June the 13th, 2024 – Croatian ports have recorded a significant drop (of approximately a quarter) in traffic. What are the reasons for it?
As Poslovni Dnevnik/Marija Brnic writes, when it comes to the traffic of goods, Croatian ports have felt current geopolitical issues very strongly. These proverbial earthquakes have taken place on the energy market, and the consequences of the actions of the Yemeni Houthis on ships sailing to Europe from Asia. Then of course comes the blockade of traffic through Suez, and this has been confirmed by the figures of strong decline in traffic seen by Croatian ports since the beginning of this year.
In total, in all Croatian ports on the coast in the first quarter of this year (according to data collected by state statisticians) a quarter less in tonnes of goods were traded compared the first quarter of 2023. The continuation of bad news was recently added by the fact that the owner of the Zenica steel company, ArcelorMittal Zenica, decided to close the coking plant and, as a result, stop importing coal through the Port of Ploče in southern Dalmatia.
How strong a blow it is for the business of these companies is illustrated concretely by their figures. 403.6 thousand tonnes of coal were imported last year, and 38 thousand tonnes were imported over the first five months of this year. Shutting down the coking plant is, no doubt, a big challenge for the Port of Ploče’s management.
the pandemic shook things up for croatian ports
The Port of Rijeka promptly announced that they are making maximum efforts to deal with the new situation as successfully as possible.
“Although the market of Bosnia and Herzegovina is the emission market of the company, the company worked to attract new customers from Central and Eastern Europe, which resulted in greater resistance of the company to such changes. While before the pandemic, 90 percent of our end customers came from Bosnia and Herzegovina, today that percentage has significantly decreased,” they stated.
Rijeka Port also had to try to calm the first negative reactions to the news from the management of Ploče Port. The company already had indications that such a development would follow, so it started preparations on time, and larger projects are underway that aim to strengthen Ploče’s position on the Mediterranean transport port network.
croatia’s first 5g port
Among other things, Ploče Port is the starting and ending point of Corridor Vc, and will be included as a core port on the Trans-European Road Network (TNT). That alone will be a great opportunity for new business partnerships and further positioning of the port on the market.
“With continuous investment in technology and measures that will make our business sustainable, Ploče Port is the only European port that has received funds for the development of a private 5G network from the CEF-Digital fund. That will see it become the first smart 5G port in all of Croatia. In cooperation with the Port Authority of Ploče, we’re working on a strategic project to expand the container terminal, which will continue the diversification of the portfolio of services”, they emphasised from the Ploče Port.
However, it hasn’t yet been specified which new users and which goods will replace the reduction in capacity for bulk cargoes, which are the most important items in total traffic. Over the last year, the company recorded a decrease in the transshipment of all goods compared to the record year of 2022, from 5.5 million tonnes at the time to 4.8 million tonnes in 2023. At the level of the first quarter of this year, it fell from 1,142 to 973 thousand tonnes. The financial report also shows a change in the cargo structure, so the decrease in bulk cargo, dominated by coal, is being replaced by an increase in transshipment of general and liquid cargo.
not all croatian ports are equal – looking up to rijeka
Looking up to other Croatian ports elsewhere, Rijeka Port has recorded a decline that is somewhat weaker than down south in Ploče. That port’s decline stands at about 4%, but their data includes all concessionaires in the port area, Rijeka Port itself, according to figures from the financial report for the first quarter, has recorded a total drop in traffic of 28%, from 662 thousand to 477 thousand tonnes. As in the case of Ploče Port, that fall was contributed to by the turnover of bulk cargo (from 448 to 261 thousand tonnes), while with general cargo there was an increase of 20% (from 149 to 178 thousand tonnes).
In their explanation, the management of Rijeka Port cites the decrease in coal transshipment as a reason for the drop in traffic, which is a consequence of the failure of the transshipment bridge, and the crisis in the Red Sea, which resulted in the extension of ship trips around the Cape of Good Hope. A reduction in the transshipment of scrap metal due to the drop in prices in Turkey, as well as the performance of works on the port infrastructure of the Rijeka Terminal, also left its mark, due to which storage space was limited.
croatian ports have their incomes on a seesaw
“Due to the crisis in the Red Sea, shipping companies are rerouting their ships via the Cape of Good Hope, which increases the ship’s travel time and also increases freight rates. The above will have the greatest impact on container traffic, which is organised as liner traffic. Container traffic accounts for 11% of the traffic of Rijeka Port, and the transshipment of different types of cargo enables the advantage of adapting to unpredictable situations that may arise in the supply chain”, they explained, noting that it is difficult to predict the extent to which the crisis will affect business.
Recently, the Rijeka Port Authority was visited by a delegation of a dozen Austrian businessmen, Styrian railways and the logistics centre from Graz, Cargo-Center Graz Betriebsgesellschaft, interested in cooperation.
The decrease in turnover has also left its mark on financial results. The total revenues for Rijeka Port in the first quarter of 2024 fell by 19%, amounting to around 7.4 million euros, resulting in a loss of 265,000 euros. For Ploče Port, the first quarter of this year brought 22.75 million euros, 1 million less than last year, but with a profit of 2.3 million before taxation.
