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How do Ports adapt to the Changing
Patterns in Container Shipping?
Drewry Maritime Advisors
October 14th 2015
TOC Americas - Panama
Michel Donner, Senior Advisor
www.drewry.co.uk
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How do Ports adapt to the Changing Patterns in Container Shipping?
Agenda
• Adapt to what ?
• How ?
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How do Ports adapt to the Changing Patterns in Container Shipping?
A “non-virtuous circle”
- Poor financial performance
- Slower global trade growth
- Search of economies of scale through
increase of vessels sizes
- Widespread overcapacity and poor
utilisation rates
- Cooperation between shipping lines in the
form of VSAs (Vessel Sharing
Agreements), joint services and alliances
- Dropping freight rates
Shipping lines will deploy ships from the lower
bracket of the 8-14,000 TEU category even in
trades where only a few ports are equipped to
handle them, as has been seen in South America
and Oceania. Vessels of 9,400 TEU capacity have
already been seen in South and West Africa.
An equilibrium will be found through providing
direct services to the largest ports and running
feeder services to smaller ports. The optimal
balance and border-line are not known, however
the shipping lines’ network designers are prompt
to adjust networks and vessel deployments.
The global container shipping industry trend is to build and deploy larger vessels on all
trade routes, in search of economies of scale.
Source: Drewry Maritime Advisors
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How do Ports adapt to the Changing Patterns in Container Shipping?
Evolution of the global fleet 2014-16
The containership orderbook is dominated by the 14,000+ teu but also the 8-10,000 teu.
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Ve
ss
el C
ap
ac
ity,
TE
U
2014 2015 2016
Source: Drewry Maritime Research
Global Container Shipping Industry Trends
For the rest of 2015, ULCVs from 10,000 teus upwards
will continue to roll out of the yards at a pace of one a
week.
largest average
Santos 10,622 5942
Callao 9,962 6854
Vessel sizes in South America – mid 2015 (teu)
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How do Ports adapt to the Changing Patterns in Container Shipping?
Bigger ships and the pressure on ports infrastructureExamples from the South Atlantic
Cap San Nicolas 9700 teu - Source APMT Buenos AiresSAMMAX 8000 teu Source : Datamar/Porto de Itajai
MSC Loretta, at 304m LOA and 40m beam 6750 teu
MSC Arbatax 9400/7100 teu - Source Roberto Smera, Santos
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How do Ports adapt to the Changing Patterns in Container Shipping?
the dimensioning of the quayside and its
superstructure is changing radically.
The big ships require:
• Larger (and more) cranes
• Longer berths
• Deeper berths and approach channels (-15m or deeper)
• Farther outreach ( > 23 boxes, even 25)
• Greater air draft
• Higher crane and berth productivity
• More back reach, larger yard/gate operation ……
• …..and suitable inland transport links
This type of cranes can cost between $8 and 10 million apiece.
Inventory of super-post-panamax gantry cranes
3015
1911
189
Panamax
16-18 rows
18-20 rows
20-22 rows
22+ rows
Orderbook by outreach (2014)
2000 2014 2020
20 1160 >2000
Upsizing of container cranes
It is the whole port infra- and super-structure that needs upsizing, causing significant increases in ports and
terminals CAPEX and OPEX.
The counterpart of vessels upsizing is terminals upsizing.
Source: Drewry Maritime Advisors
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How do Ports adapt to the Changing Patterns in Container Shipping?
Typology of container terminal projects
• Averages from a sample of 50 projects, in 23
countries, and 3 regions: Latam, Africa, South
and South-East Asia
• The proportion of greenfield is increasing, partly
due to shortage of room for port growth inside
the city-ports
quay length 1,045 m
water depth 15,8 m
area 60 ha
capacity 1,4 million teu/y
greenfield 76%
brownfield 24%
•
76%
24%
Greenfield & Brownfield projects
greenfield
brownfield
Source: Drewry Maritime Advisors
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How do Ports adapt to the Changing Patterns in Container Shipping?
