The Next Box Wave: Can Containerization Reinvent Itself? Theo Notteboom ITMMA - University of Antwerp and Antwerp Maritime Academy, Belgium
Jean-Paul Rodrigue Dept. of Global Studies & Geography, Hofstra University, New York, USA
Terminal Operators Conference Europe EXECUTIVE SESSION 4: ACADEMIC PERSPECTIVE, Antwerp, June 7-9 2011
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Do you really know me?
Innovation
Diffusion The Charthouse Group
Just a partial (topless) recovery. Not a “full frontal” recovery…
SITUATION REPORT EUROPE: REASONS TO SMILE?
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Total European port throughput
European port traffic 2008‐2010 = ‐5.2%
2008: 4.26 billion tons 2009: 3.76 billion tons (-11.7%) 2010: 4.04 billion tons (+7.4%)
Million tons of maritime traffic
1600 1400
2008 2009 2010
316 ports
1200 ‐3.9%
+1.4%
1000 800 600
352 ports 266 ports ‐19.8%
400 200
135 ports
+13.6%
‐14.0%
+10.3%
340 ports ‐12.0%
+9.5% ‐19.6%
+9.5%
0 Roro
Conventional general cargo
Liquid Bulk
Dry Bulk
Containers
Cargo segment The Charthouse Group
Non-anticipated traffic gap of 15 million TEU 2009: - 14.4% compared to 2008
2010
2009
2008
2007
2006
2005
2004
2002
2001
2000
1999
1998
2010: + 10.4% compared to 2009
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
European port system Hamburg-Le Havre range Mediterranean range UK range Atlantic range Baltic Black Sea Exponential trendline total traffic
2003
95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 -
1985
Container throughput in million TEUs (78 ports)
Container volumes are bouncing back
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Market shares in the European container port system 60%
Rising market share Hamburg‐Le Havre range mainly due to Benelux ports.
50% Hamburg-Le Havre range
45%
Mediterranean range
40%
UK range
35%
Atlantic range Baltic
30%
Black Sea
Med ports are losing market share, mainly due to weaker position transshipment hubs
25% 20% 15% 10% 5%
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
0% 1985
Share in total container throughput
55%
Black Sea port system loses ground due to declining The Charthouse Group volumes at Constantza
Market shares in total European container traffic
Gateway port Transhipment/interlining port (transhipment incidence >75%) Gateway port also handling substantial transhipment flows
‘09: 1.2% ‘10: 1.3%
Finland
Norway
Sweden
Multi-port gateway region Main shipping route
Estonia
UK
‘09: 1.9% ‘10: 1.9%
Ireland
‘09: 7.2% ‘10: 7.1%
Americas
Americas
Portugal
‘09: 1.5% ‘10: 1.6%
‘09: 7.3% Spain ‘10: 7.4%
Latvia
Den.
‘09: 0.8% ‘10: 1.2%
‘09: 14.9% Germany‘10: ‘09: 25.5% 14.9% Belg. ‘10: 26.1% NL
‘09: 3.0% France ‘10: 2.9% ‘09: 4.3% ‘10: 4.5%
Russia
Lithuania
Belarus
Other ports ‘09: 29.8% ‘10: 28.6%
Poland Ukraine
Czech Republic Slovakia
Austria ‘09: Switz.
Hungary
1.5% ‘10: Croatia 1.6%
Bosnia& Herz.
Romania
Serbia Bulgaria
‘09: 0.9% ‘10: 0.8%
Mace.
Italy
Alb.
