DP World is third-largest ports operator

The Dubai company climbed one spot last year as it opened new ports and suffered smaller declines at existing ones compared with global rivals.

Containers sit stacked at DP World's Nhava Sheva port in Navi Mumbai, India.

DP World has become the world's third-largest ports operator, climbing one spot last year as it opened new ports and suffered smaller declines at existing ones compared with global rivals. The Dubai company handled 31.5 million containers (measured in TEUs, or twenty-foot equivalent units) last year, helping it surpass APM Terminals, the Netherlands-based firm owned by AP Moller-Maersk Group, which handled 31.1 million containers, according to Drewry Shipping Consultants.

DP World opened new terminals in Algeria, Senegal and Vietnam last year, while expanding capacity at its flagship port in Jebel Ali. Overall, volumes at its consolidated ports declined by 8 per cent last year. It has 50 terminals and 11 new developments across 31 countries, and a staff of nearly 30,000. The company is one of the most profitable concerns under the umbrella of its cash-strapped parent, Dubai World, and earned US$580 million (Dh2.13 billion) in earnings before interest, depreciation and taxes in the first half this year.

DP World, one of the most geographically diversified operators, holds a 6.7 per cent global market share, just behind Hutchison Port Holdings of the British Virgin Islands, which commands 6.8 per cent of the global market. PSA International of Singapore took the top spot worldwide, with a 9.5 per cent market share. In its annual report, Drewry said the ports industry had recovered well from the global downturn and a lack of spare capacity was now a concern over the decade.

The London-based consultancy has upgraded its forecast for this year in light of growing worldwide demand for sea freight. "Without question, the global terminal operators weather the storm," said Neil Davidson, the senior adviser of ports at Drewry. "Several parts of the world could see the spectre of congestion returning by 2015 if some of the originally planned expansion projects cannot be reactivated within the next three to five years."

DP World's Jebel Ali facilities have undergone periods of heavy congestion during boom times, leading to delays of several days for ships waiting to unload cargo. A proposed Terminal 3 on a man-made offshore island could help boost capacity to 50 million TEUs over the next 30 years, but plans were put on hold when the global downturn began. A company spokeswoman said yesterday it was still reviewing the plans.

"We are still watching the market and we can move quickly once market demand returns," she said. Last year, sea freight traffic dropped for the first time since the advent of containers in the 1960s. Ports worldwide handled 524 million TEUs, a 10 per cent decline from 2008. But while volumes in North America and Europe declined by about 15 per cent, the crisis was "hardly felt" in the Middle East and Africa, Drewry said.

"Global terminal operators have always been about expanding and adding capacity as quickly as possible. Suddenly they were all faced with changing mindsets towards drastic cost control and halting projects," Mr Davidson said. Global container traffic was projected to grow at 7.2 per cent a year between last year and 2015, while Middle East capacity is slated to grow at just 3.1 per cent per year. That means utilisation rates could be about 95 per cent at Middle East and Far East ports by 2015, the Drewry report said.

With credit finance much slower and more difficult to obtain, the recovery "raised the question as to whether capacity plans can be reactivated quickly enough", Mr Davidson said. [e-mail]