Entrants Challenge Old Guard Terminal Operators

Several financially strong companies, mainly in Asia, are poised to break into the global container terminal market, challenging the established operators that dominate the industry, according to a new report.

“The appetite for investing in the container terminals business has returned strongly,” said Neil Davidson, Senior Advisor, Ports at Drewry Shipping Consultants in London, which published the report.

There is evidence of increased merger and acquisition activity and signs of renewed interest in bidding for greenfield sites, according to the “Global Container Terminal Operators 2011” report.

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“Several strong companies are mounting serious challenges to enter the big league based on very strong cash positions and the incumbent international operators will need to be ready to face this new competition,” Davidson said.

Drewry identified China Shipping Container Lines and China Merchants among several companies that could break into the Top 20 global terminal operators by internationalizing their businesses.
Shanghai International Ports group has already made its first international move with a minority stake in APM Terminals.

“It is no coincidence that all three of these operators are Chinese and are seeking outlets to invest cash,” Drewry said.

Other newcomers pursuing international growth are Gulftainer of the United Arab Emirates, which has already located opportunities in Iraq and Brazil, and Turkey’s Yildirim Group, which appears to be using its 20 percent stake in French ocean carrier CMA CGM as a springboard for terminal expansion.

There was no change in the top five rankings in 2010 with those with significant interests in Chinese ports achieving particularly high growth.

The top company based on equity throughput was Singapore’s PSA, followed by Hong Kong’s Hutchison Ports, Dubai-based DP World, A.P. Moller-Maersk’s APM Terminals and China’s Cosco Group.

-- Contact Bruce Barnard at brucebarndard47@hotmail.com.