Report Polish Ports in 2020. Summary and Outlook for 2021

Report Polish ports in 2020. Summary and outlook for 2021

March 2021

Port Monitor. Polish ports in 2020. Summary and outlook for 2021

Summary

 In 2020, Polish ports (Gdańsk, Gdynia, Szczecin-Świnoujście) handled a total of nearly 104 million tons of cargo, which is a 4% decrease compared to 2019. This is the first year-to-year decline in the total turnover since 2011.

 Reduced turnovers were recorded by the Port of Gdańsk and the Port of Szczecin-Świnoujście, while the Port of Gdynia, despite the pandemic, ended the year with a higher result than in 2019.

 A large increase in the grain group (+3.7 million tons) - especially noticeable at the Port of Gdynia (+2.2 million tons). A significant decline in turnover in all analysed ports was noted in the case of two cargo groups: coal and coke (-2.9 million tonnes) and fuels (-3.4 million tonnes).

 Container handling in 2020 decreased (-4.3%) for the first time since 2015. The decrease was mainly due to the reduced volumes in the Port of Gdansk (-7.2%). In turn, the Port of Gdynia and the Port of Szczecin-Świnoujście recorded increases. In the containerized cargo segment the biggest drops were noticed in the first half of 2020.

 The drop was also recorded in the ro-ro cargo segment. The volumes of freight units decreased in each of the Polish port. In all ports ro-ro cargo turnover decline by 5.6% to the level of 779 thousand units. In turn, the service of passenger cars in ferry traffic decreased by a one fourth (to the level of 309 thousand passenger cars).

 Last year, due to restrictions in international passenger traffic, the number of passengers in regular ferry traffic was reduced significantly. In 2020, all Polish ports handled 1.47 million passengers, which is 23.2% less than in 2019.

 The negative effects of the pandemic were visible in the cruise ship service segment. Most of the shipowners cancelled the sailings and, as a result, 6 out of 84 planned cruise ship’s calls took place in the Port of Gdańsk, and in Gdynia, only one out of 50 planned.

 At this stage, it is difficult to forecast what the entire year 2021 may look like for port operations, because this year will also be marked by a pandemic. However, the level of the cargo handling at the beginning of the year allows for optimistic predictions. In January this year all Polish ports recorded growths in cargo volumes compared to January 2020 and these were quite significant increases (+ 13.6% Port of Gdynia, + 8.8% Port of Gdańsk and +7.7 % in Ports of Szczecin- Świnoujście).

Port Monitor. Polish ports in 2020. Summary and outlook for 2021

Operational results of the Polish seaports in 2020

In 2020 Polish ports handled a total of 103.8 million tonnes of cargo, which is a decline of 4% compared to 2019. The Port of Gdańsk (-7.9%) and the Ports of Szczecin-Świnoujście (-3.1%) recorded a decrease in turnovers (Table 1). In turn, in the Port of Gdynia, despite the pandemic, the result was higher than the record volume of 2019 (+ 2.9%) – the greatest dynamics was noticed in cereal volumes (+ 68%). There was also an increase in the handling of containerized cargo (+ 0.9%). Table 1. Turnover in the biggest Polish seaports in years 2015-2020 (thousands of tonnes)

Change 2015 2016 2017 2018 2019 2020 2020/19 Port of Gdańsk 35 914 37 289 40 614 49 032 52 154 48 038 -7.89% Port of Gdynia 18 198 19 536 21 225 23 492 23 957 24 662 2.94% Port of Szczecin-Świnoujście 23 174 24 113 25 424 28 314 32 175 31 178 -3.10% Total 77 286 80 938 87 263 100 838 108 286 103 878 -4.07%

In 2020, the Port of Gdansk was the fourth force in the Baltic Sea, the Port of Szczecin-Świnoujście was on the 7th place (compared to the 8th place in 2019), and the Port of Gdynia on the 9th (promotion from the 10th position in 2019) - Figure 1.

Figure 1. The cargo volumes in the largest ports in the Baltic Sea in 2019 and 2020 (thousands of tonnes)

120 000 5,0% 3,3% 2,9% 0,0% 0,0% 100 000 -1,2% -3,0% -3,1% -2,3% -5,0% 80 000 -7,9% -10,0% 60 000 -15,0%

40 000 -19,2% -20,0%

20 000 -25,0% -27,7% 0 -30,0%

2019 2020 Change 2020/2019

*estimated data based on selected cargo groups

Port Monitor. Polish ports in 2020. Summary and outlook for 2021

Handling structure in 2020

Last year, general cargo accounted for 51% of total cargo handled in Polish ports. The coal & coke and fuel groups had a smaller share in the overall product structure (the share of each group decreased by 2 pp compared to 2019). There was also a change in the handling of cereals in Polish ports - volumes increased by 3.7 million tonnes, which contributed to an increase in the share of cereals in the total turnover (from 5% in 2019 to 8% in 2020) - Figure 2.

