The economic downturn presents an opportunity for ports to upgrade and prepare for the rebound, but they will need to focus on changes in trade patterns and industry trends.
The economic downturn presents an opportunity for ports to upgrade and prepare for the rebound, but they will need to focus on changes in trade patterns and industry trends, delegates at the 9th International Association of Ports and Harbours Asia/Oceania Regional Meeting and Port Forum were told yesterday. 'In Singapore, our port operators are taking advantage of the slowdown to upgrade the skills of their workers and retrofit equipment,' Ministry of Transport permanent secretary Choi Shing Kwok said at the opening of the forum, attended by 150 officials from 15 countries.
'The Maritime and Port Authority (MPA) is also pressing ahead with port development, as well as investments in systems and technologies to raise the port's efficiency and productivity,' Mr Choi said.
In line with this, Singapore is keeping its investments in port infrastructure on track, including the $1.9 billion Pasir Panjang Terminal Phase 3 and 4 capacity expansion and the MPA and Infocomm Development Authority's [email protected] programme to harness information technology (IT) use in the port.
Chew Ek Peng of the National University of Singapore's Centre of Maritime Studies said that the top three trends in regional port development will be consolidation, bigger ships and the growth of peripheral ports.
The trend towards consolidation of lines will continue, and may accelerate during the downturn as smaller players are absorbed in merger and acquisition (M&A) deals and global liner alliances expand as margins in the container business shrink.
As a result of this, a dominant single line or alliance of lines can start to influence the ports, he said. This has already caused to some extent a shift in the balance of power from ports to lines.
In terms of vessel size, after Maersk's bold E-class ships and the current batch of 13,000 20 ft equivalent (TEU) ships, the next quantum leap in containership design will be the step up to the 18,000 TEU rangethat will serve the Asia-Europe trades. Prof Chew cited various reports showing that operating expenditure on this route can be cut by up to 60 per cent as these massive vessels radically reduce the cost per TEU-mile.
These ships may start to come into service as soon as 2015 and ports need to be ready to deal with their massive dimensions and huge capacity, he said.
Finally, as trade patterns evolve in the aftermath of the economic downturn, and as vessel and capacity configurations change, peripheral ports may start to make an increasing impact on the regional landscape.As these ports increase overall port capacity in the region, price wars are likely to result.