Episode Transcript
[00:00:03] Speaker A: On release of mass Q2 results, CEO Vincent Clerk said it was ports and their lack of investment that was to blame for the congestion and delays being suffered by many shippers and forwarders right now. But was I alone in thinking? Isn't it the carriers themselves who've been buying up the capacity, both the ships and the terminals today? We'll get into that. Plus why the biggest hubs in Asia and Europe are seriously congested. How one closed strait has triggered a $15 billion scramble to build container ports. The implications of low water at the Panama Canal El Nino is striking again, it would seem, and we'll look at why West Africa is attracting lots of investment but also seeing delays surge. To make sense of it all, I'm joined by Elena Hadland. She started her career Associated British Ports, the UK's largest port operator before more than a decade advising ports and terminal operators as an independent consultant. Today she runs her own advisory practice, Hadlen Maritime, and leads Drury's ports and terminals research.
If anyone can tell you whether a port is actually performing or not, it's here. Eleanor, welcome to the Freight Buyers Club.
[00:01:20] Speaker B: Thank you for inviting me, Mike. It's great to be here.
[00:01:23] Speaker A: You're always very welcome, Eleanor. We'll get into all of this shortly, but first, some housekeeping.
Hello, if you don't know me, I'm Mike King and I'm the founder and host of the Freight Buyers Club. And I'm delighted and very proud to say that in 2026 we're averaging over 20,000 downloads a month across podcast platforms. We're now chasing 10,000 subscribers on YouTube and, well, you can help hit subscribe, hit follow, Please drop a comment telling us what you want us to cover next. And if you fancy sponsoring a show full of people who get unreasonably excited about container rate supply chains and air cargo markets, well, this is what that looks like. Over to Tameko Express Group, literally the best possible partner you could have. If you're in the business of moving cargo out of Asia to anywhere.
If your supply chain runs through Asia, why not work with a company that has been connecting Asia with the world since 1971? DiMerco Express Group Elna, Before I get your take on capacity, I want to play something from Mayor Svenson. Clerk said around the time of their Q2 call in August, he put a number on exactly the gap you track for a living.
Let's have a listen or a watch if you're with us on Spotify or YouTube.
[00:02:45] Speaker C: And I think that what we're seeing now is as A result of underinvestment in landsite infrastructure for the past 15 years and continued growth in traded volumes, we're starting to hit and to stretch the limitations of what the landsite can actually cope with. It's true for terminals, it's true for landsite infrastructure.
[00:03:06] Speaker A: Eleanor so Vincent did point to other failings in the supply chain and more recent disruptions such as war and weather that are making these port and hinterland bottlenecks worse and causing multiple and lengthy delays for shippers. But specifically, what was your take on his claims about the lack of port investment over the last 15 years? Do they stack up to you?
[00:03:29] Speaker B: Well, I think it's difficult to say that an industry that's added well over half a billion TEU in capacity has underinvested. And over the same period this 15 years, from 2010 to 2025, container volume growth has only been 480 million TEU. So we've added more as an industry. It's added more capacity than the industry has grown by.
And on top of this, there's also been significant investments to just handle the same traffic. So that's the channel and berth deepening and the ever larger cranes to handle the ultra large container vessels that now form a really core part of the global container fleet. I guess the question then is whether this capacity has been built in the right place. And where we can see when we look at the largest ports is that in emerging markets, volume growth has outpaced capacity growth, whereas the reverse is true in some of the more mature markets such as the US and Europe.
I think it's also really important to remember that port capacity is not fixed. It's actually a really dynamic concept that's strongly impacted by factors such as dwell time, vessel size and vessel arrival schedules, all of which you can largely track back to shipping lines or shippers.
