European Port Warehouses Full, and Croatian Logistics Companies Struggle for Every Cargo

Western Mediterranean ports, and even ports in Mediterranean African countries, are bursting at the seams. Warehouses are full, both in EU ports and in African countries that serve as transshipment points, and the disruption has arisen due to, as reported by the Financial Times, the crisis in the Red Sea and attacks by Yemeni Houthis on ships sailing from Asia to Europe.

Due to longer transport routes around the Cape of Good Hope and increasingly uncertain geopolitical risks, international transport has reacted by increasing inventories, and these inventories are now becoming a problem. One of the issues, writes the Financial Times, is caused by electric cars from Asia that are sold in Europe and North America, which are transshipped in Mediterranean ports.

Unofficially, it can be heard that the situation in Rijeka is not nearly as described by the Financial Times for other ports. For the Port of Ploče, it can be informally heard that it is ‘packed’, but their response shows that this is not quite the case.

– After a record 5.5 million tons in 2022 and 4.8 million in 2023, in the first quarter of this year, the Port of Ploče handled about 973,000 tons of various goods compared to about 1,142,000 tons in the same period last year. In the cargo structure, there has been an increase in the transshipment of general and liquid cargo, along with a decrease in the transshipment of bulk cargo, primarily as a result of changed market circumstances and energy consumption compared to last year and especially compared to 2022.

Additionally, among the key users in that segment of transshipment, and thus in the use of capacities/terminals for bulk cargo, there has been a restructuring of production. This has also affected the smaller volume of bulk cargo transshipment, thus also the use of accompanying capacities, which are the most important in the overall traffic of the Port of Ploče. From the above, it can be said that the port capacities intended for the transshipment of bulk cargo, primarily for various types of coal and ores, are not currently fully utilized and that there are opportunities and space for new market opportunities. Other terminals and port capacities are also satisfactory in use, but with significant additional possibilities for full utilization, especially in the container traffic segment – states the response from the Port of Ploče.

There is Space in the Warehouses

We have not yet received a response from the Port of Rijeka, but according to the unaudited Business Report for 2023, it states that our largest Adriatic port recorded a decline of six percent compared to the previous year.

– Due to the crisis in the Red Sea, shipping companies are redirecting their ships around the Cape of Good Hope, which prolongs the ship’s travel time and also increases freight rates. This will have the most impact on container traffic, which is organized as liner shipping. Container traffic accounts for 11 percent of the traffic of the Port of Rijeka, so we do not expect the impact of the crisis in the Red Sea on operations to be significant, and the transshipment of various types of cargo allows for an advantage in adapting to unpredictable situations that may arise in the supply chain. It is difficult to predict to what extent the crisis will affect operations; this will certainly depend on the duration of the navigation restrictions and the willingness of all shipowners to maintain existing lines at the ports of call – they emphasize in the Report from the Port of Rijeka.

Marin Škufca, CEO of Liburnia Maritime Agency, emphasizes that the situation in Croatia is not at all similar to that in other countries, and that there is indeed space in our warehouses. He notes that there is also space on cargo ships; it has not yet happened that any cargo cannot be delivered or dispatched due to overload.

– What we in the logistics-transport sector are witnessing are some different trends; for example, we see a lack of activity in the European market and lower cargo traffic. Industrial production is falling, there are no new projects, investments are being postponed, and we are the first in the chain to witness such practices. If we talk about the volatility of our sector, we are now at the lower part of the sinusoid – emphasizes Škufca.

In addition, he says, freight rates are now low, and warehouses are overflowing. – It turns out that we are fighting for every cargo – notes Škufca.