Dynamics in the Port and Maritime Business: The Same Stage, Different Players, Another Game?

Transcription

1 Dynamics in the Port and Maritime Business: The Same Stage, Different Players, Another Game? Prof. Dr. Theo Notteboom President and Professor, ITMMA University of Antwerp President International Association of Maritime Economists (IAME) Chairman, Belgian Institute for Transport Organisers (BITO) Part-time professor, Antwerp Maritime Academy Co-director PortEconomics.eu IFSPA conference, Keynote Session 2, Hong Kong, May 2012

2 1. THE STAGE

3 The boom (bubble?) in shipping trade Source: UNEP/Arendal

4 Source IMF, April 2012 GDP and world trade development Real GDP, Consumer Prices, Current Account Balance, and Unemployment

5 Trade flows: a world of regional trading blocks Source: adapted from Notteboom (2012)

6 Basis = trade value in billion dollars Share of intra-regional merchandise trade in total trade Asia Middle East Africa Commonwealth of Independent States (CIS) Europe South and Central America North America Source: own compilation based on WTO data

7 Basis = trade value in billion dollars Trade flows: share of Asia in total merchandise trade? Middle East Africa Commonwealth of Independent States (CIS) Europe South and Central America North America Source: own compilation based on WTO data

8 Distribution of European container trade volumes Extra-European Container trade volumes 2011 basis = TEU Exports from Europe 3% 9% 21% 15.9 mln TEU 1% 4% 21.4 mln TEU Asia 10% 19% 38% Imports to Europe Indian subcontinent and Middle East North America 13% South & Central America 9% 8% Australia and Oceania Sub-Saharan Africa 65% Asia Indian subcontinent and Middle East North America South & Central America Australia and Oceania Sub-Saharan Africa Intra-European 3.7 mln TEU or 9.1% of total European container traffic

9 2. THE PLAYERS

10 9 Outsourcing strategies of global corporations Global corporations Outsourcing - Transportation, warehousing and distribution - Logistics service providers take over a large part of the added value creation within the product chain (low-end VALS versus high-end VALS) - The rise of 3PLs and 4PLs

11 The main 3PL companies in the world 3PL company Country Gross revenue (million US$) Deutsche Post World Net (DPWN) Germany 39,900 Kuehne & Nagel Switzerland 20,220 DB Schenker Logistics Germany Geodis France 9,700 CEVA Logistics 1 The Netherlands 9,523 Panalpina Switzerland 8,394 Logista UK 8,190 CH Robinson Worldwide USA 7,130 Agility Logistics Kuwait 6,316 UPS Supply Chain Solutions USA 6,293 Expeditors International of Washington USA 5,650 Dascher & Co Germany 5,377 DSV Denmark 5,351 UTi Worldwide USA 4,896 Sinotrans China 4,757 NYK Logistics Japan 4,723 Wincanton UK 4,331 Bolloré France 4,330 Hellmann Worldwide Logistics Germany 4,209 Rhenus & co Germany 3,940 Toll Holding Australia 3,125 JB Hunt Transport Services USA 3,088 Logwin (formerly Thiel Logistik) Luxemburg 3,081 Kitetsu World Japan 2,991 Penske Logistics USA 2,910 Source: SJ Consulting Group,

12 Liner shipping Top 25 Container Shipping Lines (on 23 May 2012) World total: 5,981 ships, 16,388,580 TEU capacity 4,948 fully cellular ships, 15,910,068 TEU capacity Source: Alphaliner

13 Number of terminals and total hectares controlled by the 12 largest container terminal operators CMA-CGM ICTSI Hanjin Cosco Pacific Shanghai International Port SSA Marine Ports America Eurogate APM Terminals Dubai Ports World Port of Singapore Authority Hutchison Port Holdings ,270 1,646 2,038 2,347 2,604 3,248 Terminals ,000 2,000 3,000 4,000 Hectares (2010) Source: Notteboom & Rodrigue (2011)

14 3. THE GAME

15 Source: Notteboom (2012) Key considerations

16 Source: Notteboom (2012) Key considerations

17 Need for SUSTAINABILITY The carbon footprint challenge Example of externalities on origin-destination routes Maritime +inland transport (index = 100 is lowest CO 2 emission on route)

18 SUSTAINABLE ports and shipping Higher regulatory and societal requirements Compliance in order to ensure community support & to attract customers. Environmental management system, toolbox, sustainability report, etc.. Cost of going beyond compliance?

