Market and Competition

With its listed core business Port Logistics, HHLA operates on the European market for international sea freight services. This offers long-term growth prospects. Central European countries have strengthened their competitiveness and thus created the condititions for further growing foreign trade and consumption. The Eastern European region, particularly the Russian Federation and Ukraine, also provide growth potential. Whether these will develop positively depends on the solution of regional conflicts as well as the development of commodities and energy prices.

For the European Union, the relevant economic indicators point to a sustained increase of GDP. Due to the persistently high debt rate, however, stronger growth is only expected in the medium and long term. In the short term, exogenous conditions as well as unresolved structural problems affect the containerised trade and transport volume.

Throughput at the North Range Ports

Volumes and market shares, 2016

Source: Port Authorities / own calculation (market share)

The market for port services on the Northern European coast (the North Range) of relevance for HHLA is characterised by its high concentration of ports. Competition is particularly strong between the four major North Range ports of Hamburg, HHLA’s main hub, Bremerhaven, Rotterdam and Antwerp. Other handling sites – such as Wilhelmshaven and Zeebrugge – are considerably smaller in terms of their capacity and/or current freight volume. At present, the Baltic Sea ports are primarily served by feeder traffic operating via central distribution points in the North Range. The practice of ocean-going vessels calling directly at ports such as Gdansk or Gothenburg has established itself over the past few years and is increasingly competing with this network system.

As well as the geographical position and hinterland links of a port, its accessibility from the sea affects the competitive position of terminal operators. Local freight volume in the direct catchment area of each port location plays an important role. Other key competitive factors that influence the market position include the reliability and speed of ship handling, the scope and quality of container handling services, as well as the performance of pre- and onward-carriage rail systems serving the hinterland (e.g. frequency, punctuality, pricing).

Container Throughput at the Largest North Range Ports

in million TEU

Source: Port Authorities; *incl. HHLA

Seaborne Container Throughput by Shipping Region

in the Port of Hamburg, 2016

Source: Hamburg Hafen Marketing e.V.

New capacity was created in 2016 by relocating and expanding a terminal in Antwerp, while a further terminal was closed in Zeebrugge. Competition remains extremely fierce and the ports are increasingly dependent on changing shipping company constellations. The resulting shift of more geographically flexible feeder traffic is having a significant impact on handling volumes. By contrast, the market position for handling volumes that are tied to the natural catchment area onshore is largely stable – given that it is vital to take the shortest route for the disproportionately more expensive land-bound transportation.

The Container segment benefits from the Port of Hamburg’s position as the most easterly North Sea port, which makes it the ideal hub for the entire Baltic region and for hinterland traffic to and from Central and Eastern Europe. Furthermore, the long-standing trading relationships between the Port of Hamburg and the Asian markets are advancing Hamburg’s role as an important European container hub. With a container throughput of 8.9 million TEU, Hamburg ranked an estimated 18th among the world’s ports in 2016 and is thus the third-largest European container port after Rotterdam and Antwerp.

In Hamburg, HHLA maintained its position as the largest container handling firm with a throughput volume of 6.5 million TEU in 2016. As in the previous year, approximately 73 % of container traffic at the Port of Hamburg was handled by HHLA. Asia, Eastern Europe and Scandinavia remained the most important shipping regions.

In the Intermodal segment, HHLA primarily utilises the advantages of the Port of Hamburg’s rail infrastructure – Europe’s most important rail traffic hub handling approximately 2.4 million TEU a year. HHLA’s Intermodal network also comprises further ports along the North Sea and Baltic Sea coasts as well as the northern Adriatic and increasingly, continental traffic. The companies that transport containers by train compete with other rail operators and intermodal transport firms in Germany and abroad, but also with other carriers such as trucks and feeder ships. As the rail infrastructure is for the most part publicly owned, various national authorities guard against discrimination in both access and usage fees. In addition to the density of the available network, key competitive factors include the frequency of departures, opportunities for freight pooling and storage in the hinterland, the geographical distance to destinations, on-schedule operation and infrastructural capacity. The importance of these factors is growing as ports compete with one another.

Intermodal Network of HHLA

Selected connections

HHLA has proprietary inland terminals in Central and Eastern Europe along with its own container wagons and traction fleet (locomotives). All of these factors play a major role in the company’s service offer. This is necessary to enable it to run direct trains with frequent departures and to allow the efficient pooling of rail freight transported via the port, which is efficiently distributed by central handling facilities. HHLA occupies relevant market positions in the majority of the regions it serves. HHLA has a sound market position in the greater Hamburg metropolitan region in the delivery and collection of containers by truck.

The Logistics segment serves various market sectors, some of them heavily specialised. With its multi-function terminal, HHLA is the leading provider of specialist handling services in Hamburg. Via Hansaport, HHLA has a stake in Germany’s biggest seaport terminal for handling iron ore and coal. HHLA also provides fruit handling services for Northern Europe with its Frucht- und Kühl-Zentrum. In the field of consultancy, work is conducted on pioneering development projects around the world.

With a population of around 1.8 million and its significance as an economic centre, Hamburg is one of the largest property markets in Germany for the Real Estate segment. What makes the portfolio particularly attractive are its unique buildings and favourable locations in Hamburg’s Speicherstadt historical warehouse district and on the northern banks of the river Elbe/fish market area. The company has built up a wealth of development and implementation expertise dedicated to finding the right balance between market-based tenant demands and the careful handing of its landmarked buildings with world heritage status. The properties compete with German and international investors marketing high-quality properties in comparable locations.