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In past years, bottlenecks at terminals handling booming imports from Asia often forced frustrated shippers to wait for days to unload at Rotterdam. With cargo volumes down 13 percent so far in 2009, they can easily be in and out within 24 hours.

Meanwhile, dredgers are pumping millions of tonnes of sand into the North Sea to reclaim land for a ¤3bn extension designed to avoid the choked conditions the port has faced in the past.

“The congestion is completely over,” said Johan Blinde, Rotterdam operations manager for South-Korean shippers Hanjin Shipping.

“There is less burden at the quay, we have fewer calls from vessels compared to last year,” he said. “Now everyone is fighting for business.”

The port’s authority is pressing ahead with plans to increase its usable area by 20 percent, and sees the trade slump in a slowing global economy as a temporary breather that gives it time to be ready when growth resumes.

Engine for the economy
“The downside has an upside: we can now prepare ourselves for the next period of growth,” Hans Smits, chief executive of the port, said in an interview.

“In the last couple of years, growth was so strong that we had a lot of obstacles handling these enormous flows of goods. Now we can solve the problem for when the recovery is there.”

Rotterdam port is an engine for the export-oriented Dutch economy, helping to keep up the flow of beer, dairy products and tulip bulbs to the world while also serving as a key gateway to Europe for all sorts of commodities and finished products.

Its extension is set to add up to 20,000 jobs to more than 250,000 it already provides directly and indirectly, and will bolster the Netherlands’ position as the world’s 16th largest economy.

Share of trade
At stake is also the port’s share of trade in Europe, as rivals similarly prepare for a pick-up. Rotterdam handled about 35 percent of trade through the northwestern region in 2008 compared with Antwerp’s 16 percent and Hamburg’s 12 percent.

Bulldozers are busy distributing 250 million tonnes of sand evenly over the reclaimed islands of the Maasvlakte 2 extension, which will require seven million tonnes of stone and 20,000 concrete blocks for its construction.

Meanwhile, Smits expects it will take between three and four years for cargo volumes to return to the 420-million-tonne level reached last year, which should coincide with the expected docking of the first ship in the new harbour in 2013.

With its peers, Rotterdam had faced criticism in the past for not investing enough and analysts said priorities were to improve facilities for handling containers, which mainly carry manufactured goods, and to improve links out of the port.

Opportunity
“This downturn presents an opportunity for Rotterdam and other ports in northern Europe to restructure themselves and become more efficient in the handling of container trade,” said shipping analyst Marc Pauchet from maritime consultants MSI.

Containers carry products ranging from electronics to toys and food is also increasingly transported this way. Rotterdam is a popular transfer spot for ships because of its deep-water docks and short access route from the sea to terminals.

Ports in Asia such as Shanghai, which in 2005 assumed the title of world’s biggest port Rotterdam had held since 1962, are gearing up quickly to deal with many large container vessels. European ports have some catching up to do, analysts said.

“As vessels grow larger and bigger and have the capacity, in order to attend to the vessels the ports need to invest in infrastructure like cranes and dredging,” Pauchet said.

Rotterdam’s location, facilities and investment, aimed at eventually doubling its capacity to handle containers, should help the Dutch port to shine in Europe, analysts said.

Right pace
“Its proximity to the main shipping routes and its access to the European market, not just by road and rail but by inland waterway connections, are pretty much unrivalled in northern Europe,” said Neil Davidson, director of ports at Drewry Shipping consultants. Other European ports, such as Le Havre in northwestern France, Antwerp in Belgium and Hamburg and Bremerhaven in Germany, could also gain market share in coming years.

“Ports like Hamburg and Bremerhaven have advantages in their locations, they have a strong base inland towards Germany, and a large chunk of the shipments that arrive into Rotterdam are destined for Germany,” Pauchet said.

The challenge for Rotterdam as it carries out its expansion project would be to find the right pace to match capacity to demand requirements, Davidson said.

Container volumes have fallen 15 percent so far this year, but not as much as ores and scrap, with traffic down 61 percent as a result of low industrial demand for steel. Smits expected this sector could be the first to show signs of improvement.

