The forecasts for the future trend of container handling stand or fall with the economic development of China and its trade relations with the USA and Europe. Were there to be trade disputes or a longlasting weakness in growth in China (which we do not expect) the forecasts would be nothing more than waste paper. Something similar clearly applies to a longer clouding of the consumer climate in the USA, the largest consumer of Chinese products. Further increases in the oil price or external shocks could also have a dampening effect on the demand for container transport.
The importance that China now has in container shipping can be shown by looking at the statistics for container ports. Of the 25 largest container ports in the world, 16 are in Asia and seven of those are in China. In North America, however, there are only three of these ports; in Europe six. Three of the four largest container ports in the world are in China. It is not just the size of these ports that is phenomenal but also their level of activity. Container handling in Shanghai, for example, increased by just under 820% between 1996 and 2005, while in Shenzhen, the “shooting star” of container ports, the increase was 2,650%. The growth alone of these two ports in the last three years is more than the total annual number of containers handled in Hamburg, Europe’s second-largest container port. This growth was made possible by an enormous expansion of capacity in these ports.
Asia is also dominant in transhipment traffic: the six ports with the highest volumes of transhipment are located there. Singapore is, by a large margin, the largest hub. Over 80% of the containers handled there are in the transhipment category; this high proportion is clearly due to the relatively small home market. In 2005 the city state took over from Hong Kong, whose port is suffering from increasing congestion, as the largest container port in the world. Ports in the Near- and Middle East are playing an ever more important role in transhipment traffic. Even some Mediterranean ports have an unusually high proportion of transhipment. This is also and especially true of the port of Tanjung Pelepas in Malaysia, which has a transhipment level of 96%.
Looking at regional differences in the growth forecasts, the main routes that are likely to achieve the greatest expansion include intra- Asian transport as well as the routes from North America and Europe to Asia. However, in comparison with the last few years growth here is likely to ease noticeably. Transatlantic traffic will also grow less strongly in the future. As well as the very busy “racetracks”, some niche markets are likely to experience above-average growth in the next few years. Ports in the Middle- and Near East may expand their operations as transhipment locations for container transport. Because of its geographic location the region is suitable for grouping and reorganizing ships’ cargos in order to serve the rest of the Asian and African market. India is also one of the future boom regions for container shipping because of its expected economic growth and increasing industrialisation. In Eastern Europe, the enlargement of the EU has also provided powerful impetus for growth. The short sea shipping routes in the Baltic will gain in importance. Container shipping between Eastern Europe, including Russia, and the USA may also increase sharply in the future. Connections between Asia and the Black Sea ports will record high growth rates in the next few years, too. The large amount of catching-up needed in the field of container shipping (low basis) favours growth prospects there. The degree of containerisation in many East European ports is still low. According to forecasts by Drewry, ports in the Baltic and the Black Sea, in South America, Africa and India will record the highest growth rates in container handling, albeit from a low level in each case. Ports in the Far East (China) and southeast Asia could largely keep up with this growth. In absolute terms, for years the traditional routes will remain much more important than the comparatively new markets for container shipping.
Consolidation of shipping companies expected
In the last few years the sector has been characterised by a few spectacular takeovers. First and foremost was the purchase of P&O Nedlloyd by Maersk, by which Maersk improved its leading position in global container shipping. An important reason for the takeover was to be able quickly to respond to the increased demand with its own capacity. In the coming years further consolidation is likely. The catalyst could be the coming overcapacity in container shipping (particularly in large tonnage), as this will put pressure on charterand freight rates and will therefore negatively influence the economic prospects of the shipping companies. However, increasing overcapacity clearly also reduces the incentive to expand a fleet by purchasing competitors.
The importance that China now has in container shipping can be shown by looking at the statistics for container ports. Of the 25 largest container ports in the world, 16 are in Asia and seven of those are in China. In North America, however, there are only three of these ports; in Europe six. Three of the four largest container ports in the world are in China. It is not just the size of these ports that is phenomenal but also their level of activity. Container handling in Shanghai, for example, increased by just under 820% between 1996 and 2005, while in Shenzhen, the “shooting star” of container ports, the increase was 2,650%. The growth alone of these two ports in the last three years is more than the total annual number of containers handled in Hamburg, Europe’s second-largest container port. This growth was made possible by an enormous expansion of capacity in these ports.
transhipment category; this high proportion is clearly due to the relatively small home market. In 2005 the city state took over from Hong Kong, whose port is suffering from increasing congestion, as the largest container port in the world. Ports in the Near- and Middle East are playing an ever more important role in transhipment traffic. Even some Mediterranean ports have an unusually high proportion of transhipment. This is also and especially true of the port of Tanjung Pelepas in Malaysia, which has a transhipment level of 96%.
the main routes that are likely to achieve the greatest expansion include intra- Asian transport as well as the routes from North America and Europe to Asia. However, in comparison with the last few years growth here is likely to ease noticeably. Transatlantic traffic will also grow less strongly in the future. As well as the very busy “racetracks”, some niche markets are likely to experience above-average growth in the next few years. Ports in the Middle- and Near East may expand their operations as transhipment locations for container transport. Because of its geographic location the region is suitable for grouping and reorganizing ships’ cargos in order to serve the rest of the Asian and African market. India is also one of the future boom regions for container shipping because of its expected economic growth and increasing industrialisation. In Eastern Europe, the enlargement of the EU has also provided powerful impetus for growth. The short sea shipping routes in the Baltic will gain in importance. Container shipping between Eastern Europe, including Russia, and the USA may also increase sharply in the future. Connections between Asia and the Black Sea ports will record high growth rates in the next few years, too. The large amount of catching-up needed in the field of container shipping (low basis) favours growth prospects there. The degree of containerisation in many East European ports is still low. According to forecasts by Drewry, ports in the Baltic and the Black Sea, in South America, Africa and India will record the highest growth rates in container handling, albeit from a low level in each case. Ports in the Far East (China) and southeast Asia could largely keep up with this growth. In absolute terms, for years the traditional routes will remain much more important than the comparatively new markets for container shipping.