[00:04:38] Speaker A: Plenty to unpack then. Elna, to what degree as we start out, should lines be looking in the mirror? Maybe when we're talking about port congestion. I'll just throw a few things out there. Maersk and Hapag Lloyd are now running a hub and spoke network via the Gemini cooperation, for example, and there's also been this concentration of volumes at a small number of large ports across all carriers. This is a consequence of bigger ships, the search for economies of scale, networking efficiency even before we get into carriers being big Tamil owners themselves. Is this really the fault of ports?
[00:05:14] Speaker B: I think you've addressed one of the key things which is larger vessels. So if we look back over the last 15 years, then back in 2010, the largest vessel vessels in service were the Maersk E class ships which had a capacity of around 15,000 TEU.
And concerns were being flagged even then that the impact that these larger vessels would have on port operations on inland transport networks. Yet the big ships just kept on coming. And we can clearly see, we track 225 major ports every month using AIs data.
And the number of port calls is growing far more slowly than throughput. And this is indicating basically the increase in vessel sizes. So ports have had to work hard to accommodate larger vessels and they've had to invest a lot of money to accommodate larger vessels.
So as a consequence, the time these vessels spend in port has increased and much so it's increased at a faster pace than volume growth. But much of this increase in port time is actually non productive waiting time.
[00:06:12] Speaker A: Thanks, Eleanor. Let's get some context before we move to regional markets. What sort of delays are lines actually seeing of terminals right now? How much of the global fleet is this tying up and how is it playing out in terms of the reliability that shippers are actually experiencing?
[00:06:30] Speaker B: Well, as you can see, average port duration has been on a bit of a roller coaster rise since 2019. And obviously we can all remember the massive delays during the pandemic. What would you ever given? And this, everyone working at home and suddenly needing desks and gym equipment and all of that stuff. Old story, but in what we can perhaps now refer to as a series of unfortunate events. So the war in Ukraine, the Red Sea crisis, the US tariff policy and now war in the Gulf. Supply chain disruptions has just persisted and average port call durations have not recovered to pre pandemic levels. And as I've just said, a high proportion of this increase is non productive waiting time. So in 2019, around 17% of total time spent by container vessels across our sample ports was classified as pre birth weighting.
And this moved rapidly up to hit 24% at the beginning of 2021. It peaked up at 27%. So more than a quarter of your time on average was just spent waiting for a birth. But importantly, it's not fallen back below that 20% level since.
So by 2Q26 it's risen back up to around the 25% level. And that's just not efficient for global supply chains.
[00:07:40] Speaker A: No massive ramifications from those sort of numbers.
Just going back to clerg, what struck me listening to that, and I know this is true for more than one shipper I've spoken to recently, bottlenecks like these are driving huge profits for carriers. We saw that in the. In the May results, for example. And all the other point here is ocean carriers already control just under. Well, it's around 45% of the world's marine container terminals. They had a much smaller short share a decade ago.
So what would you say to people in this industry who claim the same companies, basically the container shipping lines that are benefiting from the squeeze at ports are also playing a major role in causing it? Or is that too black and white?
[00:08:25] Speaker B: I think probably. I mean, it's certainly true that major carriers have upped the pace of investment in terminals and that terminal revenues have increased on the back of these higher storage charges. But terminal costs have increased as well because it's less efficient. Congested yards are a higher cost to operate, but it's not simply just a demand story. So it's not just a standalone port issue, it's a supply chain issue. And while congestion might be only visible at the terminals, that's not to say that the problem doesn't sit either upstream or downstream. The root causes lie all along the supply chain from larger vessels and a loss of schedule reliability. Whatever happened to fixed birthing windows and a fixed daily schedule where you could rely on the fact that that service was arriving Monday morning? I know the good old days makes me. Well, it wasn't even that old. It was only six years ago.
[00:09:12] Speaker A: Were they the good old days of excess capacity and bottom feeding rates? Were they or not?
Am I going back too far?
[00:09:19] Speaker B: Didn't really affect the port industry.
[00:09:21] Speaker A: Yeah, no, right.
[00:09:23] Speaker B: But to a certain extent, yes, you get what you pay for, but the root causes. So they lie all along the supply chain from this loss of schedule reliability and then onwards towards constraints on inland transport networks.
