Authors: Dr. Theo Notteboom, Dr. Jean-Paul Rodrigue and Dr. Athanasios Pallis

Ports are composed of specialized terminals designed to handle a specific cargo type. An increasing number of port terminals, serving either cargoes or passengers, are managed by operators maintaining an international portfolio.

1. Port Terminals

Ports are primarily multifunctional entities, but this characteristic often results from the combined activities of several specialized terminals, each handling specific goods and commodities, such as containers, grain, oil, or iron ore. Thus, a port combines terminal facilities, each developed to fulfill a specific function and sometimes serving a single user, such as a petrochemical plant. The main types of port terminals include:

• Break-bulk. Concerns cargo that is carried in drums, bags, pallets, or boxes. Also referred to as general-purpose facilities that combine open storage space and warehouses. Historically, most port terminals were built as multipurpose facilities, as most commercial cargo was carried in a break-bulk form. It was only in the late nineteenth century that ship specialization became dominant, enabling the development of single-purpose terminal facilities.
• Neo Bulk and Ro-Ro. Neo bulk terminals handle large-sized unitized cargo, such as heavy equipment, project cargo, or lumber, with specialized equipment. Ro-Ro terminals handle vehicles, such as cars and trucks, that are rolled on and off a vehicle carrier. This requires ramps, but standard vehicle carriers commonly have their own ramps. The most significant footprint of a Ro-Ro terminal is the parking space allocated for storing vehicles. It also includes ferries that carry a combination of vehicles and passengers and, as such, require rather extensive parking spaces while vehicles are waiting to roll onto the ferry.
• Containers. Terminal facilities are designed only to handle a single break-bulk standard transport unit, the container. Container terminals have come to dominate the port terminal landscape because of the wide variety of goods that can be carried in containers. Due to the storage requirement of containers, they are capital-intensive and require a large footprint.
• Liquid bulk. Commodities transported in liquid form require specialized transshipment equipment and storage facilities. The most common type of liquid bulk terminal facility is designed to handle oil and petroleum products.
• Dry bulk. Relates to cargo that is not packaged and transported in large quantities, which is limited by ship size or existing demand. The main commodities involve coal, iron ore, and grain, which require specialized equipment and storage facilities. This specialization level implies that the terminal cannot handle bulk products other than those for which it was designed and equipped. Thus, a grain terminal cannot handle other commodities even if the pier can accommodate any ship class.
• Passengers. Historically, passengers were handled at multipurpose facilities as liner ships also carried freight. Ferry terminals are a specialized component in many ports that are part of a domestic ferry network, such as Greece and Japan. The emergence of the cruise industry has been associated with the setting up of cruise passenger terminals that can be extensive at turn port facilities such as Miami and Barcelona.

Although terminals may share a related port site, they often have no particular commonality in terms of the supply chain they are servicing. There is a potential that a multi-terminal port may not be an integrated entity, with its presence being merely coincidental. Still, terminals share common maritime and inland infrastructure. Further, terminals are influenced by the fundamental characteristics and capacity of ships, particularly their draft. There is a reciprocal relationship between port and terminal design and the characteristics of ships. A well-known standard, Panamax, has substantially influenced terminal design in the 20th century, as it provided a set of technical characteristics, particularly draft and length, around which infrastructure was built, exerting a pull effect. The growth of ship size began in the 1970s and became prevalent for container shipping in the early 2000s. This trend prompted consideration of push factors in terminal design and equipment for new terminals, as well as incentives for existing terminals to expand their technical capabilities through dredging and the acquisition of new equipment.

Outside commercial issues related to cargo demand, port terminals rely on a specific range of equipment, which requires a specific footprint and configuration. Terminal equipment is highly commodity-specific, as some terminals can only handle one commodity or a limited range of cargo. For instance, an oil terminal can only handle bulk shipments of crude oil through specialized equipment, pipes, pumps, and storage facilities. This equipment cannot handle other forms of liquid cargo.

