Growth at ports is expected to contract by at least 40% over the next five years thanks to the coronavirus, according to a new report from Drewry Shipping Consultants. Port operators are likely to cancel new projects as the pandemic depletes demand.
Drewry expects container capacity to increase at an average rate of 2.1% over the next five years. This is equivalent to about 25 million TEUs per year of increased capacity, down from 40 million averaged over the past ten years.
The report predicts that port throughput will grow by 3.5% per year, from 801 million TEUs in 2019 to 951 million in 2024, but only if Covid cases do not cause a second lockdown and further economic standstill.
‘Our five-year forecast for global container port handling has been cut back drastically due to the Covid-19 pandemic, and the risks remain heavily weighted to the downside,’ Drewry’s senior analyst for ports and terminals, Eleanor Hadland said in a press release. Projects to grow port capacity such as adding new terminals or deepening channels have largely been put on hold.
‘Major expansion projects and greenfield projects that are already under construction and due for commissioning in 2020 and 2021 may face minor delays due to interruptions to global supply chains during 1H20,’ Hadland said. ‘However, for projects which are currently at an earlier stage of planning, particularly where construction contracts and equipment orders have not yet been tendered, suspension or cancellation is more likely if market conditions remain poor.’
Further proof of the depths of our global recession. Sailings have fallen by 30% since Covid got its claws into the world, and demand has tanked. It’s reminiscent of a World Trade Organization warning back in April that global exchange would fall by 13-32% this year.