Second can be better than first
COMMENT: The poor state of health of the container shipping sector has prompted a lot of speculation about the implications for the container terminal operating sector, writes Mike Mundy.
Mainly, this centres on the industry being required to make substantial investments to cater for larger vessels on the one hand and on the other the probability of shipping lines and consortia seeking to ‘share their pain’ with terminal operators by seeking reductions in container handling charges.
The latter action is also seen as the natural outcome of the larger shipping blocs now being formed whether this be via merger and acquisition or the formation of mega alliances or both.
There are certainly signs of this in a number of key ports around the world serving the larger capacity vessels, especially where those ports have recently added major new capacity. Where there are competing terminals in a major port there is unease about who will secure the essential business volume flowing out of the formation of the new mega alliances. A winner and loser scenario can be seen certainly in the early life of new terminals active in the same port or even in the same coastal range.
Secondly, some terminals are clearly concerned about what happens in the wake of acquisitions and mergers. Will long established shipping line customer/terminal relationships be dissolved by the new management? What will the attitude be to existing contracts, especially long-term contracts, and the tariff provisions contained therein?
To be involved in the top tier of high capacity container handling is not, frankly, a great place to be at present, unless of course you are ‘the only game in town’.
While there are still investment and tariff issues, a healthier place to be, generally speaking, is in the second tier of container handling – medium size terminals where the per move yield characteristics are stronger. There is a greater incidence here of exclusivity of operation and as such greater bargaining power with lines.
Equally, where there are two medium size terminals there is also the opportunity to join forces as has recently been seen, in a ground-breaking way, between Miami’s South Florida Container Terminal and the Port of Miami Terminal Operating Company, two of the port’s three container terminal operators. The arrangement between the two terminals effectively mirrors the approach of lines and creates a ‘conference agreement’ facilitating common pricing and operational practices.
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