Dive Brief:
- Compared to the recent container shipping crisis, major container ports could experience an even greater disruption because they don't really need all the big container vessels recently added to the global shipping fleet, analysts said at the TOC Europe Container Supply Chain conference.
- SeaIntelligence Consulting's Lars Jensen said hub port operators will probably need to begin expensive investment projects to offset costs of the massive new ships.
- However, Drewry's Senior Port Analyst Neil Davidson reminded conference attendees that ports are currently thriving, with double digit EBITDA profits.
Dive Insight:
The shipping industry is changing, signaling a trend in ports needing to find new ways to offset the costs of big ships.
U.S. ports have undertaken significant debt and public works projects in order to reap the benefits of larger vessels, from the raising of bridges to the dredging of existing ports. And while calls are less frequent due to the high numbers of TEUs, thus far the results have been successful, with the Port of Long Beach reporting a 16.5% increase in container volumes.
The value of ports to the regions they inhabit generally make investment worthwhile since they provide hundreds of jobs and millions of dollars to the cities they inhabit. Typically specializing in distribution, with countless freight forwarders, trucking companies, trade agents and freight equipment providers settling nearby, port cities also tend to have a healthy industrial real estate market, since both manufacturers and retailers prefer to minimize transport costs with nearby distribution centers and warehouses.