Three fundamental categories of port terminals, equipment, and design characteristics can be found:

• General cargo. Unitized cargo that can be carried in batches and handled by three specialized terminal types with specific equipment and design considerations. Since break-bulk and container terminals handle unit cargoes, they are designed around the lift-on/lift-off principle, requiring cranes and storage areas (both covered and uncovered, depending on the cargo). Vehicle terminals, a type of neo-bulk terminal, operate on the roll-on/roll-off principle and are characterized by extensive parking areas. The design of general cargo terminals strikes a balance between average throughput and related storage requirements.
• Bulk cargo. Loose cargo carried in loads that are limited only by demand, ship size, and storage capacity. This system is synchronized at the bulk terminal, which acts as a buffer between large suppliers and customers. Liquid bulk and dry bulk depend on different transshipment and storage techniques and are two distinct categories of bulk terminals with design considerations. Bulk terminals tend to specialize in handling a single commodity, such as coal, grain, iron ore, natural gas, or petroleum. Each of these commodities has unique equipment, storage, and design considerations. Some may need to be stored as outdoor stacks, while others require more complex storage, such as warehouses.
• Passengers. Ferry and cruise terminals are a small segment of port terminals. Ferry terminals are mainly roll-on/roll-off facilities with direct connectivity to the road system. Larger facilities require significant parking areas, but the infrastructure and equipment are simple, consisting of mooring areas and ramps. Recently, the growth of the cruise industry has led to the emergence of specialized cruise terminals that include passenger handling facilities and parking areas, which bear several similarities to airport terminals. Cruise terminals might also be involved in freight activities related to the procurement of cruise ships, which may require separate terminal access and storage facilities, including cold storage.

Each terminal acts as a key node in the maritime-land interface, allowing maritime and inland systems to interact. The balance between market demand, ship capacity, service frequency, and hinterland distribution requires a variety of footprints and design considerations.

2. Freight Terminal Operators

A. Private involvement in port terminal operations

As late as the 1980s, public ownership and operation were the dominant models. While the forms of port governance differed greatly, from the municipally-owned ports in Northern Europe and the United States to the state-owned ports in France, Italy, and much of the developing world, public ownership was dominant, and publicly managed port operations were prevalent. The institutional entry barriers for port terminal operations were remarkably high and limited to specific services. This contrasted with the shipping industry, where private ownership was almost universal. Containerization particularly underlined how operationally deficient public port authorities were challenged to adapt to growing time and performance requirements imposed on intermodal transport chains. The changes, slow at first, came from two directions:

• First, there was the belief that the transport industry as a whole should be divested to the private sector to promote competition. Ports were among the many sectors targeted by economic liberalization policies.
• Second, there was a policy recommendation from the World Bank that developing countries would do well to free their highly controlled port industry by issuing concessions to organizations able to modernize their port industries and better manage operations. This allowed new intrants of domestic and international origins, some of which saw the opportunity to globalize. The World Bank created a Port Reform Tool Kit to facilitate required changes.

These developments helped create what has become a global snowball of port government reforms, commonly known as port devolution, as the public sector relinquished its role in a function it had formerly assumed. It made governments more open to considering reforming port governance and offering better conditions to ensure privatization. The growing demand for public and private investment in ports, precipitated by the growth in world trade and the limitations of governments in meeting these needs due to competing investment priorities, was a key factor. Thus, while few were willing to go as far as the UK in the total privatization of ports, many countries were willing to consider awarding concessions as an intermediate form of privatization, leading to various forms of public-private partnerships.

B. Typology of port holdings

Privatization has sparked a nearly global trend toward awarding port operational concessions, particularly for container terminals. The reasons container terminals were particularly prone to concessioning were related to the rapid growth of international trade, which required massive and rapid capital investments that most governments could not readily provide. If the opportunities to award operational concessions can be seen as an increase in demand, growth has also been significantly impacted by a rise in the number of companies seeking concessions, with many becoming large port holdings.

Port holding. An entity, commonly private, that owns or leases port terminals in several locations. It is also known as a port terminal operator.

Transnational terminal holding companies are grouped into three categories, with some companies showing a more hybrid nature:

