Living in the past

Just 20 years ago, Japan had three ports in the top twenty, now it has none. Port Strategy contacted many port operators, both already operating inside Japan, and not one expressed an interest in spending funds at the moment in the Japanese ports scene.The fact is as Japanese salaries have risen, so too has the need to outsource production, something the Japanese manufacturers have been hugely successful at, to the detriment of the ports.

exuberance just before the Japanese bubble burst, building pointless projects became all the rage in a desperate bid to stave off the inevitable financial collapse.

As well as bridges to nowhere and ski resorts that now lie disused, a rash of container terminals were built up and down the archipelago that now see more tumbleweed running through them than boxes. Strong unions were finally overcome in 2003 and Japanese docks finally began working round the clock.

Yet foreign interest remained muted.However,the tight grip maintained on hiring dock workers by the Japan Harbour Transport Authority (which lies under the jurisdiction of the Ministry of Land, Infrastructure and Transport), and high minimum manning levels for new container terminal operators remain unattractive hurdles for investors.

To this day there are just three foreign port operators inside Japan – APM Terminals at Kobe and Yokohama, ICTSI at Naha and PSA at Kitakyushu.

While other lines have dedicated berths, such as OOCL in Tokyo, APM has two owned terminals, which makes sense for the global carrier to avoid the high costs of calling in the archipelago,but only for someone with Maersk’s volumes is this a worthwhile investment.

APM Terminals in Yokohama is arguably the most modern terminal in Japan. Located 25 km southwest from Tokyo, this is the only terminal in Japan with 16m draft, and super post-panamax cranes reaching across 22 rows. The facility also has one of the highest productivity rates in the world, with a net productivity of about 50 crane moves per hour.

The Philippines’ ICTSI, which professes to being a niche port operator, took on Naha International Container Terminal in 2005. NICTI is a 21 hectare site on the island of Okinawa with two quay cranes. It is a Japanese joint venture company owned 60% by ICTSI, and 40% by six stevedoring companies operating in the Naha Port. It holds a 10-year Lease Agreement with the Office of the Japanese government to operate Terminals 9 and 10 which commenced January 2006.

PSA, meanwhile, has laboured to get its way in Japan, having first expressed an interest to invest at the turn of the century. In 2003, an operating company for the Kitakyushu Hibiki Container Terminal was established in a typically complex Japanese arrangement with 10 capital investors and a total of 16 partners, PSA Corp took a 34% stake. Since then delays have continued to mount. The 1.1m teu capacity facility spread over four berths has become a terminal many PSA insiders confide they “wish they never got involved in”.

“Itakyushu turned out to be a hell of a lot of work for little teu,” commented one source close to the port’s development.

This financial year was meant to see an array of major state run ports privatised, yet this has failed to materialise and state sources suggest it is unlikely to go ahead even next year.