The global shipping industry has been in the media spotlight for the past couple of years. The sector first started to make headlines as the coronavirus pandemic started to take root globally and ships were prevented from docking at ports - leading to a container shortage and mental health problems for crews. Then, a year later in 2021, the Panama Canal was blocked for six days and almost immediately, prices of various goods soared all over the world. Just as the industry had started to recover from these events, the Russian invasion of Ukraine kicked off last year and forced oil shippers to take longer routes.
One integral part of the shipping industry is the port terminal sector. This industry deals with transporting goods from and to the ships that berth at harbors, and according to a research report from Infiniti Research Limited, the sector is set to grow by $42 billion between 2022 and 2027 at a compounded annual growth rate (CAGR) of 10.1%. This dollar value estimate is also mirrored by Technavio, who in a research report dives a bit deeper into the sector. It explains that food transportation will form the biggest chunk of the market, with APAC accounting for 67% of the overall growth estimate. The firm adds that growth in operations automation will aid the industry moving forward into the future, with machine to machine (M2M) communications and the Internet of Things (IoT) enabling terminal operators to improve costs and reduce hazards.
Zooming in on the U.S., the largest terminal operator in the country is Ports America, which has operations in 33 ports across 70 locations. Ports America came under a bit of controversy a while back, when Howard Marks' Oaktree Capital, which had assumed ownership of the company through buying Highstar Capital in 2014, decided to sell the firm to the Canada Pension Plan Investment Board in 2021. The sale opened a debate about crucial U.S. infrastructure making its way into foreign hands, with Federal Maritime Commissioners asking for a deeper review of the deal. While this might have come as a surprise to some, the problem of foreign companies owning U.S. ports has been around for decades, and the last time the issue created this much attention was in 2006 when Dubai Ports World attempted to buy facilities across six U.S. ports. Speaking at the House Subcommittee of Coast Guard and Maritime Transportation, Representative James Oberstart (D-MN) revealed that the problem was going on for even longer. He explained to the Committee that:
We have 95,000 miles of shore line, 361 U.S. ports. Eighty percent of our port terminals are operated by foreign companies. Ninety-eight percent of the cargo that we import or export goes on foreign flag vessels. And that is an issue that has been going in the wrong direction for the last 32 years, since I have served in Congress, despite all of our efforts to build a U.S. flag maritime fleet.
This problem has continued until today, with the latest data from 2021 revealing that Chinese companies own stakes in terminals at five U.S. ports, such as those in Long Beach, Seattle, Houston, Miami, and Los Angeles. Apart from China and Ports America, another major entity, also foreign, that controls U.S. ports is APM Terminals. APM Terminals is a subsidiary of A.P. Møller - Mærsk A/S (OTCMKTS:AMKBY), and in the firm's earnings call discussing its fourth quarter of 2022 results, its chief executive officer Mr. Vincent Clarc commented on the industry and noted that it remained resilient in a difficult environment:
That said, terminals remains an extremely resilient business with strong pricing and good cost control, which made it possible to offset the inflationary cost increase in 2022. The segment ROIC of 7.6% is still affected by the impairment of our Russian activities and adjusted for that, we continue to have an excellent ROIC of 12.3%. As we look towards a full normalization of the extraordinary storage income, we are confident that the segment ROIC will remain above the targeted 9%.
Today, we'll take a look at some of the largest port terminal companies in the world, with the big ticket names being Evergreen Marine Corporation (Taiwan) Ltd. (TPE:2603.TW), COSCO SHIPPING Holdings Co., Ltd. (OTCMKTS:CICOY), and CK Hutchison Holdings Limited (HKG:0001.HK).
We analyzed the port terminal industry through several metrics such as tonnage, terminals operated, number of countries in operational footprint, revenue, and market capitalization. This enabled us to sift out both the biggest public and private firms in the sector, and these are ranked according to their revenue.
12 Biggest Port Terminal Operators in the World
12. China Merchants Port Holdings Company Limited (HKG:0144.HK)
China Merchants Port Holdings Company Limited (HKG:0144.HK) is a port operator headquartered in Central Hong Kong. The firm has operations in China, Hong Kong, Taiwan, and other countries. The firm builds ports, operates berths, and provides tugboats, and power for docked ships. The company is a subsidiary of the China Merchants Group, which is a state owned Chinese company. China Merchants Port Holdings Company Limited (HKG:0144.HK) also took over the lease of a Sri Lankan port after the country's economic crisis left it unable to pay its debts to China and other countries.
