Poland’s Gdansk looks to Asia

Gdansk, Europe’s fastest growing port, has unveiled plans to double its cargo volumes to 100 million tons a year. The ancient city is again at the crossroads of history thanks to Singaporean money.
Poland’s Gdansk looks to Asia

(Port Gdańsk, Public domain)

“The port of Gdansk wants to take back its crucial role that it enjoyed in the time when Poland ruled this part of the world, Port of Gdansk Authority vice-president for infrastructure, Marcin Osowski has recently said. “Gdansk handled 50 million tons of all types of cargo in 2018 and the plan is to reach 100 million tons by 2030,” Mr. Osowski stressed. “We were the center of gravity for trade in the region. This changed during the Prussian era, but it is changing again today,” he added.

“With developments such as the One Belt One Road and Brexit, our role as a European gateway is gaining importance again,” the vice president pointed out.

Enter Singapore

In May, the Singapore port operator, PSA International bought DCT Gdansk, saying it aimed to position Gdansk as the “gateway to the Baltic.” “Gdansk’s unique location makes it the ideal gateway port to Central and Eastern Europe and transhipment hub for the Baltic,” DCT Gdansk deputy CEO Laurent Spiessens said. “The Port of Gdansk grew by 20 per cent in 2018 and 9 per cent this year, and we are on a target to exceed 50 million tons of cargo for the first time, up from 40 million in 2017,” he said and added “But our ultimate ambition is to grow cargo to 100 million tons, as Gdansk has the best hinterland connections into Central and Eastern Europe, reaching 120 million people.”

Work underway

DCT has already invested in new cranes and infrastructure increasing the port’s capacity from 2.2 million TEU in 2018 to an 2.8 million in 2019.

Mr. Osowski outlined plans to build a new EUR2.8bn Euro Central Port. “This will be the biggest maritime project in Europe,” he said. The infrastructure investment program is EUR591m and will be split between public and private finance.

Mr. Osowski said the proposals for the Central Port include building 19 kilometers of operational quays, 8.5 kilometers of breakwaters and the building of nine terminals, four turning areas and three approach fairways. The terminals could be used for containers, passengers, offshore operations, LNG operations and shipbuilding.

Competitive advantages

Bunkering operations at the port will also be increased to save ships time traveling to Kaliningrad for fuel.

Port of Gdansk CFO, Slawomir Michalewski said Gdansk was the only port on the Baltic sea capable of receiving the biggest container vessels in the world from Asia. Plans to regenerate Poland’s inland waterways network to accommodate more freight along the Vistula River were also made, he added.

Modal split

“The port on the Baltic Sea already has a modal split, with 33 per cent of container handling by rail, which can be raised to 50 per cent,” Mr. Osowksi said. The ports of Bremerhaven and Hamburg saw a modal split of 46 and 43 per cent respectively in 2017. The port of Wilhemshaven handled 33 per cent of container traffic by rail, and the port of Rotterdam 10 per cent.

The hinterland

The natural hinterland of the port consists of the Czech Republic, Slovakia, Ukraine, Belarus and Poland. It is preparing new direct rail connections to Belarus and Slovakia, which are likely to push the figures further. A direct rail link to Minsk is in the pipeline, with the purpose to tap into the booming rail freight traffic between China and Europe.

Currently, traffic departing from Minsk reaches Gdansk either via the rail link through Warsaw, or via the Lithuanian port of Klapeida, the largest competitor of Gdansk in the Baltic sea. “But with a direct rail link from Gdansk to Minsk this could be changed,” argues Dominik Landa, Commercial Director at DCT Gdansk. The Belarusian capital is developing the Great Stone Logistics Center. “This will change local flows of a market worth 180 thousand TEUs per year,” he added.

According to Mr. Landa, Gdansk has a competitive position for transshipment of cargo as the additional costs at the port are much lower than those in the port of Klapeida. “In Gdansk you pay for border transshipment; in Klapeida you pay terminal handling charges, feeder slot cost and inventory cost of stored cargo. The total cost of a feeder slot and inland transport to Minsk via Gdansk is 15 per cent lower than in via Klaipeda,” he said.

According to Mr. Osowski, the new rail link not only enables Gdansk to compete with Klapeida, but also with Duisburg, the main European hub for Eurasian traffic. “With this rail link, we want to show that the port of Gdansk is able to position itself as a versatile port capable of handling the growing volumes coming from China,” he added.

The port of Gdansk is also preparing a direct rail link to Zilinia in Slovakia, to shorten the route that currently runs via Warsaw and Katowice. It already has a direct link to Ostrava in the Czech Republic. The flow of cargo exported from the Czech Republic by sea to non-EU countries constituted about 27 per cent of exports in previous years. With the deep-sea connections of Gdansk, it is an interesting gateway to the Far East.

“The direct lines to the hinterland enable the port to compete with Hamburg,” explained Mr. Landa. “From Ostrava, the route to Gdansk is 30 per cent lower in costs than the route to Hamburg or Koper; from Zilina the costs are 20-50 per cent lower”, he noted.

(Port Gdańsk, Public domain)