Accommodating bigger ships and preparing for an increasingly digitalised future in Hamburg
Hamburg is Germany’s largest universal port and the third biggest container port in Europe.
With approximately 150,000 people directly working in and around the port – and a further 250,000 indirectly related to activity – key decisions taken at the Port of Hamburg are felt all over the globe.
Axel Mattern, CEO at the Port of Hamburg, spoke to Daniel Barnes about the ongoing developments surrounding digitalisation, the importance of trust, and why August 2018’s decision by German authorities to approve adjustment work on the River Elbe feels like a big cloud covering all of Hamburg has been finally lifted.
In August 2018, the Port of Hamburg received planning approval to start fairway adjustment work on the Lower and Outer Elbe. What does the work entail, when is it expected to be completed, and how will this enlargement benefit the port and those using it?
After the fairway adjustment and dredging, ocean-going ships will be able to leave Hamburg with a draft of 13.5m irrespective of the tide, and with one of 14.5m using flood tide. Containerships will be able to transport an additional 1,800 TEU per call. Dredging work is expected to begin in the second quarter of 2019.
A ‘passing box’ downstream from Hamburg is expected to be completed by the end of 2019. This will make the Elbe navigable for mega-ships in both directions without encountering the existing restrictions.
This is very good news for our trading and shipping customers worldwide and for the whole Hamburg metropolitan region. It’s like being free of the big cloud that was hanging over us. There is a complete change of mood in the city and in the port. It is now much easier to go out into the market and confidently discuss other topics – such as digitalisation – without this decision hanging over us.
This was the main topic of 2018. Of course, we have not just been sitting here and waiting for the decision; we were active in the port, and currently we are really focussed on all the things on the digitalisation side.
What aspects of digitalisation does the Port of Hamburg do particularly well right now, and where will developments to this area most likely take place?
We have done a lot of intensive work to prepare the port for being able to operate as a digitalised port. This is very important because digitalisation is the future, so we think we have to develop it effectively to stay in the game and hopefully take a leading role in respect to the digital side of the port business.
In fact, the Port of Hamburg actually started the digitalisation process way back in 1985 when we established a stock-listed company called DAKOSY Datenkommunikationssystem AG. We have been dealing with data communications in a completely paperless way for years now. Everything passing between the terminals, the port, the authorities, customs and police has been handled entirely within this system for years. It already works perfectly, while other ports are only just beginning to build up these systems and are waiting for or developing their so called ‘blockchain technologies’ – but we have done it.
As I see the world right now, the main obstacle hindering the development of data communication at an individual port level is a lack of trust. You have to walk in to what is effectively a black hole, and you don’t know with whom you are dealing, so there is naturally a lack of trust to begin with. The big advantage we have in Hamburg is, of course, that we started this more than 30 years ago, and we have learned to trust each other and share our mutual trust, which is still the status right now.
What are the next steps for port digitalisation – be that from a Hamburg or a global perspective?
To build the next steps on top of what has already been achieved involves exchanging data between ports. Hamburg already has a type of chain-port initiative, which sees us talking very extensively with ports in Shanghai, Shenzhen, Singapore, Rotterdam, Los Angeles, Barcelona, and Antwerp about digital and IT topics. We are exchanging projects and developments on the IT side, which is very interesting, since it means that as a port, you don’t have to develop everything on your own.
You can talk to your colleagues because you aren’t really on the infrastructure port authority side, so you are not really competitors. You are dealing with the same stuff and you have to face the same challenges in regard to port issues. Looking at IT, the Chief Officers of these ports are talking to each other regularly and exchanging their current developments in their individual ports. You can then basically copy and implement them in your own port.
Once all ports as a group know and trust each other, which is the fundamental basis for this to work, the final question which has to be addressed is not a technical one – it is simply a matter of deciding how we are actually going to do it.
The questions that need answering include issues of data security – who is able to extract which information streams from this huge flow of information, who can see it, who is able to feed the system with information, and who actually creates this neutral platform. Those are the ‘softer’ or social factors to be solved. I am not at all concerned about the technical side; I am pretty sure that is quite easy to solve.
