In light of changing global economic developments, the industry of container terminal operators will face several changes as well, according[ds_preview] to maritime consultancy Drewry. »Softening demand growth coupled with larger liner shipping alliances and bigger ships is moving the container ports industry towards a value sector from growth sector, albeit still highly profitable«, the recent Global Container Terminal Operators Annual Review and Forecast 2016 reports.
Global container port demand is forecast by Drewry to grow by less than 3% per annum over the next five years with projections softened in particular due to the sharp slowdown in China’s exports. However, there are some signs of hope. As positives, the resilience of the Middle East and South Asia and potential recovery of Russia (along with oil prices) is identified. To meet the changing landscape, terminal operators and investors have been urgently reviewing capacity expansion plans. »Many projects within the five-year forecast horizon are already too far advanced to change significantly, but those scheduled to appear later in the period are subject to reconsideration in terms of timing and scale«, the report says.
In particular, the focus is switching from greenfield developments to M&A activity, with a number of major deals already in the pipeline and more likely to come. As examples, the acquisition of Grup TCB by APM Terminals, the one of APL by CMA CGM and the takeover of Tertir by Yilport are named. Acording to Drewry, three Chinese companies – China Merchants Port Holdings, Cosco and China Shipping (the latter two now merged) – have a strong appetite and significant activity in terms of expansion through buying existing businesses. As a result, the combined Cosco-China Shipping entity will be the largest of Drewry’s global/international terminal operators (measured by capacity) by 2020, albeit with a large proportion of this in one country (China). Neil Davidson, Drewry’s senior analyst for ports and terminals said: »A dichotomy in approaches is evident. On the one hand many of the established international players have become more cautious because they are concerned that returns may be less than what they are used to. But on the other hand there are several expansion minded players like the Chinese operators and Yilport Holdings whose top strategic priority is to acquire more assets.«