“I hope to see the automotive industry pick up again next year so that steel production picks up and the throughput of a number of goods will recover,” he said.

Although volumes have declined in most other cargo, oil products including diesel and kerosene have shown strong growth this year, which along with crude oil occupy most of the port’s storage capacity.

Home to some of Europe’s biggest oil refineries, Rotterdam’s role as an energy hub is expanding as the Dutch seek to diversify their supplies. Flows of biofuels are rising, while the port is also a site for liquefied natural gas (LNG) and carbon capture projects.

“We have become a biofuel hub in Europe, that will grow step by step. By 2011 the first LNG terminal will be operational, and we expect to also become a gas hub,” Smits said.”

At a busy intersection in urban Hamburg, Germany, researchers have been trialling a new kind of traffic light. That might not sound very exciting, but their unique method of cutting stop-times at red lights and keeping the traffic moving is based on an entirely new way of thinking about computer systems.

Normally, traffic light systems use either fixed timer controls or a centralised control system. Both are based on a technique that tries to keep lights green at certain times, so that traffic flows smoothly and pedestrians can cross roads safely. Such systems can be highly sophisticated, but they aren’t always effective – as anyone who has tried to cross a major urban area at rush hour can testify. Fixed timers are flawed because they do not respond to the volume of traffic. Centralised systems are more responsive, but not optimal. Drivers still end up stuck at red lights when they could be moving forward, wasting time and fuel and creating unnecessary pollution.

The experimental Hamburg traffic lights have done a much better job, using a technique inspired by what is known as “organic computing”. An organic approach to computing systems is based on the idea that we will soon be surrounded by large collections of autonomous systems, of which traffic lights are a good example. These systems, equipped with sensors and actuators, are aware of their environment, can communicate freely, and organise themselves in order to perform the actions and services that seem to be required. Organic traffic light systems can collect their own information about traffic flows and work out for themselves whether they should change the lights to red or green.

According to the team behind the Hamburg traffic lights – Holger Prothmann of the Karlsruhe Institute of Technology and colleagues there and at Leibniz Universität Hannover – organic computing can model even very complex systems. In recent years, it has emerged as a possible solution to a wide range of problems involving complex, autonomous systems that have sensors and controllers, they argue in a recent edition of the International Journal of Autonomous and Adaptive Communications Systems.

“The environmental and economic importance of traffic control systems combined with the distributed nature of traffic nodes and their constantly changing traffic demands make traffic light control an ideal test case for organic computing approaches,” explains Prothmann.

The Hamburg test uses industry-standard traffic light controllers, adapted to have an observer/controller computer architecture that allows the traffic light to respond to traffic flow and to pass on information to the other traffic lights on neighbouring roads. The results show that the average number of vehicle stops can be cut significantly, delays avoided, and journey times reduced, all of which has benefits for drivers, pedestrians and city dwellers.

It was not that long ago that experts were predicting that our skyrocketing human population would outstrip its food supply, leading directly to mass famine. By now millions were supposed to be perishing from hunger every year. It was the old doom-and-gloom mathematics of Thomas Malthus at work: population shoots up geometrically while food production lags behind. It makes eminent sense. I grew up with Malthus’s ideas brought up-to-date in apocalyptic books like The Population Bomb.

But someone appears to have defused the bomb. Instead of mass starvation, we seem to be awash in food. And it’s not just the US. Obesity is on the increase in Mexico. Fat-related diabetes is becoming epidemic in India. One in four people in China is overweight, more than 60 million are obese, and the rate of overweight children has increased almost 30-fold since 1985. Everywhere you look, from Buffalo to Beijing, you can see ballooning bellies.

Instead of going hungry, humans around the world on a per capita basis are eating more calories than ever before.

