APM Terminals CFO Christian Laursen outlines operator port investment strategies and realities at the TransFin 2010 Conference, including how the industry has responded to the new global economy.
Addressing the Global Transport and Infrastructure Finance Conference (TransFin) 2010 attendees, APM Terminals Vice President and Chief Financial Officer Christian Laursen advised that while global trade volumes may be recovering, cost-cutting imperatives remain in place throughout the transportation industry, particularly among shipping lines, and higher productivity among port and terminal operators will be essential to remain competitive.
Mr. Laursen, asked to provide “Insights into how ports can compete, perform and find growth in the new economy” for the 8th annual TransFin conference, observed that having passed the “stress test” represented by the steep 10% drop-off of global container volume in response to world-wide recession in 2009, new adjustments must still be made by port and terminal operators to stay competitive in what APM Terminals has called the “New Normal” of the industry. Included among these concerns is the ongoing delivery of Ultra-Large Container Ships with capacities of over 10,000 TEUs into the global liner fleet, which Laursen noted, account for more than 40% of vessels on order.
The industry has seen a stronger than expected recovery in volume during the first few months of 2010, but Mr. Laursen did not expect a return to the 10-15% annual growth rates experienced before the crisis. “While the overall global demand growth for container traffic remains uncertain, what appears to not have changed with the new normal is the demand for suitable infrastructure to handle these bigger ships” Laursen stated, including adequate depth in shipping channels as well as berths.
The highly competitive nature of the industry means that staying close to the customers and having established relationships with the container shipping lines is critical for success.