Wei Zhe Tan |
Group welcomes capacity generated by container shipping consolidation
The new container alliances are scheduled to start their new networks on April 1, but it is still too early to tell what will be their actual impact on port operations, according to DP World’s management.
In an earnings call for the company’s 2016 results, key executives said the consolidation activities could mean that operational realignments and adjustments would be needed in light of perhaps three shipping lines, for example, that previously called at separate terminals subsequently calling at one terminal now.
The executives added that the extra capacity stemming from all this consolidation activity was "exceedingly helpful" for the group's terminal operations, especially with the major alliances all slated to call at its UK terminals.
Earlier in March, DP World gained exclusivity to The Alliance’s mainline calls in the UK, including the first fixed regular Asia-Europe calls at London Gateway.
The agreement will also see vessels deployed on The Alliance’s transatlantic AL3, AL4 and AL5 offerings call Southampton, while those on the AL1 and AL2 will call London Gateway.
From the start of the second quarter, DP Word Southampton will become the only UK port to handle all three boxship alliances' vessels.
In the near term, though, it was not planning any further investments at the London terminal, the executives said.
In terms of an industry overview for global trade, the group noted there was a big ramp-up in productivity, with signs of a recovery as better numbers came out of Asia and especially China.
However, it cautioned again banking on those numbers prematurely with uncertainty on the geopolitical side.
With regard to issues over US trade protectionism, the executives said that this was also happening across Europe.
However, it was not that easy to simply relocate manufacturing facilities within a short period of time.
Hence, the group believes these protectionist measures are unlikely to have too much of an impact on trade itself and perhaps just on the terms of trade.
Despite the challenging industry backdrop, executives say the group is positive on the medium-term outlook and will evaluate market conditions to look for growth opportunities.
The group was looking at some investment opportunities in Brazil, though no further details could be revealed.
First published on www.lloydslist.com
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