New ports and shipping analytics data is predicting a significant change-up in the global shipping industry. Hong Kong-based port operation Cosco Shipping Ports is expected to overtake its main rival Hutchison Ports to become the world's second-largest port operator by the end of the year.
The report published by analytics firm Drewry shows massive growth in Cosco's output. The company, which is a subsidiary of China's state-owned shipping giant Cosco, saw its throughput increased by 32.2 percent to 46.1 million twenty-foot equivalents units (TEU) in 2018.
This was just shy of Hutchison's 46.7 million TEU last year. If the company able to manage to gain the same amount of growth this year, it should quickly overtake Hutchison's position. Both Hutchison and Cosco are currently lagging behind the current leader, the Port of Singapore Authority, which reported a 60.3 million TEU performance in 2018.
According to the report, the massive increase in Cosco's throughput was due to the exclusive handling of its parent company's business. The company has also invested heavily in acquiring new terminals, which it intends to use for its own liner business.
Late last week, Cosco Shipping Ports released its better-than-expected years results. The company reported a 7.7 percent increase in its container volumes from 17.9 million TEU in the same period last year to 19.3 million TEU this year. The port operator also reported a 4.5 percent year-on-year growth on its revenues, which stood at $517.9 million for the first six months of 2019.
Hutchison Ports, which is a subsidiary of CK Hutchison Holdings, released its first-half earnings report over the weekend. The parent company reported that first-half revenues from its ports and related services remained flat at around $2.25 billion.
The company's container throughput rose by only 4 percent during the period.
Given the amount of growth in both container throughput and revenues, and the assumption that Cosco will be able to sustain the same amount of growth for the second half of the year, be able to overtake Hutchison this year.
Container volumes throughout Hong Kong have been steadily declining over the past few years, more so with the eruption of the trade dispute between China and the United States last year. Overall throughput for the first five months of 2019 had fallen by 7.5 percent when compared to the same period last year. This was a significant decline when compared to the 5.7 percent drop in throughput experience in 2018 when compared to the same period in 2017.
