Germany’s storied port and “Gate to the World” faces new challenges.

PUBLISHED SEP 13, 2021 10:09 PM BY ERIK KRAVETS

 

(Article originally published in May/June 2021 edition.)

From its storied 13th century origins as a Hanseatic port to being Germany’s current “Gate to the World,” Hamburg and the rest of Germany were in constant tension but also essential to each other. Now, trade is scaling up to ever bigger dimensions, and its rivals and concerns have become global, not local.

Bremen and Hamburg, who competed with each other for centuries for leadership of the Hanseatic League, announced in 2020 that they were formally exploring a port cooperation agreement. This tonal shift took a long time. Previous efforts in this direction – some dating back to the 1990s – met their demise in the face of local opposition, either in Hamburg or one of its bordering states.

Now it’s different. “We need a strong Northern German alliance,” urged Claudia Schilling, Bremen’s Port Minister, in 2020. Her counterpart in Hamburg, Michael Westhagemann, echoed the sentiment and suggested it was “time to start thinking in Northern German terms when it comes to ports rather than state borders.”

It’s those borders that were Hamburg’s biggest problem, particularly during the Cold War.

Shifting Fortunes

Starting in 1952, thanks to the German Democratic Republic’s succinctly titled “Regulation Regarding the Demarcation Line Between the German Democratic Republic and the Western Occupation Zones,” the Iron Curtain descended, cutting Hamburg off from large parts of Germany, Poland, the Czech Republic (then Czechoslovakia) and points east by rail or barge.

This meant the loss of many commercial opportunities. The Port of Hamburg was cut off from its usual markets by the militarized East German border, 50 kilometers (30 miles) away. “Traditionally,” as per a recent Hamburg School of Business Administration case study, Hamburg “served not only as a local port but also as a transport hub for large swaths of Central and Eastern Europe.” All that industry and many customers were lost.

When the Soviet Union fell in 1989, opening up these markets (and their consumers) to trade, the Port of Hamburg “was revived and experienced one of its strongest decades.” That decade made it the third largest port in Europe, a position it’s struggling to defend.

While Rotterdam and Antwerp, the latter with significant Chinese funding, grew their cargo volumes between 2.2 to 3.0 percent per annum since 2007, Hamburg lost 1.2 percent. Bremerhaven, part of the Free and Hanseatic City of Bremen, suffered an average 0.2 percent loss during that timeframe. Few things focus the mind of a merchant like losing market share. Hamburg was put on notice.

Serving the Hinterland

What drives cargo? Why choose one port over another? Writing in 1912, Edwin Clapp, a Germanophile, proposed that a port “is the heart of a country’s commercial life, drawing off the sluggish flow of surplus inland production and sending back through the arteries of traffic to the life-giving currents of foreign trade.” One of the biggest preconditions, he added, for “the existence of a great seaport, nowadays, is the existence of a hinterland interested in foreign trade.”

Peter Tschentscher, the current Mayor and Chief Executive of Hamburg, praised the city-state for its good hinterland connections since “every second container is transported onward by rail.” Additionally, Hamburg is located within this hinterland – the North Sea lies roughly 130 kilometers (80 miles) away, which works out to anywhere from 8-12 hours of extra sailing time from the mouth of the Elbe River.

In fact, this can lead to confusion in “notice of arrival” clauses in charterparties (the Hamburg Port Authority urges masters to contact the pilot ship two hours before arrival at the “Elbe light buoy,” which is actually situated near Cuxhaven).

Dredging the Elbe

But Hamburg’s inland location has been most controversial as it relates to maintaining its waterway: The Elbe River was recently dredged at the cost of 800 million euros to accommodate the next generation of super-large container ships, which have from 13.5-14.5 meters draft.

Perhaps not coincidentally, Hamburg – under the leadership of its Mayor – is (tentatively) exploring a cooperative agreement with Chinese shipping line COSCO, which is looking to acquire a stake in terminal operator Hamburg Hafen und Logistik AG (HHLA). COSCO operates some of the world’s biggest ships, which would certainly stand to benefit from the Elbe River’s improved depth, being able to then steam to the port at low tide and without lightening.

It was certainly no great benefit for local shipowners in Hamburg. Even though the city is called home by half of the German-flagged fleet and is a nexus for adjacent industries, the German flag is flown only by a few ships that could take advantage of the river’s new depth. The biggest German-flagged vessels will be six recent newbuilds belonging to Hapag-Lloyd, which are “Made in Korea” giants measuring 400 meters in length and carrying upwards of 23,000 TEUs.

