Ownership of terminals by subsidiary or related companies does not appear to have played a significant role in P3’s port choices.Although each P3 carrier has a connection with a terminal operator – CMA CGM through owning Terminal Link (TL), MSC through its strategic relationship with Terminal Investment Limited (TIL)
and Maersk Line through its sister company APM Terminals (APMT) – it does not appear to have played a dominant role in the alliance’s recently announced port selections. For example, Rotterdam will lose calls for services operating between Asia and Northern Europe, even though it has the presence of all three carrier-related terminal operators. Hamburg, meanwhile, will also see a reduction, but has none of the three terminal operators present.
To illustrate this point more clearly, the graph below provides a snapshot of the number of P3 loops planned to call at each port on the Asia-North Europe route versus the number of P3 carrier related terminal interests in each port. Regardless of the number of carrier related terminals in any port, the number of loops ranges from several to one, suggesting little or no correlation. This is unsurprising. APMT is the largest of the three terminal operators in question and therefore the most potentially significant in the P3 port plans, but operates at arm’s length from Maersk Line and has its own strategic aims. In addition, there are numerous other factors which each carrier has had to consider when selecting ports, which means that compromises will have had to be made by all of them.
Figure 1
Proposed P3 Asia-North Europe Loops: Ports vs. Extent of Carrier Related Terminals
* Unconfirmed stake reportedly held by MSC
Note: Some terminals still under construction
Source: Drewry Maritime Research
The proposed P3 Alliance schedules and port call patterns are the result of what must have been complex and fascinating horse trading between the three protagonists. Each one has a well-established set of services and customers which it does not want to disrupt too much – so it is not surprising that the intended P3 schedules bear fairly close resemblance to their existing loops. However, all three carriers are looking to maximise the benefits of their collaboration first and foremost in terms of shipping network advantages. All of the factors in the graph below (and probably more) will have been part of the give and take of the negotiations between the three players. The selection (or dropping) of any particular port is not based entirely on cold logic therefore.
Figure 2
Myriad Factors Influencing P3 Proposed Port Call Choices
Source: Drewry Maritime Research
Having said this, as far as the choice of gateway port calls are concerned, the underlying question is always: does the ship go to the cargo, or the cargo to the ship? The decision by the P3 to continue to call at ports like Antwerp and Hamburg with very large vessels suggests that it is the attraction of cargo which wins out. Both ports have vessel draft and access limitations but they do have significant cargo generation ability, including forwarder controlled cargo. In other words being tidally restricted and 5-6 hours sailing up river, thereby creating possible schedule reliability challenges, does not appear to represent a barrier to being a major P3 port. Transhipment port calls, though, are a different story, as the choice here is purely operational and largely independent of cargo interests.
It is worth noting that all of the industry comment to date has been on the basis of the number of loops calling at each port, with a number of individual ports being classed by some commentators as either “winners” or “losers”. However, such judgements are premature. Ultimately it is not the number of loops that matter to a port, it is the number of teu handled per vessel call, and this is a consequence of ship size deployed and the number of ports called at each end of a loop. A port could lose a loop but might still end up handling more teu overall. The recent example of an Ultra Large Container Ship call at ECT Rotterdam which involved an exchange of over 11,000 teu shows just how much a loop can be worth today in the real currency of ports – teu not vessel calls.
Our View
The P3’s proposed port call choices are the result of a highly complex bargaining and balancing act between three heavyweights. Stakes in terminals (either directly or through sister companies) appear to have had little bearing, whereas sources of cargo generation clearly have. Whilst some ports appear to have gained markedly from the proposed schedules, the acid test will be the volume of teu handled for the P3, not the number of loops.
Source: Drewry Maritime Research