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Asian trade growth is being endangered by inadequate port capacity and productivity, which are chronic problems not only at U.S. ports, but also increasingly around the world. Industry experts say gridlock at the ports of Hong Kong, Shanghai, Qingdao, Manila and Rotterdam threatens Asia’s thriving intra-regional trade.
"In my 25 years' experience in shipping, 2014 was the worst I've seen in terminal congestion in Asia," said Tim Wickmann, chief executive of MCC Transport, the intra-Asia container shipping arm of AP Moller-Maersk Group. "Congestion in Manila and Hong Kong was a huge problem for us."
Ports are trying to keep up with container carriers, which are introducing newer and larger vessels. Wickmann guessed trade growth would create three million extra handling moves for Asian terminals.
"However, we have a situation where many ports in Asia are close to their maximum capacity and are not developing fast enough to cater for this growth," Wickmann said. "Inadequate port capacity and related infrastructure is the single biggest challenge to intra-Asia trade growth."
"Many (port) terminals have enjoyed captive markets and high returns on investments for many years,"
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said Andy Lane, a partner at Container Transport International Consultancy. "As such, they have not felt compelled to focus on creating competitive advantages, which is likely the primary reason why productivity has lagged. The environment is changing. We now see different ports competing for the same hinterlands, and multiple terminals within ports."
Others blame shipping lines for their obsession with bigger and bigger ships, putting pressure on ports that have little to gain from more capital investment.
"The short-term impacts of large ships on terminal productivity and supply chains have often been adverse," said Jonathan Beard, a vice-president at US consultancy ICF International. "Our analysis of container exchanges per port call for large ships does not indicate a significant increase over the past two years, yet the larger vessels demand greater investment in terminal infrastructure and equipment."
"Until the economies of scale start coming through, the potential benefits of these larger vessels will not be fully realized - the terminals will suffer the additional investment cost without the upside."
For more of the South China Morning Post story: www.scmp.com
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