Port industry: “We are ready to start”

As of this week, 62-year-old Sebastian Jürgens has become the new president of the Central Association of German Port Companies (ZDS), based in Hamburg and Berlin. He sees big challenges for ports, especially in terms of infrastructure renewal. ZDS represents the interests of approximately 140 companies. Jürgens’ main job is managing director of the Lübeck Hafen-Gesellschaft.

WORLD ON SUNDAY: Mr Jürgens, the port industry in Germany has been calling for a significant increase in federal funding for ports for years – from the current 38 million euros to at least 400 million euros per year. What makes you confident that you, as the new President of ZDS, can successfully meet these demands?

Sebastian Jürgens: German ports in the North and Baltic Seas are united by their systemic relevance to the economy, security and energy transition. They are the heart of global trade. The majority of our foreign trade passes through German ports, these ports provide millions of jobs and are the basis of our country’s prosperity. Therefore, it is no exaggeration to say that the country’s future will also be determined by its ports. To carry out this task well, the federal government’s dedicated infrastructure fund of 500 billion euros offers a unique opportunity. Of this, general port infrastructure needs about 15 billion euros to complete a backlog of renovations that have accumulated over decades – that is, about three percent of dedicated funds. To ensure that we never experience a situation like this again, we also need annual federal co-financing of German ports of 500 million euros.

JERKIN: Do you increase your claim from 400 to 500 million euros?

Jürgens: Yes, because we must realistically take into account the increase in costs in recent years to maintain infrastructure at the port. We need efficient and strong seaports for the handling of goods, for the supply of energy for better climate protection – and to realize the “turning point”, namely for our security and defence. This is not only the responsibility of the states, but also the responsibility of the federal government. If bridges on motorways collapse and traffic on core motorways such as the A1 or A7 ceases to function, the federal government cannot stand by and say that we will wait until the federal states do something.

JERKIN: From ZDS’s perspective, are dedicated infrastructure funds in danger of being misused for other federal needs?

Jürgens: Recently, the Council of Experts – better known as Economists – and the German Economic Institute pointed out that so far every second euro from the special fund has been misused. Even Economy Minister Katherina Reiche (CDU) has stressed that the federal government needs to rethink the use of the special funds. We as ZDS can only agree with this. Much of the money in this special fund is – rightly so – intended for railroads. But we really need more flexibility here. If a mode of transportation cannot afford to spend the money, then it must invest in other infrastructure. As a port, we have prioritized our investment projects and are ready to start.

JERKIN: When it comes to renovating transportation routes, is the rail or road sector more important?

Jürgens: If I stick to my picture of the ventricles: In the end, it doesn’t matter which blood vessels are malfunctioning and unable to ensure proper blood supply to the ventricles. Everything has to work – railways, roads, inland waterways and ports.

JERKIN: European long-distance transport routes are a prestige project of the EU Commission. However, construction continues to stall in Germany, be it the connection to the Fehmarnbelt Tunnel or the Brenner Base Tunnel.

Jürgens: There is a big problem with the European axis. On the one hand, there is still a lack of coordination, but on the other hand, there is also no real acceleration or clear planning. And when we finally want to build or renovate such corridors, including the so-called high-performance corridors in Germany, there is often a lack of efficient diversion routes. We must address this at full speed and provide appropriate resources.

JERKIN: Deutsche Bahn was blamed for everything that didn’t work. But sometimes he himself is irresponsible. How can we strengthen railways, especially in terms of expanding and building new routes?

Jürgens: As ZDS, we have long engaged constructively in the debate over stronger trains, for example by providing advice on what measures are specifically needed on which corridors to relieve congestion. After all, German ports are “railway ports”. Most rail freight traffic departs to or from the port. You can’t just leave it to the railroads, who are often fighting alone. After long discussions, for example about a new line between Hamburg and Hanover, you have to find a solution with everyone involved and start implementing it. This is because discussions, some of which have been going on for decades, are not beneficial for the national economy.

JERKIN: How can the German economy, including Deutsche Bahn and its competitors, increase the share of freight transport by rail?