Turkey
Greece
Cyprus
Main shipping route Algeria Morocco © 2011 T. Notteboom – ITMMA, University of Antwerp
Middle East – Far East
Tunisia Malta
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Trade volumes per route to/from Europe: Mixed results Year on year change in trade volumes (basis = TEU)
Europe-SSA Northbound Europe-SSA Southbound
Q1-2009 -4.2% -1.3%
Q2-2009 -4.3% -3.1%
Q3-2009 -7.1% -1.8%
Q4-2009 3.5% 2.6%
Q1-2010 7.8% 5.7%
Q2-2010 2.5% 7.3%
Q1-2011 10.9% 27.5%
Q1-2011 vs. Q1-2008 30.7% 43.3%
Europe-Asia Westbound Europe-Asia Eastbound
-22.1% -15.6%
-22.2% -1.6%
-13.2% 9.2%
-0.2% 29.1%
21.2% 23.0%
24.1% 0.6%
6.3% 4.3%
0.2% 8.6%
Europe-North America WB Europe-North America EB
-16.9% -29.0%
-21.6% -35.0%
-15.0% -25.6%
-6.5% -6.6%
13.4% 12.3%
22.2% 16.0%
5.3% 8.1%
-1.1% -13.3%
Europe-India/Middle East WB Europe-India/Middle East EB
-12.1% -4.1%
-7.4% -0.6%
-0.5% 1.7%
4.7% 6.4%
18.1% 14.4%
20.1% 6.8%
15.4% 6.0%
24.9% 18.2%
Europe-South/Latin America NB Europe-South/Latin America SB
-12.9% -27.4%
-12.3% -26.4%
-18.6% -22.5%
2.7% -0.8%
4.7% 47.5%
-5.1% 57.7%
13.7% 20.1%
0.9% 28.7%
Europe-Oceania NB Europe-Oceania SB
-6.8% -14.7%
-9.1% -26.4%
-14.0% -8.5%
-12.9% -6.0%
-11.1% 19.6%
-2.3% 32.8%
2.4% 2.6%
-15.3% 4.1%
Source: based on data EELA and Container Trade Statistics
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Trade volumes per route to/from Europe: geographical shifts
2010
2008 Geographical distribution of extra‐European container trade (dry and reefer) ‐ year 2008 (based on data ELAA) South and Latin America 8,2%
Sub Saharan Africa 5,0%
India/Middle East 11,7%
North America 19,2%
Oceania 1,8%
Asia 54,1%
Geographical distribution of extra‐European container trade (dry and reefer) ‐ year 2010 (based on data ELAA) South and Latin America 8,1%
Sub Saharan Africa 5,7%
India/Middle East 13,1%
North America 16,9%
Oceania 1,8%
Asia 54,4%
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Far from being a no‐ brainer…
LOOKING AT THE FUNDAMENTALS
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Intermodal Integration
Major Steps in Intermodal Integration Advanced Containers An enduring innovative process. Advanced Terminals Multiplying effect on an existing Regionalization technique. Intermodal rail crane (1985) An exercise in unintended consequences? Doublestacking; IBCs (1985) From revolution to evolution? Deregulation (1980s) COFC (1967) Transatlantic (1966); Containerships (1968) Standardization (size and latching) (1965) Containerization (1956) TOFC (1950s) Pallets (1930s)
Time The Charthouse Group
Some Key Issues in Liner Shipping: Towards a Revolution? Herd behavior or segmentation?
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Filling the “gap”?
Air
Impact slow steaming & transshipment
Freight rate to shipper (gate‐to‐gate)
Polar routes Direct services Fast ships Trans‐Siberian rail
LTL
Truckload
Intermodal Liner shipping
Performance (Speed, Reliability, Flexibility)
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Containerization as a Diffusion Cycles: World Container Traffic (1980‐2010) and Possible Scenarios to 2015 Adoption
Acceleration
Peak Growth
Maturity
1966-1992
1992-2002
2002-2008
2008 -
New (niche) services Productivity gains
Network development Productivity multipliers
Reference
Divergence
To what extent the growth in 2010 is attributed to transshipment and emerging markets?
Depression
Niche markets Massive diffusion Network complexities
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Container Usage during its Life‐Span
A lot of waste to improve upon. Challenges for asset management.
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Weighting Out versus Cubing Out: What is a Proper Distribution of Containerized Assets?
Regions follow standards; they do not set them.
Balance between retail, intermediate goods and commodities The Charthouse Group
The Main Driving Forces of Containerization
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DERIVED: ORGANIC GROWTH IN THE PIPELINE?
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Monthly Value of Exports or Imports, Selected Traders, 2006‐2011 (Jan 2006=100) Trade has bounced back. America’s consumption engine sputtering.
Yes, but at what cost?
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CRB Index (CCI), Monthly Close, 1970‐2011
Paradigm shift in input costs… Reaping the consequences of monetary policy. Could be positive for containerization…
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Business Cycles and Misallocations
When “organic growth” is using a lot of chemicals… Second phase of the credit‐ driven bust.
