S'pore port must strive to stay ahead of competition

IN RECENT months, there has been renewed interest in the construction of the Kra canal in Thailand, which could pose a potential threat to the viability of the port of Singapore.

However, given the dynamics of the world economy, Singapore is more likely to face bigger challenges in maintaining its status as a premier transhipment hub posed from elsewhere.

Below are some of the challenges that Singapore may face in future:

  • The development of shipping alliances means that port operators have to attract a group of shipping lines to use the port collectively.

Liners may choose to relocate to another hub port just to be closer to their partners.

  • As wages in China rise, companies may opt to locate their manufacturing bases elsewhere.

The Asean region and South America could become the next manufacturing powerhouses.

  • With the development of quality port facilities at ports such as Colombo in Sri Lanka and Cai Mep in Vietnam, liners could start to provide better connectivity and shipping services to these ports, leading to falling transhipment needs at Singapore ports.
  • The opening of the enhanced Panama Canal may result in liners reconsidering their options when routing vessels via the Suez Canal.
  • The growth of intra-Asian trade may entice liners to develop direct services between ports such as Jakarta and Tianjin. These could bypass Singapore, which may have a knock-on effect on its transhipment hub status and global connectivity.

These are the harsh realities of how dynamic the world's shipping and economic movements are.

Therefore, with or without the Kra canal, Singapore has to continue to strive to be a premier transhipment hub and strengthen its status as the world's port of call by providing best-in-class service and creating quality partnerships with all liners to develop new capabilities.

Tan Pang Soon

A version of this article appeared in the print edition of The Straits Times on June 29, 2015, with the headline 'S'pore port must strive to stay ahead of competition'. Print Edition | Subscribe