Anthony Renzi Quoted in Journal of Commerce on Financial Needs of Shipping Ports

Akin Gump cross-border transactions partner Anthony Renzi has been quoted in the Journal of Commerce article “U.S. ports need more than $100 bln from investors,” which reports on the money that will be needed over the next five years to handle the larger ships that are coming in greater volume to the nation’s ports.

Ports must invest $154 billion over the next five years on terminals and road and rail connectors, Renzi said during a speech at the annual conference of the American Association of Port Authorities, but they can probably expect access to no more than $25 billion in public financing. The good news, he noted, is “there’s a lot of private-sector money out there.”

Since the recession, according to the article, investors have been concentrating on terminal and infrastructure projects that offer lower, but stable, returns over 20 years or longer. Private equity investors look to mitigate risk by partnering with terminal operators that have carrier affiliates, Renzi said. With about a dozen global carriers concentrating their vessel calls at fewer but larger terminals, private equity investors seek long-term stability, relatively low risk, and guarantees of container volume, he said.

Meanwhile, Renzi added that port authorities should seek to minimize risk when committing to building costly terminals with long lives. Maintenance and repair costs in the rugged port infrastructure can add up, he said, so partnering with a terminal company that builds and operates the facility will result in a better-built project.