An era of spending but what is round the corner?

As PS goes to press there is more of this news with Hapag Lloyd signing a binding agreement via which it will acquire 35 per cent of JM Baxi Port & Logistics Limited from a Bain Capital Private Equity Affiliate. Furthermore, Hapag Lloyd is to subscribe to a capital increase by the company and raise its shareholding to 40 per cent.

The deals keep coming, with much evidence of the shipping line penetration into the terminal sector – sometimes as part of an overall effort to diversify along the supply chain and in other instances just to build a position in the terminal world.

Many of the deals, or combination of deals, are of such a scale that it is hard to imagine shipping lines repeating the actions of the past and disposing of port assets when the ‘hard rain falls.’ The theory seems to be, if you get involved on a large enough scale you move out of the arena of a niche investment and add another pillar to your business which represents a healthy and complementary area of diversification that will play a significant part in sustaining you through tough times and boosting overall performance in the good times.

Will it work? Watch this space…

There are those that believe that down the track the disposal of certain terminal assets by lines is a distinct possibility. Coupled with this there is expected to be more involvement by private equity, infrastructure and pension funds in the port sector – the high profile of the logistics sector during Covid has helped to build this interest.

As we enter 2023 there certainly promise to be interesting times ahead, with many commentators forecasting a challenging period of contraction, suggesting, in turn, as TheEconomist  puts it that its “Time to batten down the hatches.” The Analyst and TheNew Yorker  subscribe to a similar point of view, highlighting how a new planning canvas is in prospect and an era that presents a difficult decision-making environment.

If you haven’t had enough to think about after you have read these pieces, then dive into Andy Penfold’s Shape of things to come. This sees a tighter business climate having a far-reaching impact on the terminal sector.

There is plenty of food for thought.

Happy New Year!