Energy Infrastructure / Innovations SECURITY 16 January, 2024 7:30 am   

Kłos: Gdańsk is Europe’s fastest growing port

Port-channel-2-photo-Port-Gdansk-Tomasz-Dresler-2048×1202 "The second channel of the Port of Gdańsk. Photo: Port of Gdańsk."

” We have been the fastest-growing European port in the last decade. Over the past two years, we have added 28 million tons in transshipment. This is about as much as the port of Gdynia had in total last year,” said Adam Kłos, Management Board Representative for Operations of the Port of Gdańsk, in a conversation with 2022 brought a multitude of challenges. Russia’s invasion of Ukraine and the Western response in the form of sanctions extinguished much of the trade in that direction. Thus, a search for alternate sources of coal, gas and oil ensued, leading to an upsurge in volumes passing through Gdańsk. This was unpredictable. How did the Port of Gdańsk handle this challenge?

Adam Kłos: It was a huge challenge, not only for the ports, but also for the railway carriers with whom we collaborate. Full coordination was initiated even before 2022 and the events it brought. The Port of Gdańsk, together with its partners Polski PCS and PKP PLK, is developing a digitization process aimed at establishing a notification system for the railway, which will accelerate and streamline the logistic process at the port and on the railway. Without modern digital infrastructure, we would be forced to stick to manual management that slows things down.

In 2022, after Russia’s attack on Ukraine and the realization of the consequences of the sanctions, a challenge arose: where to accommodate the huge additional volume that will pass through the Port of Gdańsk? This pertained especially to coal, in 2022 there have been problems in this regard and they had two sources. The first was the relatively low coal stocks in Poland, the second was the disruption of onshore supply chains from across the eastern border. As a result, instead of utilizing rail transport, the entire coal import had to be executed via maritime routes. As a port we were concerned whether the coal would be transported out of the port smoothly and if the hauls would be rhythmic? We managed to achieve this thanks to good cooperation with rail carriers and PKP PLK, but sometimes at the expense of other cargo.

The port is a special place. It faces numerous challenges that require on the one hand visionaries, but on the other hard-stepping managers who have to handle the constantly changing conditions. A good example of this is the coal situation in early 2022. We had to solve the problem of storing the larger volume. As the Port Authority, we made the decision to quickly harden dozens of hectares in the port. We are talking about spending tens of millions of zlotys. Thanks to this, we got space to store coal, which in a short time and huge amounts began to reach us. “Operation coal,” as I call it, required bold decisions made under the pressure of time: where to store, where to reload and how to achieve the desired effect in the form of a step-by-step increase in port capacity.

Speaking of coal, how was the situation in 2023?

It differed from 2022 when we had limited reserves, and overnight it became evident that we had to bring in coal via sea routes. In 2023, as a country, we had significant coal reserves in both the professional energy, heating and municipal sectors. In the first half of last year, the momentum still carried large volumes of coal through our port, but in the second half we can speak of a downward trend. Thus, in 2023, we can talk about a more even distribution of the volume over months and the entire year, but what is worth emphasizing, in total, coal transshipment was larger than in the record year 2022 and reached the level of 13.4 million tons. What about this year? It depends mainly on how harsh the winter will be, but we expect the first half of the year to be calmer.

Since we are talking about coal, it is worth remembering that the 13.4 million tons also includes coking coal. It is a strategic resource, not only for Poland, but for the entire European Union. It produces coke, without which steel cannot be made. Interestingly, Poland is the second largest exporter of coke after China. We are talking about about two million tons of exports per year.

Cutting off supplies from Russia was a challenge not only for Poland. What is the role of the Port of Gdańsk as a hub in the region?

The main destinations to which we deliver coal transhipped in our port are the Czech Republic, Slovakia, as and Ukraine. Much depends on whether the state-owned Węglokoks will take over the majority stake of Sea Invest, which is responsible for coal transshipment. We are waiting for an approval from the ministry. Personally, I believe that such a change will be an impetus for more investments. I hope that Węglokoks will immediately be able to build a second car loading plant, which would increase loading by about ten trains per day. The current capacity is several trains. Of course, this would make sense in combination with developing the on-board transhipment capabilities by constructing a second berth on the Rudowy loading pier and re-opening the Coal loading pier. Such investments could enhance the import potential and add export opportunities to the terminal and the Port of Gdańsk. At the same time it would create opportunities to function as a hub in bulk cargo handling. Like the Port of Gdańsk, it has a strong position as a container hub thanks to the Baltic Hub terminal and Naftoport. We want to be a transhipment hub in every area, we have the perfect conditions for this. We could redistribute containers, oil, petroleum products, and we could also redistribute other bulk goods.

We talked about coal exports to Ukraine, but did the Port of Gdańsk also handle aid to Ukraine?

