The port of Singapore recorded exceptionally strong volume growth in 2017 as it benefitted from the resurgence of the global container trade and its ability to withstand pressure from regional competitors for liner customers.
PSA’s flagship operation at Singapore faces strong competition for transhipment traffic as the liner alliance system restructures, particularly from ports in Malaysia such as Tanjung Pelepas and Port Klang.
Malaysia has built a strong trading and investment relationship with China in recent years that includes multiple port and rail investments as part of the latter’s ‘One Belt, One Road’ and related Maritime Silk Road strategy, which relies on access to the strategic Strait of Malacca. So it was a surprise to many observers when the Ocean Alliance, which includes state-owned China Cosco Shipping, the world's fourth-largest line, moved its operations from Klang to Singapore on 1 April last year, a move that helped boost PSA’s Singapore 2017 volumes.
The transfer is set to have long-term benefits for Singapore after Cosco and PSA signed a memorandum of understanding when they launched a new berth at the Cosco-PSA Terminal in November. The berth opened for operations on 1 January, adding an additional 1m TEU of throughput capacity for 2018.
PSA also reported rapid growth across its global port portfolio last year, with PSA terminals outside Singapore handling 40.89 million TEUs, up 10.4% compared to a year earlier.
“In 2017, the global economy saw some recovery and bright spots of growth although the shipping industry continued to face challenges as the huge wave of consolidation and alliancing in 2016 began to manifest its full effects operationally,” said Tan Chong Meng, group CEO of PSA.
“The word ‘disruption’ has moved from being a buzzword to being the norm for most industries, reflecting the accelerated pace of change and leaving no industry untouched.”
He said PSA had demonstrated resilience and “performed reasonably well” against this challenging backdrop and in the face of tough competition.
“Amid the many business and technological forces and IT security threats buffeting us, we remain unwaveringly committed to our core focus of adapting to and pre-empting the changing needs of our shipping line customers,” he added.
“In addition, we are also preparing for a future where logistics and supply chain needs are transformed by new technology, trade, manufacturing and e-commerce dynamics.”