If you’re looking for reasons behind today’s obesity epidemic, don’t stop with the usual suspects, all of which are being trotted out by the press: fast food, trans fat, high sugar, low exercise, computer games, strange bacteria in your gut, weird molecules in your blood. I personally blame some hardwired human instinct for sitting around eating salty, greasy, sugary snacks in preference to hard physical labour. All of these factors are certainly related to the “insidious, creeping pandemic of obesity . . . now engulfing the entire world,” as one gung-ho expert recently put it. But they are only bits of the puzzle.

The underlying answer is this: There’s a lot of cheap food around. Yes, walk into your local mega-grocery-emporium or just about any food-selling area anywhere in the world and stare the problem in the face. There’s inexpensive, high-calorie food piled all over the place.

Somehow we outsmarted Malthus. Food production has not only kept up with population growth but has managed somehow to outstrip it. There are ups and downs from year to year because of the weather, and there are pockets of starvation around the world (due not to a global lack of food, but to a lack of ways to transport it where it’s needed). In general, silos are bursting.

Tons of food gets plowed under the ground because there’s so much of it farmers can’t get the prices they want. Tons of cheap food (corn, for instance) is used to create more expensive food (like steak). Lots of food means lots of grease, and meat, and sugar, and calories. Lots of food means lots of overweight people.

If you like the idea of avoiding mass starvation – and I certainly do – you owe thanks to two groups of scientists: one that gave us the Green Revolution back around the 1980’s via strains of hardy, high-yielding grains, and another that figured out how to make bread out of air.

You heard me right. If you’re looking for someone to blame for today’s era of plenty, look to a couple of German scientists who lived a century ago. They understood that the problem was not a lack of food per se, but a lack of fertiliser – then they figured out how to make endless amounts of fertiliser.

The number-one component of any fertiliser is nitrogen, and the first of the two German researchers, Fritz Haber, discovered how to work the dangerous, complex chemistry needed to pull nitrogen out of the atmosphere – where it is abundant but useless for fertiliser – and turn it into a substance that can grow plants.

A first demonstration was made 100 years ago. Carl Bosch, a young genius working for a chemical company, quickly ramped up Haber’s process to industrial levels. They both won Nobel Prizes.

It ranks among the great ironies of history that these two brilliant men, credited with saving millions from starvation, are also infamous for other work done later: Haber, a German Jew, was a central force in developing poison gas in World War I (and also performed research that led to the Zyklon B poison gas later used in concentration camps); Bosch, an ardent anti-Nazi, founded the giant chemical company I.G. Farben, which Hitler took over and used to make supplies for World War II.

Today, jaw-droppingly huge Haber-Bosch plants, much refined and improved, are humming around the world, pumping out the hundreds of thousands of tons of fertilisers that enrich the fields that grow the crops that become the sugars and oils and cattle that are cooked into the noodles and chips, pizza, burritos, and snack cakes that make us fat.

If you don’t think this work important, consider that half the nitrogen in your body is synthetic, a product of a Haber-Bosch factory. Or that without the added food made possible by their discovery, the earth could only support about four billion people – at least two billion less than today.

And yes, before you email me, I understand the concomitant problems: stress on ecosystems, pollution (including nitrogen pollution), etc. etc. But I am an optimist, so instead of moaning I will leave you with some more good news. Even with a world population that continues to add tens of millions of new mouths every year, given continuing growth in Haber-Bosch fertiliser and a surprising trend toward a worldwide decline in birth rates (if you live about 50 years longer, according to the best estimates, you’ll see humanity reach zero population growth), it might be within humanity’s grasp to avoid mass starvation forever.

The VDMA, whose members include Siemens and Volkswagen, says its incoming business has suffered record declines this year. Now the dearth of credit to tide firms over is a new headache, which frustrated policymakers are blaming on reluctant banks.

A poll in the July 6th edition of business weekly WirtschaftsWoche found some 57 percent of companies surveyed in June were feeling a credit crunch.

In March, only five percent had reported having such difficulty accessing credit.

The frustration stems partly from the fact in late July the European Central Bank poured €442 billion of low-interest one-year funds into money markets – its biggest ever injection – that is not trickling down to entrepreneurs.

“It’s a euro area-wide problem and therefore this question of a credit crunch is a big issue for the ECB,” said Juergen Michels, euro area economist at Citigroup. “It’s a big, big headwind for the recovery.”