• Pure stevedores. Port terminal operators that expanded into new markets to replicate their terminal operations expertise and diversify their revenue geographically, which is a form of horizontal integration. PSA International, with its headquarters in Singapore, is the largest global terminal operator originating from a stevedoring background, followed by Hutchison Ports, headquartered in Hong Kong. Stevedores account for about 50% of the hectares controlled by terminal operators worldwide. In recent years, many of these companies have expanded beyond terminal operations by investing in the provision of inland logistics services. Examples include DP World’s strategy to transition from a global terminal operator to a global logistics service provider, and PSA’s move into logistics through the creation of PSA Cargo Solutions and PSA BDP. The latter provides cargo solutions for global supply chains and was established following the acquisition of BDP International.
• Maritime shipping companies. Invested in port terminal facilities to help support their core maritime shipping business, which is a form of vertical integration. In many cases, hybrid structures are formed with separate business units or sister companies active in liner shipping or terminal operations. The terminal facilities can be operated on a single-user dedicated base or be open to third-party shipping lines. APM Terminals, a Maersk Line sister company, is one of the largest global terminal operators from a maritime shipping background. Shipping lines account for about 31% of the hectares controlled by terminal operators worldwide.
• Financial holdings. Include various financial interests, ranging from investment banks and retirement funds to sovereign wealth funds, which are attracted to the port terminal sector as an asset class due to its revenue generation potential, thereby providing a form of asset diversification. The majority employ an indirect management approach, acquiring an asset stake and then leaving the existing operator to manage the operations. Others will directly manage the terminal assets through a parent company. The primary reason financial holding companies became interested in acquiring port terminal assets was that they were perceived to offer a high-value proposition and a time horizon that matched their investment horizon. Holdings account for about 19% of the hectares controlled by terminal operators worldwide.

The setting up of specialized terminal operating companies is not a recent phenomenon. Many ports in Europe and the United States had already been awarded to local cargo handling companies through concessions and lease agreements. Because they were relatively small and locally based, with only a few exceptions, they did not participate in the global growth of concession award opportunities. The exceptions were Stevedore Services of America (SSA), already active in several US West Coast Ports, which obtained concessions to operate facilities in Panama and several other smaller ports in Central America; Eurogate, a joint company formed by terminal handling companies from Bremen and Hamburg and Contship Italia, that obtained concessions in Italy and Morocco.

Beyond the three main categories, other types of companies are also involved in container terminal operations:

• Freight transport companies. They are involved in a wide range of freight services, such as shipping agents, freight forwarders, road and rail transport companies, and third-party logistics service providers. Examples include Bollore, Arkas (Turkey), Wilson (Brazil), Kuwait Gulf Link, Rennies (South Africa), Korea Express (South Korea), Nippon Express (Japan), Severstahltrans (Russia), and Kontena Nasional (Malaysia).
• Construction companies. Primarily large engineering firms that have become involved in container terminal concessions through private finance initiatives or attempts to secure terminal construction contracts. Examples include Acciona (Spain), Gammon (India), Tribasa (Mexico), Tucuman (Brazil), Samsung Corporation, and Hyundai Development.
• Equipment manufacturers. Small specialist companies that have moved into concessions from their original base in equipment servicing. It is worth noting that none of the major manufacturers of container terminal equipment (quay cranes, RTGs) have been involved in bids for terminal concessions. Being involved in terminal operations could be perceived as an unfair competitive practice since they would be providing equipment to competing operators. Examples include Portek (Singapore), ABG Heavy Industries (India), and Mi-Jack (USA).
• Property developers. These are companies based mainly in Hong Kong and Southeast Asia, which have diversified from commercial and residential developments into the provision of concessioned infrastructure. Examples include New World, Fairyoung, Henderson (HK), Metro Pacific Investment Corp, and Brisas del Pacifico (Colombia).
• Industrial conglomerates. These are either diversified holding companies or large manufacturers (such as steel or automobile companies) regarded by their governments as national champions, possessing the management ability to develop strategic assets. A significant subset of this group comprises wealthy or well-connected individuals or families who have become involved due to their connections to governments. For example, the Motta and Heibron families in Manzanillo (Panama), the Suharto family in Indonesia, and Dato Ahmad Sebi at Westports in Port Klang. Other examples of industrial conglomerates include CITIC (China), Syanco (Saudi Arabia), FIAT, Mitsui, Tusdeer, CSN (Brazil), Razon Group (Philippines), Evyap Group (Turkey), and John Keells Holdings (Sri Lanka).

Several companies operating container terminals are multifaceted, often belonging to larger corporate entities that encompass a wide range of economic activities. Their categorization depends on how far back one traces the chain of ownership. The farther back the beneficial ownership of a concession is traced, the more complex and fragmented the ownership structure becomes. APMT, for example, has close links to Maersk Line while trading as an independent terminal operator. Similarly, until its sale to institutional investors, Dradagos, the Spanish port and logistics services company, formed part of the ACS Group. ACS’s activities include construction, energy supply, environmental engineering, industrial services, and concessions in other modes of transport. Additionally, some corporate structures are intentionally opaque to minimize commercial risks, taxation, or exposure to public scrutiny.

