According to a new economic impact study from the National Bank of Belgium, direct employment at Belgian ports grew for the third year in a row in 2018. Employment numbers rose by 1% to 118 021 direct full-time equivalent jobs. Indirect employment also increased, to 131 591 FTE. Value added contracted compared to the record year 2017: direct and indirect value added taken together fell at a rate of -3.9%, totalling € 32.1 billion in current prices in 2018.

The spread of COVID-19 in 2020 and the stringent containment measures imposed by governments almost everywhere in the world resulted in huge economic disruptions, and the Belgian ports were no exception. An additional chapter collects the initial findings.

Belgian ports reinforced their cargo traffic …

In 2018, cargo traffic at Belgian ports rose by 4.9% to 331 million tonnes. Every port contributed to the overall growth. The port of Antwerp welcomed a record volume of traffic. Containers and liquid bulk were the main drivers. Transshipment of cargo at the port of Zeebrugge rebounded as a result of a significant recovery of LNG traffic, while roll-on roll-off traffic continued to expand in this coastal port. Growth of dry bulk was responsible for the highest cargo turnover in five years at the port of Ostend. The port of Brussels posted an all-time record as a result of the modal shift of earthmoving operations from road to the waterways and more containers being handled. Growth of cargo traffic at the ports of Ghent and Liège was rather limited.

… which was reflected in an increasing employment level

The upward trend in Belgian maritime cargo traffic in 2018 was reflected in employment at Belgian ports as a whole, since direct and indirect employment grew by 0.8% in 2018 to 249 612 full-time equivalents (FTE), which is 5.9% of Belgian domestic employment. The rise in direct employment was partly due to a significant surge in the number of FTE registered in cargo handling. Apart from extra job creation in cargo handling, other branches also generated supplementary jobs. At the port of Antwerp, employment expanded in the chemicals industry and other logistic services, too. At the port of Ghent, the number of jobs grew in car manufacturing, while in Zeebrugge, this was the case in the shipping agents and forwarders and road transport branches. The metalworking industry and other logistic services at the port of Ostend created new jobs as well.

Value added dropped

While employment grew, value added contracted in 2018 compared to the record year 2017: both direct and indirect effects fell, together at a rate of -3.9%, leading to value added of € 32 billion in 2018, representing 7% of Belgian GDP. Direct effects declined in the non-maritime branches of the ports of Antwerp and Liège in particular. In both ports, the energy sector was affected by reduced capacity at nuclear power plants. In addition, fuel production faced lower value added due to reduced refinery margins. The inland port of Brussels experienced a fall in its value added as well, mainly explained by the contraction in other logistic services. By contrast, the port of Ghent and Ostend generated more value added. The increase in the port of Ghent was due to the trade and car manufacturing branches. Growth in the port of Ostend was driven by the dredging sector and the metalworking industry. Value added at the port of Zeebrugge stabilised.

The pattern of investment was linked to projects and therefore highly volatile

Direct investment, taking all Belgian ports together, went up to a level of almost € 6 billion in 2018. The increase was mainly explained by investment at the port of Antwerp in the context of a merger operation among shipping companies where a US-based company was taken over. If this is deducted from total investment in Belgian ports, an overall fall in investment of € 210 million would be recorded for 2018 compared to 2017, resulting from lower investment in the port construction and dredging segment, fuel production, car manufacturing and metalworking industries.

Uncertain impact of COVID-19

To contain the spread of the coronavirus, most governments across the globe imposed stringent containment measures that saved lives but resulted in huge economic disruptions. Ports worldwide ended up in turbulent waters. Maritime traffic at the port of Antwerp, as a major world port, was hit in the container handling segment due to many blank sailings, peaking in May and June. The calls of container ships decreased but were partly compensated by more volume per ship on average and extra calls, on top of the normal sailing schedules. Traffic in liquid bulk fell as well, explained early on in the crisis by falling demand for kerosene and motor fuel and lower demand for chemical products. In May and June, the drop was reinforced due to little rotation in liquid storage tanks and the Gunvor Petroleum Antwerp company ceasing trading. The downward trend in breakbulk, dry bulk and roll-on roll-off cargo traffic, visible since mid-2019, was reinforced by the coronavirus crisis to a limited extent.

A survey of maritime companies (shipping companies, cargo handlers and shipping agents and forwarders) active at the port of Antwerp suggests that the average company with maritime activity expects its turnover to decline by 21% in 2020, with no pick-up to pre-coronavirus levels before 2021. Maritime firms, recording a bigger decline in their turnover, are making more extensive use of the temporary lay-off scheme for their workers and report that it is more likely that they will transform some of the temporary unemployment into permanent lay-offs when the scheme expires. Their main concern is weak demand. The slow recovery of international trade and the increasing number of blank sailings are partly to blame for the contraction in their maritime business activity. As a result, more than half of them are being forced to delay their investment plans.

With the gradual scaling back of confinement measures, a hesitant recovery has begun. The impact on the Belgian ports in 2020 and later is still uncertain. It all depends how quickly COVID-19 can be forced back worldwide or how soon a medical solution is found. Belgian ports depend on changes in world trade and global GDP. It is impossible to predict with sufficient accuracy how fast the recovery will develop and how much of the damage will be permanent, just as there is uncertainty about the impact on demand. If a trend of nearshoring gains ground, this will eventually be felt in the Belgian ports, as ports are a gauge of globalisation. All these elements will determine the extent of the final impact of the crisis on the Belgian ports.

Brexit

On 31 January 2020, the UK definitively left the European Union and entered a transition period until the end of 2020, during which it is still bound by EU rules while both parties are negotiating a trade deal. The departure of the UK from the EU will result in lower trade openness and consequently in reduced trade flows. The damage this will cause to the respective economies will crucially depend on the kind of deal that is concluded during the transition period. The less preferential the future trade relationship between the EU and UK and of the more tariff and non-tariff trade measures it contains, the bigger the negative implications for growth of the Belgian economy will be. Belgian ports will see their imports and exports reduced, especially if they have a large trade share with the UK. Given its strong orientation towards the UK, the port of Zeebrugge will therefore most probably experience the biggest negative effects. The global impact on this port and other Belgian ports may be nevertheless be softened by a subsequent shift in traffic between the UK and the rest of the world for trade flows where the UK served as an entry platform into the EU.