Group overvIew group management report
HHLa – a leading company in the european seaport transportation industry
Division into subgroups port Logistics and real estate
Fischmarkt Hamburg-Altona GmbH. The performance and the financial result of the subgroup real estate, which also has urban development objectives, are represented by the Class S shares. these shares are not traded on the stock exchange and are held solely by the Free and Hanseatic City of Hamburg (FHH). under a separate agreement, the FHH municipal authority is responsible for indirectly assuming any losses for the subgroup real estate.
tHe HHLa management structure
As a German stock corporation (Aktiengesellschaft), HHlA, with its executive Board and Supervisory Board, has the dual structure of management and supervision that is the norm in Germany. the executive Board manages the company on its own responsibility. the Supervisory Board appoints, advises and monitors the executive Board.
In the reporting year 2008, the Executive Board had five members; their areas of responsibility are defined by their tasks and organizational segments. The Supervisory Board had 12 members in all, with six representing the shareholders and six representing the employees.
group segments
segment container
HHlA’s Container segment pools the Group’s container handling operations and is its larg- est business unit in terms of revenue and results. the Group’s activities in this segment consist primarily of handling container ships (the loading and unloading of containers) and transferring containers to other means of transport (e.g. rail wagons, trucks or feeder ves- sels). HHlA operates three high-performance container terminals in Hamburg (Altenwerder, Burchardkai and tollerort, abbreviated as CtA, CtB and Ctt respectively). HHlA also oper- ates a container terminal in odessa, ukraine. the portfolio is completed by supplementary container handling services such as storage, cleaning, maintenance and repair.
segment Intermodal
the Intermodal segment is the second-largest of HHlA’s segments in terms of revenue and results. As a core element of HHlA’s business model, which is vertically integrated along the transportation chain, the segment provides transport services using different modes of transport (rail, road or feeder vessel) between the north range ports and the Central and eastern european hinterland or the Baltic region. Its service portfolio also includes loading and unloading transport vehicles and site handling. this segment also operates a container terminal at the Port of Lübeck, from where feeder traffic to Finland and Russia is handled. HHLA operates the railway companies Transfracht, Metrans and Polzug with strategic partners.
segment Logistics
the logistics segment is the third pillar of HHlA’s vertically integrated business model and offers a supplementary range of services. these encompass a wide range of contract logistics, consulting and specialist handling services, including the handling of bulk goods, fruit, motor vehicles and other break bulk cargo. Its service portfolio comprises not only group management report Group overvIew
Listing of subgroup port Logistics
Business activities in four segments
stand-alone logistics services, but also entire process chains for the international procure- ment and distribution of merchandise. In this segment HHlA also provides consulting and management services for clients in the port and transport sectors. Most of the logistics services are provided together with partner companies.
segment real estate
the HHlA real estate segment equals the subgroup real estate. Its business activities encompass the development, letting and managing of properties in the port of Hamburg’s peripheral area. these include the Speicherstadt historical warehouse district, the largest complex of traditional warehouses in the world. Here, HHlA offers some 300,000 m2 of
commercial space in a central location. other prime properties are managed by Fischmarkt Hamburg-Altona GmbH in the exclusive environment of the river elbe’s northern banks. the segment’s core competencies are real estate services tailored to customers’ requirements, as well as services such as sales, property management, facility management, project development and construction.
marKet posItIon
Port logistics have benefited strongly from the substantial growth in global freight volume in recent years. Falling transport costs and the reduction in trade barriers have made a crucial contribution to this development. this was accompanied by a sharp acceleration in the internationalization of the division of labour in procurement, production and selling, with the intercontinental exchange of goods being handled predominantly via ocean-going traffic. Container shipping has been the fastest-growing sector in the global shipping industry over the past two decades. In addition to the advantages of the container as a standardized transport receptacle from an efficiency point of view, the increasing integration of the emer- ging economies of Central and Eastern Europe and Asia has made a significant contribution to dynamic growth in global container traffic.
