The FDI angle

• The majority of the top 10 most competitive global ports are in East and Southeast Asia.
• The CPPI 2023 ranks 405 ports, assessing performance based on vessel turnaround times.

Why it matters: Efficient ports are crucial for global trade and help attract foreign direct investment (FDI) in production and logistics sectors. Port performance directly impacts the cost and reliability of international trade.

Large east and south-east Asian maritime ports dominate the list of the world’s most competitive, accounting for six of the top 10 in the World Bank’s 2023 Container Port Performance Index (CPPI).

The 2023 CPPI, which was developed with S&P Global Market Intelligence (SPGMI) and the first released since the Covid-19 pandemic, ranks the competitiveness of 405 maritime ports based on the time spent by different sized shipping vessels in port. While Covid-related disruption to the largest maritime ports has largely subsided, global container shipping trade continues to face many external challenges, including conflict in the Red Sea and drought in the Panama Canal. 

The performance of ports is essential for the global economy, since more than 80% of merchandise trade by volume is transported by sea, according to the World Bank. Investing in high-quality container port infrastructure can help countries pursue export-led economic growth strategies and attract foreign direct investment (FDI) in production and distribution activities targeting global markets. 

The impact of well-operating port infrastructure is clear. A 2023 report by Unctad found that container ships tend to wait less time at ports in developed economies than in developing countries.

In this vein, delays and congestion at ports can make it more costly to import and export goods, lead to supply chain disruption and reduce competitiveness of locations reliant on these ports for international trade. Here is a list of the world’s most competitive ports in the 2023 CPPI:

#1 Yangshan, Zhejiang Province, China 

The first phase of construction of Yangshan deep-water port began in 2002 to overcome physical constraints to growth at Waigaoqiao port in Shanghai, China’s commercial capital. The offshore port in Hangzhou Bay is connected to the mainland by the 32.5km long Donghai bridge and can handle the world’s largest container ships, which can hold more than 13,500 twenty-foot equivalent units (TEUs).

Given that it is a relatively new port, Yangshan is a “very modern, purpose-built asset with a high level of automation, modern infrastructure and technology”, says Turloch Mooney, head of port analytics at SPGMI. It performs well across various CPPI metrics, including different segments of the ship call process and larger ship sizes, which carry more weight in the CPPI.

#2 Salalah, Dhofar Governorate, Oman

Salalah is the largest port in Oman and has been operating since 1998. Its container terminal has six berths and an annual capacity of five million TEUs, according to port figures. It has been operated by Denmark’s APM Terminal since its establishment.

“The port of Salalah has a heavy focus on efficiency and turning vessels around as quickly as possible,” says Mr Mooney, adding that this has enabled it to perform well in the CPPI. The Salalah Free Zone is located around 5km away from the port and has attracted FDI in sectors such as renewable energy, metals and logistics.

#3 Cartagena, Bolívar, Colombia 

Spanning an area of 22 hectares on Colombia’s Caribbean coast, the port of Cartagena is the best performing port across Latin America and the Caribbean. Since its operations began in 1993, its annual handling capacity has risen to five million TEUs, according to the Port of Cartagena Group.

The port also receives 98% of the cruise ships arriving into Colombia. In 2022, local logistics services firm Compas became the sole owner of the container port operator after buying out its partner Denmark’s APM Terminals. Heavy industry near to the port includes petrochemicals, fertilisers and cement manufacturing.

#4 Tanger Med, Tanger-Tétouan-Al Hoceïma, Morocco

The port of Tanger Med ranks as the most competitive in Africa. In 2022, the port in northern Morocco had a nominal processing capacity of nine million TEUs, according to port figures. The CPPI shows it performs better than any other African port across different vessel sizes and call sizes, or the average volume of containers loaded and discharged on a single ship call.

“Tanger Med has a sophisticated operational management with good infrastructure and well drilled processes that reflect a deliberate focus on productivity and efficiency, and the desire for continuous improvement,” says Mr Mooney. The port is located near several free zones which feature automotive, aeronautics and other higher value-added manufacturing.

#5 Tanjung Pelepas, Johor, Malaysia

Tanjung Pelepas is located in the Malaysian state of Johor, next to Singapore and the Malacca Strait, one of the busiest shipping lanes in the world. It has 14 berths and an annual handling capacity of 12.5 million TEUs, according to port figures. 

The port of Tanjung Pelepas is a joint venture between Denmark’s APM Terminals (30%) and the port and logistics division of local conglomerate MMC Corporation. In 2023, the port had the highest number of ship calls of any of the top 10 best performing ports in the CPPI. 

#6 Chiwan, Guangdong Province, China 

The port of Chiwan is located in the Pearl River Delta next to the tech hub of Shenzhen and the Chinese special administrative regions of Hong Kong and Macao. The CPPI shows Chiwan port jumped by 18 places between 2022 and 2023, more than any other port in the top 10, and reflective of a recovery in China after the lifting of stringent Covid-era restrictions.

While rankings show the performance of a specific port relative to other ports, Chiwan made “strong improvements”  between 2022 and 2023 with “higher levels of berth productivity and reduced vessel waiting times across most call size ranges,” says Mr Mooney. 

#7 Cai Mep, Bà Rịa–Vũng Tàu, Vietnam

The port of Cai Mep is located about 50km from Ho Chi Minh City, Vietnam’s commercial capital. It is the only terminal in the south-east Asian country capable of accommodating vessels larger than 18,000 TEUs, according to its operator Denmark’s APM Terminals.

Since being established in 2007 as a joint venture between Saigon Port (15%), Vietnam National Shipping Lines (36%) and APM Terminals (49%), Cai Mep has grown to an annual handling capacity of 2.1 million TEUs.

#8 Guangzhou, Guangdong, China 

Guangzhou is the largest coal loading and unloading port in south China, according to its operator Guangzhou Port Group. As the main port in the capital city of Guangdong province, it plays an important role in managing maritime container trade to and from the Pearl River Delta.

In 2023, the port of Guangdong ranked as the fifth-largest in China. having handled 20.78 million TEUs, an increase of 2.5% from the previous year, according to Port Technology International, a data and media company.

#9 Yokohama, Kanto, Japan 

The port of Yokohama is in Japan’s eponymous second-largest city with the same name. It is located to the south of Japan’s capital in Tokyo Bay and has the largest container terminal in the country.

In 2022, Yokohama port handled 2.63 million TEUs, an increase of 2% on the previous year but still below a record high of 2.74 million TEUs in 2018, according to port figures.

#10 Algeciras, Andalusia, Spain

Algeciras in southern Spain is the only port in Europe to make it into the world’s 10 most competitive. Located next to the Strait of Gibraltar in the western Mediterranean, Algeciras has two container terminals operated by APM Terminals and Korea’s Hanjin Shipping.

While many European ports are in the world’s top 100, Mr Mooney of SPGMI notes that one potential disadvantage they face compared to ports in other regions, like Asia and the Middle East, “could be older infrastructure and a more challenging labour environment”.

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This article first appeared in the August/September 2024 print edition of fDi Intelligence.