Demand and inflation a sucker for punch ports

Despite port throughput growth grinding to a halt in 2022, terminal operators in the main have reported strong financial results. However, Drewry’s latest analysis indicates far tougher conditions in 2023 due to weakening demand and high inflation.

It is increasingly evident from the latest port throughput and trade data that container demand is now firmly in retreat. While we expected the market to slow in 2022 on the back of consumer expenditure shifting away from goods back towards services together with inventory de-stocking, the downturn that started in the back half of 2022 accelerated in early 2023 with high inflation eroding consumers’ spending power and confidence. Drewry’s March 2023 forecast predicted that global port throughput would increase by just 0.4% in 2023, following on from the 0.5% growth recorded in 2022. Drewry has long tracked the performance of the leading terminal operators, and in 2022 we introduced a new series of financial indices to monitor the revenue, cost and earning trends in the sector.

In Quarter 4, 2022, falling demand resulted in widespread easing of port congestion which reduced the average dwell time at terminals and led to a corresponding fall in storage revenues. For example, APM Terminals and Westports both reported that by the end of the year storage income had dropped back to 2020 levels.

As we looked ahead to 2023, while we expected to see stevedoring revenues per unit boosted by inflation-linked tariff increases, the additional contribution that storage made to operators is expected to revert to pre-pandemic levels which would pull average revenue per container down.

Read the full article and forecast for 2023

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