A start-up for 135 years: HHLA

Today’s HHLA has carried the genes of a start-up in its DNA since its beginnings exactly 135 years ago. The business model of its predecessor, Hamburger Freihafen-Lagerhaus-Gesellschaft (HFLG) was innovative when it was established on 7 March 1885, and its very first project was visionary: planning, building and operating a state-of-the-art warehouse complex – Hamburg’s now world-famous Speicherstadt.

"For the glory of God, for the best of the Empire, for Hamburg's good": On 29 October 1888, the young Emperor Wilhelm II inaugurates the first construction phase of Hamburg's Speicherstadt on Brooksbrücke.

In 1885, industrialisation was just starting to gain strength in Germany. However, the transition of “Industry 1.0” to its 2.0 version was already underway. This second level required finally overcoming the last of Germany’s small states with their crippling customs tariffs. The goal was to increase trade and, therefore, industrial production. An important means for this purpose was the inclusion of the Hanseatic City of Hamburg, which had been independent up until that point, in the German Imperial customs system.

Rapid change

For Hamburg’s emerging middle class, this represented a further profound change. Furthermore, the Hanseatic City's inhabitants needed to come to terms with the era's rapid technological and social transformation. This new age had been making its mark for a while at the Port of Hamburg, namely at the technologically and logistically revolutionary Sandtorkai built in 1866.

However, in 1885, the innovative spirit of Hamburg’s inhabitants was again challenged:
as compensation for its inclusion in the customs system and the renunciation of independence as a city-state, Hamburg obtained under duress a “free port” from the German Emperor Wilhelm II and Bismark, Chancellor of the German Empire.

In this closed section of the port, with onshore fences and controlled through customs posts, shipping companies could continue storing trade goods from all over the world without paying customs.
The problem here was that the yards formerly used were located in the traditional office (kontor) buildings along the canals of the city centre.

The question therefore was: where and how can huge amounts of mostly perishable goods be efficiently stored in this new area?

Sandtorkai

The Sandtorkai influenced Hamburg’s quay arrangement, which remained in place for almost a century: the linking of sheds, rails and cranes. This early form of intermodal freight transit with smart handling possibilities between railways and ships ensured a highly efficient handling of goods – both in the sense of the increasing industrialisation and the global trade.

Busy activity at Kehrwieder, where there was also a post office. Kehrwieder are called dead ends in northern Germany, and at the latest at the tip of the narrow island one had to turn back before the construction of the Niederbaumbrücke.
The boiler house and central machine station supplied energy for the hydraulic winches of the Speicherstadt. Steam was used to drive pumps that distributed the generated water pressure via a 14.5 kilometre long pipeline network.
The climate within the walls of the storage blocks was well suited for storing coffee, tea, tobacco or spices. Using a decimal balance, quartermasters checked the exact weight of the goods.

Visionary business model

The answer was a radical one: build an entire warehouse district! And not only that but build it on the Grosser Grasbrook, and inland island in the immediate vicinity of the city and also directly surrounded by canals. However, the city had very little time to meet the deadline for completion. After all, the customs union had to be completed by autumn 1888.

The senate and the council of citizens allocated a total of 106 million marks for construction. The construction area of the Speicherstadt historical warehouse district remained government property, but rent-free usage rights were transferred to a newly established warehouse company which was partly owned by the former Norddeutsche Bank.

On 7 March 1885 – 135 years ago – the contracts were signed and the Hamburger Freihafen Lagerhaus-Gesellschaft (HFLG), the predecessor of today’s HHLA, was born.

Around 1907, workers at Sandtorkai transported crates by quay cart.

Rooted in entrepreneurship

Even though the city played a significant role, the HFLG was mainly guided by commercial criteria such as entrepreneurship, market economy and flexibility. Motivated by attractive returns, Hamburg-based merchants held a significant number of shares in HFLG.

In essence, HFLG offered all the requirements for a powerful and sustainably successful start-up – financed by a private bank and operated through a stock company while merchants invest in it and the city provides the land, supervises the operation and profits from it.