Hoarding cash
Even though the problem is generating protest from policymakers including European Central Bank President Jean-Claude Trichet and German Finance Minister Peer Steinbrueck, with bankers hoarding cash there is so far little agreement on how best to increase lending flows.

German exporters’ association BGA has warned that German firms risk a “massive credit squeeze” – a scenario that could throttle any recovery and prolong the deepest post-war recession in Europe’s largest economy.

The biggest and smallest firms are suffering most, studies show.

Peter Schaaf, president and CEO of Messer Cutting Systems, a privately held group that makes precision laser∞cutting equipment, says his company has financing but his customers are suffering from tight credit which is having a knock∞on effect.

“Investments are being postponed because credit lines cannot be put in place,” said Schaaf. Asked when customers would get the funds they need, he said: “No one could answer the question.”

Slow response
With European business heavily dependent on bank financing, policymakers are reacting.

Trichet and Steinbrueck have both urged commercial banks to pass on to the rest of the economy the liquidity they accessed from the ECB, which Steinbrueck has suggested has gone into foreign exchange, government bonds and shares rather than being passed on as corporate credit.

Trichet too has called upon banks to square up to their responsibilities and support the “real economy”.

Lenders face an awkward balancing act: German banks have been hit hard by the global crisis and are carrying billions of euros in problem assets. With their focus now on shoring up capital bases, they are averse to large and long-term loans.

But the economy is showing the first signs of recovery: industry output and orders and exports all rose in May.

“In a way it’s quite natural to see this discussion come up now,” said Citigroup’s Michels. “Before, when everything was going down and companies did not think about future plans, they did not
ask for credit.”

Surveys in the euro zone show demand for lending is quite weak, but senior bankers say long-term and syndicated loans are proving hard to come by because banks’ risk aversion is so high.

The German government has a “bad banks” plan to allow lenders to shift problem assets off their balance sheets.

Long time coming
“It took a long time to come,” Volker Treier, chief economist at Germany’s chamber of industry and commerce (DIHK) said of the plan. “That’s not a criticism – it just shows the capacity of the political process is limited.”

Berlin has also created a 115-billion euro fund to support crisis-hit firms. But Norbert Winkeljohann, a board member PriceWaterhouseCoopers, which audits applications for state loan guarantees, said aid had become harder for small firms to get.

Clemens Fuest, chairman of the Finance Ministry’s academic advisory board, said policy has been partly misdirected.

“I would have recommended forcing banks to increase their equity, more along the lines of the British-US model,” he said. “That wasn’t done in Germany.”

The ECB said in its mid-June Financial Stability Report that euro-zone banks will probably need to write down another $283bn on bad loans and securities over the next 18 months.

What to do?
Fuest said Berlin could still push banks to undertake a coordinated share issue, raising funds to boost lending without exposing any individual bank to speculation about the vulnerability of its capital base.

But so far, the government is heading in the other direction: Germany has proposed the Basel II rules on capital requirements be temporarily relaxed.

Steinbrueck also said the option of using the Bundesbank, Germany’s central bank, to lend to firms had to be kept open. But the minister faces political pressure not to tell banks how to do their business.

‘Band bank’ measures
“We can’t have the state taking on banks’ business risks, just as it can’t force banks to take them either,” said Otto Fricke, a member of the Free Democrats (FDP) and chairman of the lower house of parliament’s budget committee.

Policymakers may simply need to wait for the “bad bank” measures to take effect, and for lenders to start passing on the funds they have accessed at the ECB.

A record 1,121 banks rushed to take up the ECB’s offer of unlimited funds at a fixed rate of one percent in July.

“The take-up from banks was a good sign,” DIHK’s Treier said. “It’s obvious that they won’t pump it straight into the real economy. I think it will have a calming effect.”

