Port of Rotterdam: “every Brexit is a hard Brexit”
22 September 2020: It was no good making assumptions. The Port of Rotterdam had to prepare for no UK/EU trade agreement early and now, with just a few weeks to go, it has already built a community of consensus, through stakeholder buy-in, to its new procedures.
The Port of Rotterdam is the largest seaport in Europe, and from 1962 to 2004 was the world’s busiest. Its throughput of freight amounted to 469.4m tonnes in 2019, slightly up on 2018. Total throughput of liquid bulk in 2019 was 211.2m tonnes and dry bulk throughput was 74.5m tonnes. Container throughput measured in tonnes grew and roll on/roll off and other breakbulk were up too. It is also the largest non-Asian container gateway.
But it’s not just about pushing those numbers up year on year; for the Port of Rotterdam, it is also about having a smarter and cleaner port environment. Being smart has been especially important in its industry-leading preparations for Brexit.
External Affairs Manager, Mark Dijk, says: “Of course you can make assumptions about what type of trade deal there might be, but, in the end, that was no use for us. The only thing we could do was to prepare for a no-deal scenario two and a half years ago.”
He continues: “For the port business, there will have to be new formalities. Every Brexit is a hard Brexit for us.”
Of the 469.4m tonnes that passed through the Port of Rotterdam last year, more than 40m tonnes passed through the UK. In fact, the UK is the Netherlands’ largest trading partner by volume of goods, and for the Port of Rotterdam, the UK is the fourth largest trading partner.
“With the UK representing almost 10% of the total goods that passed through the Port of Rotterdam, we had to look at the impact Brexit could have. We considered all the options for trade deals but, whatever the outcome, we decided our role was to mitigate the impacts and make the trade lanes from our terminals to the UK as smooth as possible,” says Dijk.
“It was not rocket science,” he says. “We already trade with China and the US, for example, for whom there are already formalities for customs and for veterinary and phytosanitary inspections in relation to meat and live animals. These controls are already in place for non-EU trading countries.”
However, there is a huge complication in terms of roll-on, roll-off (ro-ro) ferry cargo. “Around 95% of all the ferry business from Rotterdam goes to the UK and the rest goes to the Iberian Peninsula. Because the ro-ro system and the clients behind it were adjusted to trading with or from the UK but within the EU, shippers and truckers of freight using ferries to transport their goods have little experience with these formalities,” he says, adding that, conversely, the cargo chain that exports goods from China on deep-sea ships is very well versed in these formalities. It is going to be an initiation of fire for the ro-ro logistics chain operating into and out of the UK in the post-Brexit world.
“This was our challenge: how to prepare not only the terminals at the port but also the trucking companies and even the producers. There are 11 extra procedures they have to become familiar with,” warns Dijk. “All the operators within the supply chain have different responsibilities.”
He cautions all producers of goods in the UK and those trading with the UK that they are going to feel the weight of these new obligations, both in terms of the arrangement for the payment of VAT and compliance with pre-registration formalities.
Expecting things to be tough, two and a half years ago the Port of Rotterdam brought all its stakeholders together so that the whole logistics chain would be involved in the Port Community System, Portbase, which enables timely and complete exchange of information.
To some extent, the €1m investment in the system was a risk back then, but today it has proved to be a small price to pay for peace of mind.
“All parties need to register within this system,” says Dijk. “The truck arrives at the terminal, the system uses number plate recognition to check that the truck and all the goods have been pre-registered, and then the truck can load onto the ferry as usual. However, all parties in the logistics chain have to be registered.”
Therein lies the rub. Those that have not registered could cause disruption. To date, 85% of stakeholders in the logistics chain have registered. By the end of the year, the Port expects this to reach 95%.
All five ferry terminals at the Port of Rotterdam have agreed that unregistered trucks will not be allowed into the terminals from 1 January 2021. That has required infrastructure investment in parking spaces. Only 24 hours is allowed – for the operators of parked trucks and the producers of all the goods those trucks are carrying – to complete the missing formalities, after which, the trucks have to vacate the area.
The impacts are going to be significant. Dijk comments that preregistration has a positive effect on the movement of fruit and vegetables, but for livestock and meat the situation is complicated by the availability of animal and meat inspection locations and an adequate number of inspectors. The situation for the movement of meat in Rotterdam is good, but for livestock it remains a challenge. There are huge incentives to register with Portbase, he says.
“Putting aside worrying about whether there would be a hard or a soft Brexit made it easier for us to work on this project,” says Dijk, adding that the Port of Rotterdam is confident it has planned well.