Jürgens: Germany has done excellent basic work in so-called intermodal transport, that is, the connection between different modes of transport. Things are going pretty well here compared to other European countries. It is also important that all future truck trailers can be towed for loading onto freight trains. In addition, Deutsche Bahn’s routing system should become more attractive to the shipping industry. Additionally, we fully support Joint Transport’s demands on Federal Transport Minister Patrick Schnieder and new railway boss Evelyn Palla.

JERKIN: Are Baltic Sea ports such as Lübeck, Kiel and Rostock, which are heavily influenced by ferry traffic, better positioned economically than the large container ports of Hamburg and Bremerhaven?

Jürgens: We must not forget the transformation that Baltic Sea ports have undergone recently. Russia is no longer an important trading partner. At the same time, new opportunities are increasingly opening up – in particular, we see consistently positive developments in the Nordic and Baltic countries. Trade flows in the Baltic Sea are very important for intra-European trade. We are also looking at energy partnership approaches. The Baltic Sea is a “sea of ​​possibilities”. On the other hand, in the Baltic Sea we are increasingly experiencing combined threats such as espionage and sabotage against critical infrastructure.

JERKIN: Due to the numerous ferry and freight connections between neighboring countries, Baltic Sea ports are even more European-oriented than seaports in the North Sea – therefore they are also an indicator of European integration.

Jürgens: Ports on the Baltic Sea are relatively rapidly increasing above pre-Corona levels in terms of cargo and passenger volumes. Intra-European trade is growing solidly and has prospects. Baltic Sea ports play an important role in this regard. It could be said that traffic through Baltic Sea ports is “bridge replacement traffic” to the Nordic and Baltic countries where there are no “real” bridges, such as in the Öresund between Denmark and Sweden.

JERKIN: What role do ferry ports such as Kiel, Lübeck or Rostock play in enhancing the defense capabilities of Germany and NATO – ports that have more experience in vehicle transport than the port of Hamburg due to their ferry connections?

Jürgens: Ports on the North Sea and the Baltic Sea played an important role in the successful formation of the new era. After all, they are a center for heavy equipment, materials, and supplies. With the Budget Committee’s decision at the weekend to provide 1.35 billion euros for the expansion and modernization of the port of Bremerhaven, the federal government recognized this role. We welcome this, but at the same time, it is important for Germany’s defense capability and resilience to include multiple port locations in the North Sea and the Baltic Sea in military planning and take appropriate financial considerations into account. As well as improving territory for military purposes, it’s also about protecting critical infrastructure – which is also the job of all states. Because ports are the focus of hybrid threats: drones, sabotage and espionage make ports potential targets. We have identified an investment need of around three billion euros for ports in the North Sea and the Baltic Sea for infrastructure that can be used for military purposes.

JERKIN: The offshore wind power industry experienced a huge boom off the German coast ten years ago – but then much of the industry moved out of Germany as the expansion of wind power at sea slowed. However, the federal traffic light coalition significantly increased its offshore expansion targets after 2021. Do you still see offshore wind power as a growth engine for North Sea and Baltic ports?

Jürgens: We continue to see the potential of this industry as a positive; this applies, for example, to the port locations of Cuxhaven, Emden and Bremerhaven. In the past, there have been a number of excessive regulations in one place or another, contributing to a lack of real progress here. Regardless, offshore wind energy will make an important contribution to achieving Germany’s goal of meeting 80 percent of its electricity needs from renewable sources by the end of the decade. Ports play an important role here: they are the first ports used for the construction, operation and maintenance of offshore wind farms, ideal locations for electrification with green electricity. Wind power components are first assembled at the port and then transported to the open sea by installation ship. At the same time, they act as import centers for domestic components. This requires large heavy-duty areas, specialized superstructures and know-how. This requires huge investments, which cannot be covered by states and the port industry alone.

Sebastian Jürgens, 62, replaces former HHLA boss Angela Titzrath as new president of the Central Association of German Port Companies (ZDS). Jürgens has managed the Lübeck port company as full-time managing director since 2014. He holds an honorary professorship for transport logistics at the Technical University of Berlin. The lawyer studied and received a doctorate in philosophy, then worked at McKinsey, at a law firm, at Deutsche Bahn and as a board member at HHLA.

Olaf Preuß is a business reporter for WELT and WELT AM SONNTAG for Hamburg and northern Germany. He has reported on maritime economics, shipping, ports and shipbuilding for more than three decades.