[070818.EN.BIZ] Terminal Utilisation Rate Continues to Outpace Capacity Growth

DREWRY Shipping Consultants has said in its latest Global Container Terminal Operators Annual Review and Forecast that container shipping ports face a challenging rise in utilisation in the next five years, as investment in new terminals trails volume growth.

Container port demand is set to increase on average by six per cent, or 45 million TEU annually, through 2022 "broadly equivalent to the size of the world's largest container port Shanghai."

Global port container terminal capacity, on the other hand, is forecast to increase by about 125 million TEU by 2022, an annual growth rate of just over two per cent, reflecting the cautious investor sentiment towards greenfield projects over the past few years, reports IHS Media.

As a result, average global utilisation is forecast to increase from 68 per cent in 2017 to 80 per cent by 2022, with the sharpest growth expected in Greater China, North Asia, Southeast Asia, and west coast South America.

"Against this positive picture, near-term container port capacity expansion will remain relatively subdued following several years of under investment, particularly in greenfield projects. As a result, average utilisation levels are expected to rise markedly across almost all regions of the world by 2022," said the Drewry forecast.

"Assuming our demand projections are well founded, and the threat of trade wars dissipates, we expect many terminal operators and investors to review and potentially increase their activity levels in terms of new capacity additions," said analyst Neil Davidson.

"Crucially however, all capacity is not the same ... indeed for certain port markets, individual ports, and specific terminals, the need for additional capacity may even be greater."

"Rapid growth in ship sizes has increased the segmentation of terminal capacity, such that today, all 'deepsea' capacity simply cannot handle all 'deepsea' vessels. It is often the case that berths with the infrastructure to handle the largest ships are the most highly utilised and in short supply, while older deepwater berths are underutilised," said Mr Davidson.

In addition, despite fears of rising tariffs, protectionist sentiment, and trade wars, economic fundamentals are likely to prevail long term and extend the global economic expansion, economists generally agree.

The medium-term outlook for global container port demand growth is positive, thanks to strong underlying economic momentum in the world's major economies (US, China, and the European Union).

Source : HKSG.