A value-for-money approach

Martin Christiansen, APM’s regional chief executive tells Port Strategy that APM, like many, is looking at how to drive more value from existing facilities. However, he also expects the industry to consolidate as operators push to reduce costs.

This follows the recent news that APM’s Kaohsiung lease of Pier 76 and 77 is to be transferred over to Hanjin Pacific. Mr Christiansen points out: “Kaohsiung has been impacted by the competition from Taipei as well as some cargo migration to China.

“APM Terminals’ current scale and cost structure including fixed costs base in Kaohsiung were not at a level to allow us to build a competitive advantage at the port,” he says.

“The global economic downturn and local market developments with changed supply and demand outlook has resulted in the need to review how best to take costs out of the system, get better scale benefits and increase co-operation with adjacent facilities,” explains Mr Christiansen. Further, he adds the move will help the remaining operators remain competitive as it will increase competition for the remaining berthing windows, alongside the ability to offer lower costs.

He expects that Hanjin Pacific will benefit from the new efficiencies: “There was overcapacity in the system, but consolidation and economies of scale will help the situation.”

Meanwhile, the success or failure of APM’s Dachan 2 project “is a matter of timing” as well as price, says Mr Christiansen adding that if the operators get it wrong, “there’s a chance of flooding the market with overcapacity.

“APMT is very much committed to the project. We are taking a hard and long look at these decisions and are making very calculated moves.”

However, he is definitely not downbeat about the region, and says that the move will free the company up. “APMT has an opportunity to find longer term solutions that take into account the changing world trade situation,” adding, interestingly, that APM believes that “there are a number of opportunities throughout Asia”.

Exported Image Caption: “There are a number of opportunities throughout Asia,” Martin Christiansen, APMT