International Container Terminal Services Inc. (ICTSI) is pressing ahead with expansion and acquisitions even as geopolitical tensions in the Middle East begin to ripple across global shipping routes and costs.
As the conflict escalates, the priority for ICTSI, the global port operations of billionaire Enrique Razon Jr., is safeguarding staff at its container terminal in Umm Qasr in southern Iraq, where the company operates one of its regional facilities. Despite heightened tensions across the region, the terminal has remained relatively calm so far.
“It’s extremely unfortunate—you never want to see anything like this,” ICTSI executive vice president Christian Gonzalez said in an interview with Bloomberg on Friday, March 6. “So far things there have been relatively quiet… nevertheless we are taking every precaution with our staff and the terminal.”
The Middle East represents only a modest slice of its global operations of ICTSI. Gonzalez said the region accounts for about 2 percent to 3 percent of the company’s total throughput, although the earnings contribution is slightly higher at roughly 3 percent to 4 percent because of fixed costs tied to the Iraqi terminal.
Still, the broader shipping industry is already feeling the effects of instability in the region. Rising insurance premiums and vessel rerouting—particularly diversions away from the Suez Canal toward longer routes around Africa—are expected to push freight rates higher in the coming months.
Despite those pressures, ICTSI is sticking to an aggressive growth strategy. The company has earmarked roughly USD740 million in capital expenditures this year, with around 90 percent allocated to expanding capacity at existing terminals.
Key projects include upgrades in Ecuador, Honduras, Mexico, Australia and the Philippines. In its home market, ICTSI is expanding its Manila terminal and developing a new facility in Batangas aimed at easing congestion in the capital’s ports.
At the same time, the company continues to scout acquisition opportunities worldwide, following recently secured projects in Indonesia’s Batam and Durban in South Africa.
“We will continue to look across multiple regions,” Gonzalez said, “and where opportunities arise, continue to be aggressive.”
