Market Insight
SPRING 2017

Annual report
Year 2017

Market Insight
FALL 2017

The Market Insight Winter 2017-2018 report is not yet available and will be published in February 2018

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Turnover development in Europe

 

 

Turnover development in the Netherlands (2010=100) – Rhine country with a high share of goods transport

Source : CBS

 

 

Turnover development in Germany (Index 2010=100) - Rhine country with a high share of goods transport *

Source : Destatis. *the figure shows the turnover in goods transport only

 

 

Turnover development in Austria (Index 2010=100) – Danube country with a high share of passenger transport

Source : Eurostat

 

 

  • The share of goods transport within turnover is 34 % in Austria, 80 % in Germany and more than 90 % in the Netherlands

 

 

Turnover development in Hungary (Index 2010=100) – Danube country with a high share of goods transport

Source : Eurostat

 

 

  • In 2016, turnover in goods transport in Western Europe fell, above all due to the recovery of water levels, which lead to higher loading degrees of vessels. Therefore, the effectively available fleet capacity increased. This changed the supply-demand relation on the market, towards an extension of the supply side. The logical result was a decrease of prices and turnover.
  • In the Netherlands, goods transport has a share of 92 % of total turnover in inland shipping, and passenger transport only 8 %. In 2016, there was a decrease of 7.5 % in total turnover. Compared to the average turnover in the period from 2010 until 2015, the result was -3.7 % (source: CBS). However, turnover per inland navigation freight transport company increased slightly due to a stronger decline in the number of companies during this period (source: Eurostat).
  • In contrast to inland shipping, Dutch rail cargo transport increased turnover by 4.1 % compared to 2015 and even by 11.7 % compared to the average in the period 2010-2015. Road transport had an increase of 3 % with regard to 2015 and 9 % with regard to 2010-2015.
  • In Germany, goods transport has a turnover share of 81 %, and passenger transport 19 % (upward trend). In 2016, there was a year-on-year decrease of 15 % in goods transport turnover, and of 13 % compared to the average in the period 2010-2015. Regarding German passenger shipping, turnover increased by 5.4 % in 2016. In terms of turnover per employee, Germany has the highest productivity among Rhine countries with about 350 k€ turnover per employee (2014 figures, source Eurostat).
  • According to surveys conducted by the German Federal Office of Goods Transport (BAG), the turnover evolution within goods transport differs according to market segments. Within the dry cargo shipping segment, a decrease was predominant, especially on the Rhine market, where small companies operate under difficult market conditions, facing a high degree of competition. In container shipping, however, companies experienced rather stagnating turnover figures.
  • Austria is a country with a dominance of passenger shipping. This segment has a share of 66 % in turnover, and shows a further upward trend. In 2016, turnover was 2 % higher than in the previous year, but its level was still far below the values of the years 2013 and 2014.

 

  • In Austria, passenger shipping has a share of 2/3 of total turnover

 

  • Hungary is a Danube country where goods transport has a higher share in IWT turnover (73 %) than passenger transport (27 %). Turnover in the Hungarian inland shipping industry was on the rise during the year 2016, but this was mainly due to the usual seasonal variations in goods transport. Over the whole year, the result was 1.3 % higher than in 2015.
  • In Danube countries, Austria traditionally registered the highest turnover per passenger transport enterprise with about €650k on average during the period 2009-2014. The turnover in Hungary was about €250k per passenger transport entity over the same period.

 

 

Turnover evolution 2016 / 2015

Country Share in total turnover of… * Total turnover evolution 2016/2015
goods transport passenger transport
Netherlands 92 % 8 % -7.5 %
Germany 81 % 19 % – 11.1 %
Austria 34 % 66 % +2.0 %
Hungary 73 % 27 % +1.3 %

Source : CBS, Destatis, Eurostat.  * % shares are for 2015

 

 

 

 

Freight rates, costs and investments

 

 

Freight rates

 

 

Development of freight rates in the Netherlands (2015 average=100)

Source : Centraal Bureau voor de Statistiek

 

 

  • In 2016, the average level of transport prices in goods transport in the Netherlands (average of dry cargo, liquid cargo and containers) was 10 % lower than in 2015. In the course of the year, prices picked up slightly, so that in the 4th quarter of 2016, prices were around 20 % higher than in the 3rd quarter of 2016. However, when compared to the 4th quarter of 2015, prices in Q4 2016 were well below the values at the end of 2015 (-17 %).

