And as if this isn’t enough, the major liner operators are expecting an influx of new high capacity tonnage over the near term which will further stretch the gap between available capacity and demand. According to a new report from UK-based PR News Service, as of the end of September 2008, 182 containerships of 10,000 teu were on order and scheduled for delivery over the next four years. One is expected to be delivered every eight days over this period.

Bottom line, the liner shipping business and other sectors of the global shipping industry are proceeding into rough waters the like of which may never have been encountered before.

And make no mistake this will inevitably negatively impact the worldwide port industry. For many there will be no bonus from strong rates of cargo growth – diverse trades will register either zero or much reduced growth. There is also the inevitably of shipping lines seeking to reduce costs through a reduction of the charges applied at a port and terminal level.

The stage is largely set for an era of consolidation or containment at best.

This, of course, will also apply to investors in the port sector – we see, for instance, the trouble that Babcock & Brown, an investment bank and recent entrant into investment in maritime ports, has recently run into. This perhaps highlights the fragility of some of the new generation investors in the port business – can they survive worsening market conditions? The short answer is some will and some won’t, and across the board both new and traditional investors in the global port industry will have to confront the reality of fewer funds available for investment as well as a much more penetrating look being taken at all investment opportunities. Less cash, less dash!

We will no doubt also see increased activity in the port and terminal resale market. Traditionally in hard times shipping lines have disposed of port assets and doubtless this will be a policy pursued again in some quarters. It will, though, be interesting to see how many of the major container lines go down this road given the reality of shipping being much more systems-oriented nowadays and marine terminals representing a key system component.

We can also expect to see the resale of one or more large port groupings, not all such groupings are well-equipped to weather a business downturn and an exit from the sector may be more appropriate particularly when part of a large diversified group that has priorities elsewhere. Similarly, there is expected to be an increasing number of smaller transactions involving the resale of port assets.

“One man’s pain is another man’s gain", and those entities that do have cash and other resources will be able to pick-up a number of port assets potentially relatively cheaply.

A changing and challenging picture, one not to be taken lightly and which for a lucky few can offer significant rewards.