Market Overview

    Sea transports are a fundamental part of international trade. Around 80% of global trade volumes are currently transported by sea. These transports comprise more than 80,000 ships within the EU . The three largest commercial ports in the Union are Rotterdam, Antwerp and Hamburg.

    Popular trade routes

    The Baltic Sea region and its 100 million consumers are an integral part of the global sea transport system. The Baltic Sea has long been a strategic transport route for oil exports to countries in other parts of Europe and beyond. The Baltic is also one of the world's busiest seas, with 15% of global shipping transports. About 800 million tonnes of goods, including 10 million containers, are transported on this inland sea each year. The great majority of freight transported by sea is destined for ports outside the region.

    Including Russia, the Baltic trade takes in nine countries, with shipping-related trade accounting for most of the export value. In terms of transports within the region, the largest segments are dry and liquid bulk, which account for over half of the total volume. The second largest segments are RoRo and container traffic.

    Over the past ten years seaborne freight volumes in the region have increased by about 10%. The increase is partly due to the growth in oil exports from Russia, but the ever increasing trade among the countries around the Baltic is another driver. These volumes are expected to continue increasing in the long-term.

    Forecasts from the EU suggest that goods traffic in Europe, which also includes land and air transports, is expected to increase by 40% by 2030 and by 80% by 2050. Regardless of the mode of transport, the EU puts a priority on efforts to improve the efficiency of transports with the aim of raising the competitiveness of European companies.

    Market trends

    Consolidation, new actors
    Port operators are becoming increasingly international and broadening the base of their operations. It is becoming more common for companies to operate both shipping lines and port businesses and it is the container lines in particular that are behind this development. A gradual consolidation is simultaneously underway with port operators expanding geographically through acquisitions of ports, some of which are a long way from their traditional domestic markets. This gives rise to global operators, which run ports in countries in different continents. The traditional ownership structures are tending to loosen up in Scandinavia too. Private companies have started to acquire port operators or have bought into these businesses, where public actors have traditionally been the predominant owners. Interest in owning port businesses is also increasing within private equity.

    Increasing rail traffic
    Another emerging trend is towards an increase in rail freight, which is also leading to an increase in combi-traffic. In CMP’s case, for example, combi-traffic has multiplied in recent years. Combi-traffic entails transporting and reloading goods by ship, lorry and connecting railways. These types of transports are prioritized within the EU, partly because they have less environmental impact and contribute to optimum use of different kinds of transport.

    Stricter environmental regulations, new transport routes
    Environmental issues are becoming increasing important, and the primary focus is on ship emissions, especially of sulphur and nitrogen. From the start of 2015, the sulphur content in fuel must be reduced by 90%. The new rules apply to shipping in the Baltic and the North Sea and are expected to affect both shipping lanes and flows of goods. Increased fuel costs might mean that logistics companies select new routes for their freight.

    To reduce emissions, new types of fuel are being evaluated within shipping, for example, Liquid Natural Gas (LNG). Developing infrastructure for storage and distribution of LNG is a priority issue in the EU. Several port operators in the Baltic region – including CMP – are currently planning to develop such an infrastructure. The reason for this is that an investment in LNG can strengthen competitiveness, particularly for those ports that already occupy a strategic location in connection to the major transport flows.

    Expansion in local sea traffic and regional cooperation
    The mix between large and small vessels is expected to increase. Cruise liners and container ships in global traffic are tending to become ever larger. This is placing new requirements on the port operators – on quay capacity and larger terminal areas, for example – which primarily represents a challenge for smaller actors.  In parallel with the increasing size of ships in global traffic, new opportunities are emerging for local sea traffic, where smaller ships transport goods between Danish and Swedish ports, for instance, or between ports in the Baltic Sea region.

    The need for regional cooperation between different ports is also expected to increase in order to meet changes in the market. Cooperation enables the operators to more easily meet increasing capacity demands, make new investments, derive cost benefits and manage their overall use of resources more effectively.