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Shipping, Trade, and the EU

Source: Pixabay

As the backbone of international trade, shipping has been essential for development of our globalized world, where economic and trade liberalization continuously bring us together, both politically, through international organizations such as the WTO, and physically, considering that the movement of people and goods has never been less restricted (without dwelling too much on the Covid-19 pandemic…).

The international shipping industry serves as the carriage of over 80% of world trade, and is of imperative importance for bulk transport or raw materials, import and export of affordable food and manufactured goods, and more. With over a million seafarers, and more than 50 000 merchant ships trading internationally, this industry not only fosters the economic ideals of liberal democracies, but also provides jobs for millions. Knowing that “over the last four decades total seaborne trade estimates have quadrupled, from just over 8 thousand billion tonne-miles in 1968 to over 32 thousand billion tonne-miles in 2008” [1], and bearing in mind that shipping is the most fuel efficient and carbon friendly form of commercial transport, drawing your attention to the absolute importance of shipping would be futile.

Being, first and foremost, an economic union, the European Union has an exhaustive number of legislation on shipping and trade, in order to best position itself, and its member states, in the world economy.

“The free provision of services (regulation 4055/86) in the maritime transport sector ensures that users of those services, i.e. logistic operators, sea passengers and, ultimately, the final consumer, have a better choice of services and that those services are offered at good prices. Moreover, the European Commission works actively in support of quality shipping in the EU and all over the world. Safety, security, environmental protection and working conditions of seafarers are at the core of the EU action in this field.”

As almost 90% of the EU’s external freight trade is seaborne, and since short sea shipping represents one third of intra-EU exchanges in terms of tonne-kilometers, “the European Commission's objective is to protect Europe with very strict safety rules preventing sub-standard shipping, reducing the risk of serious maritime accidents and minimizing the environmental impact of maritime transport.”

The European Commission’s Trade Policy Review, published in 2021, voices the Union’s interest in further trade liberalization, which is set to mitigate the protectionist sentiments remaining from the recent pandemic. The Review also contains paragraphs expressing interest in reforming the World Trade Organization, which aims at ensuring the organization maintains its status as the overarching negotiation forum. Such action would strengthen the EU's current trade agreements, while also enabling the possible future expansion of supply chains, which we have come to realize are of great importance, especially after observing the effects of the Russo-Ukrainian War. The Review has received support from ECSA (European Community Shipowners’ Associations), showcasing congruence between the policymakers and workers.

Yet, all the most progressive policies, on their own, wouldn’t be able to support such an industry. In order to fully assess the part shipping plays in the European economy, analyzing the successes “on-ground”, at the massive shipping hubs of Rotterdam, Antwerp, and Hamburg, is necessary.

Port of Rotterdam

Commonly referred to as the “Maritime Capital of Europe”, Port of Rotterdam is the largest seaport in Europe, handling 460 million tonnes annually, whose importance can easily be encapsulated by this quote from the President of the European Commission, Ursula Von Der Leyen: “If the port of Rotterdam is doing well, Europe's economy is doing well.”

The extraordinary performance of this port can mostly be attributed to its state-of-the-art infrastructure. According to the World Economic Forum’s ‘Global Competitiveness Report’, Rotterdam has the best port infrastructure in the world. Because of its fully digitalized terminals, shipping companies can respond to customer’s needs at astounding speed. On the more technical side, a plethora of branches and external companies work in unison to ensure efficiency. Container Exchange Route combines consignments, Nextlogic effectively plans cargo shipments, while Pronto minimizes port waiting and turnaround times.

The geographical location of Rotterdam also positively affects its provision of services. Consisting of not only deep sea, but also short sea and inland shipping networks, together with rail and road connections, the port stands as the best-connected trade hub on the continent, playing a crucial part in goods delivery to its 500+ million customers.

While it might not be the biggest port in the world, it is often characterized as the cleanest. Investments have been made which have resulted in more efficient energy usage, cleaner fuels such as hydrogen and LNG, extensive electrification and more.

