotterdam and France are so near to the UK. But business is increasing through our new European neighbours and the fresh produce volume going through the port has gone up considerably.”
The Port of Hamburg is expanding, and last year saw the opening of a new storage and distribution facility. “The facility has allowed us to check the quality of the fresh produce efficiently, and means we can have 100 per cent control of quality and safety,” maintains van Beuningen. “We mainly deal with fresh fruit and salad, so temperature control is very important.”
Fresh produce exports play an important role at the Port of Rotterdam, and volumes are increasing, according to van Eck. “Even though fresh produce is quite a small percentage of the 400,000mt of goods we export at the Port of Rotterdam each year, it plays an important role within Rotterdam’s local economy,” says van Eck. “Fresh produce is something that we add value to in the Netherlands, but we also have extensive farming land and greenhouses in between Rotterdam and The Hague. We also send over a lot of flowers grown in Rotterdam.
“The new produce terminal opening in Liverpool will present new opportunities for fresh produce businesses and it will be interesting to see if it helps congestion.”
“The Port of Rotterdam is very important to the UK and the rest of Europe. It is crucial to avoid transportation by land and helps diminish traffic within the UK. Seafreight is cheap, reliable and environment-friendly compared to other modes of transport and it will continue to play a very influential role within the UK fresh produce supply chain.”
Van Beuningen believes that seafreight holds a good deal of advantages for the fresh produce industry and says that continental ports are going to be pivotal to the industry’s future. “Seafreight is much cheaper than airfreight and businesses use it because it is a low cost form of distribution,” he says. “New technologies have really improved the ports around Europe. Temperature-controlled transport and equipment is now so much better than 10 to 15 years ago.
“I think the market for fresh produce in our port is growing, due mainly to the growing market in eastern Europe.”
Verhoeven says there is potential for continental ports to come together more in the future to ensure a more efficient supply chain throughout Europe. “Continental ports work together in various forms,” he says. “The most direct form of co-operation is on an information level, not on a marketing level - but that may well be something that happens in the future.”
Van Eck agrees. “All continental ports work together in the way they comply to EU legislation, the environment and safety,” he maintains. “They do not work together trade-wise, but maybe we will see this kind of consolidation in about 10 year’s time.”
Snelling believes there is still a lot of work that has to be done in order for continental ports to work efficiently and, even though expansion is on the cards throughout the ports, he fears that this may not be enough. “The new produce terminal under development at Liverpool is in a good position for continental ports to get their produce into the UK and anything that opens up distribution to other areas in the UK has got to be a good thing,” he says. “But to distribute the produce, continental ports have got to expand and if the role the continental governments play in the ports is reduced by privatisation, or liberalisation, it will be the start of a new world.
“Even with the extensions planned, deep-sea vessels will continue to increase, and any increased capacity will be soaked up by all the extra imports coming in.”
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