Supply Chain News Bites - Only from SCDigest

-June 3, 2007


Global Logistics: European Supply Chains Threatened by Inability to Expand Ports


Environmentalists Delay Numerous Projects, as Container Back-Ups in Antwerp and Elsewhere Increase, Wall Street Journal Says; Growing Mismatch between Demand and Capacity


SCDigest Editorial Staff


With Europe seeing increases in imports from Asia rising at the same level as the US, supply chains across the continent are being increasingly challenged by bottlenecks at major ports, similar or worse than those seen in Long Beach in 2005. Plans to ease these delays through port expansion are being thwarted by maneuvers from environmental groups and others, a Wall Street Journal article reported last week, meaning logistics costs are likely to increase in Europe for ocean carriers and importers.

In Q1 2007, 73% of container ships arrived late in European ports. That was up from 45% in Q1 2006, according to a report by Drewry Shipping Consultants. In March alone, Rotterdam delayed or completely sent away more than 30 ships and 50,000 containers, adding tremendous cost to carriers that will eventually be passed on to importers through higher rates. These delays also add variability to the supply chains of the importers that negatively impact inventory levels, planning and customer service.

While environmental and NIMBY (Not in my Backyard) protests have also delayed port expansion in the US, the effect has been comparatively mild compared to that in Europe. Meanwhile, China uses state control to sweep away opposition to port construction or expansion – sometimes by sending protestors to jail or labor camps.

It’s a much different story in Antwerp, Belgium, Europe’s largest port. There, opposition from a loose confederation of environmentalists and others opposed to the planned destruction of a historic (but until recently largely empty) village has indefinitely delayed expansion plans.

The village was originally slated for destruction to make way for new terminals in 1998. Nearly 10 years later it still stands. Though demolition is now scheduled for this August, it’s not clear the opposition won’t create new roadblocks. 

In Rotterdam, Netherlands, a combination of forces including environmentalists and a fishermen's association have used the courts and EU law to delay a new $3.4 billion terminal that port authorities had hoped to start building in 2002.

Meanwhile, port authorities in Hamburg, Germany have plans to making parts of the Elbe River deeper so the port can handle larger container ships. The project has been stalled because of opposition from environmental activists and a group called Save the Elbe.

“With China planning to spend $54 billion in the next 10 years on building and expanding ports, the mismatch between its capacity to ship and Europe's ability to receive goods is growing fast,” the Wall Street Journal notes.

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