The Port of Rotterdam also has an active political role, which it exercises through the Department of European Affairs, in Brussels, where the interests of the port authority are presented to policymakers and stakeholders.

Port of Antwerp-Bruges

The Port of Antwerp-Bruges is the second largest port in Europe, handling 290 million tonnes of cargo annually. The port we know today has been formed through a merger between ports of Antwerp and Zeebrugge in May 2022.

Antwerp is the leading breakbulk port in Europe, handling a range of cargoes, from steel and forest products to fruit and project cargo. The port also accommodates the largest integrated chemical cluster in Europe, which has five refineries and an annual distillation capacity of more than 40Mt. The Rotterdam-Antwerp Pipeline (RAPL) connects two large refineries to the Port of Rotterdam, ensuring a continuous supply of crude oil.

The port is also committed to reaching the gas-emissions quota set by the European Union, and a transition to greener energy sources. “The unified port is pioneering the capture, storage and reuse of CO₂ with the first 2.5Mt of CO₂ to be captured from industry at the port by 2025. The port of Antwerp-Bruges is also progressing plans to receive the first green hydrogen molecules at its platform by 2028. The process will involve expanding terminal capacity for existing and new hydrogen carriers at both port sites with the possibility of a hydrogen pipeline between the two sites, which will ensure access to future renewable energy for the port area, Belgium, and a large part of Europe.”

Port of Hamburg

The Port of Hamburg is the third largest port in Europe, handling 145 million tonnes of cargo annually. Located in between the North Sea and the Baltic Sea, Hamburg enjoys a perfect location for transportation of goods, with oil from Norway, the industry of the Benelux, and hundreds of millions of people in its vicinity.

The Elbe River, the Elbe-Seiten Canal and the Kiel Canal are all used for the transportation of goods arriving in the port of Hamburg. These waterways give premium access to customers in Scandinavian, Baltic, and Central European states. Germany’s developed road network also entails smooth and fast transport of goods throughout Germany, mostly on A7 and A1 highways.

Hamburg can also pride itself on being the largest rail port in Europe, due to Germany’s vast railway network. Most of the goods that are passing through Hamburg on their way to other EU countries have Austria, Hungary, and Czechia as their destinations, and 90% of those goods reach these countries by rail. The port also plays a key role in the New Silk Road to China.

While the shipping industry might be thriving, even after the pandemic, it won’t be smooth sailing only from this point. As the European Union is viewing to reach its goal of Climate Neutrality by 2050, a lot of changes are in store for the maritime industry.

Even though emission reductions of almost 90% compared to 2008 levels have been reached by the European shipping industry, in order to truly minimize the negative effects of carbon usage, further restrictions need to be imposed.

Thankfully, the EU has taken action. EU Emissions Trading System (EU ETS), one of the Union’s main tools for combating climate change, will likely include shipping from 2024.

“The EU’s legislative bodies have reached an agreement on including shipping in its Emission Trading System (EU ETS). Subject to final adoption, ships above 5000 GT transporting cargo or passengers for commercial purposes in the EU will be required to acquire and surrender emission allowances for their CO2 emissions from 2024.”[2]

While the European Union may be on a promising path, it is worth noting that seven out of ten of the biggest ports in the world are located in China, which doesn’t necessarily uphold the same views on climate change as the European institutions do. In order for all the regulations, restrictions, and research to be fruitful, standardization of climate change regulations on a global level is of utmost importance. If China’s ever-growing influence on trade is to be considered, my prognosis for the future would be quite pessimistic. Thankfully, time might prove me wrong.

“The maritime industry is going through profound changes, and class societies must adapt to support it. Our role now reaches far beyond protecting life at sea, ships and assets, to include the ocean itself. We must take a full and active part in preserving our blue planet for future generations.” - Matthieu De Tugny

[1] “Shipping and World Trade: World Seaborne Trade” – International Chamber of Shipping

[2] “EU ETS: Preliminary agreement to include shipping in the EU’s Emission Trading System from 2024”, DNV, 2023


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