The first evidence: With the help of state-of-the-art construction processes, the entire complex, which initially consisted of 14 redbrick buildings built side-by-side, was finalised on time for the customs integration in October 1888. Back then, the Speicherstadt historical warehouse district was the most modern and also the largest connected logistics centre of its time.

Speicherstadt

In 1888, the Speicherstadt was a new milestone of intermodal goods handling – with rail connections and access to streets as well as to the canal, with hydraulic cranes, elevators and cable winches, its own power station and, already back then, its own power grid including electric illumination.

The warehouse buildings, built on thousands of piles and adorned with cornices, oriels and small gables, were identified with letters: in the east, particularly beer and wine were stored in the rows of new warehouses in blocks E and F, while tobacco was stored in blocks G and M. The south side of the warehouse rows was mostly reserved for the storage of coffee.

The "American Lancer" was the first full container ship to be handled at Burchardkai in the Port of Hamburg on 31 May 1968 - with newly built container gantry cranes.

The container changes everything

For eight decades, the Speicherstadt remained the undisputed cathedral of warehouses. This only changed when the first containers arrived in Hamburg in 1966: mobile, regulated and stackable “warehouses” made of metal, which from that moment on towered in ever increasing numbers at the port.

From that time onwards, only special goods, such as carpets, coffee and spices, would be stored in the Speicherstadt. However, the redbrick buildings were no longer overloaded as warehouses.

Nevertheless, HHLA worked very hard to carefully modify the structure of the architectonically and historically significant Speicherstadt historical warehouse district. Of the total usable area of 300,000 square metres, approximately 170,000 square metres have been renovated since the mid-90s in close cooperation with the historical preservation authorities.

Today, the UNESCO World Heritage Site is home not only to traditional commercial companies but also advertising agencies, artists and other creatives, restaurants, bars, the Speicherstadt museum and the world-famous Miniatur Wunderland exhibition.

At the beginning of container handling in 1967 Burchardkai was still being handled with a conventional crane.

Dual demand: Tradition and innovation

At the same time, HHLA recognised the importance of containers as new, universal means of transport. These investments paid dividents rapidly. In the 70s, the HHLA Container Terminal Burchardkai (CTB) rapidly developed into the largest handling facility in Hamburg.

In 2002, however, a different innovation, inventive and fearlessly planned, served as a reminder of the milestones that were the Sandtorkai in 1866 and the Speicherstadt from 1888: the inauguration of the Container Terminal Altenwerder (CTA).

At the time of its inauguration, the CTA was considered to be the most innovative and best-performing terminal in the world. Even today, the terminal is state-of-the-art in terms of container handling – and is, in the meantime, also the first climate-neutral facility of its kind in the world.

Since early 2012, the “dual cycle” principle has enabled another leap in terms of productivity at the terminal: since then, loading and discharging takes place simultaneously in order to use container gantry cranes and storage blocks more efficiently.

All in all, the facility has by now handled almost 40 million standard containers (TEU) at the quayside in a fast and reliable manner. And new record numbers are also in the offing, because at every turn there is potential for improvement.

The demand HHLA placed on itself to always apply and develop new trends and technologies secured its long-term success. Innovation all the way to the point of disruption as part of the company’s DNA: nothing has changed since the decision to build the Speicherstadt in 1885.

The newly built Container Terminal Altenwerder from the air.

Container Terminal Altenwerder

With an area of 1.1 million square metres, the Container Terminal Altenwerder (CTA) (link to www.cta-klimaneutral.de) offers four berths for the most modern, large container ships along the 1.4-kilometre quay wall. However, at the heart of the terminal are dozens of storage blocks of stacked containers. There are two stacking cranes, one at each end. The cranes can lift containers from the storage blocks and place them on trucks or store new containers in the yard. Trucks reach their container drop-off point via 104 parallel lanes; rail containers are transported on seven parallel railway tracks in both directions. A fleet of approximately 100 Automated Guided Vehicles (AGV) autonomously transport containers on site without a driver.

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