On 4th March, the sale of terminal company Hutchison Ports’ assets by the Chinese (Hong Kong) conglomerate CK Hutchison Holdings to the group consisting of US investment company BlackRock, Global Infrastructure Partners (specialized in infrastructure and controlled by BlackRock itself) and the terminal company Terminal Investment (controlled by the Swiss shipping company MSC) was announced
“The sale and purchase transaction, which concerns 90% of the capital held by HPH (Hutchinson Ports Holdings) in Panama Ports Company and 80% of CK Hutchinson, is not a simple handover of one or more port terminals from one group to another, but has an obvious strategic political importance,” Gian Enzo Duci commented to Port News
According to the professor at the University of Genoa and vice president of Conftrasporto Confcommercio, although official statements only highlight its economic value, the operation was clearly facilitated by the pressure on the seller by the White House. “The Hong Kong giant has decided to sell or at least accelerate the sale of its non-Chinese terminal division, as well as the two ports it controls at the entrance and exit of the Panama Canal, to avoid a knock-on effect on the rest of the group. Let’s not forget that Trump’s declarations of a trade war on China, accused among other things, of having a dominant control position over the Canal’s traffic, led to CK Hutchinson losing 25% on the stock exchange in one day.”
For a long time, the company was the top global terminal operator (remember its less than fortunate experience in Taranto), but then over the last six years it has lost its stronghold dropping to sixth position: “Drewry’s data reveals that in 2023 Hutchinson Ports handled 43 million TEUs through its terminals, one million more than the 42 million twenty-foot containers handled by MSC’s terminals. In recent years, however, the Hong Kong giant has focused on diversifying its activities to the point of developing business interests in other sectors, such as telecommunications, real estate, energy and retail.”
On the other hand, “although the full scale of the joint venture with Blackrock has yet to be disclosed, with this transaction, Gianluigi Aponte’s group has practically doubled its port capacity, acquiring the management of almost the entire CK Hutchinson network. Trust HPH, which operates terminals in Hong Kong, Shenzhen and southern China, and any other port in China, was effectively excluded from the purchase and sale.”
The figures speak for themselves: “With this operation MSC should become the number one global terminal operator, overtaking PSA’s leadership in the sector with a 62.5 million TEU turnover.”
In Mr. Duci’s opinion, the move further underlines MSC’s intention to enhance its position as a ‘lone rider’ in the global maritime logistics market. “Aponte’s group is of such a size that it no longer needs to ally itself with any industry player, and the agility of operating alone makes it much easier to manage any form of vertical integration,” he admits.
“And it is equally clear that MSC is playing a key role in overcoming the competitive gap that the US has in the transport sector. With the Bolloré acquisition in Africa, the liner has proved to be the white knight needed to try and curb Chinese expansion in the Dark Continent. With this latest operation, Aponte is once again playing second fiddle to the American superpower, carving out a leading, even decisive role for himself in the Trump administration’s economic strategies.”
It seems no coincidence that CMA CGM, only two days after the Swiss-US operation press releases and as soon as the prospect of overtaking Maersk as the second player in the container market thanks to a larger orderbook was disclosed, announced $20 billion worth of investments in US shipping, leveraging the relaunch of its iconic American President Line (APL) brand. However, perhaps there is even more behind it, if it is true as it is that the Marseille-based shipping company did not just announce its intention to add 20 ships to APL’s fleet, but it also stated that it intends to develop port infrastructure in key locations in the States, such as New York, Los Angeles, Dutch Harbor, Houston and Miami (another key issue in Trumpian economic policy).
The US continues to be the most important market in the world, and no-one from the (albeit Trump-abused) ‘friendly’ countries wants to be left behind.
It now remains to be seen how the economic-customs tug-of-war that Trump has started with Beijing is going to develop. According to Duci, Trump’s idea, recently disclosed by the United States Trade Representative, to impose port levies on Chinese shipping companies, to Chinese-built ships and any operator with Chinese-built ships in its fleet or vessels on order from Chinese shipyards, is likely to have a less significant impact on traffic to and from the United States than one might initially imagine.
“Chinese built ships that now call on the US are only 26% of the total, while ships built in South Korea and Japan account for over 60%. The impact of the ‘made in China’ fleet on the US is less important compared to the trades between Asia and Europe.”
If we analyze the top carriers’ fleets, we find that MSC currently has 220 Chinese ships out of a total of 802, Maersk has 199 out of a total of 735, CMA CGM has 274 out of 665, COSCO has 306 out of 517 and Hapag Lloyd has 72 out of 301.
On the other hand, if we look at the overall orderbook, the situation is more serious. 93% of the vessels ordered by MSC will be built in China. Hapag Lloyd, Maersk, CMA CGM have, respectively, 91%, 70% and 52% of their ships ordered from Chinese shipyards in their portfolios.
Economically speaking, the imposition of new port levies for each call made by Chinese-built vessels would come into an already high-cost scenario: “Handling containers in the US is already four to six times more expensive than European standards: If we add the one- million-dollar port surcharge to these costs, we would have an overall increase in port fees of between 12% and 15% for a medium-sized ship,”
Certainly, “Trump’s move could push liners to increase the size of their vessels on trade lanes from the Far East to the US and concentrate on fewer ports, assuming they can find a sufficiently large number of large ships not built in China,” admits Duci.
The US president’s move therefore risks having a boomerang effect and highlighting the weaknesses of the US port system: “The growth in the size of ships could expose US ports to serious congestion problems, highlighting the infrastructural inefficiencies which their national port system suffers from,’ the professor concludes.
Translation by Giles Foster
