However, an even more underappreciated corollary concerns the rise of container terminal operators. Just as airlines used to be nearly the exclusive preserve of flag carriers throughout the globe in the not-so-distant past, most of the world's major ports used to be run by national port authorities. However, lacking any comparative advantage in handling goods shipments, many have since outsourced this activity to commercial container terminal operators which have accumulated expertise over the years in this specific endeavour.
Accordingly, a cursory look at the world's top terminal operators yields no surprises. (This compilation was prepared by the folks at Hofstra U.) At the top of the list is PSA International. formerly known as the Port of Singapore Authority. Over the years, Singapore's port has been at or near the top of the charts in container throughput as measured by twenty-foot equivalent units (TEUs) handled. In other words, its local expertise has readily been transferred to operating others' ports as nearby as India or as faraway as the UK.
In second place is Hong Kong multibillionaire Sir Li Ka-Shing's flagship enterprise, Hutchison Whampoa. While some claim that it is the world's largest port operator based on container handling capacity, the above chart is rebalanced to account for the fact that a fifth of Hutchison Whampoa is owned by PSA (hence-the measure "equity-based throughput"). Nevertheless, Li's vaunted business chops are once more evident in how he began his involvement in this business just as global merchandise trade volumes shot upwards
At a more than respectable third place is Dubai Ports World, perhaps known to most for bring forced to divest in America, where anything vaguely Middle Eastern-sounding has terroristic overtones to a lot of politicians and regular Joes. Although it got its start in the eponymous UAE port city, it has expanded largely through acquisitions alike that of the British P&O which then managed several US ports. Despite "national security" claims masquerading as protectionism--I don't recall any Yanks complaining about foreign port management when the British were in charge--such racist-protectionist thinking is embarrassingly typical of many US lawmakers and their hick constituencies.(For instance, then-Senator Barack Obama said "we're not allowing our port security to be outsourced to foreign governments" which is strictly not accurate.) Think about it: what sort of idiotic port operator would risk losing so much business by facilitating the transfer of WMD and other such supplies?
That aside, there is also greater concentration evident in the business being handled by these large conglomerates as in other lines of business. The following write-up also offers a way of distinguishing the method they use to rank these concerns:
The importance of port authorities in directly managing terminals is in decline, particularly in view of the emergence of global port holdings. This is mainly the outcome of deregulation of port management in a number of countries, which permitted the emergence of global terminal operators. By 2001, global terminal operators were controlling 35% of the port terminals and 42% of the containerized throughput. Ocean carriers accounted for 19% of global terminal ownership.
Since terminal operators have various stakes depending on the concerned terminal, equity-based throughput is commonly used to measure the respective amount of containerized traffic they handle. For instance, two terminal operators may have respective stakes in a terminal of 75% and 25%. If that terminal handles 100,000 TEU per year, then 75,000 TEU will be attributed to one terminal operator and 25,000 TEU to the other.
By using such a measure, PSA is the world's largest terminal operator, even if HPH, DPW and APM have more terminals in their portfolio. Actually, PSA owns a 20% stake in HPH, which from an equity-based throughput perspective conveys traffic handled by another terminal operator. The top ten terminal operators control an increasing share of the world’s total container handlings: 64.6% in terms of total throughput handled in 2009 compared to 41.5% in 2001.As with most things, no news from port operators is good news since they get the job done with a minimum of fuss. But unfortunately, it also may mean that their good work is underappreciated--including that of Dubai Ports World
