Asia-Pacific Ports Lead RREEF Opportunity Survey

The Asia-Pacific region tops the list of investment opportunities for global container ports, while the leading container ports in the United States have plenty of ground to make up, a study published last week by RREEF contends. “We found that despite the current downturn, most analysts agree that future growth in container traffic will be led be intra-Asian trade,” concluded researchers from RREEF, the alternative investment affiliate of Deutsche Bank A.G., in a comprehensive overview of global container ports. “This does not discount opportunities elsewhere, although they may need to be more targeted and selective.” The study’s authors emphasize that the scores reflect relative opportunity rather than an absolute ranking. In a striking finding, China’s ports earned the best scores overall. Shanghai received the highest overall score, 9.28 on a scale of 1 to 10. Eight other Chinese ports earned marks of 7.3 or better, and no other container port in the world scored above 7. Of note, Chinese ports scored relatively higher than Singapore and Hong Kong, which have been the world’s busiest ports in recent years. The highest-ranking port in the United States, Savannah, achieved a 6.37 score, tying the Georgia city with Balboa, Panama. Significant challenges await the neighboring ports of Los Angeles and Long Beach, which together handle 40 percent of U.S. container traffic. Los Angeles’ 5.91 score ranked it behind fourth among U.S. ports and fifth overall for container ports in the Americas. Long Beach reached sixth place, scoring 5.76. The ports are the world’s fifth busiest, handling 15.7 million 10-foot-equivalent container units in 2007. But to keep pace with growing demand, the ports must step up productivity and capacity expansion programs that have been stalled by road congestion, environmental roadblocks and obsolete facilities, the report predicts: “Inevitably, many importers and exporters will diversify their supply chains to take advantage of other ports along the West Coast and East Coast.” Northern Europe’s three dominant ports had the strongest showing in RREEF’s assessment of the Europe-Middle East-Africa region. Rotterdam took first place with a 6.94 score, edging Hamburg (6.32) and Antwerp (6.16). Those ports are making major investments to maintain their dominant positions. By 2013, the port of Rotterdam will complete the Maasvlakte 2 program that will triple its capacity from its 1997 level. Dubai leads Middle Eastern container facilities, scoring 5.45, followed by Durban, South Africa, which leads all African ports with a 5.35 score. RREEF developed its rankings by evaluating container ports for 21 factors. Sixty percent of the scores stem from quantitative variables relating to the ports themselves, including capacity, through-put, development pipeline and future absorption pressure. Also figuring into the mix were more qualitative factors including development plans, existing and planned infrastructure, competitiveness and potential productivity gains. As for the remaining 40 percent of each port’s score, forecasts for several economic categories weighed most heavily: imports and exports, gross domestic product and industrial production.