By Peter de Langen
There is a clear transition towards a circular economy, where materials and components are reused or recycled at the end of their lifecycle, and this transition has important consequences for supply chains, ranging from the way products are designed to the business models of companies.
Ports as transport nodes and as locations for logistics and manufacturing activities will be affected by the transition towards the circular economy. On the downside, ports handle huge volumes of non-renewable primary resources; the trend towards circular economy will likely lead to a decline of these volumes. In addition, the majority of non-fossil imports and exports consist of products in linear supply chains and these flows will be impacted as well, especially when supply chains move from current globalised and linear structures to more localised and circular ones.
On the upside, the transition towards the circular economy increases the number of companies focused on creating value through advancing the circularity of supply chains. An overview of new investments in circular manufacturing activities in ports in Europe shows the (slow) development of circular economy activities in ports.
In about one out of three ports at least one activity can be classified as circular. Most circular economy activities in ports relate to sustainable energy generation, which is in line with the role of ports as important centres of energy generation.
Investments in the circular economy are concentrated in specific ports: for instance, Amsterdam and Helsinki stand out. This is probably partially due to the fact that both ports are located in large metropolitan areas. However, in other metropolitan areas, circular economy activities are far less developed.
Are ‘early mover advantages’ relevant in attracting circular economy activities, in the same way they were relevant in earlier days in developing hinterlands and industrial clusters in ports? Solid analysis is lacking, but my intuition is that such early movers’ advantages will turn out to be very relevant, and give ports that had an early start an advantage in developing manufacturing clusters based on re-use and recycling.
For ports without a single circular project in the business development funnel, it may be time to get going.
First published @Port Strategy.
