News
China’s conquest of European box ports
China port and shipping lines have increased their investments in European ports as part of the ‘Belt and Road’ initiative
China is investing billions of dollars into its Belt and Road initiative, where it is attempting to create better connections to Europe. A significant part of this involves the investment of Chinese port and shipping companies into European container terminals.
A Drewry Consultants webinar in September highlighted the dramatic rise of overseas port investment by Chinese port operators in Q3 this year. Drewry Shipping Consultants director of container research Neil Dekker said that M&A activity this quarter is related to the Belt and Road initiative, adding “Chinese investors are willing and able to pay a premium for port assets.”
Chinese overseas container port investments have risen from eight in 2002 to 30 in 2017 (see figure: The rise of Chinese International port investments).
It looks as if there will be more international port investments by Chinese players such as COSCO Shipping, as Mr Dekker pointed out that Chinese bank loans to support these initiatives only have 2.5-3.5% interest rates, meaning these companies have scope for more aggressive bids compared to other players.
A majority stake in the Greek Port of Piraeus was acquired by COSCO Shipping in Q2 2016. COSCO Shipping also announced in June 2017 that it was acquiring a 51% stake in Port of Valencia’s Noatum terminal. In March 2016 China Merchant Group confirmed an investment in Klaipëda port container terminal in Lithuania. The most recent European port investment took place in November 2017, when COSCO Shipping Ports agreed to acquire 100% of APM Terminals’ Zeebrugge shares.
Port of Zeebrugge chief executive Joachim Coens told Container Shipping & Trade “The upscaling of vessels and downscaling of the number of shipping lines has led to the slowdown of trade and this has had an impact on Zeebrugge.” He said that this had led to a decrease in the importance of deepsea containers to the port’s disadvantage and to the advantage of hubs like Rotterdam.
But all this changes with COSCO Shipping Ports’ acquisition of APM Terminal’s shares in Zeebrugge, which will lead to a boost in container traffic. COSCO bought 24% of APM Terminals’ shares in 2014, before buying the remaining 76% stake in a deal that was completed in early November 2017.
Mr Coens said “We have to find reasons for us to be on the map and one of these reasons is the accessibility we have to the UK and our transhipment possibilities. But despite this we needed the interest of a big shipping line.” This of course has been realised by COSCO’s acquirement of APM Terminals’ facility.
COSCO is already calling at the terminal and now that it fully owns it, Mr Coens said he expected the shipping line would announce new services to call there by the end of the year.
Mr Coens said Zeebrugge was attractive to COSCO due to its transhipment links to Scandinavia and the UK, its capacity for large vessels, good maritime access and a beneficial location toward the markets.
He added “This is a very important platform for COSCO and complements its port acquisitions in Spain and Greece, as Zeebrugge gives the shipping line access to the North Sea.”
China’s Belt and Road initiative has also benefited Zeebrugge, as a train carrying containerised cars to the port from China was launched in Q2 2017 and runs four times a week.
The port is also currently in discussions with Chinese logistics companies to establish distribution centres at Zeebrugge.
Elsewhere, Antwerp Port Authority is seeking Chinese investment in its container terminals. It was one of the first European ports to actively show interest in the Belt and Road initiative of President Xi three years ago. Working with different stakeholders including Chambers of Commerce and Flanders Investment and Trade, it is jointly looking at opportunities to enhance links and trade between Belgium and China.
Antwerp Port Authority director of international relations Luc Arnouts told CST that Chinese port investment would allow it to “anchor container flows” from Chinese shipping lines including COSCO Shipping. He said the port authority was “actively” seeking Chinese investment and speaking to Chinese companies about opportunities.
“Our terminal operators would love to see Chinese investment,” he said, explaining that such investment would boost Port of Antwerp’s development and expansion plans, including building a new dock and adding more cranes.
Port of Antwerp already has Chinese investment – COSCO Shipping has a 20% share of Antwerp Gateway, one of the first investments the Chinese shipping conglomerate made in Europe.
In Q3 this year the port struck a collaboration agreement with the port of Caofeidian in China as part of the Belt and Road project – and is investigating the possibility of a rail connection between the two to further boost trade. Shipping transport will also be improved thanks to the introduction of a regular liner service.
Antwerp Port Authority has also boosted its presence in China by establishing key account manager offices in Shanghai, Beijing and Taipei.
