Ports

Ports

Ports are gateways for trade, catalysts for growth.

The pace of change in the global ports industry is close to breath-taking. The value of ports as major assets is now recognised on many levels: for their contribution to the achievement of national economic growth aspirations; as central to the dynamic changes occurring in investor portfolios worldwide; and in their role in multi-modal transport links and the hinterland logistics programmes of many multinational companies.  

Understanding how ports can remain competitive in a global market

Ports today are required to fulfil a number of roles and meet a number of expectations and challenges. The key is in understanding the dynamics of the market, a port’s position within it, and how to maximise potential however that is defined. This applies as much to a port specialising in handling a single commodity serving a relatively small hinterland and looking to diversify, as it does to a mega-transhipment hub positioned on global trade routes and expected to handle mega-sized vessels. 

MDS Transmodal helps you to address these issues, to pinpoint major developments in a market and provides advice so that you can plan accordingly. The full range of possible market studies are offered, the resources are all in-house, not out-sourced, and can be added to and enhanced with models which have been developed specifically for the ports industry.

MDS Transmodal contributes advice through:

Market studies

MDS offers the entire range of projects from in-house resources covering;

  • Market and feasibility studies for port and terminal infrastructure including assessment of competition and competitive positioning.
  • Commercial due diligence services for buyers or vendors of ports and terminals.
  • Business cases and business plans for port or terminal infrastructure.
  • Port traffic forecasts at a national, regional, port and terminal level, taking into account the key economic drivers of port traffic by cargo type and the level of international or inter-port competition.
  • Financial modelling to support the commercial and strategic objectives of port authorities, terminal operators, government agencies, lenders and investors.
  • Analysis of port hinterlands and road, rail and inland waterway hinterland connections including analysis of available capacity.
  • Analysing the case for the development of port-centric distribution at individual ports.
  • Grant applications for port and terminal infrastructure and equipment.

Immediate access to in-house resources enable studies or projects to be completed within short timescales. Key resources include:


  • The World Cargo Database: a harmonised global database of trade flows at a detailed commodity level. Go this link for a detailed description of WCD
  • The Containership Databank: tracks the deployment of the world’s containership fleet Go to this link a detailed description of the Databank
  • The Ferry Databank: tracks the deployment of the world’s RORO vessels and ferries. Go to this link for a detailed description
  • Database of global container port TEU throughput.

All of which can be cross-referenced using common definitions.


MDST has developed a range of models which can be used to assist in port studies:

  • The Great Britain Freight Model (GBFM): a demand simulation model that can be used to test the impact of changes in the policy and market environment on the flows of short sea unit load freight traffic through ports at a corridor and port level and the impact on road and rail flows inland 
  • The European Container Port Demand Model (ECPDM): a demand simulation model that can be used to test the impact of changes in the policy and market environment on the flows of deep sea container traffic through the top 40 European container ports on the continental mainland. 
  • GB Port Supply & Demand Model: An economic simulation model that consists of a database of all port terminals by type, with their size in terms of hectares, depth of water etc. and with freight demand assigned to vessel calls.  The model, which has been used by the UK Department for Transport as part of its ports policy review, seeks to allocate traffic to ports, allowing for switching between them, and provides outputs in tonnes of freight accommodated, and not accommodated, by traffic type and GB region, for a given forecast year.   
  • The Container Business Model (CBM): models the economics of the global container shipping industry and combines data from the Containership Databank (which tracks the deployment of the world’s container shipping fleet) with the consultancy’s trade database (the World Cargo Database) to allocate world trade in maritime TEU to container ships, synthesising transhipment as required and, therefore, utilisation. The model, which is calibrated against the financial results of the more transparent global shipping lines, provides estimates of revenue, costs (ship costs, bunker costs, terminal handling costs etc.) and profit, by trade lane. It has been used by several global shippers to help them understand shipping line costs. 
  • The End to End Model (E2E): models the economics of door-to-door container shipping services between a given set of origins/destinations in Great Britain and a given set of origins and destinations overseas, based on a given volume of containerised trade on the relevant trade lane.  It allows the complete door-to-door transport costs to be modelled and so includes not only the costs of operating the shipping services on a quay-to-quay basis via a particular port, but also considers the inland distribution costs by road or rail. It can be used, in particular, to compare the average cost of container transport between different British ports for a specific trade lane, such as Europe-Far East and Transatlantic. 

