Europe’s top container ports are hunkering down for a potentially tumultuous 2015 dominated by a growing capacity glut and slowing cargo growth that will make the congestion of the past year appear like a minor irritant.

On the surface, everything looks fine. Rotterdam and Hamburg, the two largest container hubs, have largely shrugged off the creeping congestion that culminated in ship diversions and hefty surcharges last summer, while terminals in some of the world’s largest ports, from Los Angeles-Long Beach to Hong Kong, are gridlocked.

Traffic figures are looking good, too, largely because of unexpectedly strong growth in Asian imports. Rotterdam’s volume increased 4.2 percent in the first nine months of this year, to 9.2 million 20-foot-equivalent units, a major rebound from a 2.1 percent decline in 2013 and a feeble 0.3 percent increase in the first quarter. At neighboring Antwerp, Europe’s third-largest container port and eighth-best in terms of berth productivity, volume increased 5 percent in the first three quarters to more than 6.7 million TEUs.

The global terminal operators that dominate North European container flows are also optimistic. “We remain encouraged by the performance in Europe, which continues to display strong volume growth,” said Ahmed Bin Sulayem, chairman of DP World, which has terminals in Southampton, England; Le Havre and Marseille-Fos, France; London; Tarragona, Spain, and an inland facility in Germersheim, Germany. Antwerp Gateway was Cosco Pacific’s fastest-growing terminal in the first three quarters of 2014 in terms of volume, outperforming the terminal operator’s Chinese ports, with traffic surging 28.2 percent to nearly 1.3 million TEUs.

Beneath the surface, however, things don’t look so good. The outlook for the global container market is relatively positive, according to Drewry Shipping Consultants, which forecasts year-over-year growth of around 5.5 percent in 2015, muted by a 3.3 percent increase on the key Asia-North Europe route.

But traffic in the dominant Le Havre-Hamburg range could stagnate — or even decline — as its 18-nation eurozone hinterland teeters on the brink of a third recession in six years.

The key drivers of the all-important Europe-Asia trade are in trouble, too. China’s economy in the third quarter grew at a projected 7.3 percent, its slowest pace since the 2008 financial crisis, and analysts expect it to miss Beijing’s official growth target for the first time in 15 years. German exports plunged 5.8 percent in August, the steepest decline in more than five years, fueling fears that Europe’s locomotive economy is heading for recession.

The short-sea and feeder markets that have helped offset slowing deep-sea volumes in the past also appear vulnerable. The once-bullish Baltic trade, reeling from Ukraine-linked sanctions and recession that are deflating Russian container imports, faces further declines in traffic in 2015 as feeder lines impose hefty surcharges to cover the cost of complying with regulations requiring ships plying North European and North American routes to burn cleaner low-sulfur fuel.

The North European waterfront, meanwhile, is about to be swamped with two state-of-the-art container terminals in Rotterdam that will add more than 5 million TEUs of annual capacity to one of the world’s most concentrated and competitive markets.

The industry got breathing space to fine-tune strategies when APM Terminals postponed the commercial opening of the world’s first fully automated terminal, with a Phase 1 annual capacity of 2.7 million TEUs, on Rotterdam’s giant reclaimed Maasvlakte 2 site, from this month to February 2015. The opening of a second facility, the 2.4 million-TEU-a-year Rotterdam Gateway Terminal, also will start operations later than planned in 2015. That terminal is jointly owned by DP World and four ocean carriers.

The game-changing potential of the two terminals, which eventually will add some 8.5 million TEUs of capacity, was highlighted by a 900 million-euro ($1.2 billion) claim for lost earnings filed by ECT, Rotterdam’s biggest terminal operator, against the port authority for unfairly awarding concessions to APM Terminals and DP World. The company, owned by Hong Kong’s Hutchison Ports, argued the new terminals will increase capacity by 50 percent, depressing container-handling rates and leading to major economic and social problems in  the region. A court rejected ECT’s claim in September, but the company, which handles approximately two-thirds of Rotterdam’s container traffic, is considering an appeal.

While Rotterdam braces for intra-terminal rivalry in 2015, Hamburg continues to outpace its close rivals. Germany’s largest port boosted first-half traffic by 6.8 percent to 4.8 million TEUs after volume grew 4.4 percent in a sluggish 2013 market that saw traffic decline 2.1 percent in Rotterdam and 0.7 percent in Antwerp.

Hamburg’s success in grabbing a near 27 percent share of the North European container market is all the more remarkable given its reputation for higher charges, the negative publicity over congestion and its problematic location 80 miles down the river Elbe.

The impact of congestion has been greatly exaggerated, according to Hamburg port executives. Only one of the port’s four terminals — the HHLA Container Terminal Burchardkai — experienced handling problems, “which is not the same thing as a throughput crisis,” Port of Hamburg Marketing said.

