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Explanation from the Port of Rotterdam Authority on ECT lawsuit

The Port Authority takes the utmost care in finalising contracts and in treating its customers equally. The Port Authority ensures that each commercial agreement can withstand scrutiny. Reliability, consistency and transparency are important to the Port Authority. For these reasons, it is extremely exceptional that talks with a customer lead to an extensive discussion in the media and even to a lawsuit.

Considering the fact that ECT has repeatedly sought media coverage in recent months, that the Port Authority fulfils a key role in the development of the port and that the stakeholders follow the Port Authority with a critical eye, the Port Authority has decided to give the following response to the summons issued by ECT, even though the Port Authority is usually extremely reserved in giving information or comments on a case coming before the court.

ECT started lawsuit
The ECT summons basically amounts to the Port Authority supposedly treating ECT unfairly in favour of other stevedores. This concerns matters such as not being given a fair opportunity in the issue of the first terminal on Maasvlakte 2 and that the Port Authority is said to be imposing stricter or more severe conditions than on other stevedoring companies.

Prior to issuing the summons, ECT had demanded that the Port Authority delay the terminals at Maasvlakte 2 becoming operational and that ECT should not be required to pay for the widening of the Amazonehaven. These are demands that the Port Authority found impossible to meet. The first would have meant the one-sided breaking of existing contracts with other customers. The second would have meant large-scale adaptations to fairly new infrastructure for one customer, without that customer having to pay anything. Both are disrupting to the free market forces in the level playing field in the port. The demands were and are unreasonable and are incompatible with that which the Port Authority has to do.

No concerns regarding outcome
ECT is still making these demands and, if the Port Authority does not meet these, ECT is now also demanding compensation for the supposed damage that might be suffered by ECT into the distant future. This is said to amount to €900 million. The Port Authority is not concerned regarding the outcome of this lawsuit. The Port Authority and its legal advisors are convinced that, over the years, they have always operated correctly with respect to ECT.

The Port Authority finds this situation extremely regrettable. In recent years the Port Authority has always operated cooperatively and has continued to look together at how container transhipment in Rotterdam could be developed further. Considering the growth of transhipment and its market share, this has proven to be a successful cooperation.

Two-track policy
The Port Authority is conducting a two-track policy regarding the issue of container terminals at Maasvlakte 2: give existing customers the space to grow and strengthen the competitive position of Rotterdam. The consequence is that ECT (Euromax) has an option on an area on Maasvlakte 2, APMT will soon start with the construction of a terminal and the Rotterdam World Gateway Consortium has won the open assessment procedure for a new terminal at Maasvlakte 2 and will start constructions at the start of next year. The Port Authority is thus looking at the interests of its customers and those of the Dutch economy.

Container transhipment, meanwhile, is growing strongly: +12% in 2010, +11% in the first 9 months of 2011. This continues to justify the issuing policy as this was introduced some five years ago.

No market control
The Port Authority's responsibility is to ensure that there is sufficient capacity in the port for the transhipment of containers. In doing this, of course the Port Authority has to look at market demand. The Port Authority is averse to market control: the Port Authority will not and cannot protect businesses against market forces. As subsidiary of Hutchison, a global terminal operator that competes across the world, ECT is well-acquainted with the way in which the market operates.

Occupation of new terminals is intermittent: it is not smooth and seamless. This, combined with the fact that the construction of terminals takes many years and that the economic situation is difficult to predict, is part and parcel of how a market develops. This is not unique to ECT. The same goes for RWG and APMT, and for all companies within and outside the port.

Changes in the container sector
The container market is changing. Increasingly, shipping companies want to participate in terminals. This is also attractive for stevedores, because in this way they can be certain of cargo. Combinations of stevedores and shipping companies are active in Le Havre, Antwerp and Bremerhaven. ECT is also doing this itself at the Euromaxterminal, a joint venture between ECT and four shipping companies. Far-reaching agreements have also been made with Evergreen for the ECT Delta terminal. Nothing is stopping ECT from making cooperative agreements with still more shipping companies. The position in which ECT finds itself is, to a large extent, the consequence of the company's own decisions. ECT was free to participate, in combination with other shipping companies or not, in the open procedure for the issue of the terminal on Maasvlakte 2, which will now be used by RWG.

Research
The Port Authority is conducting research into the development of and demand for container handling capacity in North West Europe and what this means for Rotterdam. This research, conducted by McKinsey, is now complete and will be presented to shareholders and policy makers from central and regional government next week. The outcome indicates that the choice that the Port Authority made 5 years ago with the issue of terminals on Maasvlakte 2 was a good one. In the coming years the Port Authority will look carefully at how the container sector develops, as it in fact does with each sector in the port.

The Port Authority does this because, separate from economic developments, entirely different developments could occur that influence logistic patterns in the container sector; the consolidation of market parties, for instance. In the media there are reports about cooperation between, for example, the shipping companies MSC and CMA CGM. Just like the development of the economy, these can have huge consequences for container transhipment.

Separation of lawsuit - other areas
One of the first questions that the Port Authority posed when this claim was put forward was: what does the start of this lawsuit mean for its intensive cooperative relationship with ECT? The Port Authority has made the express decision to isolate this dispute, to leave it with the lawyers and to let it run its course. This is because this case should not interfere with the development of the container sector and of the port. The Port Authority works well together with ECT in all areas to make the port and logistic processes still more efficient. The Port Authority hopes and trusts that this legal dispute will not lead to any stagnation in progress in these areas.

Page updated at: 12-19-2011