Seaport – you invest or you go out of business. EUR 80 billion needed immediately

By Marek Grzybowski

EU ports must invest EUR 80 billion over the next 10 years if they want to maintain a competitive position in global logistics chains, according to the latest ESPO report. We need to invest in infrastructure and superstructure, in wharves and aquariums, industrial and logistic infrastructure and their surroundings. You can’t skimp on marketing and people expenses.
During the annual conference held in Paris, the European Sea Ports Organization (ESPO) published the results of the ESPO 2024 Port Investment Study. I recommend the report not only to port managers, but also to those who make their living from ports, agents and forwarders, operators of terminals and logistics centers and warehouses, transport companies and financial institutions. The report should also be carefully studied by representatives of state administration, ministries related not only to maritime industries, as well as representatives of authorities and local governments.

Today, like never before, sea ports have become an important factor ensuring the energy and industrial security of the EU, including Poland and the Baltic states. Sea ports guarantee the continuity of production of Europe’s leading industries, including chemical, construction, and energy, including renewable energy. Therefore, the alarm raised a few weeks ago is fully justified, stating that slowing down industry in Europe also means slowing down the development of ports and disturbing the stabilization of logistics connections.

EU ports need EUR 80 billion
The study offers a unique and comprehensive analysis of the investment schedule and challenges facing European ports, emphasizes ESPO management. The study was prepared by Dr. Peter de Langen in cooperation with ESPO. It analyzes the changing role of European ports in global logistics networks and in the EU economy. During the study, investment needs and barriers encountered by sea ports when implementing investment projects were identified. The study is unique in terms of representativeness, as it is based on an analysis of the investment needs of 84 port managing entities, reflecting the geographical distribution and functional diversity of European ports.

The study shows that by 2034, the investment needs of seaports are estimated at EUR 80 billion. The second key finding is that investments in sustainability and energy transition are becoming the most important investment category for port authorities. Many more projects than in 2018 are aimed at enabling this transition. This updated survey of planned port investments clearly shows that the changing and broader role of today’s ports brings new and broader responsibilities and investment needs.

It often means an investment with a less predictable return on investment, says ESPO Secretary General Isabelle Ryckbost, noting: “As stated in our memorandum on the European elections, ports are ready to get involved and be part of the solution [EU economic problems – Ministry of Economy]. “To meet the tasks and responsibilities imposed on them in the new geopolitical and economic context, ports need support.”

Sustainable transport, green energy
Seaport authorities have set themselves a strategic goal to invest in devices ensuring the supply of electricity from the quayside (OPS). Many of them also plan to invest in the transport and/or storage of (clean) electricity and the generation of clean energy. Some seaport authorities seek to expand the role of ports as centers for the production of ecological fuels and closed-loop operational activities. Third, leading EU port authorities are expanding service provision, adding services that facilitate the transition to sustainable transport and clean energy.

Over the last 5 years, some boards have already started offering new services to ship operators and customers, such as OPS delivery, transportation via pipelines and loading facilities. Many seaports allow bunkering of ecological fuels. Respondents reported that they intended to offer such services within the next five years. Fourthly, investments by EU seaport authorities have a strategic goal of creating conditions for creating significant values ​​for port users and values ​​for society. ESG is becoming not only an important component of seaport management, but also a competitive tool.

The focus on users and society as a whole is consistent with the nature of public ownership of the vast majority of European seaports, the ESPO report highlights and compares: “Compared to the value creation of projects in the 2018 schedule, the 2023 investment schedule in contributes more to the transition to sustainable transport and clean energy. The vast majority of projects (84%) contribute directly or indirectly to the implementation of this strategic goal. Fifth, European port authorities need public funds to be able to implement planned projects.

ESPO notes that “It is clear from the identified bottlenecks that [constraints – Ministry of Economy] related to project financing are the most critical. Moreover, ports indicate that they seek public financing from various sources, at regional, national and EU level.” Therefore, we can expect strong competition for funds obtained from various European Union and other European programs. Poland has experience here, but when compared to the funds obtained by many comparable ports, we should be vigilant and more active.

Time for Group of Ports
The situation is becoming more difficult than it was just a few years ago. Large ports consolidate cooperation and build competitive advantage within green corridors. Many of them simply form groups of ports, such as HAROPA in France. The HAROPA port complex is the number one seaport in France for foreign trade, number one for inland passenger transport in Europe and the fourth Western European port for grain exports. It is the number one French logistics hub. Over the last decade, reforms and mergers of national ports have led to an increase in the importance of seaports in Europe – the ESPO report emphasizes. And let us add that this is a way to build a competitive advantage in the fight for financial resources, investments and to build a competitive advantage on the global market.

In Italy, many years ago, the organizational reform of ports led to the creation of the Ports Authority, which manages several ports in the same region. The merger of 24 existing port authorities and other smaller port authorities into 15 boards formed the basis of Italy’s 2016 port management reform. In Sweden, Denmark and Finland, mergers have led to the creation of (cross-border) regional port authorities.

Flagship projects in the Baltic Sea region include Kvarkenhamnar, HaminaKotka and Copenhagen Malmö Port. Similar solutions were adopted by Atlantic and North Sea ports. In Portugal, the ports of Lisbon and Setubal have long operated as one entity. In Belgium, the action of the Antwerp-Bruges Port Authority is natural. The merger of the ports of Antwerp and Zeebrugge was formalized in April 2022 by the signing of a shareholders’ agreement by both cities of the port company.

The shares of the Antwerp commune are set at 80.2%, and Bruges has 19.8%. The supervisory board consists of six members representing the city of Antwerp, three members representing Bruges and four independent members. In addition to commercial purposes, an important reason for connecting the ports was the integration and coordination of investment processes. Investments in connections between ports have priority. Pipelines are being built to transport fuels and other liquid cargoes. Projects are underway to improve port connections via rail and inland navigation.

Ports – pillars of geopolitical and economic resilience
Ports in Europe are more active than a few years ago. From multimodal nodes in the transport chain connecting the sea with the hinterland, ports are transformed into nodes and entities facilitating the production and use of green energy, clusters of industry and the circular economy, as well as important pillars of geopolitical and economic resilience, emphasizes ESPO. New port functions complement their traditional tasks. European ports’ investment programs and processes reflect this evolving and multidimensional role.

The study shows that, in addition to investing in the development of basic port infrastructure and maintaining it at the highest level, port managing entities are increasingly investing in tasks ensuring the strategic and social goals of the EU economies. Many investments “are projects of high social value, while at the same time allowing only slow, small and even risky returns on investment.” ESPO emphasizes that “European port authorities are fully committed, but they need European support to turn all their goals and ambitions into success.”

It is postulated that there is a need to “create specific port portfolios under various EU financing instruments, primarily through the Connecting Europe Facility or a similar financing instrument.” There are many examples of mergers and agreements. Polish ports have often presented themselves at integrated stands at international and national fairs, and at national and international conferences. So there is a topic for the Polish Ports 2030 Congress, which is organized by in June. and finding an answer to the question: what development strategy should be adopted in response to a number of actions taken by leading logistics operators and the management boards of leading EU seaports? We will undoubtedly have to fight for the market, EU funds and maintaining Polish ports in global logistics networks. The basis will be building good international relations at all levels of management. Marketing of Polish ports and terminals must no longer be carried out only by management boards and relevant units. Today, all employees of ports and terminals of forwarding companies and seaport marketing agencies in which they work.