C. Global terminal operators

Like many multinational corporations, global terminal operators are market seekers that expand their business opportunities by entering new markets. A terminal can grow organically, but this is a rather slow process. A much faster growth rate can be achieved by acquiring terminal facilities in new markets. From the 1990s, a few companies emerged as major global terminal operators, controlling a multinational portfolio of terminal assets. They mainly originate from Asia, with four large companies dominating, three coming from a stevedore background, and one from a shipping line:

• Hutchison Ports (HPH). Hong Kong-based firm part of a major conglomerate, Hutchison Whampoa.
• PSA International (PSA). The government-owned operator of the port of Singapore was formed in 1964. In 1997, PSA was corporatized and renamed PSA Corporation Limited. The company kept the name PSA, which is no longer an acronym. In 2003, PSA International Private Limited became the main holding company for the PSA Group.
• DP World (DPW). Mainly part of a sovereign wealth fund created by the government of Dubai to invest the wealth derived from the oil and gas trade.
• APM Terminals (APM). A parent company of the world’s largest shipping line, Maersk.

The setting up of global terminal operators took place in three main waves:

• The first wave began in the 1990s and included companies like HPH, P&O Ports, and SSA, which expanded their operations on a geographical scale, thereby benefiting from the port privatization schemes in many regions across the world. HPH, which originated as a terminal operator in Hong Kong, first purchased Felixstowe in 1991, the largest UK container port. It developed a portfolio of over 50 terminals worldwide, including those in Rotterdam and Shanghai.
• As soon as the strategies of the pioneers proved to be successful, the second wave of companies started in the 2000s to seek expansion internationally, such as PSA, CSX World Terminals, and Eurogate. PSA has actively secured concessions in China and Europe, including Antwerp and Genoa. Like HPH, PSA originates from globally oriented ports offering limited local terminal expansion opportunities. Local operators were thus encouraged to manage the constrained assets efficiently and to look abroad for expansion opportunities.
• The third wave of terminal operators emerged during the 2010s when major container carriers entered the terminal industry to support their core business. This also included financial holdings, such as DPW, which have grown through acquisitions, including P&O Ports and CSX World Terminals, as well as by securing concessions in new markets. Shipping lines have also participated in terminal concessions, but to a lesser extent. The most important is Maersk’s in-house terminal operating company, APM Terminals. Additionally, Evergreen, COSCO (via COSCO Shipping Ports), MSC (via its majority stake in TIL – Terminal Investment Limited), and CMA CGM (via its majority stake in Terminal Link) hold port terminal leases. A global pattern of concessions is evident between the dedicated terminal operating companies and the shipping lines.

A concentration of ownership among four major port holdings has taken place. While mergers and acquisitions are usually completed, there are cases where they have triggered a regulatory response. For instance, in 2006, DPW acquired the terminal assets of P&O (Peninsular & Oriental Ports), further consolidating its global holdings. However, DPW was constrained to rescind the American assets of this transaction (terminals in Baltimore, Miami, New Orleans, New York, and Philadelphia) to the holding AIG (Ports America) due to political controversy, a Middle Eastern holding operating major American port terminals was perceived negatively in the post 9-11 context.

Despite being global, large terminal operators have a strong regional orientation, indicating their transnational nature. Global container terminal operators exhibit varying degrees of involvement in the primary cargo handling markets, characterized by complex and geographically diversified portfolios. The container terminal has become a fundamental node in global freight distribution, with the managerial and operational expertise offered by global holdings an important element in its performance in terms of capacity and reliability.

3. Cruise Terminal Operators

A. The emergence of cruise terminal operators

The cruise industry experienced remarkable growth rates, only with a temporary setback during the COVID-19 pandemic. Since the 1990s, the global growth rate of the cruise industry has endured despite economic cycles of growth and recession or other events disrupting cruise tourism, such as hurricanes. This growth rapidly reshapes the cruise industry, with private operators entering the business. Liberalization and internationalization in the cruise terminal business have become a trend similar to what occurred in the container terminal sector. Ports started to see cruises as more than an ancillary activity of secondary importance.

