Drewry lowers container port investment, throughput forecast

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The pace of container port capacity expansion will contract at least 40% over the next five years in the wake of the COVID-19-induced slowdown in port throughput, according to a new forecast from Drewry.

In recent years global operators have been cutting back on investments, and the pandemic has only accelerated this trend, according to the latest Global Container Terminal Operators Annual Review and Forecast report published by global shipping consultancy Drewry.

Global container terminal capacity will grow at an average annual rate of 2.1% over the next five years, equating to an additional 25 million twenty-foot equivalent units (TEUs) a year, according to the report.

This is well below the average capacity increase of more than 40 million TEUs a year on average seen over the past decade.

Port throughput will grow at an average annual rate of 3.5% over this period from 801 million TEUs in 2019 to reach 951 million TEUs by 2024.

But Drewry said risks remain to this outlook should a resurgence in COVID-19 cases cause further widespread economic lockdowns over the forecast period.

“Our five-year forecast for global container port handling has been cut back drastically due to the COVID-19 pandemic, and the risks remain heavily weighted to the downside,” Eleanor Hadland, author of the report and Drewry’s senior analyst for ports and terminals, said.

Operators and port authorities are now reviewing delivery of planned projects in the light of the pandemic, which has caused a drastic slowdown in economic growth and led to uncertainty in the short- to-medium-term outlook.

Major expansion projects and greenfield projects already under construction and due for commissioning in 2020 and 2021 may face minor delays due to interruptions to global supply chains during the first quarter of the year, added Hadland.

But projects currently at an earlier stage of planning, particularly where construction contracts and equipment orders have not yet been tendered, may be suspended or cancelled if the market conditions remain poor.

In recent years global operators had already scaled back investment plans, with only limited greenfield projects in the pipeline, noted the report. However, leading operators look set to continue to lead the way in terms of automation.

Currently more than three quarters of automated terminals are operated by global and international operators. And of the 22 automated terminal projects currently planned (including both greenfield and brownfield), more than 80% will be delivered by this group of leading operators.

In 2019, the group of 21 companies classified by Drewry as global/international terminal operators outperformed the market, with combined volumes growing 4.3% compared to global growth in port throughput of 2.1%.

However, this headline figure disguises strongly divergent growth patterns. In 2019 six out of 21 global/international terminal operators reported lower volumes on an equity-adjusted basis.

“Divestment of non-core assets, and the fall-out from the US-China trade war were key factors behind these results,” explained Hadland.

Of these leading operators, PSA International retained its top spot in Drewry’s rankings despite its global throughput remaining flat year-on-year.

By contrast, Hutchison Ports saw volumes fall by more than 2% and dropped back to fourth place. DP World, with 2019 throughput only marginally above 2018 levels, also dropped a position.

China Cosco Shipping and APM Terminals both reported strong growth in volumes, and both moved up to take second and third place, respectively.

Photo by Dietmar Rabich at Wikipedia