Ports are simply the joining part in the middle and can't control everything. So if your port is congested, it's just as likely to be an external cause as it is down to maybe a lack of port efficiency or a lack of port labor, which is an internal factor that as a terminal operator you might stand a chance of controlling.
[00:09:53] Speaker A: I'm not really drawing you on disruption as profit centre for spot rates, am I? But let's keep going.
Are we expecting lines? It's just back to that ownership point that I mentioned, around 45% of global container terminal capacity owned by carriers that's massively increased over the Last sort of 10, 15 years. Are we expecting that trend to continue and independent operators continue to be edged out? Is that what liner Economics in 2026 dictates maybe that control of the cargo and the ships decides eventually terminal ownership, at least where we've got free markets and people can just buy in.
[00:10:35] Speaker B: Certainly we see the carrier investment in terminals as a story that's got plenty more miles to run, especially in major ports where securing access to capacity is really key. But you need to. I mean, I've been in the industry since the early 90s and at that time a dedicated berthing agreement was the route to secure capacity.
Consolidation then meant that a dedicated terminal became a viable prospect and now a dedicated mega terminal is what's needed. But there's still space for independent port operators at the smaller ports where a single operator is always going to be slightly more attractive to the concession authority.
But also at major ports where we're seeing more and more joint venture agreements where carriers, if they're not able to, if there's not sufficient volume growth to build a greenfield terminal, then partner up with one of the incumbents and let that local knowledge and experience really play in your favour, but lock into the success of that terminal. A lot of your expenses going into that terminal. So sharing in the profit is something we see across many industries and expect this partnership approach to actually be more of a feature as we move forward.
[00:11:39] Speaker A: Thank you, Elna. Let's look at the Asia Europe trade first. We're seeing these delays hit shippers quite a lot on both ends of this Major storms in Asia through August around key low ports really haven't helped this summer, but a lot of ports over in Asia haven't exactly helped themselves either. I would say in terms of investing ahead of the curve. That demand curve, Shanghai being one example we've covered a fair bit on this podcast previously, has really been struggling for an extended period. But it's not just Shanghai, there's other big hubs over in Asia that are having the same problems. Where are these most evident and are there any investments in the pipeline for that might relieve them?
[00:12:19] Speaker B: I think it's really important to understand that yes, Chinese ports have got behind the curve. They spent a lot of time with a lot of excess capacity and a lot of consolidation within the market and perhaps took their foot off the gas, but they spent a lot of time and money intensifying their operations.
And when you're dealing with a large amount of ultra large container ships, then the IT systems that are in place at, at the SIPG terminal operating system has enabled them to run their stacks at far higher levels of utilization than previously would have been the case. So back when I started in the sector, the port planning manual said stack utilization at Non peak time 65% peaks happen seasonally. When you move into the modern container terminal, peaks happen every single time an ultra large container vessel comes in. And yet your operating utilization within Your stack is 85%. As your norm, the amount of buffer capacity you've got if there's a storm or there's a ship stuck in the Suez Canal, that's gone now. And when you've got the intensity of coverage that you've got at Shanghai on Yingbo, it's not surprising that terminals quickly become overwhelmed. There is some hope on the horizon though. There's a big new terminal opening later this year in Yantian.
Shanghai and Ningbo are going to be building new terminals, but they're several years off now. They're under development now, but it takes a few years to build new terminals and install new cranes.
So we do expect to see Chinese ports continue to be congested.
[00:13:51] Speaker A: And we've got, there are new ports in Vietnam as well. And we've got the. I mean Singapore's really been struggling despite the tremendous organization they've traditionally had there. But they've got new capacity on stream as well.