19 Source: Notteboom (2012) Key considerations

20 Cost control in order to get a piece of the global logistics cake

21 Source: Alphaliner (2011) Consolidation and cooperation among shipping lines

22 Lower costs: scale increases in vessel size New standard sizes on mainline routes Cascading of vessels to north-south routes Upscaling of feeder vessel sizes Triple E class source: Maersk Line 21

23 Scale increases in vessel size Who is (allowed to be) in the race? Vessel Capex commitments Oct Orders before 2009 (30 billion $) Orders after 2009 (27 billion $) Top ship finance banks: HSH Nordbank, DNB Nor, Commerzbank, RBS, KJW, Nordea, BNP Paribas Fortis, Credit Suisse. Rol Islamic finance en private equity. Source: Alphaliner

24 The application of slow steaming (SS) Main characteristics of 174 European liner services in January 2010 Services Number % SS Vessels % SS TEU Mean Age Design Speed Engine kwh Africa ,570 Far East ,778 India/Pakistan ,202 Latin /South America ,639 North America ,971 Oceania ,427 SS = slow steaming Source: Notteboom & Cariou (2010) based on Alphaliner database (January 2010) and LRF (2009)

25 Going slower at sea but speeding up in ports

26 Global terminal operators: Intensified cost control helps to keep margins level EBITDA margin HPH 60.6% 60.3% 58.6% PSA 29.8% 28.9% NA APMT 18.4% 24.4% 25.3% DPW 40.8% 38.0% 40.3% Eurogate 28.3% 25.3% 26.5% Note: EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization. Source: company websites (2010 figures) and Drewry 2010 (2008 and 2009 figures) Revision of investment plans, equipment maintenance schedules, asset deployment strategies and renegotiation of concession agreements and throughput levels. Source: Notteboom and Rodrigue (2011)

27 COST-EFFICIENT chains and networks Shift of cost burden from seaside to landside Gains mainly to be made in terms of bundling flows Role of ports as information centres

28 Source: Notteboom (2012) Key considerations

29 A better service at lower costs

30 FLEXIBILITY in the global transport system Routing possibilities on the North Europe - Far East trade Northwest Passage Northern Sea Route East-West rail corridors a d e c b a Suez Canal Panama Canal route Legend a = Trans-Siberian Railway b = Trans-Manchurian Railway c = Trans-Mongolian Railway d = Baikal Amur Mainline (BAM) e = New Asia-Europe Land-Bridge Cape Route Source: adapted from Notteboom (2012)

31 FLEXIBLE ports Seaport choice is likely to become more flexible Last minute decisions on final port choice? B/L for inland destinations Driven by equipment utilization, liner service synchronization Not all eggs in one basket

32 Source: based on data Drewry Need for RELIABILITY Schedule reliability in liner shipping - April-June 2010

33 RELIABLE ports and shipping Ports and shipping will increasingly have to offer service guarantees In a supply chain setting (foreland-port-hinterland) Adopting new partnership models Even in a more volatile business environment Promise to partners, to investors, to the communities

34 Need for RESILIENCE Calamities, disasters, political changes are affecting supply chains

35 RESILIENT ports and shipping To support supply chain resilience Redefining the buffer function of seaports and shipping in supply chains

36 Source: DHL RELIABILITY, FLEXIBILITY and RESILIENCE demand VISIBILITY through advanced IT systems

37 Conclusion: is the game changing? Higher uncertainties and risks facing ports & shipping Future will bring stronger focus on cost efficiency flexibility, resilience, reliability sustainability

38 Thank you for your attention!