Forging Chinese connections
COMMENT: Much of the major port and terminal investments over the past ten to fifteen years have been made by private and corporatised companies from the likes of DP World, PSA, ICTSI and SSA Marine, as well as from firms linked to carriers such as APM Terminals (Maersk), Terminal Link (CMA CGM) and TIL (MSC), to name but a few, writes Ben Hackett.
But as revenue growth has come under increasing pressure, these investors have become less spend happy.
The largest investors today are COSCO Ports and several other Chinese companies, usually linked to provincial governments in China. In the twelve months to the end of June 2016, Chinese firms spent nearly $10bn on ports and terminals worldwide according to the UK Financial Times (July 16, 2017). For the same period this year, this figure has blasted up to $20bn and is still growing.
No continent has been left untouched - the One Belt One Road is proving to be very wide indeed with its three maritime routes, from China to the Indian Ocean and then on to the Mediterranean and northern Europe.
Malaysia alone has so far received $11.64bn in investments and Indonesia $590m. Northern Europe has also benefitted from Chinese investment as has Africa, mainly via the China Merchants Port Group. The most recent has been Djibouti, an addition to Nigeria and Togo. China Merchants also have a 49% shareholding in Terminal Link.
What we are seeing is a projection of economic power along the largest global trade routes as well as regions with primary resources that China needs, and has already invested in. More obscure is the strategic investment that would allow the projection of the Chinese navy along these routes to safeguard passage so as not to disrupt the supply lines to and from China.
This leaves the traditional port and terminal operators in a hard place with not enough funds to compete and facing deeper-pocketed carrier linked terminal operators. But perhaps the solution is obvious: those operators need to seek out joint ventures with shipping lines as well as with the Chinese to be able to compete on a level playing field.
LATEST PRESS RELEASES
In 2016 we were awarded with the supply of fender systems for the entire new port of Turkmenistan's ... Read more
SOGET and Microsoft: a strategic partnership for a secure digitization of ports in France and worldwide
SOGET, world specialist in Port Community Systems (PCS), and Microsoft, world leader in technology, ... Read more
The new Echoscope® 4G Performance Pack Upgrade presents an opportunity for our existing customers to... Read more
Coda Octopus Products Selected to Collaborate on One of Five Premier Scottish-Japanese "Joint Ocean Innovation" Strategic Subsea Projects
The Nippon Foundation and Scottish Enterprise R&D Program provides funding of up to $32 million over... Read more
ShibataFenderTeam permanently sustains and develops its agent network. Read more