I believe that it mainly arrived via the Gdańsk Port as breakbulk cargo in containers, which is visible in the results of he Baltic Hub from last year. Shipowners and terminals refused to transport to Russia and the Kaliningrad region, but this gap was filled with the aid to Ukraine. We are talking about various cargoes, humanitarian aid, military equipment, energy resources or various devices. I am referring to equipment that is used to make repairs, for example, to energy infrastructure. The Russians are destroying it in Ukraine to prevent the country from functioning. At present, Ukrainian ports are a fat prize for the Russians, so our role in distribution has become even more important. Based on our analysis, both the Port of Gdańsk and Gdynia will play a crucial role in the reconstruction of Ukraine as well.

What about oil transhipment?

The Port of Gdańsk serves as the primary hub for importing hydrocarbons and is the largest of its kind. All the oil is transported by sea, accounting for a demand of 25 million tons for our refineries. In 2023, Naftoport, our transshipment leader among terminals, handled a record 36.5 million tons, and the bulk liquid cargo category reached 37.6 million tons throughout the port. The Naftoport also carried out transshipment, which allowed us to supply our western neighbors. Oil from the Naftoport was piped to refineries in Schwedt and Leuna.

The Port of Gdańsk is important for Poland’s critical infrastructure. How is it protected?

For security reasons, I can’t divulge any details. We work with all services. Ports are becoming an increasingly critical part of infrastructure. We are talking not only about theory but also about facts, damage to the Balticonnector and the cables running along the bottom of the Baltic Sea reveal the scale of this threat. Recent events highlight the crucial importance of diversification. Key components essential for the state’s operation should possess a degree of substitutability. I can’t go into specifics, but I assure you that we are collaborating with the Border Guard. Their responsibility includes safeguarding borders, including maritime areas. In addition, we work together with the military, the police, the Internal Security Agency and many other services and agencies. When it comes to ports, one must be cautious about potential surveillance by foreign intelligence and the nature of what passes through them. For example, a container of cocaine was recently discovered in Gdynia, and this was not an isolated case of such smuggling. Due to the very dangerous situation around Poland, both we and the state authorities are making every effort to ensure the port is protected.

The Port Authority also has its own security measures. We are talking about traditional physical protection, which guards the material and passenger traffic in the port. In recent years, we have invested heavily in the purchase and modernization of electronic surveillance components. We are talking about standard optics as well as thermal or night vision capabilities. New threats are emerging, challenging us. Especially in the electronic and cyber sphere.

What are the forecasts for 2024? What events and phenomena is the Port of Gdansk preparing for?

In 2024, we expect further increases in transhipment volumes, and we expect to reach 87 million tons. It’s the European super league. In order to make our plans a reality in both the short and medium term, we continue our planned investments in infrastructure, digitalization and human capital. When it comes to long-term planning, we are in the process of developing a new strategy that addresses the current and likely challenges that await us. We have a long-term perspective, 30 years ahead. We continue to make investments. We finish some projects, we start others. The last few years in terms of infrastructure investment have been a real game changer. We have led the port through an investment revolution with a simultaneous increase in transshipment. In recent years, the value of projects completed and currently implemented by the Port of Gdańsk Management Board, operators operating in the port, the Maritime Authority and PKP PLK is about 6-7 billion PLN. Most importantly, we were able to capitalize on them. The Port as a land lord, which manages this great shopping center without a roof, creates opportunities for businesses. Investments are calculated and implemented according to the needs of potential and future contractors. One such project has just come to an end. The expansion of the Industrial Quay area, which is part of the long-term investment strategy of the Port of Gdańsk, will significantly improve communication, enhance transshipment, and also allow commercialization of new investment areas. We are currently starting a project to rebuild four more quays with a total length of nearly 2 km, along with the necessary underground infrastructure in the Inner Port. The Baltic Hub container terminal is being expanded. The launch of the first sections of the T3 waterfront is planned for the first half of 2025. With this investment, the company will be able to handle up to 4.5 million TEU per year. Together with the Naftoport, we have started design work for the construction of the sixth oil transshipment station. In addition, Gaz-System is preparing to locate a floating FSRU unit in the Gulf of Gdańsk, in the waters lying within the administrative boundaries of the port. This is a strategic investment from the point of view of the country’s security. It will contribute to further diversification of sources of natural gas to Poland. These investments guarantee the further development of the Port of Gdańsk and the entire Pomerania. They also have a significant impact on the Polish economy and its security.

I hope that in the coming years, the Port of Gdańsk, aligning with its  strategic direction, will secure the top position in the Baltic Sea,  surpassing the 100 million tons transshipment mark, and stand as a  competitive equal among the leading ports in Europe.

Interview by Marcin Karwowski