The presence of specialized cruise terminal operators has expanded. Along with service and other upgrades, the essential infrastructure for cruise terminal operations is also undergoing rapid changes. Specialized cruise terminals replace multipurpose or temporary docking facilities. Larger cruise ports have developed through a terminalization strategy, with the evolution of autonomously operating terminals of considerable size. The terminals at Cruise Port Barcelona, the biggest port in Europe, and the size of cruise terminals in North America provide illustrative examples. New cruise terminals are built, and existing facilities are upsized and upgraded, imposing additional investments on the host port or terminal operator. Aiming to effectively respond to calls for upgrading cruise terminals, while safeguarding public spending, port authorities started to seek the active involvement of third parties to finance, construct, operate, and commercially develop cruise facilities. Port governance reforms have facilitated private entry in cruise terminals, with governments establishing a more commercialized environment for port operators.

This development has resulted in new opportunities for several firms, such as cruise lines and specialized cruise terminal operators, wishing to undertake new or additional investments in the cruise business, and sometimes to follow a path of internationalization. The concessioning of cruise terminals to third parties and the development of new terminals have become common practices. In some ports, cruise lines are directly involved in the financing, building, and operations of terminals. In other ports, local cruise terminal operators, which are often also port agents, are progressively joined by other companies that have developed interests in taking control of cruise ports and specialized purpose vehicles (SPVs) built by terminal operating companies. Eventually, international players emerged. As cruise activities in ports gain additional operational autonomy, public authorities are pursuing partnerships with third parties to finance and develop growth strategies.

B. The internationalization of cruise terminal operators

Since 2010, cruise terminal operators have started expanding overseas.

International Cruise Terminal Operators (ICTOs) holds a share in at least one cruise facility located in a foreign country.

Global Ports Holding (GPH) is a major ICTO established in 2004 as an international port operator with a diversified portfolio of cruise and commercial ports. It started as a cruise terminal operator in Turkey and, as of 2024, operated 27 ports in 14 countries. The group also offers commercial port operations specializing in container, bulk, and general cargo handling. Another ICTO, Creuers Del Port Barcelona S.A., was established by the Port of Barcelona and subsequently expanded its cruise terminal portfolio to Asia, specifically in Singapore. The internationalization of cruise terminals may create a diverse array of international actors managing global portfolios of facilities, similar to what has occurred with the rise of global container terminal operators.

Global Container Terminal Operators (GTOs) have also assumed responsibilities for cruise terminal operations. This has been the outcome of the acquisition of majority stakes and ownership of entire ports. For instance, China Cosco Shipping became the owner of the master concession in Piraeus, and Terminal Link (CMA CGM) took over the concession in Thessaloniki, both ports and important container terminal facilities, as well as cruise ports. Further, in 2017, DP World was awarded the concession to operate the port of Limassol, another important cruise destination. This trend is emerging even though cruise terminal activities are not part of their core business, but a derived responsibility that may provide an incentive to acquire additional assets.

Given the pivotal role of cruise terminals in touristic global value chains, entities responsible for port destination development, such as Chambers of Commerce, and tourism-related firms, such as shipping agencies and travel operators, have become involved. Cruise facilities operations are seen as a tool to promote local and regional businesses or to support tourism. In some cases, such entities establish hybrid companies responsible for the management and operation of cruise ports. For instance, CCI Nice Côte d’Azur is an entity operating cruise terminals in several French Riviera ports. Several port companies are corporations with a public-ownership background that paved the way for the cruise business launch and facilitated a higher private equity commitment. Some of them entered the market predominantly in search of economies of scope and new business opportunities. For this purpose, they often exploited formal and informal ties with local public entities and institutions, rejecting the option of seeking foreign investments.

Financial investors, who are less directly involved, may be attracted to the high growth rates and profitability in the cruise business. Specialized financial institutions, such as banks, insurance companies, and private equity (PE) firms, are seeking investments that balance reasonable risk and return, while also considering their maturity. They may view cruise terminals as attractive assets for diversifying their business portfolios, contributing to a higher degree of financialization in the port sector. The attractive features of port terminals include their long-term economic viability, the monopolistic or oligopolistic nature of the industry, and the potential for partially transferring risk to host governments through public-private partnerships.

