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Power play and price wars loom for ports
2009/3/30
Port operators in the region will face increasing problems from larger vessels, more shipping line mergers, and the emergence of peripheral ports, according to a maritime expert, the Straits Times reported
Mergers pose a particular problem. They can lead to super-sized shipping lines or even alliances of large firms, which have the potential to affect the business of a major port.
The world''s top 20 liners already capture about 80 percent of the container market share, and further industry consolidation would result in ''a shift in the balance of power from ports to shipping lines'', said Chew Ek Peng, associate professor at the Centre for Maritime Studies at the National University of Singapore.
He was speaking at an event staged by the International Association of Ports and Harbours. More than 250 industry leaders from over 15 countries were present.
Chew said there was also a greater need for ports to upgrade facilities, including constructing deep-water and longer berths to accommodate bigger vessels.
Price wars also loom, with peripheral ports developing which may compete with major ports. For example, Chinese ports in Qingdao, Tianjin and Dalian compete with South Korea''s Busan ports, while Singapore''s faces heat from Malaysia''s Tanjung Pelepas.
"When the economy recovers, growth in global trade may potentially move at a slower pace due to demand saturation," said Chew, who expects the region comprising east and south-east China, Hong Kong and Taiwan, to capture a greater market share of container trade volume.
Global container trade volume grew at more than 10 percent a year from 2002 - resulting in capacity crunches for some of the world''s busiest ports - until the financial crisis put the brakes on growth.
World number one Singapore saw container traffic fall for the seventh straight months last month to its lowest in three years.
Port operators are taking advantage of the slowdown to upgrade workers'' skills, said Brigadier-General (NS) Choi Shing Kwok, Permanent Secretary at the Ministry of Transport.
The Maritime and Port Authority is also pressing ahead with capacity expansion at Pasir Panjang Terminals three and four. This will allow Singapore ''to be well-positioned for growth when it returns'', said BG Choi.
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2009/3/30