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Maersk Group's business unit APM Terminals has made a splash in the shipping industry with a recent acquisition of Spain's leading container terminal operator Grup Maritim TCB. This acquisition adds 11 terminals in Colombia, Brazil, Mexico, Guatemala, Turkey and Spain to their global portfolio. APM's volume will increase by millions of containers, solidifying its place as the second-busiest terminal operator in the world behind Hutchison Port Holdings.
Though acquisition in the Shipping industry is common, the location of the majority of the ports is the significance of this deal. South America has had some economic turmoil, perhaps more turbulent than other regions, due to the price of oil among other political issues. According to the IMF the overall growth has been stagnant over the past few years and the outlook for the future remains uncertain as the price of commodities like oil struggle to rebound. Oil is important to many South American nations for their economic success, especially benchmark nations such as Brazil, Mexico and Venezuela. Oil prices are not expected to experience growth in 2016 but it is hard to picture the price of such an important resource remaining so low for much longer.
APM Terminals' acquisition is a leap of faith in the South American economy and a bet that the economic climate will stabilize. If South America's economic growth increases, more products are sold and more is being transported to different nations. Nations with stable, promising economies also become more viable hosts for manufacturing, further developing trade and movement via shipping.
If South America becomes a hub not only for commodities but also for manufacturing, the impact would be directly related to North America's outsourced production. The shift would mean shorter transport, lowering the cost of manufacturing and weakened ties with China and Southeast Asia, creating a flurry of other global development issues.
The hope is a steady, sustainable growth that provides opportunities for all regions to grow together. This would develop worldwide trade and benefit the shipping industry most.Deep Trekker is always interested to see the development of the shipping industry, because mini ROVs play an integral part in the protection of the container ships via structural inspection as well as security inspection. As the ports of South America develop along with the economy, maritime security and asset management will be key to ensuring long term economic success.
What do you think about the long term economic outlook? Comment below with your thoughts on the future of shipping.
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