Less carriers, more terminal overcapacity by 2025

“By 2025, the industry will have got around to using transparency; process management will become simplified; and we’re going to have automation and digitalisation,” said Lars Jensen, chief executive and partner of SeaIntelligence Consulting.

But while automation and digitalisation will be more prevalent, neither will provide a sustainable competitive advantage, he added, advising ports and terminals to focus on exception handling to achieve that. “This must be prioritised above all else,” he said. “95% of the focus now is on automation as the sexy part, but we need to step up to the plate and deal with exception handling as this will be the competitive differentiator in the future.”

He described today’s hub structure as “highly inefficient” and predicted that fewer hubs will be favoured by 2025, a shift that will have huge ramifications for ports, especially for those highly leveraged on transhipment. This will lead to “fantastic competition” between the transhipment hubs of the future, he said.

Meanwhile, those ports and terminals banking on a recovery in the physical shipping markets this year will be disappointed: “Despite a surge and pickup of the container market it will not rebalance in 2017,” said Mr Jensen. He predicted a structural rebalance by 2019, but only if scrapping of container ships continues at its current pace.

And while the container ship sector continues to plough through depressed markets, Mr Jensen noted that the path ahead could be even rougher for ports and terminals as overcapacity looms. “If you think the container lines have had it hard the last five years because of overcapacity, wait until you see what the container terminal operators are going to face over the next decade. That’s going to be an equally appalling battle,” he said.