Rivalry among ports set to continue

By Sidek Kamiso

WHEN it comes to transportation service, the rivalry between Malaysia and Singapore had never been apparent, until recently. 

For many years, being the largest entrepot in the region, Singapore's position as a port city looked formidable. It appeared that whatever other regional ports could offer, Singapore could offer better because of its enviable location as the transhipment hub in the region. 

When businessman Tan Sri Syed Mokhtar Albukhary opened the Port of Tanjung Pelepas (PTP) in 2000, the port was not even considered a threat to Singapore. 

It was not until the world's largest shipping company Maersk Seland made the relatively unknown port as its port of call in the region, that Singapore started to take notice. 

Maersk not only changed its transhipment hub from Singapore to PTP; it also moved its entire operations there, taking with it nearly 11% of cargo throughput handled by the Port of Singapore Authority (PSA). 

The PTP’s grand plan became clearer when it managed to lure Taiwanese liner, Evergreen, to become the second major name to call at PTP. The two major clients represent 15% of PSA's annual throughput and their departure was noticeable and PTP started to pose a serious challenge to Singapore's position.  

Besides shipping liners, other operations that depend on port services have also dropped anchors near PTP. Among them are BMW and Scania, which had set up their respective regional centres for spare parts distribution. 

Having its business threatened almost overnight, Singapore retaliated with discounts and rebates to shipowners to match the lower fees offered by PTP. 

PTP continues to make its mark as the alternative transhipment hub to Singapore. For the first six months this year, PTP saw its throughput increased by 25.3% to 2.1 million TEUs (20-foot equivalent units) from 1.6 million in the previous corresponding period. 

In the future, the situation could change further as PTP strives to make the port more attractive by marketing it as an air and sea cargo hub, linking the port with Senai Airport nearby. 

A potential threat to both Singapore and PTP is the plan by Thailand to open a canal on the narrowest part of the Kra land bridge connecting Thailand and Malaysia.  

If this plan materialises, not only Singapore would feel the heat, PTP's position could also be threatened as ships may find it faster to bypass the two ports to sail to other parts of Asia through the canal. 

  • These are the last articles in the series on Firming Ties 

    Earlier reports.

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