Terminal operators look to consolidate ownership
Global shipping consultancy, Drewry, says as the sector is being faced with the dual challenges of weaker demand growth and rising costs due to larger vessels and alliances, terminal operators are looking to consolidate terminal ownership.
The Global Container Terminal Operators Annual Report 2016 details that softening demand growth coupled with larger liner shipping alliances and bigger ships is moving the container ports industry towards a value sector from a growth sector.
Neil Davidson, Drewry’s senior analyst for ports and terminals, said: “It is clear that global and international terminal operators are fundamentally reviewing their strategies, becoming cooler on greenfield projects and more interested in M&A opportunities.”
“A natural response to the increasing size of liner alliances is for terminal operators to look to consolidate terminal ownership in parallel.”
He said a dichotomy in approaches is however evident. On the one hand many of the established international players have become more cautious because they are concerned that returns may be less than before.
But on the other hand, there are several players whose top strategic priority is to acquire more assets.
APM Terminals has acquired Grup TCB, CMA CGM bought APL and Yilport is taking over Tertir. Three Chinese companies – China Merchants Port Holdings, Cosco and China Shipping also have a strong appetite and significant activity through buying existing businesses.
By 2020, the combined Cosco-China Shipping entity will be the largest of Drewry’s global terminal operators by capacity, albeit with a large proportion in one country.
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