World Economy vs. Global Port Trade - Global Maritime Hub | Shipping… · 2018-03-21 · Total...

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World Economy vs. Global Port Trade

Port Development Forum, March, 2014, Shanghai

Tina Liu, Country Manager – China [email protected]

© Drewry 2014

2 Drewry Maritime Advisors | PDF

© Drewry 2012

© Drewry 2014


Top trends of global port/terminal industry

Ship size, Cascading

Carrier alliance

Shipping lines financial issues

Active Asia investors

Portfolio management

Emerging market focus

Lack of public money

Healthy industry profitability

Higher productivity required

Terminal valuation on the rise

Terminal automation

Supply demand balance

© Drewry 2014


Facts and figures of the industry

Total container port throughput worldwide is currently around 640 million teu p.a.

Just over 5,000 gantry cranes worldwide

About 600km of berths

Around 700 specialised container terminals worldwide

Around 600 multi-purpose and RoRo facilities handling containers

Estimated 2013 container terminal industry Revenue: US$ 48 billion.

Estimated 2013 container terminal industry EBITDA: US$ 11 billion (~22%)

© Drewry 2014


Historical market trends Global container port volume growth (%)

Asian financial crisis

US recession

Global financial crisis

Prior to 2009 the industry’s worst year was +4.6% growth

China outsourcing

New global norm

© Drewry 2014


Driver of container port traffic

Organic growth: GDP

Imbalance of trade: empty containers

2012 to 2020 world GDP CAGR 3.6% （2000-12CAGR3.4%)

Replacement：Dry cargo containerization

Transshipment: result of vessel upsizing

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© Drewry 2014


Global economy on the path of bumpy recovery…

IMF keeps down grading global economy outlook

© Drewry 2014


Forecast container port demand growth 2012-2017

© Drewry 2014


Forecast of global container port capacity to 2017

Demand growth less than capacity expansion

Middle East, North Europe, South Asia, Africa

Demand growth = capacity expansion

Australasia, Eastern Europe

Demand growth more than capacity expansion

Far East, South East Asia, Latin America, North America, South Europe

© Drewry 2014


Vessel size development

Regina Maersk 7,400 teu Mid 1990s Other carriers followed…

Emma Maersk 15,500 teu Mid 2000s Other carriers followed…

Maersk Triple E 18,000 teu 2013 Other carriers following…

22,000+ teu vessels? 2018? Carriers will follow…

http://www.gl-group.com/en/index.php

http://www.google.co.uk/url?sa=i&rct=j&q=stx+logo&source=images&cd=&cad=rja&docid=2XApbVb1Ii6FxM&tbnid=KUrf6fWPvOi-xM:&ved=0CAUQjRw&url=http://commons.wikimedia.org/wiki/File:STX_LOGO.JPG&ei=biymUeXrGIqq0QX7vYCwCQ&bvm=bv.47008514,d.d2k&psig=AFQjCNFgDCBg6IxFzTP1ny8K5ZhHW1up-Q&ust=1369931231534105

© Drewry 2014


Largest vessels deployed in Asia-N. Europe trade, Jan 2014

Source: Drewry Maritime Research

…Yang Ming and K Line:14,000 teu ships coming

…China Shipping: 19,000 teu ships coming

…UASC: 14,000 and 18,800 teu ships coming

…MSC: 18,400 teu ships coming

…Zim: 12,600 teu ships ordered but cancelled

© Drewry 2014


Number of ULCVs per carrier by end of 2016

0 10 20 30 40 50 60 70

NYK

K Line

OOCL

MOL

Evergreen

Hapag-Lloyd

HMM

Zim

APL

Yang Ming

UASC

Hanjin

CSCL

Cosco

CMA CGM

Maersk

MSC

No. of 10,000-13,999 teu

Vessels No. of 14,000+

teu Vessels Totals CKYHE 53 20 73 MSC 38 26 64 G6 44 10 54 UASC/CSCL 17 23 40 Maersk 18 20 38 CMA CGM 26 6 32 Zim 8 0 8

