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In the Q3 2017 Ports and Terminals Insight, our thought leadership spotlight analysis looks at the rise of international port and terminal investments by Chinese operators and investors. Arabian Gulf ports are the focus for our analyses of liner services and port call changes, while the latest quarter’s port volumes are assessed on a region-by region basis, along with a new, long-term port throughput growth index analysis. Three significant new port developments are critically examined in the new projects section, followed by our analysis of the latest financial trends affecting the major listed port operators. We summarise below the key findings of our analyses.

Spotlight analysis

The rise of Chinese international port investments

Mainland China-based operators are expanding internationally at an aggressive rate
Over the next five years, they will outperform the projected global growth in capacity and that of traditional global operators as well
Further acquisitions are likely to boost the known plans
Chinese operators are prepared to pay a premium for port assets

Liner service and port call trends

Larger vessels and more direct calls in the Arabian Gulf

There are now direct calls at more Arabian Gulf ports, coupled with an increase in vessel size
This is both on dedicated Asia-Arabian Gulf services and on Asia-Europe services, making wayport calls at hubs in the region

New port projects and concessions

Chinese and US geopolitics at play

A large-scale new port project at Anaklia has received support from investors in the US, despite Georgia having ample container port capacity currently
In Sri Lanka, Hambantota port will likely have to look beyond boxes for success
In Panama, a large Chinese-backed greenfield terminal project appears to be going ahead, even though another proposed new terminal has been shunned by international players

Port throughput trends

Positive signs continue

Growth in global container port volumes has persisted into second-quarter 2017
Drewry’s latest rolling annual average growth figure was 5% – the highest for over two years
Growth in sample ports in secondquarter 2017 versus 2016 was 6.4%
However, second-quarter 2016 was a weak quarter volumewise, and this flatters the performance in second-quarter 2017

Port sector financial analysis

Belt and Road interests sustain M&A pace

Investors have raised earnings growth expectations
The sector’s EBITDA margin eased from 39.6% to 36.7%, prompting terminal operators to rein in variable costs
The pace of M&A has quickened, driven by Chinese investments in Spain and Sri Lanka