INSIGHT & OPINION

What’s not new and what’s next

4 years ago

Accurately forecasting the future is always a challenging business. Imagine doing this prior to early 2019 – how wrong would you have been? Who could have imagined COVID-19 or Russia initiating a war in the Ukraine? At an industry level, who could have forecast the phenomenal profits of shipping lines, the mega investment in new tonnage and diverse new business streams. A similar scale of change has been triggered in the bulk agri-products and energy markets. A lot to discuss – hence the timely restart of the Terminal Operations Conference in Rotterdam this month, one welcome return to normality!

So, what has not changed since the last Terminal Operations Conference (TOC) convened on a face-to-face meeting basis? Short answer, not a lot!

So, what’s up next? Anymore big shocks in the system round the corner? We hope not, although parties are talking about the spectre of recession in today’s climate of rising inflation, but let’s not talk that up.

There is presently a fair amount of speculation about a return to normal – i.e. life before COVID-19. From our perspective this may occur in parts but not across-the-board.

In the container sector the lines have all enjoyed hitherto unseen profits, a significant part of which has been invested in new tonnage. A flood of new capacity – equivalent to near 30 per cent of the existing fleet – is thus expected on the market over the short-term. It would be ironic indeed if this ‘home cooked’ reality were to turn out to be a brake on positive future development. It is hard to imagine where all this capacity is going to find gainful employment and the cascading of bigger capacity vessels into secondary trades is to be expected. This, in turn, will have consequences for port investment plans.

We also see in today’s liner sector a greater interest in investing in terminal assets – the landmark deal in this area being MSC’s acquisition of the Bollore terminal and logistics network, the biggest acquisition of its kind undertaken to-date.

This trend also presents a more competitive picture in the bidding for terminal concessions. A line invariably comes to such an opportunity with the promise of bringing substantial container volumes more-or-less from day one, an enticing aspect for port authorities, but how much of an advantage will it prove to be over the long-term? We discuss this important subject, presenting the pros and cons.

This issue of Port Strategy contains discussion of future prospects across diverse market sectors and subjects, not the least of which is how to unlock the Ukraine’s agri-products in order to avoid massive famine and starvation in the developing world.

These are fertile times to engage in discussion to positively shape the future of the global ports and terminal industry. The re-start of TOC is to be welcomed in this respect – if you are attending we wish you a good event and would like to extend the invitation to visit us at Stand F38.