In a statement released to CM, he points out that world GDP and global container handling growth rates are forecast to remain moderate and in low single digit percentages. On the other hand, mega vessels will continue to be delivered, with many coming on stream in the next two years.
“The imbalance between weak trade increase and surplus shipping capacity will continue to challenge freight rates and consequently, sustain the squeeze on the profitability of container shipping lines. Ports will be under greater pressure to deliver high performance standards at competitive rates,” he stressed.
This will be caused as more mega ships are launched with the result that the upsizing cascade will trickle down to smaller ports, demanding additional capital investments to upgrade port infrastructure and to meet a re-written set of service level expectations.
“We should see the ushering in of a new paradigm – a paradigm requiring unprecedented cooperation between lines and operators to operate the ships and the terminal assets productively. This cooperation is even more important when lines operate in alliances and ports play an instrumental role to relay containers across shipping services, an increasing transhipment mode as ships get larger,” said Tan.
In September last year PSA received the first 18,000 teu mega vessel, the ‘Maersk Mc-Kinney Moller’, at its flagship PSA Singapore Terminals and subsequently the ‘Mary Maersk’ from the same class, at PSA Antwerp shortly thereafter. The company states that it will continue to upgrade its terminals globally to handle mega vessels and their cascading effects.
Looking to the coming year and beyond, Tan stated: “On the investment front, we remain tuned to the varying container growth rates and shifting trade patterns around the world, and will continue to make suitable investments in new growth markets and in our existing portfolio as we have demonstrated this year . PSA will continue to engage our customers and partners to grow our port network in the locations that matter to them”.