Threat to growth in Global Container Port throughput at highest level ever says a report

LONDON: Container terminal operators are facing higher risks than at any time in the industry’s history, according to a new report.

And Container Terminals: Paths to Profitability suggests future investment by operators and investors will need to be more carefully considered than ever before.

The report by industry veterans Remco Stenvert and Andrew Penfold says many of the risks the industry faces are “beyond the control of operators”.

“The container port and terminal business faces greater uncertainties now than at any time since the container revolution started in the late 1970s,” it says.

 

“These represent systemic and intrinsic risks that could dramatically impact the outlook for port demand, profitability and investment in the next 10 years. “All investments need to take a clear view on these risks, the days when expanding container demand could be relied upon to save marginal projects have passed,” the authors write.

 

The study outlines a range of external factors – the retreat of globalisation in the face of rising protectionism; the growing financial instability since 2009, with most growth since the financial crisis funded by mounting levels of debt; a structural change in the nature of demand with many developed economies now effectively reaching peak container throughput; the challenge of near-sourcing strategies; the technological challenges posed by blockchain and 3D printing; and mounting environmental – that port operators have no control over, but yet need to take into account when planning new projects.

 

But there is also a long list of factors internal to the shipping and terminal industry with which many are already acquainted – shipping overcapacity and under-utilisation; alliance instability, which increases in terms of risk as volume growth slows; shipping line terminal investment, which is increasingly in the minds of terminal operators independent of carrier involvement; the pressure of ever large vessel sizes; terminal overcapacity in some regions; and finally the potential for the industry to be disrupted by new operators altogether.