China Merchants Port Holdings Company Limited (HKG:0144.HK) joins COSCO SHIPPING Holdings Co., Ltd. (OTCMKTS:CICOY), Evergreen Marine Corporation (Taiwan) Ltd. (TPE:2603.TW), and CK Hutchison Holdings Limited (HKG:0001.HK) in our list of the biggest port terminal operators in the world.
Hutchison Port Holdings Trust (OTCMKTS:HUPHY) is a Singaporean company that is also headquartered in Singapore. It runs deep water container ports primarily in China, Hong Kong, and Macau. The company's fiscal year 2022 results disappointed investors as it missed analyst estimates for both revenue and earnings. Hutchison Port Holdings Trust (OTCMKTS:HUPHY) is also expected to reduce its revenue by 3.4% alongside an earnings drop of 9.6%. The firm's management attributed the results to a Chinese slowdown.
10. Hamburger Hafen und Logistik Aktiengesellschaft (FRA:HHFA.F)
Hamburger Hafen und Logistik Aktiengesellschaft (FRA:HHFA.F) is a German shipping company that is a subsidiary of HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH. and is headquartered in Hamburg, Germany. The firm primarily operates terminals in its home country and in Europe, in areas such as Ukraine, Estonia, and Italy. Hamburger Hafen und Logistik Aktiengesellschaft (FRA:HHFA.F) is currently building a hydrogen station at its Hamburg port, as part of its efforts to reduce carbon emissions.
9. International Container Terminal Services, Inc. (OTCMKTS:ICTEF)
International Container Terminal Services, Inc. (OTCMKTS:ICTEF) is a Philippine based company that is headquartered in Manila. The firm operates ports and terminals all over the world, in regions such as Asia, Africa, and the Americas. It has 35 terminal operations and projects in 20 countries.
8. Adani Ports and Special Economic Zone Limited (NSE:ADANIPORTS.NS)
Adani Ports and Special Economic Zone Limited (NSE:ADANIPORTS.NS) is an Indian company that is the maritime arm of the Adani Group. The company is headquartered in Ahmedabad, India. The Adani Group is one of the biggest stories in the media these days, after allegations by a U.S. short seller accused the firm of shady accounting practices. In this controversy, Adani Ports and Special Economic Zone Limited (NSE:ADANIPORTS.NS) became a breath of fresh air for the Group, as it bought Israel's Haifa port for $1.2 billion in an attempt to paint business as normal. The company's shares have also performed better than the group's shares, as they are down by 'only' 32% year to date while the Adani Group has bled 65% of its market value.
PSA International Pte Ltd is a Singaporean shipping company owned by the country's state owned investment management firm Temasek. It is one of the biggest terminal operators in the world, with 66 terminals under its belt. The firm's latest revenues stand at $3.48 billion.
6. A.P. Møller - Mærsk A/S (OTCMKTS:AMKBY)
Trailing Twelve Month Revenue: $4.4 billion
A.P. Møller - Mærsk A/S (OTCMKTS:AMKBY) is one of the largest marine shipping companies in the world. The firm operates in the terminal business through its subsidiary APM Terminals. A.P. Møller - Mærsk A/S (OTCMKTS:AMKBY)'s annual report for 2022 revealed that APM Terminals had earned $4.4 billion in revenue, which marked a $371 million annual growth. APM Terminals has access to 59 terminals across 31 countries, and its adjusted EBITDA stood at $1.2 billion last year. The firm's terminals in North America have the highest concession times among its global operations, which currently stand at 25 years.
Evergreen Marine Corporation (Taiwan) Ltd. (TPE:2603.TW), A.P. Møller - Mærsk A/S (OTCMKTS:AMKBY), COSCO SHIPPING Holdings Co., Ltd. (OTCMKTS:CICOY), and CK Hutchison Holdings Limited (HKG:0001.HK) are some of the biggest port terminal operators in the world.
