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Europe’s Largest Port Says Virus Impact to Get More Severe. 20% decline possible

BLOOMBERG, APRIL 17, 2020

Port of Rotterdam largest seaport in Europe and the 8th largest in the world ⚫️ Port handled 14.8 million TEU in 2019 ⚫️Throughput could decline by as much as 20% on annual basis

By Fred Pals for Bloomberg – The Dutch Port of Rotterdam is anticipating a throughput drop of up to 20 per cent this year following a volume decline in Q1 2020 caused by the coronavirus pandemic. 

The coronavirus is set to further damage trade in the coming months, threatening supply chains and causing oil inventories to swell, according to the head of Europe’s largest port, Rotterdam.

Businessman wearing dark suit standing by railing. Port in background.
Allard Castelein, CEO of the Port of Rotterdam Authority

“We are facing unprecedented disruptions and the port of Rotterdam, as a vital process, intends to continue contributing to society,” port Chief Executive Officer Allard Castelein said in a statement. Oil-storage at the complex is already “quite full,” he said later on a conference call.

“We are facing unprecedented disruptions and the port of Rotterdam, as a vital process, intends to continue contributing to society,”

Allard Castelein, CEO of the Port of Rotterdam Authority

Europe’s largest ports — essential to the delivery of food, medicine and other vital materials — are being tested to the limit as the outbreak consumes the continent. The challenges are myriad: preventing delays, ensuring that goods aren’t contaminated, managing congestion amid ship quarantines, and keeping their own workforce healthy.

Oil refinery at port
Gunvor Petroleum Rotterdam BV’s Rotterdam refinery is one of five refineries at the Port of Rotterdam

Rotterdam, which harbors five refineries and serves as a gateway to the inland part of the continent, won’t be paralyzed by the outbreak, as has happened at some ports in other countries, according to Castelein.

“Less-organized ports that don’t have a logistics chain like ours are running into problems, but that won’t have an impact on goods that flow to northwest Europe,” he said.

Still, the pain inflicted by the virus is evident. Overall throughput volume dropped 9.3% in the first quarter, compared with the same period last year, and a decline of as much as 20% on an annual basis is very likely, according to the port. Governments across Europe have imposed measures to restrict the movement of people in order to limit the spread of the outbreak.

The true impact on the decline in demand will become clear from April onwards, and throughput at the port could slump significantly in the coming months, the chief executive said. “This will depend on how long the measures remain in place and on how quickly production and world trade recover.”

Swelling Storage

White oil storage tanks
Oil-storage at the Port of Rotterdam is already “quite full,” according to its CEO

Oil-storage facilities at the Rotterdam port are filling as demand for products such as jet fuel and diesel has evaporated, according to Castelein.

The five refineries in the region have a combined capacity of about 1.1 million barrels a day and include Europe’s largest such facility, Royal Dutch Shell Plc’s 404,000 barrel a day Pernis complex. The port is also a supply hub for other refineries, including Shell’s Godorf plant in Germany and Total SA’s facility in Antwerp.

Refineries that don’t supply products region-wide will find it more difficult to find storage than those in Rotterdam area, which also has an extensive pipeline network, Castelein said.

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