In 2008, the port of Hamburg ranked second in europe, just after rotterdam, with its handling volume of 9.7 million standard containers (TEU). Hamburg occupied eleventh place in the list of the world’s leading international container handling ports, now that the Chinese ports, in particular, have risen to occupy the leading places due to their massive growth in recent years. Thanks to its high volume of traffic with the Asian region, the Port of Hamburg has largely benefited from this trend to date.
As the most easterly north Sea port, the port of Hamburg is in the best possible posi- tion to function as the hub for the entire Baltic region and for hinterland traffic to Central and eastern europe. Furthermore, the long-standing trading relationships between the port of Hamburg and the Asian markets are advancing Hamburg’s role as an important european container hub.
the market for port services along the north Sea coast between Hamburg and le Havre (the “North Range”) that is relevant for HHLA is characterized by its relative preponderance of ports. the ports most strongly represented in the global competitive environment are currently the major north range ports of rotterdam, Hamburg, Antwerp and the Bremen ports – the “Hamburg-Antwerp range”. the market share of these ports’ aggregate handling
Group overvIew group management report
Source: Port Authorities
Top 15 ports
BY CONTAINER THROUGHPUT 2008 IN TEU MILLION Singapore Shanghai Hong Kong Shenzhen Busan Dubai Ningbo Guangzhou Rotterdam Qingdao Hamburg Kaohsiung Antwerp Tienjin Port Keelang 29.9 28.0 24.2 21.4 13.4 12.0 11.2 11.0 10.8 10.3 9.7 9.7 8.7 8.5 8.0 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.group management report Group overvIew
volume accounted for by the port of Hamburg was 28.0 % in 2008. while Antwerp was still able to market its available handling capacity, especially at the beginning of the year, and temporarily benefited from a port strike in nearby Le Havre, Rotterdam and Hamburg were in the second half of the year noticeably affected by the downward trend in container traf- fic on important trading routes during the course of the year. In Bremerhaven, the handling volumes were accounted for mainly by the shipping companies A.p. Møller Mærsk and MSC, which have terminal holdings there.
In the Container segment, HHlA competes directly with other terminal operators in Hamburg and the rest of the north range. Factors with relevance for competition apart from costs are, in particular, the available capacity, the reliability and speed of container handling, and the scope and quality of container handling services. other factors affecting the ports’ competitive position are their accessibility from the sea, their geographical position and their hinterland links. In Hamburg, HHLA, with a handling volume of 6.9 million TEU in 2008, is the largest container handling company and has a considerable lead over its nearest competitor. In 2008, HHLA dealt with 71 % of all container handling activity in the port of Hamburg. In the Hamburg-Antwerp range, HHlA’s market share was 19.9 %.
the market served by HHlA’s Intermodal segment is characterized by competition among a multiplicity of service providers. HHlA is well positioned on this market with its diversity of carriers within a vertically integrated business model. In this area, the segment is benefiting in particular from Hamburg’s position as the most significant rail traffic hub in europe. transfracht, for example, provides transport services for railbound hinterland traffic within Germany and from there to Austria and Switzerland, making it the market leader for seaport-hinterland traffic with the German sea- ports. the Metrans Group is the leading provider of rail links between the international ports of Hamburg and Bremer- haven on the one hand, and the Czech Republic, Slovakia and Hungary on the other. The Polzug Group has a strong competitive position in the railbound transport business from Hamburg, Bremerhaven and rotterdam to the Central and eastern european hinterland (primarily poland, the ukraine and russia) and ultimately Central Asia. the rail companies’ regional orientation provides a special market proximity and great market knowledge, both of which are among the HHlA rail companies’ special competitive strengths.
the HHlA logistics segment serves different market sectors, some of them heavily specialized. Thanks to its Frucht- und Kühlzentrum (fruit and refrigeration centre), for ex- ample, HHLA is market leader in the field of fruit handling in Germany and occupies second