Crowning glory

Two thousand and seven is all set to be the year Shanghai adds the final jewel to its port crown. Already number one overall, the container mantle is likely to be wrested from Singapore – a startling jump from a port that a decade ago had yet to crack 2m teu/year.

In 2006,Shanghai’s combined facilities notched up a record 21.7m teu, leaping 20.1% year-on-year. Authorities are aiming for 15.2% growth this year in order to beat the 25m teu mark.

Phase II of Yangshan comprising four berths equipped with super post-panamax cranes was officially opened in December.Cosco Pacific, Hutchison Port Holdings and APM Terminals, as well as Shanghai International Port Group (SIPG),won the fiercely fought tender for this phase.

Recently, Shanghai port authorities announced the list of investors for Phase 3 scheduled to begin in December 2007. China Shipping and Singapore-based PSA are each to finance 30% of the Yuan9bn ($1bn) needed for the development of seven berths with a total pier length of 2,600 metres. Additional investors are SIPG (who will supply 20% of the total investment), Cosco Group (10%) and CMA-CGM (10%). Under the new phase,berths at the container terminal will boast a 5m teu annual handling capacity. Having said that, though, not every customer is delighted with both the fragmented nature of the port and the authoritarian attitude of SIPG.

With terminals for the transpacific trade at Waigaoqiao – a 30km steam inland from the sea – and Asia-Europe at Yangshan – via an awkward 32.5km bridge – plus Shanghai Container Terminal and Shanghai East Terminal in the middle, carriers have to make many stops in Shanghai.What’s more, SIPG can give little warning to its clients about its intentions. Hence the sight last September of container lines on the Asia-South America route in a state of disarray as once again SIPG moved suddenly to shift cargoes from Waigaoqiao to Yangshan.

In 2005, SIPG gave lines just a couple of months to move all Asia-Europe boxes from Waigaoqiao to Yangshan. Then last autumn, those lines on the South American trades were given just two weeks to shift to Yangshan, starting October 8. The sudden move was intended to ensure that Yangshan secured a throughput of 3m teu in its first full year of operations.

Without the South American boxes, Yangshan’s throughput was likely to hit 2.8m teu for the year. Central government will always ensure that Shanghai remains the leading port in China, yet ask a container line where his or her preferred call in Central China would be and invariably the answer is Ningbo, to the south of Shanghai in Zhejiang province.

Over the past 10 years,no port has grown faster than Ningbo,oft considered China’s finest natural deepwater port. Shanghai’s increasingly fragmented terminal structure (Europe calls from Yangshan, transpacific from Waigaoqiao, for instance) has made Ningbo an increasingly attractive destination for carriers’ central China call.

Last year, Ningbo’s port authority joined forces with the neighbouring Zhoushan archipelago, a fertile maritime area.Throughput just passed 7m teu last year and authorities are confident of cracking 8.35m teu this year. Like Dalian, Shanghai, and Guangzhou the city’s next phase of container development takes place on an island.

Back in Shanghai, also of note this year is SIPG’s joint venture with Shanghai Automotive Industry Corp Group to build the nation’s biggest auto roll-on and roll-off terminal at the sixth phase of Waigaoqiao port.

Furthermore, the powerful SIPG is looking to mirror its peers by investing overseas. Last September, it signed a framework agreement with APM Terminals for a 40% stake in the latter’s new Zeebrugge facility which opened in May. SIPG will take a 40% stake in the ¢45m (US$59.88m) venture. Further overseas forays are planned to the point where,to the massed acronyms of terminal operating giants such as PSA, HPH, DPW and APM, one more, SIPG, will soon be added.