Recently The Economist wrote a piece on the port of Rotterdam as a global indicator. The port has been heralded as the instant indicator of the state of the global economy. In 2014 it handled 446m tonnes of cargo which was double the amount in Antwerp Europe’s second largest port. So why is Rotterdam such a prevalent indicator? Well the trends that are transforming the port include those that are rapidly growing in the global economy – e.g. automation and the reduction of fossil fuels.
The port has evolved and kept up with new ideas and before the post-war boom Rotterdam built new storage facilities for oil and chemicals. Furthermore, with the onset of globalisation the port started to accepts mega-ships bringing sneakers and flat screen TVs from Asia to Europe. Activity in the port bears witness to four trends in the world economy:
- The low price of oil
- Slow growth in China and Emerging markets
- The sluggish euro-area recovery
- The global slowdown in manufacturing and trade.
Rotterdam’s vast storage tanks (see photo below) quickly filled, as traders bought cheap crude on the spot market and sold futures at a higher price, locking in a profit. The slow down in China has led to the appearance of Chinese ships offloading surplus steel as demand for German cars in China has dropped which means less demand for steel. Therefore the drop in shipments of bulk goods arriving in Rotterdam is a result of this threatening cycle.
Global trade has been falling for the last few years (down by approximately 14% in 2015) and has been less than global growth (usually the other way around). The port of Rotterdam has been felt this pinch as one in four containers originates form China. Although the volume of goods in the port has increased by 4.9% in 2015 it was almost entirely due to the increased trade in oil and oil products as container volumes dropped by 1.1% and agricultural bulk by 3.8%. As the production of oil becomes concentrated in fewer countries there will be the requirement of shipping oil as well as storing it which will add to the activity of Rotterdam.
Another indicator that is prevalent in Rotterdam is automation. A lot of the work usually carried out by labour has been replaced by automated guided vehicles (AGV’s). The cranes lift the containers onto these vehicles who then deliver them to stacks to be distributed by truck train or barge. Furthermore these new technologies are powered by electricity as solar panels and an increasing number of windmills provide much of the power the port consumes.