Mr Arnouts said he felt the Belt and Road initiative had strengthened in 2016-2017. “This has been talked about since 2014. At first there were just lots of conferences and seminars on the subject. But now we are seeing tangible things like investments taking place, meaning that we are moving from words to deeds.”
So what next from Chinese port investors? Drewry’s Mr Dekker said “Chinese players may well seek to acquire part or all of some of the other major global/international terminal operators, in the same way that China Merchants acquired 49% of CMA CGM’s Terminal Link for example.”
He added that they can be expected to pursue further Belt and Road asset acquisitions, not just ports and terminals but landside and land transportation assets.
Indeed, this is an important factor in European acquisitions. Hong Kong Trade Development Council assistant principle economist Louis Chan told Container Shipping & Trade how one of the ongoing “hallmark” projects is the Budapest-Belgrade rail link, which is scheduled for completion by 2018. “This is designed to improve the overland connection between Asia and major European hubs such as seaports in the Adriatic and Mediterranean Seas, including the Greek Port of Piraeus,” he said.
Freight forwarder Damco – part of the AP M¸ller M¿rsk Group – has also launched a block train from China to France, which Maersk chairman and chief representative for north Asia Tim Smith described as an example of how Belt and Road is starting to bring in more products and services that generate opportunities in transport. “It is an interesting complementary service to sea – a good alternative niche between sea and air,” Mr Smith said.
Indeed, he described Belt and Road as the “biggest opportunity” for Maersk Line within north Asia. “Anything that has one of its goals as generating US$1.5Tn in the next 10 years is going to provide more cargo opportunities,” Mr Smith said, adding that the infrastructure needed for the project would allow Maersk opportunities spanning investment and development of ports and warehouses.
“Improved connectivity and infrastructure brings costs down and spurs new trade,” Mr Smith summed up. “In a world of more protectionist sentiments, China is looking to try to stimulate demand which, from our perspective, is an exciting opportunity.”
Belt and Road – an explanation
“The ‘Belt and Road’ refers to the land-based ‘Silk Road Economic Belt’ and the seagoing ‘21st Century Maritime Silk Road’. The routes cover more than 60 countries and regions from Asia to Europe via southeast Asia, south Asia, central Asia, west Asia and the Middle East, currently accounting for around 31% of global GDP and around 34% of the world's merchandise trade.
To enhance connectivity among and across all the Belt and Road countries, land, air and sea transport are naturally of utmost importance to the success of the initiative. To this end, both dry ports and seaports are crucial elements.”
Hong Kong Trade Development Council assistant principle economist Louis Chan.
Source: www.containerst.com
Other News by Category
General Shipping & Maritime
-
Port of Rotterdam Reports Success in Bunker Spill Cleanup
-
Day of the Seafarer: Mental Wellbeing in Focus
-
Posidonia 2018: 5 Most Exciting Things to Watch Out for in Shipping Industry
-
North Korea's High-Seas Fuel Smuggling Continues
-
Meyer Turku hands over new-design Mein Schiff 1
-
92% Of Seafarers Strongly Influenced By Internet Access – Futurenautics
-
Container ship MSC Kia Ora banned from Australian ports
-
Carnival to increase capacity on short cruise program with arrival of Carnival Dream in 2019
-
LNG cruise ships herald new era of training
-
Kinder Morgan takes delivery of 4th tanker from Philly Shipyard
Safety & Piracy
-
Three Killed, Five Missing After Two Ships Collide Near Shanghai
-
Oil tanker hit by blast at Saudi terminal, Saudi Arabia confirms
-
AMSA To End Permit That Allowed Seafarers To Work Longer Than 11 Months On Board Ships
-
Pirates Kidnap 19 in Two Separate Incidents in Gulf of Guinea -Dryad
-
ONE Containership Diverted to Tacoma Due to Collapsed Containers
-
Container Incident in Bristol Channel
-
Australia Evacuates Crew from Coronavirus-hit Livestock Carrier
