Volume growth will continue for ports throughout the world but at a more modest pace over the next 10 years, according to a new Fitch Ratings report.
Global port throughput growth has outpaced economic growth rates over the last 10 years, with containerisation of cargo and increasing vessel sizes coupled with supporting infrastructure at ports all contributing to growth. However, growth rates are slowing relative to historical averages as these trends mature, and volume growth, while expected to continue, will likely more closely mirror that of global GDP. An increase in protectionist trade policies, shifts in centres of production, and the advent of disruptive technologies add further complexity in considering future throughput levels.
On the subject of US-China trade relations, Fitch Ratings’ senior director Emma Griffith, said: “Primary ports of call will be able to weather the storm despite elevated concentration in Chinese trade exposure in some cases.
“Conversely, smaller and more specialized ports will have less leeway to offset major losses in imports and exports if commodities handled are targeted by tariffs.”
However, US-China trade uncertainties could mar the rate of growth for ports in the Asia Pacific, which have been the pace-car for volume growth. Bilateral trade in particular will suffer if the dispute continues to escalate.
Policy won’t hurt growth
Shifts in trade policy are not likely to curb growth meaningfully for ports located in North America, found the report. “Port investment will continue to focus on capacity enhancements to accommodate larger vessels while investor interest in North American port assets appears to be increasing,” said Ms Griffith.
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