Greenfield caution harming capacity expansion
Underinvestment and cautious investor sentiment towards greenfield projects is partly to blame for container terminal capacity expansion falling to not much more than 10% of existing capacity in the next five years, the lowest proportion ever.
This is according to Drewry, which said that global container port capacity will be well below projected demand in the next four years, with global container port capacity projected to increase by around 125 million teu by 2022, a growth rate of just over 2% per annum. Capacity expansion has to increase for the industry to avoid problems in the future, the shipping consultants warned.
This is because "average utilisation levels are expected to rise markedly across almost all regions of the world by 2022,” stressed Drewry, following the publication of its latest Ports & Terminals Insight report, which analyses the pipeline of container terminal capacity expansion through to 2022.
“Greenfield projects are a key part of the industry’s capacity expansion activity”, but for operators and investors they “are more risky due to their ‘start from scratch’ nature.
The number of projects has fallen markedly from 134 in 2009 to just 83 currently, while after 2013 there was a decline in the average planned amount of capacity, despite an earlier promising upwards trend.
In 2009, planned capacity was around 470,000 teu per project. By 2013, this had risen to over 800,000 teu per project, but the 2018 projection is that the average capacity addition per project has fallen to around 650,000 teu.
“This suggests that investors are most cautious about the largest terminal projects, and that the focus, for what greenfield projects there are, is on smaller facilities. This is understandable, but it is not necessarily what the market wants or needs,” said Drewry.
LATEST PRESS RELEASES
Long-term commitment guarantees JLT rugged computers validation for use with all major releases of t... Read more
TTS Group ASA ("TTS") announced on 8 February 2018 that the company had entered into an asset sale a... Read more
MacGregor, part of Cargotec, announced on 8 February, 2018 that it has entered into an agreement to ... Read more
LiSIM Simulator for Port Nelson in New Zealand Read more
The online tool announced upgrades to functionality for working with BAPLIE files, providing increas... Read more
December 2018 OPCSA successfully migrated its operation to NAVIS N4 and at the same time went live w... Read more