Credit-Driven Boom
Normal Cycle Peak Credit-Driven Bust Credit-Driven Cycle
Trough Expansion
Recession
Expansion
Depression
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SUBSTITUTION: STUFFING THE BOX WITH SOMETHING DELICIOUS
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Looking Inside the Box: Accept all Substitutes…
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The Usual Suspect: China’s Share of the World Commodity Consumption, c2009
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Bulk and Containerized Commodity Chains: An Emerging Complementarity Cost / volume driver Low frequency Dedicated terminals One way flows
Bulk Commodity Chain Supplier
Port Point‐to‐Point
Customer
Consolidation center
Time / flexibility driver High frequency General terminals More balanced flows
Complementarity Container port Pendulum Services
Intermodal terminal
Containerized Commodity Chain
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Continuous Commodity Index and Baltic Dry Index, 2000‐2011 (2000=100)
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Continuous Commodity Index and Average Container Shipping Rates, 1994‐2011 (1994=100)
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From Bulk to Containers: Breaking Economies of Scale
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The Cold Chain: A Highly Constrained Niche
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Equal but Separate… The Reefer Ghetto (Away from Containers of Color…)
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INDUCED: TRANSSHIPMENT (THE GREAT SHUFFLE)
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The Global Transshipment Market
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How the Main Actors in Global Freight Distribution Influence Routing? Top ten terminal operators: 65% of the world’s total container handlings
Container Terminal Portfolio of the Four Main Global Terminal Operators, 2010
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Sea‐sea transshipment plays a role, particularly in Med and in relation to UK and Baltic…
Hamburg Rotterdam Bremerhaven
Antwerp
Le Havre
Influences on North Europe (1)Maasvlakte 2 effect + JadeWeserPort, capacity in UK (2)Direct deepsea calls in Baltic (cf. Gdansk)
Zeebrugge
Barcelona Sines
Valencia
Taranto
Cagliari Piraeus
Algeciras Gioia Tauro Malta
Influences on South Europe (1)Direct calls in gateway ports (cf. NAPA, Spain, etc..) (2)Competition Tanger Med
Transhipment incidence: North Europe = 24.2% Eastern Europe = 16.2% South Europe = 44.6%
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Pure transhipment hubs in West Med lose market share West-Mediterranean ports with one-way diversion distance > 250 nm West-Mediterranean ports with one-way diversion distance 100-250 nm West-Mediterranean ports with one-way diversion distance < 100 nm
90% 80% 70% 60% 50% 40% 30% 20% 10%
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
1977
1976
0% 1975
Share in TEU throughput West-Med
100%
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Major ports and future terminal developments in non‐EU Med ports: impact of a changing political landscape? Container throughput in million TEU, capacity extensions in million TEU
Enfidha (Tunisia) Capacity: +1 (2011) +2.5 (period 2011-2015) +2 (period 2015-2030)
Djendjen (Algeria)
Rades (Tunisia)
Capacity: +2 (DP World)
Bejaia (Algeria)
Ambarli (Turkey) Traffic: 2.26 (2008)
Traffic: 0.3 (2007)
Traffic: 0.15 (2008) Capacity: +2.5 (>2010)
Mersin (Turkey)
Algiers (Algeria) Traffic: 0.5 (2007) Capacity: +0.8 (2010)
Beirut (Lebanon) Traffic: 0.95 (2008)
Haifa (Israel) Traffic: 1.39 (2008)
Tanger Med II
APMT/Akwa: + 3 mln TEU (2012) PSA: +2 mln TEU (2012)
Tanger Med
APMT: + 1.5 mln TEU Eurogate: +1.5 mln TEU
Damietta (Egypt) Capacity: +4 (2012)
Misurata (Libya) Initial plans cancelled?
Port Said (Egypt) Traffic: 3.2 (2008) Capacity: +2.5 (2011)
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Pushing Atomization in the Hinterland and Massification in the Foreland Capacity
Frequency
Hinterland‐Based Regionalization PORT HINTERLAND Capacity Gap
Frequency Mitigation
PORT FORELAND Economies of scale
Different momentums Economies of scale Functional Integration
Foreland‐Based Regionalization The Charthouse Group
INCIDENTAL: LIVING IN AN ASYMMETRIC WORLD…
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Containerized Cargo Flows along Major Trade Routes, 1995‐2009 (in millions of TEUs)
Empties; a breath of fresh air…
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Geographical Levels of Empty Container Repositioning
Hinterland
Port
Global Reposit io
Depot / Inland terminal Freight Distribution Center Cargo Rotation
t io osi
p l Re ) a n o d egi (inlan R r Inte
ning
g nin
Regional Repositioning
Inter-Regional Repositioning (coastal / fluvial)
Foreland
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Asymmetries between Import and Export‐Based Containerized Logistics
Gateway
Inland Terminal
Distribution Customer Center
Import-Based Many Customers •Function of population density. •Geographical spread. •Product customization. •Incites transloading. •High priority (value, timeliness).
Repositioning Supplier
Export-Based Few Suppliers •Function of resource density. •Geographical concentration. •Lower priority. •Depends on repositioning opportunities. The Charthouse Group
Slow Steaming: What Hath You Brought Us?
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TERMINAL OPERATOR STRATEGY: IN SEARCH OF UNIQUE FEATURES? The Charthouse Group
Going Green: Hypocrisy?
Carbon neutral
Low emission vessel
Green supply chain
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Going global Regional Share in the Terminal Portfolio of the Twelve Largest Global Terminal Operators (Hectares, 2010)
Changes in regional orientation?
