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April 16, 2020 9:45 AM, EDT

Virus Causing Disruptions at Europe’s Largest Port

Ship-to-shore cranes are seen at the Port of Rotterdam.Ship-to-shore cranes are seen at the Port of Rotterdam. (Yuriko Nakao/Bloomberg News)

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The coronavirus is set to further damage trade in the coming months, threatening supply chains and causing oil inventories to swell, according to the head of Europe’s largest port, Rotterdam.

“We are facing unprecedented disruptions, and the port of Rotterdam, as a vital process, intends to continue contributing to society,” port CEO Allard Castelein said in a statement. Oil storage at the complex is already “quite full,” he said later on a conference call.

Europe’s largest ports — essential to the delivery of food, medicine and other vital materials — are being tested to the limit as the outbreak consumes the continent. The challenges are myriad: preventing delays, ensuring that goods aren’t contaminated, managing congestion amid ship quarantines, and keeping their own workforce healthy.

Rotterdam, which harbors five refineries and serves as a gateway to the inland part of the continent, won’t be paralyzed by the outbreak, as has happened at some ports in other countries, according to Castelein.

“Less organized ports that don’t have a logistics chain like ours are running into problems, but that won’t have an impact on goods that flow to northwest Europe,” he said.

Still, the pain inflicted by the virus is evident. Overall throughput volume dropped 9.3% in the first quarter, compared with the same period last year, and a decline of as much as 20% on an annual basis is very likely, according to the port. Governments across Europe have imposed measures to restrict the movement of people in order to limit the spread of the outbreak.

The true impact on the decline in demand will become clear from April onwards, and throughput at the port could slump significantly in the coming months, the chief executive said. “This will depend on how long the measures remain in place and on how quickly production and world trade recover.”

Swelling Storage

Oil storage facilities at the Rotterdam port are filling as demand for products such as jet fuel and diesel has evaporated, according to Castelein.

The five refineries in the region have a combined capacity of about 1.1 million barrels a day and include Europe’s largest such facility, Royal Dutch Shell Plc’s 404,000-barrel-a-day Pernis complex. The port is also a supply hub for other refineries, including Shell’s Godorf plant in Germany and Total SA’s facility in Antwerp.

Refineries that don’t supply products regionwide will find it more difficult to find storage than those in the Rotterdam area, which also has an extensive pipeline network, Castelein said.

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