Receiving 397 of the 611 valid parliamentary votes, Merkel’s CDU-CSU coalition was sworn in in 2005. Yet Eine Schwalbe macht noch keinen Sommer!, as they say in Germany, translating quite literally to “One swallow doesn’t make summer”; in the context of Angela Merkel’s coming to political fruition, public perception has endowed her appearance with more weight than ever. An almost unprecedented use of demagogy following her election has been seen, realigning (or rather re-weighting) the political focus to further celebrate Merkel’s election as a win over expectation.

This damaging rhetoric was employed by Social Democrat parliamentary leader Peter Struck, who in 2005 projected the opinion that [“Any woman who can fight her way to the chancellorship of the (Christian Democratic) Union has certain strengths,”] continuing that [“she has the opportunity to become a good chancellor.”]

Society’s tendency to define people and politics in terms of unrealistic dichotomies has inevitably led to Merkel’s defining features being portrayed as her status as a Protestant childless female divorcee from east Germany with a background in the sciences. It’s populism as a façade, in a phrase.

So what’s changed since 2005?
The European shift to the right (Sarkozy, Berlusconi, Tusk, Reinfeldt and many more), further strengthened by the European elections, constitutes what some might describe as a new paradigm. This on-the-face-of-it shift has been explained through the population’s desire for a return to pragmatism; pragmatism’s means of conviction is namely itself, centred around the portrayal of a core rationality. The reality, however, is once again that of a façade.  

In Stock’s authorised biography, the German Chancellor positively dissociates herself from “rank-and-file democracy”, rather focusing on the power of the state. On issues including everything from party organisations and church groups to nuclear power, Merkel’s idea of leadership is clear at least in the sense that she wishes the general population’s power to emanate from the point just before her party was voted in, and not thereafter.

But what are Merkel’s opinions?
Merkel’s CDU focuses on tax cuts, especially for the low paid, tempered by the coalition SDU component, who rather focus on child benefit and infrastructure spending. Recently, German lawmakers voted in favour of capping new borrowing by the federal government, banning deficits in the 16 states and thus approving the constitutional amendment to shrink budget deficits until after the recession.

There has been a glut of talk about civil unrest in Germany, what with the country’s GDP set to drop by some six percent, but does this herald legitimated fears of civilisation taking to the streets and calling for the heads of their leaders? Unlikely. Merkel is still riding the wave of the façade, unleashing market forces and intensifying the residue left by the Schröder government; redistribution in favour of the rich; more elitism; privatisation; less restriction on the working week, and yet further distance from the “rank-and-file” system.  

Goals as Chancellor
Merkel’s long-term goal of breaking the alliance with the Social Democrats is held back by Germany’s lack of consensus. The Chancellor must avoid criticism of running too quickly from that famed post-war “German miracle”, a capitalistic caring if you will.

However, times of crisis, post-war Germany has resorted to stability and bureaucratic leadership. With her schooling under Kohl, Merkel is certainly of the sitting-out-a-problem mindset; where Brown and Obama have relied on charisma and an altogether more pro-active approach to re-garner public support, Kohl’s teachings have further entrenched the tendency to see politics in terms of mutually exclusive, dichotomous categorisations.

Merkel is far from a master of risk-taking, yet she recently made the decision to let Arcandor, owner of the Karstadt department store chain, go bust. Contrary to this calculated risk, Merkel led the government-orchestrated rescue of General Motors unit Opel in May. Analysts have described this lack of consistency as Merkel distancing herself from ideology and returning to the façade of pragmatism relied upon by the far-right. At one and the same time, Merkel has been quick to criticise the Bank of England’s quantitative easing programme at a conference in Berlin: “What other central banks have been doing must stop now. I am very sceptical about the extent of the Fed’s actions and the way the Bank of England has carved its own little line in Europe. Even the European Central Bank has somewhat bowed to international pressure with its purchase of covered bonds.”  She continues, “We must return to independent and sensible monetary policies, otherwise we will be back to where we are now in ten years’ time.”

Was she required to say that? German consciousness is stamped with the Weimar Republic’s failed experiment, leading some critics to argue that she made such a statement in order to distance her government from such a move and once again, restore faith in the pragmatism so revered by the electorate.