© Drewry 2014


Global containership size development

Total order book by teu size range (% of teu capacity)

48%

29%

4%

9%

7%

3%

10,000 teu +

8,000 – 9,999 teu

6,000 – 7,999 teu

4,000 – 5,999 teu

2,000 – 3,999 teu

< 1,999 teu

Route No. of ships Asia-North Europe 130

Asia-Mediterranean 36 Asia-USWC 14 Asia-Mid East 9

Trade lane deployment of ULCVs - Jan 2014

© Drewry 2014


Vessel cascading

“India’s Mundra Port today handled one of the largest and longest container vessels in the world - MSC Valeria, having a capacity of 14,000 teu” Source: Economic Times, 5 June 2013

There are currently 104 vessels of 7,000-10,000 teu deployed on the Asia-N Europe route. All will need to be cascaded elsewhere by 2016

Largest deployed vessels, January 2014:

Asia - North Europe: 18,270 teu

Asia - Mediterranean: 14,000 teu

Asia - US West Coast: 13,800 teu

Asia - East Coast South America: 9,700 teu

Europe - East Coast South America: 8,800 teu

Asia - West Coast South America: 9,200 teu

Asia - Middle East: 14,000 teu

Europe - South Africa - Asia: 12,500 teu

Bigger Asia-North Europe ships = More cascading to other routes = More alliances on other routes (e.g. G6 Asia-USEC, P3 east-west routes) = Port/terminal choice shake ups

© Drewry 2014


The challenge of ship size growth for ports

Mega vessels = mega cranes

Berth length and depth

Air draft

Outreach

Intermodal capacity

Crane and berth productivity

Bigger ships have less choice of ports

© Drewry 2014


Port/terminal infrastructure equipment requirements

To be able to accommodate the current largest container ships, a port/terminal must have:

Large enough cranes (i.e. at least 21-22 boxes across outreach)

Sufficient large cranes (at least 3 cranes per vessel and usually 5 or more is desirable)

Long enough berths (i.e. at least 400 metres)

Deep enough water alongside the berth (i.e. at least 14.5 metres and up to 17 metres)

Deep enough water in the approach channel (i.e. up to 17 metres)

And a yard/landside operation capable of coping……

Are shipping lines prepared to pay for these enhanced requirements?

© Drewry 2014


Traditional ports out of the game?

Hamburg Sud 9,800 teu vessel in draft restricted Buenos Aires

(at terminal using mobile harbour cranes)

CMA CGM 16,000 teu vessel in Hamburg

Maersk Line 18,000 teu vessel

in Antwerp

© Drewry 2014


Vessel call volumes

Maersk CEO: 6,000 moves in 24 hours

* i.e. 20% of vessel discharged and 20% loaded per port call

© Drewry 2014


Crane intensity

Ship size (teu)

Length (m) Width (m) Max draft (m)

Boxes wide

12,000 365-380 48-50 15.5 19-20

15,000 400 56 16 22

18,000 400 59 16 23

20-25,000 440-450? 59-61? 16.5? 23-24?

© Drewry 2014


Crane intensity and berth productivity

Operational factors

Commercial factors

• The way in which the ship is stowed

for the port in question (e.g. are the

containers spread out across the

ship or concentrated in just a few

holds)

• The size of the container exchange

per vessel call

• The speed of turnaround required or

guaranteed. What level of productivity

does the shipping line want (they may

not want the fastest) and are they

prepared to pay for it?

