Interim Report 2023

Management Discussion and Analysis 6 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED The international shipping industry has been so profoundly affected by the reshaping of the global industrial chain and supply chain that there were significant adjustments in route layout. According to the report published by a shipping consultancy Alphaliner, as of the end of July 2023, the Asia- Europe routes deployed by shipping companies increased by 3.4% year-on-year, and the shipping capacity of the Trans- Pacific routes decreased by 19.1% year-on-year. In respect of ports of call, the number of ships calling at the United States ports from China dropped sharply, while more container cargoes arrived at the United States from Vietnam, Mexico and other places. A report published by the Lloyd’s List showed the number of cargo originating from China to the United States decreased by 17%, the number of ship calls from China to Vietnam increased by 23%, and the number of ship calls from Vietnam to the United States increased from 44 to 62, representing an increase of 41% since 2022. China’s port calls to Mexico increased by 14% year-on- year. The number of Sino-Russian direct ports surged to 342, representing a year-on-year increase of 88%. With increasing uncertainties in the container shipping market in 2023, the supply and demand fundamentals were cautiously optimistic and international shipping prices dropped rapidly, then hovering at low levels. On the supply side, the shipping market entered a new round of shipping capacity delivery period and the average time of berthing at port continued to be shortened. The idle capacity of container vessels accounted for approximately 4.4%. On the demand side, a shipping consultancy Drewry expected that the growth rate of global port throughput would be approximately 1% in 2023. With the decrease in freight rates, the shipping companies were committed to cost control and business diversification to ensure revenue, including optimising fleet capacity, reducing charter costs, slow navigation, as well as extending to both ends of the shipping and logistics chains and carrying out investment in the zero-carbon field and etc.