Market position

With its listed core business Port Logistics, HHLA operates on the European market for sea freight services. This market offers long-term growth prospects as a number of key Central European countries strengthened their competitiveness after the debt crisis, thereby paving the way for a further increase in foreign trade and consumer spending. Eastern Europe also offers growth potential and stable forecasts. Whether these positive trends materialise depends on the resolution of regional conflicts and the development of fuel and energy prices.

In 2019, uncertainties regarding trade policies and geopolitical tensions had a negative impact on the economy and, above all, on production and trade. As a result of a sluggish economy, the International Monetary Fund (IMF) expects weaker global economic growth in 2019 than in the previous year. Economic environment

Protectionist trade barriers in particular are having an effect on containerised trade and transport volumes. The current easing of the trade dispute between the USA and China, and minor worries regarding a hard Brexit, have both had a positive influence on the latest forecasts. According to IMF estimates, global growth will continue to be positive in 2020 and stronger than in 2019. Business forecast

Container throughput at the North Range ports

Handling volumes and market shares in 2019

Source: Port Authorities / market shares according to own calculation

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. The Baltic Sea ports are served by high feeder traffic operating via central distribution points in the North Range. The practice of ocean-going vessels calling directly at ports such as Gdansk and Gothenburg, however, is resulting in more intense competition. Gdansk is exhibiting particularly strong growth and is therefore increasingly competing with this network system. Adriatic ports, such as Koper and Trieste, and the Polish ports have also improved their infrastructure and are competing with the Port of Hamburg for freight in the hinterland.

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, as well as the scope and quality of services. Also of increasing importance is the performance of pre- and onward-carriage rail systems serving the hinterland (e.g. frequency, punctuality, pricing) and therefore the range of integrated transport solutions.

In late 2019, APM Terminals (APMT) signed a letter of intent regarding the sale of APM Terminals Rotterdam on Maasvlakte 1 to Hutchison Ports. Furthermore, a consortium of PSA International, the state-owned Polish Development Fund (PFR) and the Australian IFM Global Infrastructure Fund acquired the Deepwater Container Terminal Gdansk (DCT) from Macquarie in March 2019. Competition remains extremely fierce in Northern Europe and the ports are increasingly dependent on changing shipping company constellations. The resulting shift towards 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.

Container throughput at the largest North Range ports

in million TEU

1 incl. HHLA / Source: Port Authorities

Container throughput by shipping region

in the Port of Hamburg, 2019

Source: Hamburg Hafen Marketing e.V.

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 9.3 million TEU, Hamburg ranked 17th among the world’s ports in 2019 and is thus the third-largest European container port after Rotterdam and Antwerp. In Hamburg, HHLA expanded its position as the largest container handling firm with a throughput volume of 7.0 million TEU in 2019. The market share of HHLA’s container terminals with regard to handling at the Port of Hamburg fell slightly to 75 % (previous year: 79 %). The Far East, Eastern Europe, North America and Scandinavia were 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 2.7 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 a variety of 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, punctuality and infrastructural capacity. The importance of these factors is growing as ports compete with one another.

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. Graphic: Intermodal network of HHLA

Intermodal network of HHLA

Selected connections

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. The portfolio is rounded off by new business activities, such as additive manufacturing and airborne logistics services.

With a population of approximately 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 handling of its landmarked buildings with world heritage status. The properties compete with German and international investors marketing high-quality properties in comparable locations.