Container terminal operations are pure play infrastructure business and have some of the following key characteristics:
High barriers to entry due to the high capital requirements, regulatory requirements and limited land availability Coordinated hinterland transportation connections requiring local governments receptive to development
New terminal development often constrained by local planning procedures and regulations Long lead times for project execution due to the involvement of many stakeholders in the process
Limited competition partially due to geographical constraints
The competitiveness of container terminals operations is determined not only by the terminals facilities but also its the external infrastructure. A container terminal is a crucial link in the wider logistics chain. The water, rail and road hinterland connections and logistical services provided in the port, including warehousing and customs processing, make up the logistics chain in which the ports operate. Additionally, high quality inland transport links is a key element in the success of a container terminal. Container terminal operators have long-term relationships with their customers. While contracts between shipping lines and container terminals typically have a duration of one year, in practice these relationships generally last much longer, even decades.