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Fewer big terminals needed

Global trends mean the industry needs fewer big box terminals, Neil Davidson, senior analyst, ports and terminals at Drewry tells TOC Europe 2019 in Rotterdam.

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In a wide ranging presentation, he said changes in world trade and consolidation in the liner shipping business were having significant effects on the container ports and terminals sectors.

“Globalisation is no longer the big trend that it was and factors, such as trade protectionist policies, rising labour costs, particularly in countries like China, automation of manufacturing and growing concerns over climate change and emissions coalesce and support the regionalisation of trade.

“Smaller gateway ports can be very successful as they are often close to centres of consumption and production and generally have good inland connections in their hinterlands. But they have to be green and efficient and in the future that means automation and digital concepts have to work.”

In contrast, Davidson said that economies of scale and critical mass meant large terminals were still the norm for transhipment and if anything this was increasing. He pointed to smaller hubs, including in the Mediterranean basin, as suffering.

Within ports he expects some consolidation of container-handling facilities terminals to take place. “Consolidation in the ocean carrier business means there is a need for fewer multiple container terminals in a port. Take Buenos Aires, which is looking to consolidate as many as five terminals into one,” said Davidson “Look at Hong Kong where HPH, Modern Terminals, Asian Container Terminal and Cosco-HIT have set up an operating alliance and are now viewing the implementation of a unified terminal operating system.”

He also said that generally lower margins in the terminal operating business could result in less greenfield developments.

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