Dive Brief:
- COSCO Shipping and CMA Terminals Holding signed a memorandum of understanding (MOU) promoting greater cooperation at ports around the world, American Shipper reported Thursday.
- COSCO and CMA CGM have further agreed to support both business and service to ports in which the other has previously invested.
- The companies said the creation of the Ocean Alliance has sparked a desire by both companies to more closely collaborate on operations, according to the press release. The companies added ports called upon by the Ocean Alliance will receive preference in investment.
Dive Insight:
As shipping alliances are formed and re-formed, ports are also being drawn into the maelstrom, losing the stability and rate establishment power they had back when the industry was healthy.
As far back as 2013, only five companies controlled nearly 30% of the world's terminals: PSA International held 8.7%; Hutchison Port Holdings owned 7%, APM operated 5.5%; DP World had a stake in 5.1%, and China Merchant Holdings owned 3.6%. The seascape has continued to shift, especially as pricing pressures and stakeholders have changed over the years.
In just one example, negotiations and shifts in ownership plague many ports, including Ports America, which in May 2016 was targeted by Yilport for majority control. Similarly, the Port of Long Beach saw various shifts in one of its terminals as the Hanjin bankruptcy forced a sale of Total Terminals International and subsequent bidding wars.
Increasing fragmentation is taking hold within established ports, and certain lines and alliances receive preferential treatment as shareholders. Perhaps such moves will increase the security of some ports worldwide, while leaving others still vulnerable to the shrinking shipping market.