-
Here’s One Way To Avoid COVID19 – Set Your Ship Adrift In Arctic Ice
-
Containership with Cracked Hull Leaking Fuel Oil in Bayonne, NJ
-
ICS, UNHCR and IOM call on States to end humanitarian crisis onboard ship in the Mediterranean
Maritime Economy
-
X-Bow Design Could Help Solve Air Draft Challenges for Boxships
-
How Eastern Pacific Shipping Achieved its CO2 Target Two Years Early
-
Dutch Seafarers Threatened With Dismissal Petition Maersk Shareholders For Help
-
Sailor Dies, 3 Injured on Bulker in Atlantic Storm
-
Cargo Boom Continues at Nation’s Second-Busiest Port
-
Japan’s MOL Scraps its Oldest LNG Carrier in Fleet Modernization
-
Maersk Essen Arrives in Mexico with Collapsed Containers
-
Steel cutting commences for Proman Stena Bulk’s methanol-fuelled tanker
-
World’s Largest VLEC Departs Texas with Record Shipment to China
-
Port of Long Beach Reports Busiest Year in 2020 Despite Headwinds
Environment & Technology
-
A.P. Moller- Maersk, The Ocean Cleanup extend relationship with new three-year partnership
-
Top charterers agree to publish shipping emissions data
-
MSC Sees Hydrogen And Biofuels As Key Components Of Shipping’s Future Fuel Mix
-
Storm-weary U.S. energy producers, refiners prep for hurricane strike
-
In Just 20 Years, Ships Could Cross an Open Arctic Ocean
-
As Arctic Ice Melts, Polluting Ships Stream Into Polar Waters
-
Hapag-Lloyd to lower CO2 emissions using biofuel
-
GLOBAL: NEW REPORT CLAIMS LNG AS MARINE FUEL IS ‘WORSE THAN BUSINESS AS USUAL FOR THE CLIMATE’
-
Study: New Blends of Marine Fuels Have Higher BC Emissions than HFO
-
New Report Identifies Clean Energy Options for Global Shipping Industry
Offshore, Oil & Gas
-
Rise in New Southeast Asia Upstream Players
-
Iraq looks to rebuild tanker fleet, eyes crude oil sales on delivered basis
-
Interview: Methanol Is Ready for Use as Marine Fuel
-
Chevron Announces Gorgon Expansion
-
Interview: What Will Be THE Marine Fuel of the Future?
-
Skangas Celebrates Milestone with 1,000 LNG Bunkering Operations in 2017
-
New LNG Carrier Design Suits “Milk Run”
-
Japan Commissions Oil Tanker To Combat Chinese Presence In East China Sea
-
Danish Energy Agency Clears Maersk Oil Sale
-
Offshore architects diversify and look to new roles for existing designs
Port & Shipbuilding
-
Bulk Shipping Comes Back to Oakland Port
-
Port of Newcastle to become the first Australian port to join the International EcoPorts network
-
CSP Abu Dhabi Terminal opens at Khalifa Port
-
North Sea Port: We Are Ready to Invest in Hydrogen as Fuel
-
Port Awarded $50 Million for Zero Emissions Project
-
New container terminal planned for Port of Newcastle
-
Port of Gothenburg Adds LNG Bunkering Option
-
China’s conquest of European box ports
-
Damen acquires Daewoo’s Mangalia yard
-
ICTSI approves Iraq’s BGT development
Events & Press Releases
-
Nakilat records 13% increased profits for the first quarter of 2018
-
Cargo throughput of UCL Holding’s stevedoring division rises 9% to 37.1 million tonnes
-
International Sea Ports and Maritime Authorities Gather in 2 Weeks to Discuss Port Security Technology
-
Hydropower Balkans 2017
-
Hydropower Balkans 2017 - Free Webinar
-
Speaker Line Up is Announced for the Maritime Big Data Forum at Nor-Shipping on 30 May
-
Sea Asia 2017 Reinforces Role as Leading Maritime Forum in Southeast Asia
-
10th International Fujairah Bunkering & Fuel Oil Forum: Event Summary
-
Counter-Terrorism Measures at Ports
-
DHT Holdings, Inc. announces delivery of first VLCC from BW Group
National (Croatian)
-
Uljanik plovidba ulazi na tržište prijevoza ukapljenog plina
-
Hrvatska brodogradnja - poslovi vrijedni 1,9 milijardi dolara
-
Zanimanje po kojem je Hrvatska oduvijek bila poznata u svijetu potrebno je spašavati od izumiranja
-
Drama u Arapskom moru: Naš tanker iz Uljanika napali pirati
-
Luka Rijeka planira od ulagača privući 300 milijuna kuna
-
Uljaniku i »3. maju« gradnja 20 brodova u idućih 15 godina
-
Floti Jadrolinije priključen brod „Mljet“
-
Jadroliniji prijete tužbe teške 20 milijuna kuna
-
U lovu na konkurente: Rijeka raste, ali promet luke u Kopru i dalje je četiri puta veći
-
Treća novogradnja u seriji, brod „Krk“ svečano priključen floti Jadrolinije