The Corporate Geography of Global Terminal Operators Paper no. 2.03.01

1. The Corporate Geography of Global Terminal OperatorsPaper no. 2.03.01 Theo NotteboomITMMA - University of Antwerp and Antwerp Maritime Academy, Belgium Jean-Paul RodrigueDepartment of Global Studies & Geography, Hofstra University, New York, USA

2. The Corporate Geography of Global Terminal Operators 1) An Overview of Global Terminal Operators 2) Typology and Market Strategies 3) Consolidation and Scale Increase 4) The Spatial Expansion of Terminal Operators 5) How “Global” are Global Terminal Operators? 6) Vertical Integration Strategies in the Hinterland Container yard, Port of Yantian (HPH), China

3. Changing Role and Function of Transport Terminals Labor Intensiveness Capital and managerial intensiveness

4. Top 12 Global Port Operators in Equity-Based Throughput, 2007

5. Container Terminal Surface of the World's Major Port Holdings, 2009 N = 405

6. Number of Terminals and Total Hectares Controlled by the Ten Largest Port Holdings, 2009

7. Depth and Surface Characteristics

8. Typology of Global Port Operators APM T (Private)

9. Factors behind the Interest of Equity Firms in Transport Terminals

10. Consolidation and Scale Increases: Major Port Terminal Acquisitions since 2005 EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization

11. The Strategies of Port Operators

12. Inter-firm Relationships in the Three Main Container Ports of the Rhine-Scheldt Delta, 2010 Partnerships of multiple stakeholders HUTCHISON PORT HOLDINGS PSA 20% Majority shareholding 100% ANTWERP Minority Shareholding ECT MSC MSC Home terminal 50% North Sea Terminal 50% NYK PSA (Antwerp/ Zeebrugge) Europe Terminal 100% Delta Terminal 100% CYKH Alliance Deurganck Terminal 50% Waal- and Eemhaven 50% 100% Antwerp International Terminal (AIT) Shipping Line New World Alliance 50% Euromax phase 1 DP World Delwaidedock 50% (Global) Terminal Operator 100% 60% DP World 42.5% Antwerp Gateway 30% Rotterdam World Gateway (Maasvlakte 2) Operational by 2013 ZIM Line 10% Terminal Cosco Pacific 20% 10% PORT CMA-CGM APM Terminal Maasvlakte 10% • Financial Holding CHZ 65% 35% 100% Terminal 1 (Maasvlakte 2) Operational by 2014 APM Terminals (AP MollerGroup) Albert II-dock north (under construction) 100% 100% ROTTERDAM 75% APM Terminal Shanghai International Port Group (SIPG) 25% ZEEBRUGGE

13. Inter-firm Relationships in the Three Main Container Ports of North America, 2010 Japanese, Taiwanese & Korean(Export-oriented strategy) “Financialized” Stevedores • Ontario Teachers' Pension Plan APL • Global Gateway South 100% NYK • YusenTerminals 100% 100% • TraPac Los AngelesBerth 136 Global Container Terminals • Mitsui OSK 100% APM Terminals (AP Moller Group) 100% • APM Terminals Pier 400 100% Evergreen • Evergreen Terminal 50% 50% • New York Container Terminal • West Basin Container Terminal Yangming 40% 60% 100% • Global Terminal and Container Services LOS ANGELES • Deutsche Bank RREEF LONG BEACH • APM Terminals Port Elizabeth 100% • Terminal C60 Maher Terminals MSC • Maher Terminal • Terminal A 50% 100% 50% • Long Beach Container Terminal OOIL • Port Newark Container Terminal 100% Ports America 100% K-Lines • Pier G Berth 100% NEW YORK 100% Hyundai • Stevedoring Services of America • California United Terminals 100% • AIG Highstar Capital Cosco Pacific • Pacific Container Terminal 49% 51% • Macquarie Infrastructure Hanjin • Total Terminals International 60% 40% Shipping Line Terminal Operator Terminal PORT • Financial Holding

14. Inter-firm Relationships in the Main Container Ports of the Pearl River Delta, 2010 Joint Ventures (TO / Local Government) GUANGZHOU Cosco Pacific • Guangzhou South China Oceangate Container Terminal 39% APM Terminals (AP Moller Group) 20% 41% • Guangzhou Port Group • China Shipping Group 60% • Nansha Container Terminal 40% • Nanhai International Container Terminals 50% ZHUHAI • Guangzhou Huangpu Xingang Terminal 49% • Zhuhai International Container Terminals PSA 50% • Guangzhou Huangpu Xinsha Terminal 49% 10% 50% • Moderns Terminals • Shenzhen Yantian Port Group • Dongguan Container Terminal • COSCO-HIT Terminal 10% 30% 33% HUTCHISON PORT HOLDINGS • Hong Kong International Terminals • Yantian International Container Terminals 70% 67% 20% 100% • Shenzhen Municipal Government • Asia Port Services • Da Chan Bay Terminal One 35% 65% ModernTerminals • DP World Hong Kong 66% 33% • Shekou Container Terminals 20% 80% DP World • China Merchants Holdings International 55% • Asia Container Terminals 25% 75% • Chiwan Container Terminal HONG KONG SHENZHEN Shipping Line Terminal Operator Terminal PORT • Financial Holding

15. Container Terminals of the World's Four Major Port Holdings, 2009 Importance of ‘home port’ (2009) PSA: Singapore = 44.2% of global non-equity based throughput. DP World: Dubai = 25.3% of global non-equity based throughput. HPH: Hong Kong = 16.5% of global non-equity based throughput.

16. Regional Share in the Terminal Portfolio of the Four Main Global Terminal Operators (Hectares, 2009)

17. Container Terminals of the World's Regional Port Holdings, 2009

18. Regional Share in the Terminal Portfolio of Some Regional Terminal Operators (Hectares, 2009)

19. Vertical and Horizontal Integration in Port Development Vertical Integration Horizontal Integration Maritime Services Port Holding Inland Port Port Services Port Inland Services Intermediate hub Terminal Port Rail / Barge Distribution Center Maritime Shipping Port Terminal Operations Inland Modes and Terminals Distribution Centers Commodity Chain

20. World’s Main Intermediate Hubs, 2008

21. Conclusion • The “four sisters” (HPH, APM, PSA and DPW) • Analogies with the oil industry (oligopoly). • Strong multinational portfolio; each market is regional. • Standardization of management practices. • Multiplying effects to the functional and operational benefits brought by containerization. • Two major and complementary roles • Gateways: • Linking global and regional freight distribution systems. • Complex stake holding at the port and in the hinterland. • Intermediary hubs: • Connecting different systems of maritime circulation. • Single GTOs played a preponderant role. • Both account for terminal growth and profitability.

22. Conclusion • Vertical integration, horizontal integration and portfolio diversification • Maritime shipping companies: • Secure traffic for their networks. • Profitability of both seaside and landside operations. • Stevedore companies: • Expanded from their base port or region. • Diversify and replicate their business model. • Financial holdings: • Valuation and revenue generation. • Organic growth (new terminals) and M&A of existing facilities (and operators): • Common strategies. • GTO differ little from their manufacturing and retail counterparts in view of globalization.

23. Conclusion • Future expectations • Part of business cycles. • Diminishing returns. • Fast growth, mergers and acquisitions: • Underlines that the industry may be close to achieve a level of maturity. • Convergence towards a common business model? • Shift in the corporate geography of GTOs: • Then: Dynamics oriented towards expansion. • Now: Rationalization, performance improvements and the search for niche markets (segmentation).