That word is back again: “ congestion” , and along with it some interesting projections. Two new reports have recently been issued both of which foresee capacity crunches in the port sector.
MDS Transmodal projects in its ‘Supply and Demand in the Container Trades’ report that there will be a capacity shortfall by 2011 of 82.5m teu,with 68% of this in the Far East and nearly 70% of this in China.Northern Europe, the Middle East and Indian subcontinent will be the other major areas suffering from this problem, according to MDS Transmodal.
Underpinning these capacity problems is the spectacular rise in internationally traded maritime cargo which has more than doubled from 332m tonnes in 1996 to an estimated 765m tonnes in 2006, an average annual growth rate of 8.8%.This has also been accompanied by burgeoning container vessel fleet growth over the last decade with slot capacity increasing fivefold, a factor that has fuelled the fires of globalisation in a positive way.
In terms of container numbers, MDS states that container trade reached a total of 106m teu in 2006, up 12% from 2005 and forecasts that this year the volume of loaded containers will rise by just under 9% to 116m teu. Looking further into the future, MDS foresees that container volumes will increase by 42%, from the 2006 base, by 2011 to hit the 1bn tonne mark (equivalent to 151m teu), compound annual growth equivalent to 7.6% over the next five years.
MDS summarises the containerport capacity situation as more than 800 ports worldwide providing handling capacity over 2,400 container berths and 605 km of quay. It stresses,however, that its capacity crunch forecast is not based on the inadequacy of the latter capacity as a whole to cope with demand but the reality that demand is focused on a relatively small number of ports effectively creating critical pressure points in the demand equation.
Noting the increased emphasis on the ordering of high capacity container vessels, it further suggests that the availability of the right container capacity will be a crucial factor in their successful deployment.
The second container sector report to be released recently comes from Boston Consulting and this echoes the comments of MDS Transmodal suggesting that congestion in the container ports sector could be the crucial factor in slowing the momentum of globalisation. It does not,however,see problems arising in China but in the major nations consuming Chinese goods such as the US and the northern European nations.
Effectively, the alarm bells are ringing and what the containerport industry must do is act and act quickly. The big question,however, is can this be done with the delivery of new containerport capacity becoming ever more complicated, not least because of environmental considerations, in mature markets?
The accepted view today is that the container handling sector in markets such as northern Europe is performing quite well in a pressurised situation. There will come a point, however, when without significant new capacity being introduced gridlock will inevitably occur. If this is to be avoided one thing is clear, a concerted effort must be made to untangle what are now very complicated, expensive and extended planning processes. Some steps are being taken in this direction,in the UK for example,but will they be enough?
It also has to be said that while container terminals represent the critical interface, meeting future demand will also hinge to a great extent on the adequacy of road and rail capacity to and from these terminals.While this is clear now, it is a reality that promises to become increasingly prominent over the near term.
Carly Fields
