Global port volume will continue to grow over the next decade but at a slower pace than it has done since 2007 due to the US-China trade war and key industrial trends, according to a new report by credit ratings agency Fitch.
In its ‘10 Years on Ports’ paper, Fitch says an increase in trade hostilities and shifts in centers of production will all affect growth in ports and terminals around the world, as will the introduction of disruptive technologies in operations which could drastically reshape the supply chain.
The credit rating agency said the deterioration of US-China trade relations will have a larger effect on smaller ports than the world’s largest, which will be able to “offset” losses brought about by an increase in tariffs.
Furthermore, it said that dents to volume growth in North America will small and port expansions will continue unabated.
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The situation in Latin America is more unpredictable as recent shifts in trade policy between the US and major Asian economies have affected the traffic through the Panama Canal.
For ports in the Asia Pacific, growth could be negatively affected by the trade war and the automobile industry is particularly vulnerable.
Despite not being directly linked to US or Chinese tariffs, ports in Europe and the Middle East will be affected should be prolonged to the point where it has a noticeably negative impact on global trade flows.
According to Fitch, the bigger issue for European ports will be the fallout from Brexit and disruption in trade between the UK and the EU.
Senior Director at Fitch Emma Griffith had this to say: "Primary ports of call will be able to weather the storm despite elevated concentration in Chinese trade exposure in some cases.
"Conversely, smaller and more specialized ports will have less leeway to offset major losses in imports and exports if commodities handled are targeted by tariffs.
"Port investment will continue to focus on capacity enhancements to accommodate larger vessels while investor interest in North American port assets appears to be increasing."