Second can be better than first

COMMENT: The poor state of health of the container shipping sector has prompted a lot of speculation about the implications for the container terminal operating sector, writes Mike Mundy.

Mainly, this centres on the industry being required to make substantial investments to cater for larger vessels on the one hand and on the other the probability of shipping lines and consortia seeking to ‘share their pain’ with terminal operators by seeking reductions in container handling charges.

The latter action is also seen as the natural outcome of the larger shipping blocs now being formed whether this be via merger and acquisition or the formation of mega alliances or both.

 

There are certainly signs of this in a number of key ports around the world serving the larger capacity vessels, especially where those ports have recently added major new capacity. Where there are competing terminals in a major port there is unease about who will secure the essential business volume flowing out of the formation of the new mega alliances. A winner and loser scenario can be seen certainly in the early life of new terminals active in the same port or even in the same coastal range.

 

Secondly, some terminals are clearly concerned about what happens in the wake of acquisitions and mergers. Will long established shipping line customer/terminal relationships be dissolved by the new management? What will the attitude be to existing contracts, especially long-term contracts, and the tariff provisions contained therein?

 

To be involved in the top tier of high capacity container handling is not, frankly, a great place to be at present, unless of course you are ‘the only game in town’.

 

While there are still investment and tariff issues, a healthier place to be, generally speaking, is in the second tier of container handling – medium size terminals where the per move yield characteristics are stronger. There is a greater incidence here of exclusivity of operation and as such greater bargaining power with lines.

 

Equally, where there are two medium size terminals there is also the opportunity to join forces as has recently been seen, in a ground-breaking way, between Miami’s South Florida Container Terminal and the Port of Miami Terminal Operating Company, two of the port’s three container terminal operators. The arrangement between the two terminals effectively mirrors the approach of lines and creates a ‘conference agreement’ facilitating common pricing and operational practices.

LATEST PRESS RELEASES

Successful participation and presentation at exhibition in Beira, Mozambique

The exhibition series ‘Intermodal Africa’ organized by Transport Events is always a good possibility... Read more

Protectors of Esbjerg's new East Port quay

The German based Headquarters of ShibataFenderTeam recently completed an order for the Port of Esbje... Read more

Aquaplot joins Technology Transfer Programme of European Space Agency

Start-up for ocean route planning enters ESA’s Business Incubation Centre (BIC) Read more

AMRO Increases Scope To Cover The GCC Region

AMRO, a specialist marine equipment and services provider, is proud to announce that they will now c... Read more

SAFE AND SECURE

Ninth Consecutive “Excellent” Coast Guard Security Assessment Awarded to Port of Baltimore Read more

Being part of the most important infrastructure project in Costa Rica

In 2017, the US office of ShibataFenderTeam delivered 55 nos. CSS 1450 Cell Fender Systems (G2.0), 8... Read more

View all