Figure 2. The structure of cargo handled in the main ports in Poland in 2020

10% 20% 2% 9%

51%

Coal and coke Ore Other bulk Grains Timber General cargo Fuels

All analysed ports recorded declines in the coal and coke group - the largest decline in turnover was observed at the Port of Gdansk (-1.1 million tonnes) - Table 2.

In recent years, the Port of Szczecin-Świnoujście has been characterized by high results of reloading of coal and ores. But for about 3 years, the import of ores by sea has significantly weakened due to the decline in production in Polish, Czech and Slovak ironworks. It resulted in a reduction of turnover by a one fourth in this cargo group (-588 thousand tonnes compared to 2019).

In the fuel group, both the Port of Gdańsk and the Port of Gdynia recorded declines, by 21.7% and 4.3%, respectively. In turn, the Port of Szczecin-Świnoujście noticed increase in fuels handlings by 12% (of which, LNG turnover increased by 10.3%).

Port Monitor. Polish ports in 2020. Summary and outlook for 2021

Table 2. Handling structure in ports of Gdańsk, Gdynia and Szczecin-Świnoujście in 2020 (thousands of tonnes)

Port of Szczecin- Port of Gdańsk Port of Gdynia Total Świnoujście Cargo group Change Change Change Change 2020 2020 2020 2020 2020/2019 2020/2019 2020/2019 2020/2019 Coal and 5 658.92 -16.42% 1 684.90 -41.44% 2 557.30 -18.29% 9 901.12 -22.51% coke Ore 534.17 3632.59% 0.00 +/-0% 1 684.50 -25.88% 2 218.67 -2.98% Other 4 533.65 10.25% 1 564.30 4.84% 3 139.90 -6.31% 9 237.85 3.15% bulk Grain 1 499.14 145.10% 5 430.60 68.62% 1 875.70 43.90% 8 805.44 71.45% Timber 11.93 -95.33% 101.90 -72.08% 104.00 -48.00% 217.83 -73.46% General 22 108.99 -3.42% 14 108.10 -0.29% 16 874.20 -3.64% 53 091.29 -2.68% cargo Fuels 13 691.61 -21.76% 1 772.30 -4.33% 4 941.90 12.16% 20 405.81 -14.11% Total 48 038.41 -7.89% 24 662.00 2.94% 31 177.50 -3.10% 103 877.91 -4.07%

The greatest dynamics was observed in cereals group - the total turnover in this group increased by 71.5% compared to 2019. The largest increase was recorded at the Port of Gdynia (+2.2 million tonnes compared to 2019, + 68.6%). The other ports also increased – Port of Gdańsk handled almost 0.9 million tonnes more, and in the Ports of Szczecin-Świnoujście about 0.6 million tonnes more. Containers

Last year, Polish ports handled over 130 thousand. TEUs less (-4.3%) than in 2019. The total result for Polish ports was mostly affected by the decline at the Port of Gdańsk. The 7.2% decrease at the Port of Gdańsk was mainly due to the drops in transhipments, while the volumes of cargo to/from the Polish market increased. At the same time, the port of Szczecin-Świnoujście recorded a double-digit increase (+14% compared to 2019). In turn, the Port of Gdynia recorded a slight (almost 1%) increase. The Port of Gdynia was one of the few ports among the Baltic largest container ports, where a positive change in the container volumes was recorded. Despite the pandemic, 2020 turned out to be particularly good for the Gdynia Container Terminal (GCT), which last year achieved a record result - 401,546 TEUs.

Table 3. Container handling in the biggest Polish seaports in years 2015-2020 (TEU)

Change 2015 2016 2017 2018 2019 2020 2020/19 Port of Gdańsk 1 091 202 1 299 373 1 580 508 1 948 974 2 073 215 1 923 785 -7.21% Port of Gdynia 684 796 642 195 710 698 803 871 896 968 905 121 0.91% Port of Szczecin- 87 784 90 869 93 579 81 451 76 143 86 816 14.02% Świnoujście Total 1 863 782 2 032 437 2 384 785 2 834 296 3 046 326 2 915 722 -4.29%

Analysing the turnovers of containerized cargo (in thousand tonnes) in Polish ports in individual months of 2020 compared to 2019, it can be indicated that particularly severe drops took place in the first half of 2020, starting in March, then the first effects of lockdown imposed in January in China (then many factories in China stopped their production) were visible in European port sector, including Polish. In March, the lockdown began in Poland and many other European countries. In the summer

Port Monitor. Polish ports in 2020. Summary and outlook for 2021

months of July-August 2020, the level of container volumes in Polish ports was comparable to the corresponding period of 2019. In the later months, except from November, when container handling increased, drops were again noticeable, although the levels were not so low as in the first half of the year.

