'Ports need to be ready for bigger cargo ships'

Spore has planned ahead as firms use larger ships to cut costs: Expert

PORTS will need bigger quays, deeper berths and more cranes with a wider reach to keep pace with the ever-increasing size of cargo vessels, said an international shipping expert yesterday.

Mr Olaf Merk, a senior official from the International Transport Forum under the Organisation for Economic Cooperation and Development, told a briefing that Singapore has "done a lot of long-term strategic planning to get ready for more cargo and bigger ships" so it is "in a good position to have these ships".

He also noted that shipping lines have been consolidating globally as companies use bigger vessels to reduce costs. Smaller firms without the capital to buy these ships have formed alliances, allowing them to buy larger vessels and to ship their cargo collectively.

"An alliance is a way to share the cost," said Mr Merk, who was in town to give a lecture organised by the Maritime and Port Authority of Singapore and the Centre for Liveable Cities.

He noted that there are two consequences of these industry trends.

One is that using bigger ships means more cargo is arriving at destinations at once. Ports will need larger terminals and equipment and more workers to handle the larger loads.

Labour flexibility at ports will also be needed to accommodate the bigger loads coming in at relatively lower frequencies.

In addition, the new alliances will mean that ports will be increasingly reliant on a few shipping lines for traffic.

Mr Merk said: "If they (the shipping alliances) change their idea on what would be the best port of call, it could mean that suddenly, you lose a lot of cargo."

Ports will have to be as efficient as possible to compete in this new environment.

"Big ships only make sense if the handling time in ports is very quick, so shipping lines will prefer ports and terminals that are able to handle that very quickly," said Mr Merk, adding that improving information flow and planning through technology will play a crucial role in improving efficiency.

"Using modern technology and big data to become more efficient, I think that is going to be the trump card for Singapore.

"It is about knowing exactly when there is going to be a slot available in a terminal and making sure that all the equipment is in place (to handle incoming shipping loads)."

Mr Merk also suggested that increasing automation and promoting the maritime sector could help address the shortage of labour and rising staff costs here.

"Ports and labour terminals that have higher labour costs have a business case for higher automation," he noted.

jkoh@sph.com.sg

A version of this article appeared in the print edition of The Straits Times on June 19, 2015, with the headline ''Ports need to be ready for bigger cargo ships''. Print Edition | Subscribe