Terminal operators face a “perfect storm” of rising costs due to bigger ships, greater business risks from larger liner alliances, softening global demand growth and pressure on terminal handling prices from cash-strapped carriers.

The financial results of listed port and terminal operators reveal a weakness in organic earnings amid escalating debt levels. Stricter cost rationalisation and financial risk reduction will be necessary to retain investment interest. Companies with growth plans are commanding a significant market premium amid diminishing profitability. The market valuation of listed operators remains weak, underlining the cautious assessment of growth in the sector. Drewry’s Port Index, a market weighted assessment of share price performance of the top listed operators, slumped 10% in the last quarter.

Resisting downward pressure on terminal handling prices will be challenging, but not impossible, as much depends on local market conditions and the extent of choice for ever larger ships and alliances.

Full report can be found here

Source: https://www.drewry.co.uk/news/carriers-playing-poker-with-ports-warns-new-report
2016-12-03

Naval gazing, what lies ahead for the supply chain Rockford IL

As this blighted year nears its end, three maritime journalists were asked to assess the industry as it enters a critical period in history. Change is afoot and 2021 is likely to herald a new beginning for some, writes Nick Savvides, managing editor at Container News.

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