Sea Technology

MAR 2018

The industry's recognized authority for design, engineering and application of equipment and services in the global ocean community

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www.sea-technology.com March 2018 | ST 7 SEA TECHNOLOGY® I N C L U D I N G U N D E RS EA TEC H N O L O G Y The Industry's Recognized Authority for Design, Engineering and Application of Equipment and Services in the Global Ocean Community Charles H. Bussmann Founder and Publisher 1924-1999 publisher C. Amos Bussmann managing editor Aileen Torres-Bennett assistant editor/ Amelia Jaycen online news producer production manager Russell S. Conward assistant design/ Joshua Ortega website manager advertising Susan M. Ingle Owen service manager ADVERTISING REPRESENTATIVES: HEADQUARTERS C. Amos Bussmann 1600 Wilson Blvd., Suite 1010 Arlington, VA 22209 Tel: (703) 524-3136 • FAX: (703) 841-0852 e-mail: seatechads@sea-technology.com NORTH AMERICA, EAST COAST MJ McDuffee Director of Business Development Tel: 772-485-0333 mobile e-mail: m-j@comcast.net NORTH AMERICA, WEST COAST John Sabo Barbara Sabo Gregory Sabo John Sabo Associates 447 Herondo St. #305 Hermosa Beach, CA 90254 Tel: (310) 374-2301 e-mail: bsabo@jsaboassoc.com EUROPE John Gold John F. Gold & Associates "Highview" 18a Aultone Way Sutton, Surrey, SM1 3LE, England Phone/FAX Nat'l: 020-8641-7717 Int'l: +44-20-8641-7717 e-mail: johnfgold@gmail.com Sea Technology back issues available on microform. Contact: NA Publishing, Inc. P.O. Box 998, Ann Arbor, MI 48106-0998 1-800-420-6272 COMPASS PUBLICATIONS, INC. 1600 Wilson Blvd., Suite 1010 Arlington, VA 22209-2510 Tel: (703) 524-3136 FAX: (703) 841-0852 oceanbiz@sea-technology.com www.sea-technology.com publishers of: Sea Technology Commercial Fisheries News Fish Farming News Commercial Marine Directory Fish Farmers Phone Book/Directory Sea Technology Buyers Guide/Directory Sea Tech e-News Celebrating more than 54 years of serving the global ocean community - Since 1963 - editorial Ton van den Bosch, Maritime Infrastructure Practice, Ince & Co Challenges, Opportunities: The 2018 Port Landscape N o one can deny that the last few years have held some twists and turns for the global ports industry. The challenge of operating in an industry—not to mention a wider global economy—still recovering from one of the most persistent downturns in recent memory has had a palpable effect on terminal operations and development across the world. But a sunnier global economic outlook, combined with potentially trans- formative changes taking place in Asia, mean that the coming years may be even more impactful than the last—and operators will have to take measured steps to ensure that they can adapt to new operating realities. These changes are mainly expected to be macroeconomic, but technological innovation will also play a part. The year 2018 will see continued R&D in the use of emerg- ing technologies in the ports world, including automation and blockchain. Although there is no expectation that any of these technologies will be game changing this year, a clearer picture will begin to emerge of commercial ap- plications for ports and their benefits to the industry. This means that port op- erators will have to lay down a strategy for technological uptake within their hubs—or risk being left behind. For emerging markets, an ongoing eastward reorientation of global trade— triggered by China's Belt and Road Initiative—is likely to throw up an array of challenges that will demand navigating in a way that ensures profitability and commercial sustainability. The Belt and Road will be transformational for the shipping industry, and the impact is already being felt on East-West trade routes. Measured at around $150 billion a year, covering roads, railways, pipelines and more, it is clear that the Chinese government is making good on its promises to improve infrastructure across the developing world. Further, it is estimated that China has invested $20 billion alone in ports and terminals in the past 15 months. For the West, there is a risk of focusing too much on geopolitical ambitions at the expense of understanding the economic and commercial transforma- tions that are about to take place. Consolidation of port ownership is likely to be an abiding trend in the coming years. Indeed, recent figures from Drewry Maritime Research already bear that out. Their findings show that following the merger between COSCO and China Shipping in 2015 and subsequent acquisitions and investment, the combined entity is poised to become the biggest container terminal operator by capacity by 2020. Success in this changing market will not be a matter of happenstance. It is crucial that operators lay down a strategy for where their fortunes lie in the Belt and Road era, in terms of where threats to their business may arise and in how they can ensure a competitive edge. These considerations are compli- cated by the fact that calls by some vessels may be guided by Chinese policy considerations instead of solely by commercial rationale. Securing financing to kick-start modernization will also be a crucial issue to contend with—and particularly in emerging and frontier markets where risks and uncertainties can preclude a bank's involvement. Further, it may reasonably be argued that Chinese companies currently hold an advantage in securing funding from Chinese banks. These factors are creating a truly unprecedented complexity in operations for ports. Despite the challenges, it is important to remember that, at its heart, Belt and Road will support increased trade and hold the potential for real commercial opportunities. The port operators who succeed in the coming years are likely to be those who look at these challenges and dive in—head on—in a proactive, forward-looking way. ST

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