The Asian success stories
What makes a good Asian transhipment port tick?
Hong Kong Container Terminal Operators’ Association chairman Alan Lee says that due to competition from neighbouring ports, direct exports from Hong Kong are reducing and therefore its terminals are inclined to redirect their focus to international transhipment. The increasing vessel size also supports a hub-and-spoke scenario.
Historically, transhipment volume in Hong Kong was approximately 15%-20% of total throughput. Now the ratio has increased to around 60%.
But that growth does not come without ongoing challenges.
Hong Kong has no dedicated transhipment terminal and Mr Lee says the Government has not been able to devote adequate time and resources to the transhipment requirements of the port.
“There is considerable demand for back-up land and barge berth in the port area to handle the increasing volume of transhipment containers waiting for on-forwarding. This problem however has remained unresolved over the years.”
As to lessons other ports can learn, Mr Lee says that to make the hub-and-spoke concept work, a terminal needs a shipping cluster to provide good connectivity, high terminal productivity to ensure efficiency, and reliability in work processes.
“One would need to study the critical success factors of a good transhipment port, such as PSA. Alternatively, one could consult with the shipping lines, who would be their future customers, for their actual requirements to enable better planning.”
Martin Gaard Christiansen, APM Terminals’ Asia-Pacific Region chief executive, says the
existing major transhipment hubs such as Busan, Hong Kong, Singapore and
Tanjung Pelepas continue to dominate.
“You need the right location, scale and high efficiency to compete. The
competition for transhipment business between the existing players is quite
fierce.
“For start-ups this becomes even more challenging as they do not have the scale benefits nor the track record of high efficiency, and moving the transhipment hub for carriers is a major undertaking with significant network complexity and cost if not handled successfully.”
Mr Christiansen says that with the increasing size of vessels and need for high productivity, transhipment terminals need to have the right physical dimensions in terms of draught, berth length and crane dimensions as well as yard capacity for high productivity in order to compete.
“Port authorities need to be at the forefront and ensure sufficient support is rendered for the required upgrades.”
Asked to list the most important requirements of a successful transhipment terminal in Asia, Christiansen highlights “location, high efficiency, reliability and cost competitiveness”.
“PSA and Tanjung Pelepas are excellent examples of successful transhipment ports. They are both located very strategically where a significant number of east/west and north/south services meet. They both have excellent physical dimensions and scale to compete.”
For any port executive embarking on a transhipment terminal project, Christiansen’s advice is to first and foremost assure yourself that you have a location and a product that can compete with the incumbents — “following which you need to have very firm and long-term backing and support from both port authorities as well as key customers.”
