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Container terminals may earn $25 billion in 2019

Some succour may be underway for global shipping container terminal industry this year, with soaring throughput and projected earnings of about $25 billion, all things being equal.

Maritime insight and intelligence provider, Drewry, market forecast showed the sector would remain solid and profitable in 2019, with global throughput exceeding 800 million twenty-foot equivalent unit (TEU).

“If accurate, this would generate earnings before interest, taxes, depreciation and amortisation (EBITDA) of approximately $25 billion,” it added.

However, the forecast is pegged on a plethora of challenges, including the U.S.-China trade war, and Brexit, which are expected to have great impact on the industry.

“We will see a softening of the global container port demand growth rate, down from an estimated 4.7 per cent in 2018, to just over four per cent in 2019 (although four per cent is still very respectable and adds over 30 million TEU to the world total). However, the projection for 2019 is highly uncertain due to the U.S.-China tariff wars, Brexit among others. So there is a big caveat,” it stated.

Besides, it said the Greenfield expansion projects would be the area hardest hit. Nevertheless, a global capacity addition of over 25 million TEU can be expected in 2019, representing spending of $7.5 billion.

“The good news for the industry is that there will be no significant increase in maximum container ship size (maximum TEU intake is going up but physical dimensions are not). However, cascading will still be very much at work across all trade routes, and each port will see increasing pressure on whichever berths are able to handle the biggest ships (and increased obsolescence of older berths),” it added.

Drewry said the opportunities offered by digitisation/automation, blockchain/smart ports, IoT/hyperloop and a host of others, would continue to be vigorously explored by both terminal operators and port authorities.

“However, the big challenge remains: how to find the way through the minefield of options to focus on what will really work, and what has the best potential,” it noted.

Drewry’s Senior Analyst for Ports and Terminals, Neil Davidson, was quoted as saying that while the timing of any conclusion to the trade war is uncertain, it has seen other nations, specifically in the Pacific, play a more active role in global trade.

“I think that the U.S.-China trade war is still ongoing and will be a key feature of 2019 as well. It has the potential to become much more severe, but also a degree of agreement could be found”, Davidson said.
Source: The Guardian

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