WASHINGTON: Enrique Razon Jr., chairman of port operator International Container Terminal Services Inc. (ICTSI), yesterday said global trade will continue to weaken until next year. He said port business would remain tame for the rest of the year, with a chance to turn for the worse due to the continued slowdown in global trade. Razon noted China is on a continuous slowdown and most oil producing countries are experiencing their own challenges. Global demand remains weak.
“The problem with the world now is the demand (in) the global economy; there’s no growth in trade. We’re expecting that to continue into next year, probably much worse,” said Razon at the sidelines of the company’s annual stockholders’ meeting yesterday.
Razon said ICTSI is working to be more efficient to reduce cost. He said ICTSI’s Brazil operations which he called an “economic disaster” posted a 20 percent decline in revenues two years in a row on lower volumes, as that country sunk into deeper recession and political instability as well as currency devaluation.
“Argentina is another one. However, we are turning cautiously optimistic with the recent election of a new government which seems to be very serious in executing the right economic reforms,” Razon said in his report to shareholders. “We hope that the country will return to growth in the next year or so,” he added. Razon said ICTSI hopes to realize growth not seen in the last three to four years as it operates 30 terminal concession and port development projects in 20 countries.
In 2015, these terminals and ports handled 7.78 million twenty-foot equivalent units (TEU) of cargo, a five percent increase from 2014. “The increase was driven by continued volume ramp-up in Manzanillo, Mexico and in Puerto Cortes, Honduras; new shipping line contracts and service in Karachi, Pakistan, in Guayaquil, Ecuador and in Subic Bay, Philippines; favorable impact of consolidation in Yantai, China; and the contribution from our new operations in Umm Qasr, Iraq which opened in November 2014,” Razon said.
