Sweden’s port of Gothenburg is in the midst of a major transition for its vehicle handling business. In 2008, the Port Authority of Gothenburg made the decision to divest its automotive terminal operations, including the splitting up the vehicle logistics operations into two terminals: one for ro-ro and short sea, the other for deep sea vessels, with separate management for each until the authority found private operators.
While the short-sea concession was announced in autumn of 2010, awarded to DFDS and Cobelfret, the deep-sea bidding should be completed in the coming weeks.
In the meantime, the port has also seen consolidation and changes among its private logistics operators. Logistics providers Skandiatransport (part of the Avelon Group) and Motortransport, which had previously competed in both PDI and inland transport services, have now merged their operations in the market, with Skandiatransport taking over all of the PDI activities, and Motortransport handling the inland transport, according to Peter Karlsson, the managing director for the car terminal under the current port authority structure.
The port took a hit in 2009 following the major slowdown in exports for Volvo Cars and the shutdown of the Saab plant before its sale to Spyker. Finished vehicle volumes at the car terminal (excluding short-sea volume for the ro-ro terminal) were down about 55%, with about 47,000 cars handled at the deep-sea terminal that year. The commercial vehicle output from the nearby Gothenburg plants for the Volvo Group, including truck and construction equipment, had also been significantly reduced.
But growth picked up again during 2010 as Swedish exports began to recover and imports increased. The car terminal saw volumes increase 38% to 65,000 units in 2010, including 42,000 exports (75% of which was Volvo Cars, and 25% for Saab). Imports, which were mainly Nissan, Subaru and Chevrolet, recovered more than 100% to 21,000 vehicles. The terminal handled 2,000 vehicles in transhipment for Mitsubishi, while Skandiatransport handled Opel and Ford cars that were shunted to deep-sea terminal after their arrival in the ro-ro terminal.
With its primary links going to North America, including regular WWL and ACL service, Karlsson said that ongoing recovery in the US market should continue to have a positive impact, with expectations for growth of at least 20% in 2011, good news for the hopeful winner of the concession bid. Recovery is also expected for the high-and-heavy volumes handled at the port, which include trucks and equipment manufactured by Volvo and Scania, as well as some steel exports that are moved aboard the car carriers to destinations such as Australia.
Space and growth limits
The terminal offers immediate proximity to the Volvo Group as well as Volvo Cars, both of which have plants adjacent to the port. It has a separate high and heavy processing area, while there are good rail and road links. The Skandiatransport PDI centre has room for expansion, and there is also a separate area where Ford carries out PDI.
While the US remains Volvo Car’s biggest market, Gothenburg does link the carmaker to China, where its new owner, Geely, expects to grow considerably in the coming years. Volvo Cars sends its exports to Asia using the shipping line Eukor from the port of Wallhamn, 50km north of Gothenburg and operated by Grimaldi. In 2010 Volvo Cars sold around 35,000 cars in China, including a portion built locally at the Chang’an Ford-Mazda plant in Chongqing.
Karlsson pointed out that should the network with Eukor or other shipping lines change, there could be scope for future export growth for shipping to Asia. However as Geely builds new Volvo plants in China, exports from Sweden to Asia could also be curbed, putting more focus on Gothenburg’s current trade links.
The terminal has some space limitations, however. It currently has two deep-sea berths, with a third used by ACL that is shared with the nearby container terminal. However, the smaller of the two berths will not be included in the concession. While this change implies a reduction in capacity, Karlsson observed that the smaller berth has only been used around 5% of the time, and that this can be compensated by the use of shared berth with the container terminal.
The space for storage also has limits, which would make it more difficult to gain further import customers. However, there is space to build a multi-storey parking space that could expand capacity by up to 4,000 cars, according to Karlsson. There is also six hectares of space adjacent to the terminal for long or short-term lease.
Finally, the current layout of the terminal has the high-and-heavy area in a separate yard, on the other side of the container terminal, which means that all cargo needs to be shunted to or from this area to the berth. Karlsson admitted that this setup was not ideal.
An important North Sea and Baltic link
While Gothenburg has no illusions about growing into a vehicle port the size of its larger German rivals, it still serves as an important link in the North Sea between Western Europe as well as the Baltic. Karlsson said that the port had already seen interest from some Chinese manufacturers making long-term plans. Sooner than that, however, he expects to see an increase in construction equipment imports from China.
But the growth plans will clearly be in the hands of the new operator, and it will be up to them whether the future focus of the port will be more orientated towards exports, transhipment or import, said Karlsson.
