#SHIPPING – The volume of shipping and port traffic through the Republic of Ireland declined in the first quarter of 2012. This is according to the latest figures released by the Irish Maritime Development Office (IMDO) at the European Shortsea Conference being held at the Mansion House in Dublin today.
The first quarter data indicates that only 1 of the 5 principal freight segments had any growth over the first quarter while all other freight segments declined or recorded no growth compared to the same period last year.
KEY DATA INDICATORS:
Freight Segments:
- Lift-on/Lift-off (Lo/lo) trades were down -1%.
- Roll-on/Roll-off (Ro/ro) declined by -3%.
- Dry bulk volumes was unchanged 0%,
- Tanker/Liquid bulk market was up +30%.
- Break bulk volumes were down by -4%
Total container traffic (Lo/lo) declined by 1% during the first three months of the year. Exports a subset of these figures grew by 1% in the first quarter as weakened economic trading conditions prevailed internationally, in particular in Europe. Imports fell by 2% in the first quarter. This represents the 17th consecutive quarter of declining import volumes. As a result, this has seen shipping and logistics firms strategically importing empty containers to address the reduction of laden containers imports into Ireland in recent years. In Quarter 1 2012 alone, the IMDO have calculated that 5% more empty containers were imported into Ireland to meet exporters needs.
Roll-on/roll-off (ro/ro) traffic declined in the Republic of Ireland by 3%. The majority of Ro/Ro freight from Ireland is destined for the United Kingdom. This decline in traffic is clearly reflected in the continued uncertainly in UK as their economy shrank in the first quarter, sliding into its first double dip recession since the 1970's. A considerable amount of Ro-Ro freight is destined for supermarket multiple and FMCG sectors both domestically and cross channel. These sectors particularly in the UK have reported significant downturns in sales in 2012 so far.
Dry bulk volumes were stagnant through Irish ports during the first three months of 2012. However, animal feed, peat moss and iron ore are significant products in this freight segment and ones which continue to perform strongly. Demand for aluminum remained strong internationally, particularly from China.
Liquid bulk volumes of tanker based petroleum products increased by 30% in the first quarter. This increase was driven by Bantry Bay which recorded a marked increase in its international trans-shipment activity at its crude oil and products facility. Domestic oil consumption remained weak and if we exclude trans-shipment storage, then volumes would have increased by just over 1%.
Break bulk volumes have continued its decline into Quarter 1, by 4 per cent. This freight segment was extensively linked to the construction boom as products shipped in this segment include timber and steal. Break volumes passing through Irish ports have declined by 40 per cent since 2008 but this rate of decline has eased considerably since 2010. Scrap metal exports continued to increase in volume as this commodity's price remains high into 2012.
Outlook:
The Irish Ports and Shipping sector is heavily influenced by events globally. As the stability of the European economy remains fragile, uncertainty for Irish consumers and businesses will inevitably persist, which will be clearly reflected in freight volumes passing through Irish ports. Exports in the short-term will continue to drive economic growth, which has been aided by favourable exchange rates in recent months. The Port of Rotterdam, which is Ireland's main Deep-Sea connection to countries outside of Europe, is optimistic that their volumes will show a modest increase in the latter half of 2012, which is a good sign for Irish businesses exporting globally.
Keynote speech delivered by Mr Leo Varadkar T.D. Minister for Transport, Tourism and Sport at the European Shortsea Convention 2012
Round Room, Mansion House, Dublin.
May 24th 2012
Mr. Chairman, Ladies and Gentlemen, distinguished guests
I'm delighted to have the opportunity to address this European Shortsea conference today. First of all, I should like to congratulate both the IMDO and Coastlink on taking the initiative to organize this year's conference, and for assembling such a strong lineup of speakers. Speaking as Minister for Tourism I should also like to welcome all those delegates that have travelled from overseas to participate at this year's event.
Today's European conference is timely. Important questions are being debated here and internationally about the challenges facing the Eurozone.
The European Commission has identified Ports and Shipping as important engines for future economic growth. The latest estimate from the European Commission identifies that over 800,000 enterprises, employing more than 3 million people directly, are located within European port community clusters.
European ports are already the transit point for up to 90% of Europe's freight movements with the rest of the world, and 40% of the internal market. The internal market in Europe still accounts for over 60% of all of Ireland's trade, which in itself signifies the important role that shortsea services play in the day to day competitiveness of Ireland's economy.
I understand that this is the fourth time that this Conference has been hosted in Ireland but it is my first opportunity to speak at this event since our Government came into office last year. I know that there are many delegates from across Europe representing significant maritime interests, with investments directly in Ireland, or, connected to a service from Ireland.
It is important therefore to tell you that one of the key priorities of the current government when elected was to restore the standing of Ireland, and in particular, restore our reputation as a place to do business. Despite the prevailing turbulent global and European economic environment, Ireland has made significant progress in bringing our public finances under control and returning our economy to export led growth.
Our current balance of payments is positive. We are forecasting modest GDP growth this year, while the European Commission expects that our GDP growth will accelerate to 2% in 2013. This has not been a painless process and individuals and business have had to make sacrifices to achieve the progress we have made so far, in order to stabilize the economy.
Ireland as an island trading economy is highly dependent on Shortsea shipping. 100% of our container and unitised traffic is carried via intra-European Shortsea services.