• The flexibility, availability and cost of

dock labour (and their normal hours of

working)

© Drewry 2014


Recent developments in alliances

CKYH

G6

P3

…terminals have to convince and negotiate with 3 (or 5 or 6) lines to call

• Relentless pursuit of economies of scale has led to ever larger ships

• To fill these ships, carriers have to come together in alliances

• Until 2011 the three large independents (Maersk, MSC and CMA CGM) appeared to have the scale to operate outside the alliance structure

• The other major lines in the east-west trades all needed some form of alliance or VSA partnership to maintain a viable service

• However, since 2011, the pressure for alliance consolidation has intensified: • Maersk, CMA-CGM and MSC in P3 • The Grand and New World Alliances combined into the G6 • Evergreen combining its services with those of CKYH

http://www.google.co.uk/url?sa=i&source=images&cd=&cad=rja&docid=wmfXXhpeAUEPJM&tbnid=yLMUrMvbahB81M:&ved=0CAgQjRwwAA&url=http://www.dailyshippingtimes.com/news-upload/upload/fullnews.php?fn_id=3388&ei=rL1OUri1E6OR7Aba_oDwBg&psig=AFQjCNF4nuZKh9hE-dxyIGyFCv56FnWZ8w&ust=1380978476402605

http://www.google.co.uk/url?sa=i&source=images&cd=&cad=rja&docid=XTsp5XiMexp2SM&tbnid=IJJu9Aer50GvjM:&ved=0CAgQjRwwADgT&url=http://www.lloydslist.com/ll/topic/p3-network/&ei=Bb5OUvKEJOHC7Aa9k4D4AQ&psig=AFQjCNGxbWGe6IE9N7B81_q1MFV0S4l6rA&ust=1380978565655316

http://en.wikipedia.org/wiki/File:The_logo_for_Hanjin.jpg

http://en.wikipedia.org/wiki/File:Evergreen_Marine_Corporation_logo.png

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=fyuvmvLXIyYAQM&tbnid=bo3Dbi0fp-EmHM:&ved=0CAUQjRw&url=http://www.seahorse.com.pk/seafreight.htm&ei=Y85SUtmMGeuQ0QWL0oCoAg&bvm=bv.53537100,d.d2k&psig=AFQjCNHVZzmPXZUzD3E8U5UdKhVfPbVsbg&ust=1381244895599862

http://en.wikipedia.org/wiki/File:K_line_logo.svg

© Drewry 2014


Port choice in the age of alliance

What is the effect on schedule reliability?

Where is the cargo

generated?

Is there a terminal operator in the port affiliated with the

shipping line?

Can the ships physically access

the port ?

Is the port already established in at least

one loop?

What are the benefits and

pitfalls of consolidating

port calls?

How can the widest range of direct port calls be delivered?

How can the best frequency of service and transit times be

obtained?

© Drewry 2014


Port market opportunities – Privatisation and M&A

Shipping line assets

Shipping lines remain under severe financial

pressure e.g. Hanjin and Hyundai.

May therefore need to divest stakes in their

terminal assets

Deals already: MSC – TIL stake sale,

CMA CGM - Terminal Link stake sale

Port privatisation

Main era of port and terminal privatisations has

largely passed

Some remaining significant state owned

facilities though: e.g. South Africa, Iran, Israel, Sri Lanka, Indonesia, Malaysia,

Turkey, Kenya, Egypt, India, Jamaica

Plus some possible further port authority privatisations

e.g. Australia

Global / international terminal operators assets

Global/ international terminal operators are

rebalancing their portfolios increasingly divesting from

mature to emerging economies.

May divest individual assets or portfolio of

assets

Deals already: e.g. DPW Australia, DPW

and PSA – Hong Kong, ACT- CSTD, CPL

© Drewry 2014


Port market opportunities - Privatisation and M&A

Financial investors portfolios

Infrastructure funds invested 5-7 years back are reaching maturity and may divest their holdings Private equity looking for exit

Financial groups with significant terminal assets include:

RREEF, Macquarie, Highstar Capital, JP Morgan, Morgan

Stanley

Private and family owned assets

Family and privately owned assets may divest due to

succession considerations or desire to “cash in”

