Container Terminal Operators May Be Forced to Sell

LONDON-A new report from Drewry Shipping Consultants Ltd. says the drop-off in global cargo volumes may force some owners to sell their interests in shipping terminals, creating opportunities for investors and terminal operators with access to funds to pick up assets or contracts at bargain prices. Drewry researchers say the most likely terminal portfolios to become available are those owned by shipping lines.

According to the firm’s Annual Review of Global Container Terminal Operators, released in early October, global container port throughput is likely to shrink by more than 10% this year, with little or no growth in 2010. The report projects a modest recovery the following year, but it says most regions will not see throughput return to ’08 levels for three to four more years. As a result, Drewry researchers say, “With all container lines under severe financial pressure – and some bankruptcies expected – the sale of some terminal assets owned by carriers in the near future seems likely.”

According to the report, earnings were down last year for a number of global terminal operators compared to ’07, though it says all global container terminal operators for which data was available made a positive EBITDA/net profit. But the researchers point out that a much weaker financial performance can be expected this year, given the sharp contraction in container volumes.