[00:14:03] Speaker B: Yeah, absolutely. So big investments across the Southeast Asian market where there's been this sort of shift in intensity for global export trade, but that's also pushed a lot of inter Asian trade between China and Southeast Asia. But as you said, there's a big expansion project underway now at port Klang. The 2S projects coming online in Singapore, Tangzhong, Pelapas, which has been under a lot of pressure with Gemini, they're expanding as well. And then smaller scale investments across emerging markets. So in northern Vietnam, Indonesia, et cetera, a lot of money going into the sector in these markets.
[00:14:36] Speaker A: At the other end of that trade in Europe, obviously this summer's low water levels across continental Europe. But the Rhine particularly hit, hard hit, haven't really helped at all. It's caused more congestion, there's less containers moving by river means more moving by road and rail. We've also had some workforce strikes at various points over the last year. But Europe's main hubs, they're really struggling at berth and inland. How big bad is it and at which port and when might shippers and carriers see an improvement, are you thinking, if at all?
[00:15:10] Speaker B: Well, I think you're exactly right in pointing out the challenges caused by disruptions on the inland transport network. And this is causing dwell time to rise at these ports. And as exactly the same situation in Europe, they haven't got that buffer storage capacity.
We are expecting to see some improvements towards the end of the year of Rotterdam as big new extensions of Rotterdam World Gateway and APM terminals come on stream.
There'll also be some relief in Antwerp as DP World's nearly finished the upgrade of Antwerp Gateway. But one of the key problems in Antwerp has been the PSA Europa upgrade project where they've actually had to take capacity off stream to rebuild berths and convert their yard from straddle carrier into automatic stacking cranes. So in order to make those gains, you actually get some short term pain.
So challenges abound. And I think Europe is also a very mature market. It still struggles to get the right labour force over the summer holidays which coincide with the beginning of the peak season and the weather events.
That's just problematic. And once you've got a problem in Rotterdam or Antwerp, which is typically a first port of call, the knock on effect round to the German ports just
[00:16:17] Speaker A: carries on and right across the hinterland.
[00:16:20] Speaker B: Absolutely. So there's problems on the railways, there's maintenance and upgrade projects there and definitely problems on the waterways. And I think this is something in the waterways in particular. Much as the EU is encouraging sustainable transportation, I think this is a problem that we in Europe are going to have to learn to live with for quite a long while.
[00:16:37] Speaker A: Okay, thanks Eleanor. We'll take a quick break then look at what's happening around the world, starting with the Middle East.
Is your company expanding into new markets in Southeast Asia and India? Well, why not let the experts manage all your logistics and regulatory requirements to achieve a smooth compliant transition. Dimerco Express Group connecting Asia with the world since 1971.
Welcome back to the Freight Buyers Club. I'm Mike King and I'm with Elna Hadland. Elna, I think we've heard quite a lot about port not doing quite enough to keep up with demand. But I think there's also plenty of evidence out there about how quickly these investments can happen when necessity bites. Let's have a look at the Middle east because I think that's what we're seeing over there.
So on the one end of this scale we've got DP World's flagship Hubbard Jebel Ali. They saw a 90% drop in throughput in Q2 for obvious reasons around the Hormuz closure. It's knocked it straight out of the world's top 30 ports. Before we look at the huge investments happening in the region, can you ever see Dubai or some of those other big Gulf ports fully recover their volumes or even their status. Because when I'm looking at it myself, if I'm being honest, I find it hard to see a future where people really view the golf and Hormuz as risk free again, even though I understand things can change geopolitically very quickly indeed.
[00:18:06] Speaker B: I'm with you, Mike. It's a difficult, I mean we're still, it's a live situation, we're still in the middle of it, but it is difficult to see how you could ever re establish that status quo. Given the players involved. It would need to be a major event for a back to normal type scenario to emerge.
So I think just reinforcing that, the future for the ports within the Gulf actually just remains really, really uncertain at the moment. It's a really challenging time.