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Building partnerships Complexity in terminal ownership structures Example for the Rhine‐Scheldt Delta ‐ 2010 HUTCHISON PORT HOLDINGS
PSA
20%
Majority shareholding
100% Minority Shareholding
ECT
MSC
50%
NYK 100% 100%
50%
Delta Terminal Waal- and Eemhaven Euromax phase 1
Rotterdam World Gateway (Maasvlakte 2) Operational by 2013
PSA (Antwerp/ Zeebrugge)
CYKH Alliance
50% 50%
New World Alliance
60%
DP World
30% 10%
APM Terminal Maasvlakte
Terminal 1 (Maasvlakte 2) Operational by 2014
ANTWERP
100% 100%
ROTTERDAM
Source: Notteboom & Rodrigue (2010)
100%
ZIM Line
42.5% 10%
MSC Home terminal
50%
North Sea Terminal
100%
Europe Terminal
50%
Deurganck Terminal Antwerp International Terminal (AIT) DP World Delwaidedock
Shipping Line (Global) Terminal Operator
Antwerp Gateway
Terminal
Cosco Pacific
20%
CMA-CGM
10%
35%
65%
CHZ
APM Terminals (AP Moller Group)
100%
Albert II-dock north (under construction)
Shanghai International Port Group (SIPG)
25%
PORT Financial Holding
75% APM Terminal
ZEEBRUGGE
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Filling the “gap”? Fast end‐to‐end services? Multi‐container platform for fast roro handling
Bron: Kvaerner Masa-Yards Technology
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Going inland Active involvement of terminal operators
• ‘Extended Gate’ concept of ECT (Hutchison Port Holdings) • ‘Terminal Operator Haulage’ concept of DP World Inland terminal
vessel
vessel Seaport terminal
Seaport terminal
Inland terminal
Inland terminal
• Impact
= direct truck = endhaul truck
= barge/rail shuttle
‐ Optimize capacity use at deepsea terminals ‐ Lower environmental footprint and road congestion in/around port ‐ Create a streamlined logistics solution for customers The Charthouse Group
Going inland Active involvement of shipping lines: ‘Push strategy’
B/L seaport X
x x
B/L seaport X Second move by rail, barge or truck
y Multi-port gateway region
x
CONTAINER PUSH STRATEGY
B/L inland port
y z Source: Notteboom (2011)
Rail, barge (or truck) The Charthouse Group
Gateway traffic (inland traffic excl. sea-sea transhipment) in major multi-port gateway regions in Europe (TEU – figures 2008) Core of “Blue Banana” + EDC effect
Gateway port Transhipment/interlining port (transhipment incidence >75%) Gateway port also handling substantial transhipment flows Multi-port gateway region
Finland
Norway
Sweden
Main shipping route
Estonia
Immediate hinterlands remain the backbone of ports’ gateway traffic..
Latvia
Russia
Lithuania UK
Den.
Ireland
Belarus
Gdansk Bay 0.77 mln TEU Americas
SE East Coast UK 6.3 million TEU
North Germany 9.2 mln TEU Poland
NL
Germany
Belg.
Slovakia
Seine Estuary 1.9 mln TEU
Flexibility is key
France
Americas
Austria
Switz.
Liguria Marseille 4 mln TEU 0.85 mln TEU
Hungar North Adriatic: 1.3 mln TEU
Romania
Black Sea 0.54 mln TEU
Croatia Bosnia& Herz.
Serbia Bulgaria
Spanish Med 3.9 mln TEU Portugal
Ukraine
Rhine-Scheldt Delta 16.8 mln TEU Czech Republic
.. but gateway regions increasingly vie for distant contestable hinterlands
Mace.
Italy
Spain
Alb.
Portugal 1.1 mln TEU
Turkey
Greece
Cyprus
Main shipping route Algeria Morocco © 2011 T. Notteboom – ITMMA, University of Antwerp
Middle East – Far East
Tunisia Malta
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Going intermodal Modal split targets of terminals
Source: Notteboom (2011)
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Going intermodal Linking pricing and non‐pricing levers across transport nodes and modes Pricing levers
Port pricing
Non-pricing levers
Port service level
Pricing linkages Service level linkages Rail or barge service level
Rail or barge pricing
Inland port pricing
Source: Notteboom (2011)
Pricing/service level linkages at same mode/node Pricing/service level linkages between modes/nodes
Inland port service level
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Ay caramba! Can I handle the load?
THE NEXT BOX WAVE OR THE NEXT BOX CRASH? The Charthouse Group
Conclusion: Which Growth for Which Box? Derived
Substitution
Incidental
Induced
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Thank you for your attention !
[email protected] jean‐
[email protected]
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