THE increase in the size of containerships and the formation of mega shipping alliances has created challenges for terminals operators worldwide, according London's Drewry Maritime Research.
Yet terminals remain a good bet for investors, according to Drewry's 2015 Global Container Operators Annual Report, which says that the rising port demands of mega ships is the driver for terminal operators to make significant investments,
This they must do to furnish additional handling capacity. Drewry predicts that global port demand will grow at an average of 4.5 per cent a year through to 2019, equating to an additional 168 million TEU.
This would bring the annual global total to almost 850 million TEU and make Asia the star performer accounting for more than 60 per cent of box growth during the period.
The response from the major international operators is to make big investments in additional capacity over the next five years, says Drewry.
It notes that port operators are often units of shipping lines themselves, that "have little or no expansion plans". Indeed, some ocean carriers have sold terminal assets to raise cash to prop up under-pressure balance sheets.
One of the report's authors, analyst Neil Davidson, said owning and operating international container terminals remained a profitable business despite the "significant challenges ahead".
Operating profit for international terminal operators remains in the range from 20-45 per cent and the 2014 financial results were much in line with previous years, he said.
This illustrate the consistency and reliability of container terminal operators' profitability," he said. "However, maintaining these margins will become increasingly challenging in the face of the demands created by bigger ships and alliances."
APM Terminals and DP World are the most active terminal operators in terms of the number of new projects scheduled, but Singapore's PSA International is adding the most capacity, particularly in its home port, says the report.
Hutchison, CMA CGM, TIL and ICTSI also have significant plans, with the latter's expansion representing a 40 per cent increase over the current capacity of its portfolio, said the report.
OPINION
09 September 2015 - 21:50
Megaships bring big problems to terminals, but big profits too: Drewry
THE increase in the size of containerships and the formation of mega shipping alliances has created challenges for terminals operators worldwide, according London's Drewry Maritime Research.
OPINION
09 September 2015 - 21:50
Megaships bring big problems to terminals, but big profits too: Drewry
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