Are you confident that this will come to fruition soon?
Absolutely. There are a lot of advantages for everyone if we have these kinds of systems in place, especially in the market and for the clients themselves.
But that said, there are some people and organisations opposed to this idea. For example, the forwarding industry would no longer have a business case if the global shipping industry created a free-flowing data platform. So, sorting this digital platform out isn’t going to be straight-forward and won’t happen without some objections.
Please tell us about your team’s personal involvement in the port. What are your main roles and responsibilities?
I personally lead the Port of Hamburg marketing organisation, although this description doesn’t really cover everything that we do. We represent the port to the rest of the world, dealing with everything that is not inside the Hamburg borders, running offices worldwide that are connected to the markets and to clients.
We lobby in Berlin and in Brussels on behalf of our clients and the Hamburg port industry, and we keep in contact with major as well as smaller clients in order to know and judge what the clients need to be perfectly connected to the port. The main issue for us is hinterland transportation and the connectivity of the port to the markets.
In short, as an organisation we are mainly involved in everything which is, ironically, not actually in Hamburg!
But here in Hamburg, the port is in our genes. Hamburg without the port, or the port without Hamburg, is unthinkable. But just like in London and any port city around the world, there is always an ongoing discussion about how necessary all parts of the port are. A normal discussion that we always have to deal with is, for instance, about developers wishing to transform riverside industrial sites into housing.
Everybody knows that the port is extremely important for Hamburg and for the entire metropolitan region in Northern Germany. Everyone works very closely together so that the industry leaders, the port leaders, and the city know exactly how important the port is – not only for Hamburg, but also for the nation. Part of our role is to ensure that the voice of Hamburg and other German ports is heard at a national level.
THE Alliance, made up of Hapag-Lloyd, Yang Ming, and Ocean Express Network (ONE), is relocating its trans-Atlantic operations from Bremerhaven to Hamburg in 2019. Please tell us what this entails and the port’s reaction to it.
The move will see THE Alliance operate four weekly services out of Hamburg to connect Northern Europe with the US East Coast and US Gulf. We expect this will generate an additional annual volume of 500,000 TEU.
Hapag-Lloyd is a part-owner of the terminal in Hamburg where the new service will be based, so it makes sense that they would want to concentrate their services within the terminal they own. It makes even more sense because it is one of the most modern and sophisticated terminals worldwide, and it is very efficient. But that said, everyone was surprised when the announcement came.
How do you predict the types of cargo processed at ports across Europe will change in the years ahead? What is Hamburg doing to stay ahead of the curve?
When you look into bulk cargo, for example, there will be huge changes in the coming years. Coal is definitely something that will be handled less and less, and ports like Antwerp and Rotterdam really need to think about how to compensate for the losses of bulk cargo on the coal side. Iron ore is the only stable thing in that segment, because steel production will continue in Europe as the world needs these types of special quality steel.
Agribulk terminals are something that each and every port is thinking about in terms of investing in new and more sophisticated facilities. The agribulk market is not shrinking and could offer a great deal of potential.
As for the future, everybody is talking about LNG, an area Hamburg is trying to develop as well. Whilst it doesn’t make sense to build an LNG terminal so far inland, there are talks about an LNG import terminal for Germany along the river Elbe with three specific areas under discussion right now.
But whatever market you talk about, it’s always very difficult to make a good decision in the port business, because you have to decide ten or 20 years in advance of global developments!
Finally, what are your thoughts on autonomous shipping? How much of an impact do you predict this could have on port and shipping operations?
We are watching developments in autonomous shipping very closely. It is going to come, and I read recently that barge shipping to the hinterland destinations along the rivers is going to be prepared for that. I’m looking forward to that; it is very interesting.
But I don’t think that autonomous shipping is a big deal, because we are not actually talking about huge savings in terms employees when it comes to the shipping industry. I think there are other industries that will benefit far more from automation technologies.