Reports that shippers were diverting cargoes to rival ports because of congestion are also wide of the mark, according to Hamburg Marketing. A poll of 4,500 companies involved in seaborne foreign trade in the Bavaria/Baden-Wurttemberg region unearthed just 10 that had diverted shipments because of handling problems.

Hamburg’s river location puts it at a growing disadvantage to its rivals as ocean carriers deploy larger and wider ships in the Europe-Asia trade, which can only access the port, partially laden, at high tide. The port is coping well so far, handling 244 ships of more than 10,000-TEU capacity in the first half of 2014, 27 percent more than in the same period last year. The port can handle ships up to 16,000 TEUs, but they can’t sail the Elbe fully laden, nor can two ships with a combined width of 90 meters pass each other along half the length of the river.

Hamburg’s location is also a landside asset because it narrows the distance between the port and its domestic and central European hinterland that accounts for the bulk of its business, but the relentless drive toward bigger ships poses an existential threat unless it deepens the Elbe’s navigation channels.

That moved a step closer in early October when Hamburg came within sight of beating off environmental challenges to its plan to dredge the Elbe. Although Germany’s federal court delayed a long-awaited final ruling until 2015, it said environmental issues could be overcome if Hamburg accommodates concerns about the impact on plants and animals. The final go-ahead is expected in the first quarter of 2015 with dredging likely to take two years.

Hamburg already had received a competitive boost in June when the German government approved a 750 million-euro upgrade of the 60-mile-long Kiel Canal, Hamburg’s shortest link to the Baltic Sea, which handled approximately 2 million TEUs and 95 million metric tons of freight in 2013. “The advantage of the canal is immense,” said Axel Mattern, a member of Hamburg Marketing’s executive board. “Between Hamburg and Gdansk (Poland), feeder ships save half the distance if they take the shortcut through the canal and do not sail around Skagen in Denmark.”

Terminal productivity is a key factor in attracting liner services and charging premium rates, but the competitive advantage is eroded without good intermodal connections to the hinterland. “Rotterdam is doing very well. It has invested heavily. But it’s very important that not only is the seaside of the port efficient, but also the landside,” Maersk Group CEO Nils Andersen told a Dutch newspaper last summer, when congestion was at its peak. “We therefore need big motorways, more rail capacity and expansion on the inland waterways to make the port successful.”

The big unknown going into 2015 is what London Gateway and the Jade Weser terminal in the German port of Wilhelmshaven will do to market their combined — and largely unused — 4.2 million TEUs of annual capacity. The 2.7 million-TEU Jade Weser complex, which opened two years ago and handled just more than 76,000 TEUs in 2013, is in danger of becoming the industry’s first major white elephant as neighboring Hamburg and Bremen-Bremerhaven strengthen their defenses against its deep-water location and discounted handling charges. DP World’s London Gateway, which opened in November 2013, has built up a modest portfolio of services, but it needs a big breakthrough — which can only be achieved by luring carriers from Felixstowe or Southampton — to come anywhere near to filling its 1.5 million-TEU annual capacity.

Maersk Group, which owns APM Terminals, is pragmatic about prospects on the Northwest European waterfront. “We are facing a period of slow growth, (and) some terminals will lose out as a result,” Andersen said. “Naturally, it’s awful if you have made large investments and have enough capacity and then you are overtaken by other terminals. But that’s the reality. We overestimated the future growth in Europe.”

While the Le Havre-Hamburg range grabs the headlines, southern European ports and Mediterranean transshipment hubs have been outperforming their larger northern peers as they grab a larger slice of the key Asia-Europe trade and make inroads in African, Middle East and South American markets.

Cosco Pacific’s Piraeus Container Terminal continues to set the pace with volume surging 23.3 percent in the first three quarters to 1.8 million TEUs. Algeciras, facing an uncertain future in the face of competition from Morocco’s Tanger Med container complex, has re-established itself as a thriving transshipment hub with traffic, which slumped to 2.8 million TEUs in 2010, hitting 4.3 million TEUs in 2013, and soaring 19.3 percent in the first quarter of 2014. Gioia Tauro has recovered from the loss of deep-sea Maersk services to top 3 million TEUs in 2013, and Malta’s Marsaxlokk is narrowing the gap with the Italian port.

The global port companies that are bringing on stream European terminals planned before the 2009 container market collapse abruptly ended the era of double-digit growth are refocusing their investments on fast-growing emerging markets. APM Terminals is still investing in the region — it’s spending $120 million to boost capacity at Gothenburg, Sweden — but it’s looking to Africa and Central and South America to hit its target of $1 billion annual profit.

The European waterfront is set for modest growth compared to emerging markets, but it still accounts for a sizable slice of the business of the top global port companies and is a potential profit pot if ports can boost terminal productivity.

Going into 2015, competition and capacity, not congestion, will shape their strategies.

Contact Bruce Barnard at This email address is being protected from spambots. You need JavaScript enabled to view it. .