An emerging trend has been the setting up of dedicated facilities where the cruise shipping company is directly involved in the development of the cruise terminal, as well as co-located amenities. Examples of this practice are the private islands in the Caribbean, which are reserved exclusively for a cruise company. The most prominent include Labadee (Royal Caribbean) in Haiti, CocoCay (Royal Caribbean), Half Moon Cay (Holland America), Castaway Cay (Disney), Princess Cay (Princess Cruises), and Great Stirrup Cay (Norwegian Cruise Line) in the Bahamas. These private facilities are all within one cruise day from the home ports of Florida, offering the option of short 3-4 day cruises to a quiet and safe destination. They are all enclaves within their respective host countries.

4. The Strategies of Terminal Operators

A. Container terminal operators

The rapid expansion of container terminal operating companies is a strategy that reflects two economic forces. First, the entry of former terminal operators into the global system represents a horizontal integration process. The companies, constrained by the growth limits of their own ports, seek to apply their expertise in new markets and seek new income sources. Second, the entry of shipping lines into terminal operations is an example of vertical integration. The companies aim to extend their control over other links in the transport chain. A third strategy is mainly followed by holdings with a strong financial orientation and portfolio diversification, in which terminal assets feature.

Several strategies explain the growth of global terminal operating companies and their diffusion as key stakeholders in port terminals:

• Profitability. By modernizing port operations, primarily through improved equipment, information systems, and management, port holdings can enhance the profitability of their terminal assets. Due to their scale, management, and efficiency, global terminal operators tend to be more profitable than single-terminal operating firms. For instance, HPH achieved a 35% per year return on investment in the early 2000s. Port management was highly lucrative, prompting others to expand existing assets and attracting new players to enter the field. Since 2010, profit margins in terminal operations have become thinner, further underlining the advantage of efficient terminal operation practices.
• Financial assets. Port holdings have the financial means to invest in infrastructure as they have a wide variety of assets and the capacity to borrow large quantities of capital. They can utilize the profits generated by their profitable terminals to invest in and subsidize the development of new terminals, thereby expanding their asset base and operating revenues. Most are listed on equity markets, allowing access to global capital, which supports the freight transport sector as a source of returns driven by traffic growth fundamentals. This financial advantage cannot be matched by port authorities, even those heavily subsidized by public funds. In other cases, terminals have become financial assets that can grow in value as the traffic they handle increases, generating additional revenue. Financial holdings, such as retirement funds, have considered transport and port terminal assets for their portfolio.
• Managerial expertise. Port holdings excel in establishing procedures to handle complex tasks such as the loading and unloading sequence of containerships and all the intricacies of terminal operations. Many have accumulated substantial experience in terminal design and the management of containerized operations in a wide array of settings. Therefore, they can transfer managerial expertise to new terminals. Being private entities, they tend to offer better customer service and considerable flexibility in meeting the needs of their clients through service differentiation. This also includes the use of well-developed information systems and the capacity to quickly comply with legal procedures related to customs clearance and security.
• Gateway access. From a geographical standpoint, most port holdings follow a strategy to establish privileged positions to access hinterlands. By doing so, they secure a market share and can guarantee a level of port and often inland transport services to their customers. It can also be viewed as a commercial strategy where a “stronghold” is established, limiting the presence of other competitors and creating a monopoly-like situation. Gateway access thus provides a more stable flow of containerized shipments, as gateways tend to remain as global connectors. The acquisition of a new port terminal is often accompanied by the development of related inland logistics activities by companies related to the port holding.
• Leverage. A port holding can negotiate favorable conditions with maritime shippers and inland freight transport companies, specifically regarding rates, access, and the level of service. Some are subsidiaries of global maritime shipping lines, such as the A.P. Moller group, which is controlled by the shipper Maersk. In contrast, others are directly controlled by them (such as Evergreen), allowing them to offer a comprehensive logistical solution for international freight transportation. They are also better placed to mitigate pressures from port authorities to increase rents and port fees. The “footloose” character of maritime shippers has long been recognized, with the balance of power more in their favor than in favor of the port authorities with whom they negotiate.
• Traffic capture. Because of their privileged relationships with maritime shipping lines, port holdings can capture and maintain traffic for their terminals. The decision to invest is often influenced by the knowledge that the terminal will handle a relatively secure number of port calls. Consequently, the level of traffic and revenue can be secured more effectively.
• Global perspective. Port holdings have a comprehensive view of the state of the industry and can interpret political and pricing signals to their advantage. They are thus well-positioned to influence the direction of the industry and anticipate developments and opportunities, offering global solutions to terminal requirements in ports around the world. Under such circumstances, they can allocate new investments or divest to take advantage of new growth opportunities and emerging markets.

