Tuesday 13th Nov, 2018

SPECIAL REPORT: Containerisation


THE outlook for global container port demand growth is looking increasingly optimistic, as major mergers and acquisitions are changing the landscape, according to shipping consultancy Drewry’s Global Container Terminal Operators Annual Report 2017.

According to the report, container port demand is forecast to increase at a compound annual growth rate of 4%, with an additional 152m TEU of port throughput being added to the global total by 2021.

However sunny the outlook is on the surface, there are risks and uncertainties lurking below the surface of the global container port scene.

Tensions ratcheting up in the Middle East is cited as one of these issues. Also, the potentially explosive situation on the Korean Peninsula is adding a degree of uncertainty to the outlook for global container port demand growth.

Other risk factors include the unpredictable and protectionist stance of the US presidential administration, as well as the effects of Brexit.

Drewry cited these issues in the report as reasons for its forecast that global container port capacity would increase by a compound annual growth rate of 2.7%, based on confirmed additions only – markedly lower than the consultancy’s prediction for demand increase (4%), and therefore utilisation levels are expected to rise.

Drewry senior analyst for ports and terminals Neil Davidson said while there are some encouraging signs for the demand growth outlook, the risk profile for terminal operators had increased and most of the traditional global/international players remain cautious.

“The exception to this are the Chinese port companies who are pursuing expansion and investment both at home and overseas in an unprecedentedly aggressive manner,” he said.

Drewry reports that mergers and acquisitions in the international ports sector is at a high level, with about $3.1 billion worth of deals having been struck so far in 2017.

This activity has been driven by Chinese companies such as Cosco Shipping Ports and China Merchants Ports.

In the past year, more than half of the acquisitions by global/international terminal operators have been made by Chinese players.

Cosco Shipping Ports has moved up Drewry’s operator league table as a result of the merger of Cosco and China Shipping, and will move further up in the coming years due to the acquisition of Noatum and OOCL’s terminals. The China Cosco Shipping group is projected to add the most capacity of any of the global/international terminal operators over the next five years.

Mr Davidson said the Chinese players were more comfortable with risk than the established international operators at the moment and have a geo-political strategy rather than a purely financial one.

“They are snapping up assets and opportunities and have the appetite and financial clout to take many more in the coming years.”

From the print edition August 10, 2017

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