[00:18:32] Speaker A: Okay. What we have seen is a lot of supply chain innovation, basically frenetic workarounds. We've covered this quite a lot on the Freight Buyers Club. So I'll just summarize it. Essentially what we've got is a whole bunch of long overland routes have been established to reach the Gulf while also avoiding Hormuz. This is from outside of the strait or it's across from the Red Sea or it's overland from elsewhere. Even as far as the Mediterranean. It has been a good time, let's put it that way, to own a trucking business in that region. There are signs though that these routes might become more permanent over time. Trade and oil pipeline investments are moving forward, but we're also seeing some huge bets on new terminals and I'm going to run through a few of those.
First, Corfican, still inside the UAE but outside Hormuz we've got a $2 billion investment pledge there. The plan from Gulftein of the operator is to take it to 10 million TEU capacity port within three years. And already since start of March, weekly throughputs up from 8,000 TEU to 65,000 or thereabouts.
Fujairah again still in the UAE but outside the Gulf. DP world obviously of Jebel Ali fame in Dubai is investing hundreds of millions there. Now over in Saudi Arabia at Jeddah, we've got a new 434 million dollar terminal on the Red Sea side. This is a joint venture with French container line cmacgm. So a container line buying the capacity it needs there. And and in Oman, Salalah's revenue up 20% already plus a $3 billion rail line. A new overland corridor is being built. Skip the strait entirely. Again, those terminals are outside the Strait of Hormuz so there's just four port related developments looking at about $15 billion plus committed in just a few months since the outbreak of war.
Is this, Eleanor, is this just hedging against future conflict around Hormuz? So like a plan B or do you see this as a long term strategy designed essentially to de risk trade with the Gulf and these developments are happening almost in real time.
[00:20:50] Speaker B: Well also let's not forget that DP World and APM Terminals have done a joint venture in Jeddah as well. So certainly I'll just take Jeddah. That's a separate thing, separate market. Jeddah is a, a viable commercial port in its own right. Very different prospect. So I think we just need to look at the UAE and Oman projects separately. So Jeddah commercially viable, although predicated on Red Sea security situation improving.
When we look at the projects that are in direct response to the Straits, I think it's important to remember that some of these were in process before the situation. So it's always been an issue at the back of the mind, Oman wanting to have rail links to the upper Gulf and seeing it as a potential gateway, albeit with obstacles to overcome. They've been talking about rail for a long while. This has been an accelerator for the UAE ports. It's very much seeing this whole situation of efficiency versus resilience playing out in real time. Absolutely.
So important to view these as you've already done, in the context of what else are they doing? Because there's more important trades to the Gulf than containers. So obviously a lot of container owned trade is the food and provisions and the manufactured goods that people rely on. But the wealth comes from the liquid bulk trades. So what are they doing there? And if they're putting in place resilient options for these trades, then putting in place resilience investments for the container trade is just as important.
So I very much doubt actually looking at them, that these projects would stack up commercially, which is why they've not been delivered to to date. There must be some kind of government guarantees written into all of these concession agreements or contracts for the construction.
And I think it comes back down to necessity, accelerating and pushing forward processes. So core for Kahn has definitely moved up, but the processes you would normally have in place to basically shift from being a transshipment hub to being a gateway hub. They haven't got the gate facilities, they haven't got the, they're doing bonded corridors and they're moving goods towards ports which have got the processes set up because they've had to.
So longer term these Alternative gateways. They're going to need to look at those processes and almost like move them back into the customs processes, the finance processes and everything else that goes on at a port will need to be relocated and redesigned around alternative gateways as well. So it's not just about the infrastructure, it's about getting those processes that sit behind trade upgraded and realigned to the new normal as well.
[00:23:26] Speaker A: Just on Jeddah, I was over there less than a year ago, so before the war at a grain and bulk shipping conference actually. And it struck me that maybe they were ahead of the game here because Saudi's been freeing up the grain market. It wants to become a hub for the gcc. It was building storage facilities, the rail system was being upgraded. So it could always be the like almost like a, a reserve in case of these sorts of problems happening in the future.
