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, 27-30 May 2012
1. THE STAGE
The boom (bubble?) in shipping trade
Source:
UNEP/Arendal
GDP and world trade development
Real GDP, Consumer Prices, Current
Account Balance, and Unemployment
Source IMF, April 2012
Trade flows: a world of
regional trading blocks
Source: adapted from Notteboom (2012)
Share of intra-regional
merchandise trade in total trade
Basis = trade value in billion dollars
53
49
Asia
Middle East
6
Africa
8
Commonwealth of Independent
States (CIS)
10
2010
12
2000
19
27
71
68
Europe
South and Central America
17
26
North America
40
00
Source: own compilation based on WTO data
20
40
49
60
80
Trade flows: share of Asia
in total merchandise trade?
Basis = trade value in billion dollars
Middle East
48
Africa
17
Commonwealth of Independent
States (CIS)
7
24
15
2010
9
8
Europe
South and Central America
53
2000
23
6
21
22
North America
00
Source: own compilation based on WTO data
10
20
30
40
50
60
Distribution of European
container trade volumes
Extra-European
Container trade volumes – 2011 – basis = TEU
Imports to Europe
Exports from Europe
15.9 mln TEU
3%
10%
9%
38%
1% 4%
Asia
8% and Middle
Indian subcontinent
East
North America
13%
Indian subcontinent
and Middle East
North America
Australia and Oceania
Sub-Saharan Africa
Sub-Saharan Africa
9%
19%
Asia
South & Central
America
Australia and Oceania
South & Central America
21%
21.4 mln TEU
Intra-European
3.7 mln TEU or 9.1% of total European container traffic
65%
2. THE PLAYERS
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
9
The main 3PL companies in the world
3PL company
Deutsche Post World Net (DPWN)
Kuehne & Nagel
DB Schenker Logistics
Geodis
CEVA Logistics1
Panalpina
Logista
CH Robinson Worldwide
Agility Logistics
UPS Supply Chain Solutions
Expeditors International of Washington
Dascher & Co
DSV
UTi Worldwide
Sinotrans
NYK Logistics
Wincanton
Bolloré
Hellmann Worldwide Logistics
Rhenus & co
Toll Holding
JB Hunt Transport Services
Logwin (formerly Thiel Logistik)
Kitetsu World
Penske Logistics
Source: SJ Consulting Group, www.jindel.com/aboutsjc.htm
Country
Gross revenue (million US$)
Germany
Switzerland
Germany
France
The Netherlands
Switzerland
UK
USA
Kuwait
USA
USA
Germany
Denmark
USA
39,900
20,220
12.503
9,700
9,523
8,394
8,190
7,130
6,316
6,293
5,650
5,377
5,351
4,896
China
Japan
UK
France
Germany
Germany
Australia
USA
Luxemburg
Japan
USA
4,757
4,723
4,331
4,330
4,209
3,940
3,125
3,088
3,081
2,991
2,910
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
Number of terminals and total hectares controlled
by the 12 largest container terminal operators
Terminals
CMA-CGM
412
14
ICTSI
466
16
Hanjin
13
559
Cosco Pacific
Shanghai International Port…
SSA Marine
686
14
734
10
20
939
Ports America
11
1,270
Eurogate
9
1,646
APM Terminals
Dubai Ports World
50
2,347
Port of Singapore Authority
38
2,604
Hutchison Port Holdings
47
3,248
0
Source: Notteboom & Rodrigue (2011)
42
2,038
1,000
2,000
Hectares (2010)
3,000
4,000
3. THE GAME
Key considerations
Source: Notteboom (2012)
Key considerations
Source: Notteboom (2012)
Need for SUSTAINABILITY
The carbon footprint challenge
Example of externalities on origin-destination routes
Maritime +inland transport (index = 100 is lowest CO2 emission on route)
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?
Key considerations
Source: Notteboom (2012)
Cost control in order to get a piece
of the global logistics cake
Consolidation and cooperation
among shipping lines
Source: Alphaliner (2011)
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
Scale increases in vessel size
Who is (allowed to be) in the race ?
Vessel Capex commitments
Oct 2011-2015
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
The application of slow
steaming (SS)
Main characteristics of 174 European liner services in January 2010
Number
%
SS
Services
%
Vessels SS
TEU
Mean
Age Design Engine
Speed kWh
Africa
16
6.3
68
5.9
2662
9
21
23,570
Far East
39
79.5
273
79.5
7970
5
25
58,778
India/Pakistan
Latin /South
America
11
72.7
63
74.6
4509
7
23
39,202
21
28.6
131
28.2
3251
7
22
27,639
North America
14
14.3
74
25.7
3983
11
23
32,971
3
33.3
9
33.3
2940
10
22
24,427
Oceania
SS = slow steaming
Source: Notteboom & Cariou (2010) based on
Alphaliner database (January 2010) and LRF (2009)
Going slower at sea but speeding up in ports
Global terminal operators:
Intensified cost control helps to keep margins level
EBITDA
margin
HPH
2008
2009
2010
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)
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
Key considerations
Source: Notteboom (2012)
A better service at lower costs
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
e
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
Source: adapted from Notteboom (2012)
Cape Route
d
c
b
a
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”
Need for RELIABILITY
Schedule reliability in liner shipping - April-June 2010
Source: based on data Drewry
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
Need for RESILIENCE
Calamities, disasters, political changes are
affecting supply chains
RESILIENT ports and shipping
•
To support supply chain resilience
•
Redefining the buffer function of seaports and shipping
in supply chains
RELIABILITY, FLEXIBILITY and RESILIENCE
demand VISIBILITY through advanced IT systems
Source: DHL
Conclusion: is the game changing?
• Higher uncertainties and risks facing ports & shipping
• Future will bring stronger focus on
• cost efficiency
• flexibility, resilience, reliability
• sustainability
Thank you for your attention !
[email protected]
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