Examples of private/family companies include: Eurokai,

Ultramar, Bristol Port Co

© Drewry 2014


Port market opportunities - Concessions

Forecast increase in port demand 2012-2017

Forecast regional utilisation levels

Asia will generate by far the largest increase in

absolute demand

Asia is also expected to have the highest regional utilisation levels by 2017,

but other regions also high

© Drewry 2014


Re-cap

Ship size, Cascading

Carrier alliance

Shipping lines financial issues

Active Asia investors

Portfolio management

Emerging market focus

Lack of public money

Healthy industry profitability

Higher productivity required

Terminal valuation on the rise

Terminal automation

Supply demand balance

© Drewry 2014


Drewry background

Drewry has over 40 years’ experience within the maritime sector, employing over 90 specialists across our offices in London, India and Singapore. Offering research reports and consultancy services, our ability to assess the market and give our clients the knowledge to make critical decisions sets us apart from others. Our brand is renowned for its quality, with analysis that brings clarity to markets and enables us and our clients to stand above the competition. Drewry’s bespoke consultancy service has its foundations in our research, but it is defined by our breath of expertise, sector adaptability and international capabilities. Our services extend from the provision of data and information to large assignments calling for a broad mix of disciplines. Typical commissions encompass strategic planning; market research; forecasting; management consultancy; feasibility studies and project evaluation. Since the founding of the company in 1970, Drewry has evolved into one of the world’s leading international maritime consultancy and publishing organisations. Today, Drewry reports are sold in more than 90 countries and consultancy services commissioned by clients from over 70 countries. Over four decades, Drewry has built an extensive data library on trades, shipping costs, ship prices, fleets and freight rates. Sophisticated forecasting systems project trade flows, ship demand and supply, freight rates, costs and prices. The company ’ s people include experienced market analysts, economists and financial planners who have had high-level exposure to the maritime industry. Drewry is also able to call on the services and expertise of a number of freelance consultants for projects requiring specialist knowledge.

Drewry is a highly experienced, respected and well established sector expert

© Drewry 2014


Ports: Market intelligence and databases

At Drewry we have a unique on-line, research resource capturing details of over 1,500 container and multi-purpose terminals around the world. The data covers throughput, capacity, equipment, ownership and infrastructure. This allows benchmarking of performance by country, region, operator, type of terminal, size of terminal and represents a significant contribution to increasing the depth of knowledge on the industry.

Complementing our database is Drewry’s ability to analyse global container port investment opportunities including identification of projects at existing facilities and greenfield sites, as well as potential acquisition targets and upcoming privatisations. This enables investors and operators to fast track their processes identifying identifying, sorting and pursuing deals.

Intelligence can be tailored to suit customer needs and can be provided as a one-off or retainer

Drewry maintains a sophisticated and highly detailed market intelligence database on the port and terminals industry that ensures clients stay right up-to-date on key issues.

0

Container Terminal Database Investment opportunities, industry performance, utilisation and more…

© Drewry 2014


Contact

Head Office – UK Drewry Shipping Consultants Ltd 15-17 Christopher Street London EC2A 2BS, United Kingdom t: +44 (0)20 7538 0191 e: [email protected]

India Office Drewry Maritime Services Private Limited 209 Vipul Square, Sushant Lok-1 Gurgaon, Haryana-122002, India t: +91 124 497 4979 e: [email protected]

Singapore Office Drewry Maritime Services (Asia) Pte, Ltd. 15 Hoe Chiang Road #13-02 Tower fifteen Singapore 089316 t: +65 6220 9890 e: [email protected]

Shanghai Office 555, 5th floor Standard Chartered Tower, 201 Shi Ji Avenue, Pudong District, Shanghai, China 200120 t: +86 (0)21 6182 6759 e: [email protected]

Tina Liu

Country Manager - China [email protected]

World Economy vs. Global Port Trade - Global Maritime Hub | Shipping… · 2018-03-21 · Total...

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