I wish to stress also the importance, from a Government perspective, that we continue to encourage and maintain frequent, competitive, andmodern European Shortsea shipping services from Irish Ports.
As an open economy we are more exposed to changes in the external global and European environment. The recent publication of the Irish Maritime Transport Economist by the IMDO illustrated the volatility in our economy last year.
While 2011 started positively with some economic growth in the first quarter of the year, this economic growth lost momentum as concerns about the pace of the global recovery and underlying issues in Europe started to emerge. This was mirrored in our Irish shipping volumes which had a strong first quarter before slowing down in the second quarter and turning flat to negative to year end.
The latest first quarter data for 2012 released by the IMDO shows that demand has remained relatively subdued. However, exports, which have been one of the cornerstones of our recovery over the past 3 years, rose by 3% during the first quarter.
We are confident that when the Eurozone economy returns to growth, that Ireland, with its lower operating cost base and a strong export sector, will be well positioned to quickly respond to demand from the global markets. This is why it is important that we have a ports and shipping sector both in Ireland and Europe that continues to remain, efficient, effective and above all competitive.
Speaking at the recent European Ports Conference, Dimitrios Theologitis, Head of the Maritime Transport and Ports Policy Unit, outlined its plans for an industry wide consultation of European Ports Policy later this year.
The impact assessment on the revision of the EU framework for ports services was launched in 2011 and will take until the end of 2012. It will involve extensive consultation with all stakeholders and the commissioning of various fact-finding studies. It will also rely on dialogue with the social partners in the sector. The Commission will draw conclusions and they plan to put forward fine-tuned proposals in relation to future EU Ports policy in 2013.
In Ireland, I am committed to the publication of a new ports policy this year. It is crucial that Ireland's commercial ports continue to provide the best possible service to the economy at large, as it returns to growth. Planning future port capacity is one of the many issues being addressed as part of the Ports Policy Review currently underway in my Department.
Our current ports policy will require a radical overhaul. The existing structure treats our nine port companies as though they were the same size, scale and have the same role to play, while this is clearly not the case. The circumstances in each port are quite different and need to be dealt with on a case by case basis. Ports serving significantly different markets, which vary greatly in terms of size and scale, have different potential, far higher risks and have different futures.
Evidently, there is a hierarchy of ports that are made up of core ports that serve large strategic volumes of national trade, and a number of smaller ports that have a more regional role. It is vital that our new national ports policy provides an appropriate framework for our commercial ports. A framework that allows our ports develop and respond as required to the needs of our economy; a framework that recognises that changes at a global level requires action at a national level to ensure that Ireland is served by first class commercial seaports.
I'm committed with the officials from my Department to complete and publish this review in the coming months during which we intend to engage with the all of the stakeholders involved in this process to ensure we have a sustainable ports sector that reflects the changing transport demands of our economy.
My Department has also engaged in the recent European Commission's consultation on State Aid Guidelines for Maritime Transport. We believe that the State Aid Guidelines have broadly delivered on what they intended to achieve over the past decade and that we advocate that these guidelines should be extended, and where possible improved, to continue to underpin shipping as an important growth driver for Europe.
I am also committed to the retention of the Tonnage Tax scheme in Ireland which is directly relevant to many of our shortsea shipping companies. Since the introduction of Tonnage Tax in 2002 we have seen a tenfold increase in the number of ships, owned, managed, and operated in Ireland, directly creating new jobs and investment.
As this is a European Conference, I should like to mention the upcoming vote on the European Stability Treaty which takes place in Ireland on 31st of May. I am confident that the Irish electorate will consider fully the role they will play in this election to further improve our international reputation and ensure that we continue to secure investment and jobs. At this time I wish to send out a message to the whole world that Ireland is open for business and that we have put the worst of our economic difficulties behind us.
I am very aware of the challenges facing the shipping industry today. Challenges like fluctuations in demand and increasing operating costs. Such an environment makes inventory and capacity planning even more challenging and I am aware of instances where operators have successfully come up with vessel sharing arrangements to counter balance changing market conditions.
I am also aware that the cost of fuel is another significant factor affecting shipping operators today. In 2011 oil prices rose sharply, with Bunker prices increasing by 40% over the course of the year. A weakening Euro against the dollar has meant that in EURO terms the price of fuel for shipping reached an all time high this year. Increasing requirements for cleaner fuel will also continue to affect the price. Globally, solutions have come in the form of larger ships which can deliver more freight with less fuel and reduce emissions. This in turn is putting new pressures on ports and the terminal and handling facilities they offer.
Today's conference clearly has its finger on the pulse in terms of addressing these key industry issues, starting shortly with a detailed analysis of the state of the respective shortsea market segments. Later today I see that you are also discussing issues impacting on sustainable logistics and rising fuel costs. As fuel costs and emissions control are issues to be faced by the wider transport industry in the coming years, it is encouraging to see that you will do a review of the options emerging, and the technologies being developed to fill future challenges.
I believe the views of the major ports in the final session today will be very interesting. I was particularly pleased to see that the industry will also have the opportunity to listen to the views of one of Ireland's successful indigenous exporters, the C&C Group.
Finally ladies and gentleman, I would like to wish you all well in your discussions and deliberations and hope those of you visiting from overseas have an enjoyable stay here in Ireland.