It's almost like they would already imagined unlike some of the major players on the geopolitical front now, Hormuz could be closed. But do you these investments in on the container side at Jeddah, were these moving forward prior to war or have they been and they've been accelerated or have these been started because of war?
[00:24:15] Speaker B: I think the two investments of Jeddah were prior to or the two announced investments were prior to the Iran crisis as it stands now. But I think Saudi's got unique geography in the fact that it has two major gateway ports at Dammam and Jeddah and a major market in the centre of the country. Therefore investments in cross country transport were already in place. Plus its Vision 2030 projects was looking to diversify the economy and carve out a new role for Saudi Arabia as a regional logistics lead. Amongst many other things, tourism, sustainable energy, all kinds of other things going on under Vision 2030.
Certainly the war will have accelerated this, but they've got common investors across majority of the port sector with the public infrastructure fund holding shares in all major ports and they've been very proactive in developing ports beyond oil and gas.
So I think we just need to recognize Saudi as it wasn't that it was doing this specifically in case of war. It just happened to be better prepared when the war came because of its unique geography and its long term vision to diversify its economy.
[00:25:23] Speaker A: Okay, thanks Elna. Let's move over to the Americas. The port sector in the US has been rather quiet since the two big dock worker unions completed negotiations with Lyons and Porter interests a couple of years back. Any major changes there in terms of investment speed or like service improvements perhaps? What should US shippers expect from their local terminals over the next few years. It's not going to be more automation based on those union deals, is it?
[00:25:51] Speaker B: No, definitely not. Definitely not automation. There is a few expansion projects in the pipeline but an American port development pipeline is very, very long and torturous.
So there's going to be further upgrades at Savannah. They're well advanced with converting the ocean terminal into container handling facility and ongoing expansion at Garden City. It's going to be a new terminal in Baltimore, the TIL joint venture at Sparrows Point and they're also its are going to upgrade Pig in Long Beach. But these things take a long time and there's no prospects of any major dredging below the current vessel size. We're not going to see ULCVs into the west coast on a routine or regular basis anytime in the near future because they haven't got the plan permits to dredge down in Mexico, which we still count as part of North America. APM terminals and Hutchison have expanded Lazaro Cardenas and there's going to be a new greenfield project in Manzanillo in Mexico. So they're still hoping that they can trade with the US Things are somewhat tricky and of course in the Great Lakes, Lake Ontario is no more. Lake America, here we come.
[00:26:58] Speaker A: For today.
[00:26:59] Speaker B: For today. For today.
[00:27:01] Speaker A: Depends on. Depends who's asking and who's telling.
Yes, we've heard of Canadian shippers trying to direct as much cargo through Canadian ports as they can as well where that's suitable for their supply chain. But those USMCA negotiations are really dragging out Another thing while we're on the Americas and I mentioned it at the start, Panama Canal's water levels are dropping by the day. It seems this is the El Nino effect. We're not sure how bad things will get but people are talking about it being of the worst on record. What's Drury's latest forecast on how this might affect container shipping choices? Because using the Panama Canal can be a factor for carriers and shippers in deciding which coast a service or their shipment comes into.
[00:27:45] Speaker B: I think you're right there that the cost is already going up due to the draft restrictions. Those surcharges are in place.
But I think when we look at the market as a whole, there's already been a shift towards the east coast from for via Suez or Cape of Good Hope routings as more and more American imports shift from China to Southeast Asia where the traditional routing via Suez actually had a bit of an edge on that.
So we've got a good Understanding of what the magnitude, we saw it during the strikes, we've seen it during previous draft constraints. It's unlikely to be a mammoth shift back to west coast because of the cost of rail transits and the bulk of the volume demand being on that east coast seaboard. And also a lot of the investments that ports in the east coast such as Savannah have made to really lock in volumes and customers into the supply chain or the transport chains that link into the ports is helping to keep those customers happy.
[00:28:41] Speaker A: Okay, continuing the Mike and Eleanor global trek, let's carry on with southbound to South America. Where is congestion worse? Is there much investment going in? What should shippers expect?