Figure 3. Containerized cargo turnover in Polish ports from January to December 2019 and 2020 (thousand tonnes) and change 2020/2019

2500,0 30,0% 21,0% 20,0% 2000,0 7,3% 10,0% 3,5% 0,2% 1500,0 0,0% -0,1% -10,0% 1000,0 -9,2% -9,7% -8,5% -12,4% -12,2% -20,0% -18,6% 500,0 -30,0% -29,8% 0,0 -40,0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

yoy change 2019 (thou. tonnes) 2020 (thou. tonnes)

Ro-ro ferry traffic

Last year, the turnover of ro-ro freight units in Polish ports decreased by 5.6% in comparison to 2019. All ports recorded drops, but the most significant decline was observed in the Port of Gdynia (-35.7 thou. freight units). Also, the Port of Gdynia noted the largest drop in service of passenger cars (-35.1 thou., -58.2%).

Table 4. Ro-ro freight units and passenger cars served in biggest Polish sea ports in years 2019 and 2020 [pcs]

Passenger cars Freight units

Change Change 2019 2020 2019 2020 2020/2019 2020/2019

Port of Gdańsk 52 162 45 383 -13.00% 31 484 28 923 -8.13% Port of Gdynia 107 386 44 839 -58.25% 299 566 263 590 -12.01% Port of Szczecin- 254 125 219 037 -13.81% 493 994 486 516 -1.51% Świnoujście Total 413 673 309 259 -25.24% 825 044 779 029 -5.58%

Port Monitor. Polish ports in 2020. Summary and outlook for 2021

Passenger traffic

The introduced restrictions and the imposition of a quarantine on travellers due to COVID-19 pandemic resulted in a significant reduction in the number of people traveling on ferries. Last year, Polish ports in total handled 1,473.1 thou. passengers (-23.2%). It is worth pointing out that this is the lowest number of travellers since 2013. The biggest drop took place in the Port of Gdynia (-42.2% compared to 2019). Polish ports are not an isolated case - in some Baltic ports the drops reached even more than 50% (e.g. Helsinki, Tallinn).

Table 5. Regular passenger traffic in major Polish ports in 2015-2020 [passengers]

Change 2015 2016 2017 2018 2019 2020 2020/2019

Port of Gdańsk 107 540 104 672 105 556 117 939 166 475 147 909 -11.15%

Port of Gdynia 598 207 603 444 660 900 687 545 682 590 394 608 -42.19% Port of Szczecin- 974 717 1 040 779 1 085 013 1 072 679 1 069 318 930 625 -12.97% Świnoujście Total 1 680 464 1 748 895 1 851 469 1 878 163 1 918 383 1 473 142 -23.21%

Cruise traffic

The past year was very unfavourable for the cruise ship sector - the pandemic almost completely stopped the cruise business. In 2020, The port of Gdańsk planned to serve 84 cruise vessels, while the Port of Gdynia – 50. Due to the pandemic, most shipowners cancelled their calls, and only 6 vessels called at the Port of Gdańsk (the first ship was served in September). In turn, the Port of Gdynia served only one cruise ship with 72 tourists on board. In both Port of Gdynia and Port of Gdańsk last year served over 95% less cruise tourists than in 2019. On the other hand, Port of Szczecin-Świnoujście, which mainly serves river cruisers, recorded a decrease in passenger traffic by nearly one fourth, while the number of river cruisers vessels’ calls grew from 78 in 2019 to 95 in 2020. It seems that river cruisers market was less affected by the pandemic comparing to the sea cruisers market.

Table 6. Cruise traffic in Polish ports in 2019 and 2020 [passengers]

Tourists Calls

Change Change 2019 2020 2019 2020 2020/2019 2020/2019 Port of Gdańsk 22 411 616 -97.25% 60 6 -90.00% Port of Gdynia 235 780 72 -99.97% 54 1 -98.15% Port of Szczecin- 7 420 5 650 -23.85% 78 95 21.79% Świnoujście* Total 265 611 6 338 -97.61% 192 102 -46.88% *including river cruisers

Port Monitor. Polish ports in 2020. Summary and outlook for 2021

Outlook for 2021

To make some outlook for 2021 the PMI index (Purchasing Managers’ Index™) can be supportive.1 PMI is a survey-based economic indicator designed to provide a timely insight into business conditions, it is often regarded as a leading economic indicator. It is produced globally by IHS Markit. PMI was originally compiled for manufacturing, but now PMI for services and composite PMI (weighted average of manufacturing and service sector PMIs for a given geography or economy) is also elaborated. The manufacturing PMI may herald the changes in trade while the changes in trade may affect the volumes of handled cargo in ports. Manufacturing PMI covers such sub-indexes as: business output, new orders, employment, costs, selling prices, exports, purchasing activity, supplier performance, backlogs of orders and inventories of both inputs and finished goods, where applicable.

