Wednesday , 23 May 2018
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PSA Singapore’s container volumes down 9%
Lower container volumes in Singapore hit PSA's profit

PSA Singapore’s container volumes down 9%

PSA International endured a tough year in 2015 with container volumes down by 2% to 64m teu, largely due to an 8.7% fall in throughput at its flagship Singapore facilities.

PSA Singapore Terminals handled 31m teu, marking its worst year since 2011, although this was slightly offset by PSA’s terminals outside Singapore handling 33.5m teu, an increase of 5%.

In response to the disappointing results, the Maritime and Port Authority of Singapore (MPA) will grant an additional 10% concession on port dues for container vessels calling at the Port of Singapore, if they are carrying out cargo works with a port stay of less than five days.

The additional concession will be in place for one year starting from January 15, 2016, and will be granted on top of existing port dues concessions such as the Green Port Programme incentives and the 20 per cent concession first introduced in 1996.

In all, these concessions are expected to amount to more than SG$17m (US$11.8m) in annual savings for container lines.

Tan Chong Meng, Group CEO of PSA, said: “2015 was generally a tough year with weak trade growth reflecting unsteady global economic conditions. Trade in the second half of the year was particularly lacklustre and this added to the pressures that were already building up due to structural shifts such as ship upsizing, sustained overcapacity, changes in liner alliancing, and the effect of prolonged lower oil prices.”

According to Neil Davidson, senior analyst in ports and terminals at Drewry, the figures are a result of a 4 to 5% decline in the headhaul Asia-North Europe trade over 2015 hitting Singapore, a major transhipment hub.

However, he added: “Singapore has lost market share of transhipment business to ports such as Tanjung Pelepas and Port Klang, which have seen growth in volumes in 2015. This shift is a consequence of the creation and development of the major liner alliances, which, for the time being at least, seems to have worked against Singapore.”

He did also note that since CMA CGM has promised to shift transhipment volumes to Singapore as part of its acquisition of NOL, “the picture may well change again”.

The French carrier’s acquisition of the struggling Singapore-based line included a commitment to set up its regional head office in Singapore as well as to increasing container volumes through the city-state. Its regional head office was previously in Port Klang.

Shanghai Zhenhua Heavy Industries Co (ZMPC) recently received an order worth SG$240m (US$167m) to build 22 container cranes for port operator PSA Singapore, with delivers to
start from 2017.