Why dredge the Elbe at all? The answer lies in history. In medieval times, seaports were set at the point where oceangoing vessels could proceed no farther. In other words, oceangoing ships would bring their wares as far inland as they could, then put to port. This was often somewhere along a major river that turned narrower and shallower the farther inland it went.

Cologne, for example, was one of the major medieval Hanseatic cities but is far less important today. It’s a full 210 miles inland, down the Rhine River, proceeding from the Hook of Holland. Hamburg was special: As a port, it was so attractive that the Elbe was continuously dredged to preserve access for oceangoing vessels. Cologne, by comparison, could only accommodate vessels with a two-meter draft in the early 20th century – barely enough for a modern yacht! At the time, this was also the depth of the channel leading to the port of Hamburg at low tide, while at high tide it could accommodate ships with a draft of roughly five meters.

This “artificial” cultivation of a basic element of maritime commerce – accessibility – by Hamburg is hardly new. Investment has always been needed to keep the port viable. In 1246, the Archbishop of Bremen gave Hamburg half of the island of Neuwerk, near Cuxhaven. A condition of this grant was that Hamburg maintain a lighthouse on the island to guide seagoing vessels.

This lighthouse – wooden, with a stone foundation – is now the oldest continuously operating lighthouse in the world. The island of Neuwerk can be visited from Cuxhaven via a daily ferry, and the island is pro forma a part of “Hamburg-Mitte” (i.e., downtown Hamburg), a source of local humor.

Hamburg’s position on the Elbe, which progresses 1,091 kilometers inland (678 miles), allows it to tap deep into Central European markets. The Weser, which serves Bremen, extends only 452 kilometers (281 miles). While the Elbe passes through the Czech Republic and Austria, the Weser is a strictly German affair. It also narrows substantially after Bremerhaven, which lies on the North Sea, while the Elbe remains viable for barge transport well inland.

Overcoming Old Rivalries

All of which is to say that it’s an excellent sign that the two ports – along with other ports along the North German range – have begun to accommodate each other and work together. Old rivalries are difficult to overcome, but in an era of international competition, doing so is smart.

There are three German states that are chiefly invested in this joint project: Hamburg, Bremen and Lower Saxony. They’ve been talking for years, often with little to show for it. Each state is accountable to its own constituencies. Like any venture with multiple stakeholders, it’s tough to set aside individual agendas and forego opportunities in favor of building up the team.

Olaf Lies, a long-time political leader in Lower Saxony who is known for his maritime portfolio, summarized the situation as follows: “The decision as to which port is called is made exclusively by shipping companies. Nevertheless, all ports stand before the challenge of intelligently using available and future infrastructure and resources.”

In other words, they must play to their comparative advantage. That means Bremen and Hamburg, not to mention Wilhelmshaven, Brake, Cuxhaven and the several other ports in the North German range, will need to specialize.

Rolf Habben, CEO of Hapag-Lloyd, which is partly owned by the Free and Hanseatic City of Hamburg, made the point that the real competition is “not between Hamburg, Bremerhaven and Wilhelmshaven” but rather with the Dutch port of Rotterdam or the Belgian port of Antwerp. He suggested that successful cooperation between these German ports would mean Hapag-Lloyd’s biggest Asia-Europe vessels would dock at Wilhelmshaven first, not Antwerp.

Nevertheless, not everybody is excited at Hamburg’s newfound desire to build up something great with all the other German ports. The longstanding competitive spirit that’s characterized Hamburg’s relationship with its neighbors remains very much engraved in memory.

The Green Party of Jork, a small town on the other side of the Elbe from Hamburg, summarized this frustration: “It feels not just like mockery, but rather contempt, now that Hamburg is suddenly signaling to the whole world who have previously complained about the lack of cooperation. For decades, Hamburgers (irrespective of party or power relationships!) have vehemently been against any form of port cooperation, and they forced through the dredging of the Elbe River with all their might. Now that the Port of Hamburg is suffering declining volumes, they’re making proposals. And this in spite of the fact that dredging the Elbe River was supposed to prevent all of this!”

The Way Forward

In Europe, former rivals have long memories, and Hamburg’s legacy is going to be both a blessing and a curse going forward. But one thing is certain: It will continue to play a pivotal role in Germany even as it finds its way forward in an ever-shifting global economy.

 

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