Friday, April 24, 2020

Mixed Picture for Swedish Trade as Ports Detail Sector Throughput

Whilst Container Freight Holds Up RoRo Ferry Traffic Crashes
Shipping News Feature

SWEDEN – Two separate reports today from opposite sides of the country indicate that the coronavirus outbreak has so far had little or no effect on some sectors of the country's ocean borne freight. The ports of Gothenburg on the West coast and Stockholm 500 kilometres to the East, both issued positive figures for recent cargo volumes although, as elsewhere, passenger traffic has slumped.

Many countries are studying the country’s response to the crisis, unlike most other neighbours Sweden has not enforced a lockdown and only advised, but not enforced, a social distancing policy with most schools, bars, restaurants and shops remaining open. Whilst the authorities say the situation is stabilising, Sweden has in fact seen over five times more deaths per capita than neighbouring Norway.

Gothenburg is Sweden’s largest port and freight volumes have remained high through the first quarter of the year. However Sweden is highly dependent on trade with the rest of the world and despite volumes remaining firm during the first quarter, a slowdown is expected during the second quarter as a result of the situation globally. Elvir Dzanic, Gothenburg Port Authority chief executive, observed:

“We have focused firmly on keeping the port open and we have managed to do so successfully. This has always been our strategy. Large parts of Sweden have remained open and productive during the pandemic, and coronavirus has not had any tangible impact on Q1 volumes.

“The Port of Gothenburg is a robust freight hub and together with our partners we are standing strong, with an unchanged offer and ability to deliver. This is the kind of security and reassurance that Swedish companies need, and we can see a clear tendency for more volumes to be routed through the Port of Gothenburg.”

Gothenburg saw export container volumes rise by 8% in Q1, even reaching a 10% jump in March. On the import side, a downturn has been noted as a result of a fall in imports from China. This has been compensated for in part by a rise in the import of empty containers needed to avert a shortage for the country’s export companies.

Handling of energy products increased by 13% to 5.7 million tonnes for January-March. The oil market is extremely volatile with a dramatic fall in oil prices and a substantial upturn in demand for storage. Whilst there was no increase in the demand for storage through to March, this is expected to change in the near future.

The Port of Gothenburg is the largest vehicle handling port in Sweden, with the Volvo companies as its biggest customer, both for exports and imports. However, there are significant imports of other makes, including Mazda, Nissan, and Renault. Although the Volvo companies halted production in Gothenburg and Ghent at the end of March, this has not been manifested to any significant extent in the number of vehicles shipped, with just a 1% fall for the quarter. Production has now recommenced although the outcome of the earlier stoppage and decline of new car sales will doubtless be reflected very clearly in the volume report for Q2.

The RoRo segment has seen a decline from the high levels experienced in recent years. This trend continued into the first quarter with volumes down 6%. As in the vehicle sector, the effects of the production shutdown at the Volvo companies have only been marginal, although there will undoubtedly be greater repercussions in the months to come.

As we have previously reported Stena Line, an important player in the region’s ferry sector, has seen a 14% slump in traffic because of the crash in passenger numbers whilst ferry freight volumes are currently maintained. Elvir Dzanic concluded:

“We have done what we can to respond swiftly to changing conditions and when necessary we are helping our customers’ source storage space in Gothenburg and throughout the country. At the same time, we have still managed to keep looking ahead, and we are working strenuously on our port development projects. We are in the process of deepening the fairways to ensure the larger vessels of the future can enter the port.

”We are developing land areas in anticipation of continued growth, and a major digitalisation project is about to commence that will help develop our customer offering radically. We will continue to observe all the precautionary measures and monitor the situation closely, although there will come a point when coronavirus is behind us and we need to be prepared when that time comes.

As in Gothenburg the Ports of Stockholm have seen an increase in overall trade in March. Third in terms of freight tonnages moved, the Stockholm region accounts for 50% percent of Sweden’s consumption. Once again RoRo traffic has suffered with Johan Wallén, Director of Sales and Marketing saying ferry services have been hit hard, as passenger traffic has practically ceased altogether. The business of many of the ports ferry operating customers is based on a combination of goods and passenger transport which has been very damaging.

That said the total amount of goods transported by ferry was up by 2% in March compared to the same month the year before. The increases were primarily in transport to and from Finland, Poland and Estonia. Nine goods out of ten arrive in Sweden by sea making it disproportionately important that the supply of goods via the country’s ports works well, even in times of crisis. Despite the difficult situation, Ports of Stockholm says the services are functioning very well with freight volumes up in March. Thomas Andersson, Ports of Stockholm Managing Director commented:

“Services at Ports of Stockholm function 24 hours a day, every day of the year. Thanks to our professional and dedicated personnel, we can offer the service and solutions our customers demand, and assure a reliable flow of goods to and from the Stockholm region, even in times of crisis.”

Photo: Courtesy of Ports of Stockholm (FärjorPer-ErikAdamsson)