The impact of the Global Economic Crisis and its effect on Container Terminal Operators’ Investment Strategies with a Special Focus on Country Risk.
The past three years, the global credit crunch hit the shipping industry and the derived demand for liner and terminal services. Liner industry faces the worst years of its history, as the crisis reached the industry after the boom of the industry causing a fleet overcapacity and low freight rates which cannot cover even the operational costs of vessels. Many liner operators in order to survive create alliances in order to share their costs and their risks. Aggressive cutting of liner operators’ costs through slow steaming in order to reduce fuel costs, to use the additional capacity and reduce the lay-up of vessels as the cancellation of the massive new-orders wasn’t tangible. Container flows in the ports declined and as a result container terminal operators were affected by that. The crisis found most of the terminal operators in the middle of capacity expansion projects or with new capacity all over the world. The excess container terminal capacity in combination with the declined demand cost to the operators many operational and revenue losses. The new reality for the container terminal industry required from its operators to revise and adjust their investment strategies according to the new facts. The top-terminal operators like HPH, APM Terminal, PSA and DPW postponed or cancelled or continued their investment projects, in order to cut costs and to manage their capacity. Behind the different decisions of each terminal operator there are reasons like the country risk, the risk analysis and the abandon value decision of terminal projects. This dissertation analyzes how the crisis affected the investment strategies of container terminal operators during the crisis with a special focus in the country risk. The investment strategies of the top-terminal operators are going to present through a theoretical framework analysis. Which terminal operators cancelled/postponed/continued their investments? Which locations were more attractive? Which were the reasons behind the review of their investment plans? In what kind of investments did they contribute in order to maintain their sustainability and keep their customers satisfied? The case study of ECT Rotterdam can give a good picture of one the biggest terminal operators in Europe. Under the umbrella of HPH Group, which is the global leader port investor, operator and/or owner of port infrastructures, ECT is a very good example of terminal operator who continues its investments and finishing its capacity expansion plan of the Euromax Terminal, as well as, the development of its key inland connection with the new Delta Feeder Barge Terminal and the TCT Venlo Barge Terminal. Furthermore, innovation was and still is the competitive advantage of ECT’s sustainability. For ECT, as for the rest TOCs, getting out of the crisis stronger is the challenge of the current bad economic situation. In order to achieve that ECT concentrates on its customers demands and provide them the best service through a complete network. The thesis concludes that the crisis had effects on the terminal operations in terms of volumes, throughputs, revenues, profits, investments, contracts etc. But, the good performance and the development projects of TOCs during the decade before the global crisis, helped enough most of the terminal operators, especially the sector’s leaders to sustain and maintain their business. During the crisis, top terminal operators faced the challenge to keep their sustainability by offering the best product to their customers. Customer was the main priority to the terminal operator’s investment. Many opportunities for equipment developments, software upgrading as well as for terminal facilities were rose. The latter opportunity was addressing to the terminal companies with the capability to ensure the high capital investment. Even though, terminal operators managed to maintain their business, their revenues and manage their cost through the review of their investment strategies. The postponement, the cancelation or the differentiation of their capacity expansion plan was the most efficient measure of container terminal capacity management.
|Thesis Advisor||Liu, M. (Miuaja)|
|Series||Maritime Economics and Logistics|
Saranti, A. (Aggeliki). (2010, September 24). The impact of the Global Economic Crisis and its effect on Container Terminal Operators’ Investment Strategies with a Special Focus on Country Risk.. Maritime Economics and Logistics. Retrieved from http://hdl.handle.net/2105/33268