With global container volume forecast to increase by strong single digits annually in the next five years, port congestion could once again become a problem, says an analyst.
Problems could become especially serious in fast-growing areas of the Far East and the Middle East, according to Drewry Shipping Consultants’ latest port sector report, Annual Review of Global Container Terminal Operators 2010.
The Great Recession of 2008-2009 caused container volumes at the world’s ports to decline for the first time ever. Global container throughput fell from 524 million 20-foot equivalent units in 2008 to 473 million TEUs in 2009, a drop of almost 10 percent.
By The Numbers: Container Rate Benchmark.
Global terminal operators, however, fared better than these figures suggest, as their diversified facilities benefited from regions where volumes were not hit as hard.
Emerging markets were generally less hard hit than the mature markets. Volumes in North America and Europe fell by around 15 percent but in the Middle East and Africa the downturn was hardly felt.
While worldwide volumes fell by 10 percent in 2009, the total equity TEU volume handled by the 22 global container terminal operators was only 7.5 percent lower.
These operators collectively outperformed the market and suffered less than others from the downturn. Nevertheless, average utilization levels fell markedly across the board. On a widespread basis, operators and developers put expansion and investment plans on ice.
Neil Davidson, senior advisor on ports for Drewry, said, “2009 was a year the like of which has never been seen before. Historically, for global terminal operators, it has always been about expanding and adding capacity as quickly as possible. Then, suddenly, they were all faced with changing their mindset towards drastic cost control and halting of projects.”
With economic prospects now brighter, Drewry has revised its medium term container trade growth projections upwards – although still nothing like the double-digit growth rates seen in the heady years of the early part of the 2000s.
It predicts container throughput to increase globally by an average of 7.2 percent a year between 2009 and 2015. As a result, global container port volumes are forecast to rise by 245 million TEUs, from 473 million TEUs to 718 million TEUs, an increase of just over 50 percent in this period.
At present, the capacity of the world’s container terminals is forecast to grow by 143 million TEUs during the same time frame, a rise of just under 20 percent. The much slower rate of container terminal capacity growth relative to throughput will inevitably increase global container terminal utilization rates unless more projects are brought back to life.
Several parts of the world could see the specter of congestion returning by 2015 if some of the originally planned expansion projects cannot be reactivated within the next three to five years.
Drewry predicts that by 2015 average global utilization levels will have reached just over 80 percent.
Terminals in fast-growing areas are usually more highly utilized than the average, and there are some regions, most notably the Far East and Middle East, where the inadequacy of currently confirmed projects to keep up with demand is exposed. By 2015 average utilization levels could be around 95 percent in the Far East and Middle East regions.
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