Brazil: more of the same
• Ratings agency Standard & Poor’s
downgraded Brazil’s debt status, due to
widespread economic difficulties
• steep inflation,
• rising unemployment
• falling GDP hit from the commodities price
crash
• Nation’s policy makers’ ability to turn things
around.
• 2013-14 and 2015 have been wasted, in
terms of implementation of the 2013 port
law.
• The famed dredging plan has not been
finalized properly in several ports.
• Santos has recurrent difficulties to come
to terms with its maintenance dredging
issues.
• In August, Pilots and Harbour Master
proposed to reduce the maximum
authorized draft to 13m, due to points of
silting that were not properly remedied
• Newly appointed minister of Ports (SEP)
is ex-minister of Fishing and Fisheries.
That’s what Brazilians call “trocar 6 por
meia duzia”, Brazilian observers adding
“in the Port sector, he will remain as
much a fish out of the water as he
already was in the Fishing & Fisheries”.
Reflecting a growing impatience with
politically motivated appointments in
technical ministries.
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How do Ports adapt to the Changing Patterns in Container Shipping?
Premature obsolescence of existing terminals
Timing disconnect raises the question of the risk of a
premature obsolescence of existing modern terminal
capacity.
- The MSC home terminal in Antwerp
- ECT Rotterdam
- Colombo JCT/UCT terminals
In Colombo, where transhipment is the mainstay, the recently (2014)
commissioned China Merchants’ CICT (Colombo International
Container) has mega-ship capability, have achieved 141% growth
Jan-Aug 2015 over the same period in 2015 .
Conversely, state-owned terminals Jaya and Unity terminals
(JCT/UCT) have suffered 12% volume decrease in 2015, and 18% in
August alone.
This is largely attributed to CICT’s ability to handle 10,000-TEUers,
while JCT/UCT are not deep enough to receive them. This latter
feature leads observers to comment that in the next decade JCT/UCT
face the prospect of becoming obsolete.
This confirms the need – and the difficulty – to plan and
implement port developments at the same time carefully and
well ahead, with particular attention given to the dimensioning
of the facilities to be built.
Vessel upsizing and terminal upsizing follow
different rhythms:
From 18 months to build one new mega-ship,
and up to 3 years to build a series of 10
sisterships.
From 5 to 10 years to build a new terminal.
There is thus a material disconnect between
shipbuilding and terminal building time-frames.
While vessel upsizing and terminal upsizing follow different rhythms, the issue of the early
obsolescence of some existing modern container could become a preoccupation for Port Authorities
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How do Ports adapt to the Changing Patterns in Container Shipping?
Freight rates crisis
The case of ECSA: SB continues falling, NB slightly better
Southbound Asia to ECSA utilisation v rates
Southbound Europe to ECSA utilisation vs rates
Northbound ECSA to Europe utilisation v rates
• Sources: Drewry Maritime Research (www.drewry.co.uk); Drewry
Container Freight Rate Insight (www.drewry.co.uk/cfri)
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How do Ports adapt to the Changing Patterns in Container Shipping?
“Novelties”
• M & A activity continues
• APMT acquires terminal company
Grupo TCB
• Yildrim Group takes control of Tertir,
which holds a controlling stake in the
Paita concessionaire consortium
• Mexican entrepreneur Fernando Chico
Pardo acquisition of 49% in the SSA
Marine parent firm, from Goldman
Sachs, in 2014
• COSCO and CSCL merger : timeline
and impact on alliances and terminals
portfolios
• Shipbuilding continues
• Maersk orders nine 14,000 TEU ships.
The company said they have taken a new
approach. The vessels will be designed to
operate in and perform efficiently across
many trades and not just designed for one
specific trade.
According to some analysts, these ships are
not neo-panamaxes.
• Premature obsolescence of existing
terminal installations
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How do Ports adapt to the Changing Patterns in Container Shipping?
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Thank You
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