Global container port demand will expand by almost 200 million teu in the next five years, according to a new report by Drewry.
However, the shipping consultancy also notes that although absolute growth will be substantial, growth rates through to 2023 will fall far short of those of 2007-08, before the global economic crisis.
Global Container Terminal Operators Annual Review and Forecast 2019 estimates that container port demand will see global growth of 4.4% per annum on average over the next five years. This will lift world container port throughput from 784 million teu in 2018 to 973 million teu by 2023, an absolute increase of almost 190 million teu.
“The latest five-year forecast is a far cry from the heady days of the 2000s when forecasts were around 9% growth per annum until the global financial crisis of 2007-08 brought this to a shuddering halt,” says the report.
Terminal capacity expansion plans of port operators will be also be “muted”, according to Drewry. Global container port capacity is projected to increase at a CAGR (Compound Annual Growth Rate) of around 2%, based on confirmed additions only.
“This is well below the projected demand growth and reflects the continued easing off from greenfield projects by investors over the last few years,” says the report. “As a consequence, average utilisation at the global level is forecast to increase significantly from 70% in 2018 to 79% by 2023. This, though, remains a comfortable level for both operators and customer alike.”
Terminal utilisation rates will vary significantly by region. The sharpest upward swings are expected in Greater China and Southeast Asia, with the former hitting 100% by 2023.
Neil Davidson, author of the report and Drewry’s senior analyst for ports and terminals, said China’s previous very rapid pace of terminal capacity expansion was on hold, with the focus instead being on consolidation of port and terminal ownership into large groups. “This, plus the uncertainty about China’s international trade growth in the face of tariff wars and protectionism, suggests that the government is taking a cautious approach,” he added.
Of the leading global terminal operators, Drewry said the list of the top seven players by throughput (adjusted for equity stakes) in 2018 was led by PSA and Hutchison in first and second places, respectively, with PSA’s pre-eminence due to its 20% stake in Hutchison Ports.
“Fortunes [in 2018] varied - PSA’s volume was up 7% and topped 60 million teu while Hutchison was largely unchanged at just under 47 million,” said Drewry. “Cosco moved up to third place in 2018 - from fifth in 2017 - by achieving over 30% growth, boosted by the OOCL acquisition.
“This meant that DP World and APMT each dropped one place to fourth and fifth, respectively. The latter registered nearly 8% growth, helped by the closer relationship with Maersk Line resulting in more of the carrier traffic directed to APMT facilities. China Merchants (35 million teu) and TiL (26.5 million teu) remained in sixth and seventh places, respectively, despite both recording double-digit growth in equity-adjusted volume.”
Davidson added: “A premier league of seven big operators has emerged, after which the next largest player is a third of the size. Between them they accounted for nearly 40% of global throughput in 2018. Within this elite group, Cosco has moved sharply up the table in this year’s analysis.”