Forecasts

Forecasts of trade are essential to developing forecasts of demand for port capacity as well as to establish the likely future prospects for existing ports.  As we have developed our own global trade database, World Cargo Database (WCD), for trade in tonnes and by value between 240 countries and for 3,000 commodities, we are able to produce trade forecasts without any further data collection and based on existing techniques.   


Trade forecasts give a baseline indicator for growth in the various port business sectors but port volume forecasts also require account to be taken of hinterland industry sectors, be they bulk liquids such as the chemical industry or power stations or steel manufacturing and processing and so forth.  


Further, competing ports have to be taken into account in terms of competitive advantage by cargo sector, development plans, road and rail connectivity, marine access and berth parameters.

MDS Transmodal has a long history of providing port forecasts:


Approach: 

  • Building on a robust evidence base:  use baseline data from the WCD for the relevant commodities and countries to examine historic trends; using national port statistics for mode sectors such as containers, roll on- roll off, bulks and so on.
  • Developing forecasts: produce forecasts using growth factors for each commodity/cargo sector as appropriate using the forecasting module of the WCD alongside analysis of port throughput by mode of appearance and taking account of domestic industrial sector performance. 
  • Understanding the impact of change:  analyse future scenarios by translating policy and market change into potential change in the economic drivers of trade.
  • Finalising the analysis: conclude the forecasts with any necessary sensitivity analysis to take account of different scenarios.

Outcome


A quantified view of future trade for a port by commodity and cargo sector.


Clients include:  ports and terminals; shippers and shipping lines, national government, regional authorities, banks and other financial institutions.

Master Plans and strategic advice

Specialist advice is offered for port master planning, with a focus on demand-side analysis and estimating space requirements to accommodate the forecast traffic, as well as working with consulting engineers on detailed port layout plans.


Projects concerning the development of new facilities are sometimes tackled on a co-operative basis with an engineering consultancy.  Our contribution covers the relevant market aspects, from the types of cargo that the port could attract to potential interest from shipping lines in cases where liner trades are involved.  This type of approach means that we are often the first consultancy contacted by potential developers / investors because the results of the market study will not only define the nature of the port facilities but also whether the project is financially attractive.  Work can be undertaken with planning and regeneration consultancies involved in local development planning for the public sector where the port business requires evaluation and traffic forecasts.


Services include: 

  • Market size assessment – national level analysis of the historic pattern of trade and trade volume on different trade lanes. 
  • Study of national and regional economic background, including assessment of major industrial developments in the port’s hinterland.
  • Forecasts of port traffic by trade lane using in-house modelling.
  • Analysis of the competitive position and value proposition of a port based on comparison of various factors including other national port developments.
  • Analysis of container service patterns comparing direct calls and transhipment and the transhipment potential of a target port.

Due Diligence

MDS Transmodal has conducted a number of port-related due diligence exercises over the last decade which have covered an examination of market conditions, operating costs, infrastructure requirements, regulatory environment and forecast financials.  Particular attention has been paid to the competitive position of the assets involved, relative to other actors in the relevant markets.


While our clients and the nature of the work remains confidential we can say that we have been involved in most of the sales and purchases of the large UK port groups, sometimes for the vendor and at other times for a purchaser, and we continue to be commissioned for updates and refinancing exercises.  We have also worked on ports and port groups outside the UK.


Our clients have included investors from private equity funds, international investment banks, pension funds and international port groups.


Why MDST? 

You can be assured of independent and objective advice. MDS is able to draw on the expertise of a team of dedicated and experienced consultants to provide market analysis, strategic business planning advice and support in commercial due diligence projects.

Clients: In the ports sector the consultancy works for Government departments, port authorities, terminal operators, the owners of private sector port facilities, investors and financial institutions.
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