[00:28:54] Speaker B: Well, looking at my database, the longest average birth waiting time in July, which was our most recent full month, was Montevideo, Itajai and Buenos Aires. All up around on average 1 day per container vessel. Santos is back down at about 0.5 days, which is about half where it was this time last year.
But I have to say that given that it's the largest port, it's a key transshipment hub as well for in region. Transshipment congestion remains a really high risk in Santos, probably until at least the new STS10 concession comes on stream. All the terminals are operating at really high levels of utilization. There's limited scope to expand or intensify existing terminals and there's been a lot of delays with this concession. So the Brazilian government needs to stop flip flopping around and actually get it awarded.
[00:29:45] Speaker C: Now.
[00:29:45] Speaker A: You've been told, guys, you've been told by me.
Get a move on, get a move on.
With apologies to India and Australia, well, Australasia, sorry, my friends in New Zealand, we're going to run short of time to reach you, but I do want to finish on something. We've covered quite a bit on this podcast. It's quite a dynamic market.
We've seen some huge inbound volume increases into West Africa over the last year and a half. Seem to coincide with tariff policy changes with the us. Some people have called it dumping. We've also seen a lot of major investments in those ports over the last sort of decade, but hasn't stopped port delays increasing. What's going on?
[00:30:23] Speaker B: Yeah, it's certainly not fair to say that there hasn't been investment in West African ports. And to a large extent the inflow of capital into these ports has basically unlocked trade potential as carriers now feel confident in mainline vessels into the ports that largely they own much bigger ships. Yeah, very modern terminals in Tema, Lome, Abidjan, Point Noir operating vessels Far more efficiently, often than more established ports in Europe or North America. But moving the cargo in and out of the port remains a real bottleneck. And some of the upswing in port time we've seen is down to larger vessels which obviously need more time in port.
But there is a large amount of waiting time at these ports and congestion is still prevalent at some of the outports which are now served on a transshipment basis from these hubs. So if you've got 14 day waiting at maybe an outpour in guinea, then that cargo is waiting at that hub and causing yard congestion. So they've sorted out the main gateways stroke transshipment hubs within the West Africa region. And we now need to see that efficiency overflow and investment move down the tiers of port. And we also need to see greater involvement between port authorities, customs and terminal operators to get cargo moving efficiently inland.
[00:31:40] Speaker A: Just a quick word on South Africa from me and feel free to jump in if you would like to. Eleanor We've seen huge delays recently in Durban. If anyone want to check out how badly some of those ports in South Africa have been performing and why, I'll flash up on screen now. An explainer I did less than a year ago. It's still totally relevant called the Good, the bad and the anc. And that will explain some of the challenges that people in supply chain are having as a result of the lack of investment in ports.
Exactly the opposite of what we've seen in Western Africa. I don't know if you want to say anything about South Africa, Eleanor.
[00:32:18] Speaker B: Well, I think it's good that they finally resolved. At the beginning of the year they resolved the award of the Durban gateway terminal concession to ictsi.
I see a TSI have a strong track record in coming into markets with, shall we say, challenging labor conditions and challenging operating conditions. But this is by far one of the biggest investments they'll be making. And they're still only a joint venture partner with Transnet, so actually having executive control over that change. They need to negotiate carefully with their partner. They're typically typical port concession, they would have 100% control. This one is a joint venture.
So we're hoping they can make some changes, but it's not going to happen quickly. It's going to be take time to upgrade the equipment, but more importantly change the operating and working practices and then importantly we'll start to see them push back at those inland transport networks where there's inefficiencies on road and rail as well.
[00:33:14] Speaker A: Just filling in a slight Gap there. So if anyone's listening, wonder, oh, Transnet. So that's the state owned port operator or port owner.