The growth of transnational terminal operating companies has resulted in a concentration of ownership. In 2018, the top seven global terminal operators accounted for 34.5% of global container port activity in terms of equity-based throughput. Perhaps most important is that they now dominate the world’s most important container ports and wield monopoly power in many smaller ports. There is strong evidence that performance has improved in most ports due to the concession of operations to global terminal operators. The question is whether to regulate the further concentration of power, leaving several maritime ranges with a limited number of terminal operators in a position to impose oligopolistic price settings.

B. Cruise terminal operators

The growing commitment of investors in the funding and management of cruise ports has reached levels comparable to what is being experienced in cargo ports, particularly container terminals. In the long term, this might affect the interactions between ports and cruise lines, changing bargaining power relations between cruise lines and port authorities, and the structure of cruise itineraries, as well as development strategies, such as initiatives to address the existing seasonality of cruise activities or attract higher spending cruisers. The leading actors involved in cruise terminal operations include:

• Cruise lines that are expanding vertically into terminal operations to support their core activity.
• Pure cruise terminal operators that are expanding horizontally in new markets.
• Third parties such as Chambers of Commerce, shipping agencies, travel operators, and logistics companies are entering for a specific opportunity, such as local economic development and simple diversification.

Cruise lines capitalize on the opportunities presented and undertake aggressive growth strategies, frequently expanding into overseas locations. In the Mediterranean market alone, Royal Caribbean Cruise Lines has emerged as the most active. The company operates cruise terminals in four countries: Italy (Civitavecchia, La Spezia, Naples, and Ravenna), Portugal (Lisbon), Spain (Barcelona), and Turkey (Kusadasi). Costa Crociere is present in France (Port of Marseille) and Spain (Port of Barcelona), and MSC Cruises operates cruise terminals both in France (Port of Marseille) and Italy (Port of Naples).

Cruise lines prefer to focus their terminal investments in turnaround (home) ports with a high level of transport accessibility for tourists and cruisers. The key facilities are airports and high-speed rail stations from which most cruisers arrive. This has resulted in the “fly and cruise” model, where cruise passengers are directly picked up and checked in at the airport. In contrast, transit ports (ports of call) are selected for their touristic highlights and landmarks. The interest of international cruise lines in the financing, building, and terminal operations, which emerged in the early 2000s, is part of a vertical integration strategy. The primary drivers of their strategies include the need for cost control and improvement in service quality and reliability, the necessity to defend their core assets financially, and the pursuit of additional bargaining power in negotiations with local public authorities. Such vertical integration is also observed in other shipping sectors and serves as a means of achieving competitiveness along the supply chain.

Pure cruise terminal operators are investors who pursue horizontal integration and internationalization strategies to reach economies of scope and geographic diversification. Similar drivers trigger the entry of real estate and infrastructure managers, who rely on technical and managerial competencies developed in their core business to generate cross-sectoral synergies.

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Related Topics

• Chapter 3.2 Terminal Concessions and Land Leases
• Chapter 4.1 Port Governance and Reform
• Chapter 5.2 Intra-Port Competition
• Chapter 5.5. Entry Barriers
• Chapter 8.1 Cruise Ports

References

• Notteboom, T. and J-P Rodrigue (2011) “Emerging Global Networks in the Container Terminal Operating Industry”, in T. Notteboom (ed) Current Issues in Shipping, Ports and Logistics, Brussels: Academic & Scientific Publishers. pp. 243-270.
• Notteboom, T. and J-P Rodrigue (2012) “The Corporate Geography of Global Container Terminal Operators”, Maritime Policy and Management, Vol. 39, No. 3, pp. 249-279.
• Pallis A.A., K.P. Arapi, and A.A. Papachristou (2019). “Models of Cruise Ports Governance”, Maritime Policy and Management, 46(5), 630-651.
• Pallis, A.A., F. Parola, G. Satta, and T. Notteboom (2018). “Private Entry and Emerging Partnerships in Cruise Terminal Operations in the Meditteranean Sea, Maritime Economics and Logistics, 20(1), pp. 1-28.
• Parola, F. T. Notteboom, G. Satta and J-P Rodrigue (2015) “The Impact of Multiple-site Acquisitions on Corporate Growth Patterns of International Terminal Operators”, International Journal of Shipping and Transport Logistics, Vol. 7, No. 5, pp. 621-635.