Thousands of containers related to Russia have yet to “see the sun”, the “heart” of the European economy is facing a crisis
In normal times, the Dutch port of Rotterdam is like a machine. Hundreds of ships come and go every day, and tens of thousands of boxes are loaded and unloaded from those ships. It’s all about boosting the strong European economy.
Right now, however, sanctions against Russia are hitting those thousands of containers. The port manager said the “heart” of the European economy was slowly being broken by the measures against Moscow. According to the CEO of the Port of Rotterdam, Allard Castelein, all containers destined for Russia need to be carefully checked to ensure their transfer will not violate sanctions.
Many agencies are paying attention to ships coming from Russia, and a large number of ports and shipping companies have also said they will not continue to process cargo for the sanctioned country following tensions with Ukraine. . “The nightmare is coming,” said Mr. Castelein, 63, in an interview at his office at the World Port Center in Rotterdam.
Even before Russia launched a special military operation in Ukraine, global supply chains in general and in the container shipping industry in particular were mostly suffering from the chaos caused by Covid-19. The route of ships was turned upside down while the demand for goods exploded, leaving many services unable to meet.
Allard Castelein, CEO of the Port of Rotterdam
Of the thousands of parcels that each ship docked, “several dozen or hundreds of things could be sent to Russia,” according to Castelein. “We need to re-examine and dismantle to inspect the containers before they are allowed to ship.” “Those inspection segments can pose limitations on space, manpower and time,” he commented, adding that the port currently has 4,500 containers that have been segregated for inspection. is an unusual situation.
“We are trying to keep that number as low as possible because the workshop space is also very limited,” said Mr. Castelein. He said the port is ready to create an additional backup warehouse if the number of containers related to Russia is too large, leading to the shortage of storage space. “The Euromax warehouse is scalable and we can take advantage of that space,” he said.
Russia is an important part of the port’s operations, with about 470 million tons of cargo transported through the port each year, about 13% of which is destined for Russia. Of all the containers that pass through, 10% are in some way linked to the country.
Russia also exports commodities such as steel, copper, aluminum and nickel through the Dutch hub, but an important part of the port’s total volume is related to the energy sector. Currently, about 30% of Russia’s crude oil, 25% of liquefied natural gas, and 20% of Russian oil and coal products are imported through Rotterdam, according to the port’s website.
There are no formal bans preventing Russian purchases of energy goods, but European governments, as well as companies, are starting to cut their dependence and “that will come at a heavy cost”, he said. Castelein. “The majority of refineries in this region have been refined based on Russian crude,” he said, meaning that even if supplies are replaced, fuel efficiency and output may not same.
The Dutch government is taking measures to increase its liquefied natural gas import capacity in the short term. The capacity of the LNG warehouse at the port, operated by Nederlandse Gasunie and Koninklijke Vopak NV, is expected to grow by 30%-40% before year-end, Mr.
But the energy “woes” are far from over. If European countries refuse Russia’s request to buy gas in rubles and the Kremlin then halts energy exports, “we could be in trouble,” he said. “The gas storages aren’t filling up so we won’t be immune to chaos.”
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