It's been slightly mired in corruption, lots of things disappearing. It's been one of the main problems. Now there is hope and optimism in South Africa that new management is going to turn that around. So good luck everybody there. A couple of quick fire questions, Eleanor, just as we're finishing up. If you're a freight buyer, what should you actually be watching over the next two years? Where do you think we'll see real terminal logistics improvement and where do you think things will stay stuck or maybe get worse?
[00:33:52] Speaker B: Well, I think resilience. We're moving into a world where resilience is key.
[00:33:55] Speaker A: My favorite word.
[00:33:57] Speaker B: Hey, I've made you happy today.
[00:33:59] Speaker A: Yes.
[00:33:59] Speaker B: So as I say, this series of unfortunate events, disruption is now the norm. So ensuring that you have a plan B is important.
We should see some relief as we move into the winter season in North European ports. And there's more capacity coming.
It's visible the cranes are on site. They are being commissioned as we speak.
But there's a longer timeframe on many of these Chinese port upgrades. So much as Asian markets are able to construct far quicker than, say, their European and North American counterparts. They didn't start during the pandemic or in the immediate post pandemic, so they're only starting now. So expect to see ongoing congestion issues in Shanghai and Ningbo in particular, the two of the largest ports in the world. Huge volumes moving through them, hugely efficient port operations, but just overwhelmed by the volumes that are moving forward.
[00:34:51] Speaker A: I don't want to be like a dog with a bone, but I'm going to go take you back to Vincent Kleit, Maersk CEO, because that's where we started.
So the more I think about this, Elna, the more I do cast some doubt. And this is not just me, there's other people have said this to me. So I'm like, I'm conveying their thoughts and their doubt is about whether lines really don't really want an end to poor congestion or other disruptions because disruptions and bottlenecks, there's no doubt that these drive carrier profits to a degree.
So I guess is chronic underinvestment really something to complain about when it's good business for them? And looking ahead, will the Vincent clerk of five years from now be making the same complaints or will he be saying something completely different?
[00:35:39] Speaker B: Well, I don't think you can argue chronic underinvestment. The terminal has expanded. It's just each terminal operator is invested to make their business, which they get paid for, more efficient.
So oh dear me. Terminals are no longer providing spare and free buffer capacity for the rest of the supply chain. I've been in the port sector 30 plus years, so that's always what I'm going to say.
[00:36:03] Speaker A: Why would they? Why would they?
[00:36:04] Speaker B: Why would they?
[00:36:05] Speaker A: It's their business.
[00:36:05] Speaker B: You could pay some more, more and get some more.
[00:36:09] Speaker A: There you go.
[00:36:10] Speaker B: That's how the world works. But he operates ports and APM terminals banked profit of over a billion in the first half, so he's probably not complaining about that either. And I don't want to upset APM terminals or Maersk. They're both brilliant companies.
[00:36:26] Speaker A: You can blame me. Eleanor Hadlan, thanks for joining me today on the Freight Buyers Club and thank
[00:36:32] Speaker B: you very much for inviting me to join. As always, thank you. It's a pleasure to discuss the critical role that ports play in global supply chains. It's my, it's my thing.
[00:36:40] Speaker A: It's your thing, isn't it just. I love talking about it too. Okay, thanks everybody. A couple of shout outs. De Meo Express thanks so much for supporting independent journalism. They really are the best partner if you need a shipping or air cargo solution on the Trans Pacific trades and beyond. And also gratitude, of course, to Karen Ball and Tom Matthews for their sterling production skills. Apologies I left you out at the on the last podcast that Please forgive me. And don't forget, you can find us on all major podcast platforms@the freightbuyersclub.com and of course in video on Spotify and YouTube. If you enjoy what we do and want to help us keep this content free, please take a second to like subscribe and leave a comment. It really does help us keep things rolling.
We're specifically trying to reach 10,000 YouTube subscribers, so please click the button below if you're watching there.
Thanks everybody. I'm Mike King, this is the Freight Buyers Club. We'll be back soon.
[00:37:51] Speaker B: Sa.