 

  • In the Netherlands, IWT transport prices were on average 10 % lower in 2016 than in 2015. The main reason was the recovery in water levels which lead to a decrease in freight rates.

 

  • The overall evolution since the end of 2014 shows no inherent upward trend. Major upward movements are only induced by periods of low water levels, as the example of autumn 2015 and winter 2016 shows: the end of 2016 (November, December) experienced low water levels, which explains the slight upward movement in prices in that time.

 

  • Also, tanker shipping freight rates in the Rhine market were at a rather low level in the first half of 2016, despite a slightly rising transport demand for chemicals. In the chemical segment, where longer contracts are more common than in the mineral oil segment, the freight rate level increased only very moderately when new contracts had to be concluded. (Source: BAG)

 

 

Development of freight rates in the Danube region (January 2015=100)

Source : Danube Commission

 

 

  • On the Danube, freight rates are above all determined by bunker fuel costs. These bunker fuel costs were on a strong upward movement in 2016. According to the Danube Commission, freight rates increased sharply in the course of the year 2016 (freight rates based on transport of grain and chemical products from Middle Danube inland ports).
  • Hydraulicity conditions were much better on the Danube in 2016 than in 2015. In 2015, water conditions were especially unfavorable on the Upper Danube (Germany) and on the Lower Danube (Romania). In 2016, a recovery of water levels set in, allowing large volumes of mass cargo to be transported again.

 

 

Number of days with water levels undershooting a critical threshold value on the Danube*

Source : Danube Commission, Via Donau

 

 

  • Water levels recovered strongly on the Danube in 2016, which enabled an increase in goods transport along the Danube compared to 2015.
  • On the Rhine, water levels were also much better than in 2015, but at the end of the year (November, December), a new low water period set in, leading to a short but sharp increase in transport prices.

 

 

Maximum loading degrees at Kaub / Middle Rhine for vessels with a draught of 2.5 and 3 meters, compared with Freight Rate Index*

Source : CCNR and PJK International. * Freight rates in tanker shipping

 

 

Costs

 

 

  • Fuel costs decreased further in 2016. But due to clauses in the contracts, IWT companies are often obliged to transfer the fuel costs savings to their clients (shippers).
  • Personnel costs rose modestly in 2016. The collective wage agreement for personnel in the German IWT sector included an increase in wages of 2.6 % from September 2016 onwards. On January 1st 2017, wages increased further by 2.2 %. In the Netherlands, the collective wage agreements increased wages during 2016 by only 0.3 %.
  • The activity and also the costs of maintenance and repair work increased in 2016. Due to the relatively high level of freight rates and revenues in the autumn of 2015, many ship owners decided to use the extra revenue for financing delayed repair work and inspections in the first half of 2016. However, for many old vessels, spare parts were not available anymore, which lead to additional costs in this field. (Source: BAG)

 

 

Investment

 

 

  • According to CBS data, investment in new ships accounts for about 80 % of the total investment in tangible assets of the Dutch inland shipping companies. Investment in machinery and installations followed in second place with a share of 10 %. Investment in new vessels – and also in tangible assets overall – decreased strongly from 2010 onwards, which is of course also confirmed by the decreasing new construction figures according to IVR.
  • Regarding the investment plans, the Dutch statistical office conducts regular quarterly surveys about the investment plans of IWT companies in the Netherlands. Within these surveys, companies are asked about their investment plans in tangible assets (e.g. new vessels, new machinery, etc.) in the current year.
  • The following figure shows the shares of companies (%) that want to keep their investment constant, decrease or increase their investment level. This is based on a survey where respondents are asked whether they want to keep constant, decrease or increase their investment level during the current year.

 

 

Survey results about investment plans in the Dutch IWT sector

Source : CBS

 

 

  • For the entire year 2016, on average 70 % of the companies within the survey said that they wanted to keep their investment level constant in 2016 (compared to 2015). 5 % wanted to increase, and 25 % wanted to reduce investment.
  • More than 2/3 of Dutch inland shipping companies wanted to keep investment expenditures constant in 2016.

 

  • In Q1 2017, the share of companies that wanted to keep investment constant in 2017 was 68 %. 15 % planned to invest more and 17 % planned to invest less. Overall, these results show that investment plans have picked up a bit at the beginning of 2017, at least concerning investment for 2017.
  • In Q1 2017, the survey asked also about the investment plans for the next year (2018). 77 % of the companies answered that they want to keep investment in 2018 constant. 9 % want to expand and 14 % want to reduce investment.

Annual report
Year 2017

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Market Insight
WINTER 2017-2018

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