Global ports operator DP World plans to add about three million Twenty-Foot Equivalent Units (TEUs) of container-handling capacity by the end of the year to help meet growing demand in key trade markets.
The company, which currently manages approximately 9 per cent of the world’s handling capacity and is among the top five global ports operators, said the addition will take its total gross capacity to 93.6 million TEUs.
Its medium-term target is to reach 100 million TEUs per year, depending on demand, Tiemen Meester, chief operating officer of ports and terminals at DP World, said in a statement on Tuesday.
"We have to take a longer-term view of global economics, looking at how demand will change and how we can meet it in the most efficient way," Mr Meester said.
The capacity additions to be completed this year in key markets include Caucedo (Dominican Republic) with an additional 1.2 million TEUs, Yarimca (Turkey) with an additional 579,000 TEUs, Sokhna (Egypt) with an additional 500,000 TEUs and Jeddah (Saudi Arabia) with an added 200,000 TEUs.
Other markets include Callao in Peru and Saigon in Vietnam with another 200,000 TEUs. Terminals in Luanda, Dakar, Berbera and Vancouver will each get an additional capacity of 100,000 TEUs.
The expansion plan comes as global container throughput is forecast to grow to 932 million TEUs by 2025, up from 858 million TEUs in 2021, according to maritime research and consulting services firm Drewry.
"The firm’s capacity expansion plans come at a vital time with inflation, increased cost of living and geopolitical uncertainties causing concern about global trade and fuelling demand for faster, more resilient supply chain solutions," DP World said.
As a series of crises buffet the global economy, with the Covid-19 pandemic giving way to the war in Ukraine, inflation, monetary tightening, and widespread debt distress, world trade has lost momentum, with trade growth slowing in 2022 and remaining weak into early 2023, Ngozi Okonjo-Iweala, director of the World Trade Organisation, said in July.
"Numerous downside risks, from geopolitical tensions to potential financial instability, are clouding the medium-term outlook for both trade and overall output," she said.
World trade growth is expected to decline to 2 per cent in 2023, from 5.2 per cent in 2022, before rising to 3.7 per cent in 2024, according to the International Monetary Fund.
This is well below the 2000-2019 average of 4.9 per cent and reflects slowing global demand, as well as a pivot towards domestic services, the lagged effects of US dollar appreciation – which slows trade owing to the widespread invoicing of products in US dollars – and rising trade barriers, the Washington-based lender said in its latest global economic outlook in July.
Besides physical infrastructure expansion, DP World said it is also focused on digitalisation – implementing new technology and modern terminal operating systems, which will further increase capacity by automating and streamlining operations within each port, enabling greater flow of trade and more efficient processes.
DP World continues to grow its operations globally.
Maritime services provider P&O Maritime Logistics said on Tuesday it secured an exclusive towage contract with DP World in the Dominican Republic, which will increase the volume and size of vessels calling at the Port of Caucedo.
P&O Maritime Logistics will deploy three tugs to support operations at Caucedo, which has a capacity to handle up to 2.5 million TEUs, as the contract begins on December 7, it said in a statement.
"The introduction of these new tugs, equipped with market-leading capacity and capabilities, further empowers us to expand our logistics hub and enhance connectivity," Morten Johansen, chief executive of DP World Dominicana and chief operating officer of DP World Americas region, said.
“DP World considers the Dominican Republic a strategic location for continuing investment and expansion."
DP World is also expanding in Asia, where it will begin operations at Indonesia’s Belawan New Container Terminal, after finalising an agreement with the Indonesia Investment Authority and state-owned port operator Pelindo to manage the terminal and expand its capacity, it said in June.
In February, DP World won a concession to develop, operate and maintain the Tuna-Tekra mega-container terminal at Deendayal port on the West coast of India. Once complete, the terminal will handle 2.19 million TEUs a year.