In order to improve the economic climate in their own regions, government officials must look to increase the volume of trade arriving and leaving their shipping ports. Aside from encouraging business growth and consumer demand, officials must make investments into facilities and infrastructure to accommodate the rise in cargo container traffic across the globe. This is not exclusive to the maritime shipping industry either. Road and railways have seen significant investment into upgrades and improvements in recent years, as well
To improve their operating efficiency and ultimately increase shipping profits on their routine services, a number of the world’s leading container lines have invested in 18,000+ TEU container ships. Following their lead of big investment, terminal and port operators have realized that commitment is needed on their part too, particularly if they hope to create an environment that supports economic prosperity and accommodates for rising demand. From dredging channels, extending wharves and container yards, to building terminals and buying new ship-to-shore cranes, shipping port operators all over the world are investing in improvements.
Albeit the arrival of enormous containers ships like Maersk Line’s Triple E fleet and China Shipping Container Line’s CSCL Globe have forced some officials to make sizable investments, generally speaking these commitments are needed across maritime, road and rail, to prepare for the industry’s evolution and future growth. Given the sector’s improved performance, industrial investors and analysts are in agreement that the shipping industry is a good investment that will continue to pay a nice return to governments, port and terminal operators; and even private investors can enjoy a great experience too.
China, with its deep pockets, has made important announcements on a series of major initiatives, that are designed “to place China at the center of Asia’s economic future.” These included the creation of a $100 billion fund for major projects and a 21st Century Silk Road initiatives generally known as the Silk Road Economic Belt. During APEC summit China’s President Xi Jinping announced a $40 billion fund for improving ports and infrastructure along the Silk Road. Earlier 21 Asian countries including China and India had launched a multilateral Asian Infrastructure Investment Bank (AIIB) to facilitate further cooperation on the plan.
China has invested millions of dollars in developing the Gwadar port facility in Pakistan in the Arabian Sea, to secured itself a sea-lane to the Indian Ocean. The Gwadar port’s strategic location connects China to the Arabian Sea and the Strait of Hormuz – a gateway for one third of the world’s traded oil. This approach can be used to provide a steady supply of oil to China overland, through an expanded Karakoram Highway, and serve a significant supply of cargo and oil, to both China and Pakistan.
China has also developed a project to finance a shipping canal across the Isthmus of Kra in Thailand, that would provide an alternate link between the Indian and Pacific Oceans. The project is expected to cost approximately $20 billion and will shorten the sea passage to nearly 2400 kilometers.
If a crisis were to erupt in China’s relations with Japan, India, or the United States, China may face the greatest strategic vulnerability in the Malacca Strait, a major outlet for Chinese cargo headed to the high seas. To address this vulnerability, China needs sea routes where it can operate freely and independently of this weakness. A maritime silk road – joining China with the Indian Ocean and the Mediterranean Sea with a safe passage, is regarded as a major national priority for Chinese officials.