World’s Main Intermediate Hubs and Markets

Worlds Main Intermediate Hubs and Markets 2019

Source: adapted from Drewry Shipping Consultants and web sites of port authorities.
Note: Several transshipment figures are estimates and based on an average of figures available since 2008 to account for missing data and annual fluctuations in transshipment volumes.

With the growth of long-distance containerized trade, intermediate hubs grew in importance in connecting different systems of maritime circulation. They tend to be located along the main circum-equatorial maritime route through Panama, the Strait of Malacca, Suez, and Gibraltar. Intermediate hubs usually have a low maritime deviation, and many provide connectivity between north-south and east-west shipping lanes. Transshipment incidence is the share of the total port throughput that is “ship to ship”, implying that the final destination of the container is another port. The higher it is, the more a port can be considered a transshipment hub. For ports with low transshipment incidence (less than 25%), transshipment is an incidental activity, while ports having a transshipment incidence above 75% can be considered “pure” transshipment hubs.

While, in theory, pure intermediate hubs do not have a hinterland, but a significant foreland, the impact of feedering confers them a significant indirect hinterland. Feedering combines short sea and deep sea containerized shipping at a hub where traffic is redistributed, such as for the Caribbean. Using containerships has favored the concentration of traffic at terminals able to accommodate them in terms of draft and transshipment capacity. Smaller ports, particularly those well connected to inland transport systems, become feeders through the use of short sea shipping. As the transshipment business remains highly volatile, offshore hubs might sooner or later show ambition to develop services that add value to the cargo instead of merely moving boxes between vessels.

Transshipment emerged in the 1970s as trade with Asia increased, but volumes were insufficient to justify direct connections to many ports. Ports such as Singapore, Busan, Tokyo, and Kaohsiung emerged as the first transshipment hubs. This eventually led to the setting up of pure transshipment hubs at key locations along major shipping routes, such as Colombo, Salalah, Gioia Tauro, Algeciras, and Kingston. The emergence of major intermediate hubs favored a concentration of large vessels along long-distance high-capacity routes while smaller ports could be serviced with lower-capacity ships. Economies of scale over long distances are thus reinforced, permitting liner services that would otherwise be economically unfeasible. However, there is a limit to the hub-and-spoke network configuration and consequently also to the size of the vessels being deployed on the trunk routes.

Seven major transshipment markets account for the bulk of transshipment activity. They are referred to as markets since transshipment is an activity that is not tied to a specific port, unlike gateway traffic linked with a hinterland and inland freight distribution. Therefore, transshipment hubs compete for traffic related to a region/market. Geography plays an important role in the setting up of a transshipment market, which is often at the crossroads of north / south shipping routes and where there is a bottleneck:

  • The world’s most important intermediate hub is Singapore, where 85% of the traffic is transshipment, which accounted for more than 26.9 million TEUs of transshipped containers in 2012. Major Asia – Europe shipping lanes are constrained to pass through the Strait of Malacca, which led to the setting up of an adjacent transshipment hub competing with Singapore; Tanjung Pelepas.
  • There can also be a shift in transshipment dynamics due to the changing commercial environment. For instance, transshipment incidence levels in the Japanese ports of Tokyo and Yokohama used to be in the 20% range but have declined to less than 10% as Japan was losing its role as a manufacturing center with many transshipment activities shifting to Korea or China.
  • The Mediterranean has only two points of entry (Suez and Gibraltar), both of which have significant transshipment activity and ports that are at the center of the basin (e.g. Marsalokk and Gioia Tauro).
  • Although the Caribbean has a large exposure on the Atlantic side, it has one outlet for the Pacific; the Panama Canal, which has significant transshipment activities on the Atlantic and Pacific coasts. The Caribbean generates limited cargo demand, but neighboring regions are a substantial generator of traffic, some of which are being transshipped in the region (East and Gulf coast of the United States, Central America, and northern South America).
  • The North Sea and the Baltic are another transshipment market, but of lower incidence since the Baltic generates lower freight volumes. Since the Baltic is a dead-end, it is subject to tail-cutting with its ports serviced by feeder services from northern Europe (e.g. Antwerp, Hamburg).