In April last year, in Poland, as well as in most of European countries, the economic sentiment has significantly weakened - especially due to record low production rates and new orders. It was a result of the introduced lockdown and suspended activity of many enterprises. In April 2020, the PMI index decreased significantly - the value of the index for the Eurozone fell to 13.5 points (the lowest level since 1998), and 32.9 point for Poland – Figure 4. But from May the PMI for Poland started to improve and reach the level above 52 points in July, then decreased to 50.8 points and kept this level from August to November. Since December the increase trend is noticeable and in February 2021 the level of 53.4 points for Poland was reached. At the same time, the improvement in economic sentiment was also recorded in the Eurozone countries - in Germany the value of the PMI indicator in February 2021 reached the level of 60.7 points, in France 56.1 points and 56.9 in Italy.

Looking closer at GDP forecasts for Poland for 2021, it can be noticed that forecast from January are lower than that from October last year (+2.7% forecasted in January versus +4.6% forecasted in October). It is worth pointing out that also in many other European countries, the currently projected GDP values are lower than the October 2019 estimates (Figure 5).

1 The Purchasing Managers’ Index™ (PMI™) is a survey-based indicator of business conditions, which includes individual measures (‘sub- indices’) of business output, new orders, employment, costs, selling prices, exports, purchasing activity, supplier performance, backlogs of orders and inventories of both inputs and finished goods, where applicable. The surveys ask respondents to report the change in each variable compared to the prior month, noting whether each has risen/improved, fallen/deteriorated or remained unchanged. These objective questions are accompanied by one subjective ‘sentiment’ question asking companies whether they forecast their output to be higher, the same or lower in a year’s time. The PMI is widely used to anticipate changing economic trends in official data such as GDP, or sometimes as an alternative gauge of economic performance and business conditions to official data, as the latter sometimes suffer from delays in publication, poor availability or data quality issues. The PMI is produced globally by IHS Markit although a small number of trade associations also produce local PMIs in certain markets, such as the ISM in the United States. PMI was originally compiled for manufacturing, IHS Markit pioneered the extension of coverage to other sectors in the 1990s, including services, construction and retail.

Port Monitor. Polish ports in 2020. Summary and outlook for 2021

Figure 4. The value of the manufacturing PMI in Poland and in the Eurozone in 2019-2021

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 2019 2020 2021

PMI Poland Eurozone PMI

Source: Actia Forum based on IHS Markit data

Figure 5. Forecasts of GDP growth in 2021 in selected countries of the Eurozone, Poland, Russia and Great Britain

9 8,1 8

7 6,2 5,9 5,9 6 5,5 5,5 4,6 4,5 4,5 5 4,2 4 3,5 3,5 3,0 3,0 2,7 2,8 3

0 Poland Germany France Italy Spain Eurozone Russia Great Britain

Forecast January 2021 Forecast October 2020

Source: Actia Forum based on World Economic Outlook, January 2021

Currently, it is difficult to forecast what the entire year 2021 may look like for Polish Ports, because this year will also be marked by a COVID-19 pandemic. However, both economic indicator as well as the level of the cargo handling at the beginning of the year allows for optimistic predictions. Economic indicators show a slight improvement in economy. In turn, the results in Polish ports in the first month of 2021 are quite promising, in January this year all Polish ports recorded growths in cargo turnover compared to January 2020, and these were quite significant increases (+ 13.6% Port of Gdynia, + 8.8% Port of Gdansk and +7.7 % Szczecin-Świnoujście Port).

Autorzy: Ewelina Ziajka Monika Rozmarynowska-Mrozek Specjalista ds. analiz rynkowych Lider projektów konsultingowych [email protected] [email protected] tel. 505 925 436 tel. 798 645 201

Port Monitor. Polish ports in 2020. Summary and outlook for 2021

Authors: Ewelina Ziajka Monika Rozmarynowska-Mrozek Market Analyst Consulting Projects Leader [email protected] [email protected] Phone: +48 505 925 436 Phone: +48 798 645 201

Port Monitor Port Monitor is a series of periodic reports regarding the seaports markets and trades in Poland, the Baltic Sea Region and Europe. This report has been prepared by the Consulting Department at Actia Forum.

Actia Forum sp. z o.o. ul. Pułaskiego 8, 80-368 Gdynia, +48 58 627 24 67, www.actiaforum.pl