Growth of over 3 million TEU in Singapore in 2017 suggests PSA is winning the regional transhipment race, but the port operator is taking nothing for granted as it looks to the future.
PSA has just reported its 2017 throughput figures in the following statement: “PSA International Pte Ltd (PSA) handled 74.24 million Twenty-foot Equivalent Units (TEUs) of containers at its port projects around the world for the year ending 31 December 2017. The Group’s volume increased by 9.8% over 2016, with flagship PSA Singapore Terminals contributing 33.35 million TEUs (+9.0%) and PSA terminals outside Singapore handling 40.89 million TEUs (+10.4%)”.
The very solid result shows Singapore benefitted significantly from the new alliances that started operating in 2017. It also shows the port operator’s strategic moves with certain carriers have paid dividends. In early 2017 CMA CGM extended their “joint terminal” to four berths with a capacity of 4M TEU (doubling the previous area), and PSA then signed a similar deal with COSCO SHIPPING Ports Limited, extending that agreement to cover a third berth at Pasir Panjang (taking capacity to 3M TEU).
These arrangements helped PSA return to growth last year, with volume bouncing back from the drop of 0.1% to 30.59 million TEU that occurred in 2016. Commenting on the 2017 result Mr Tan Chong Meng, Group CEO of PSA, said, "In 2017, the global economy saw some recovery and bright spots of growth although the shipping industry continued to face challenges as the huge wave of consolidation and alliancing in 2016 began to manifest its full effects operationally. The word ‘disruption’ has moved from being a buzzword to being the norm for most industries, reflecting the accelerated pace of change and leaving no industry untouched”.
Tan Chong Meng made no mention of Singapore outperforming its competitors last year, preferring to say PSA has “demonstrated resilience and performed reasonably well against the challenging backdrop and tough competition. Amid the many business and technological forces and IT security threats buffeting us, we remain unwaveringly committed to our core focus of adapting to and pre-empting the changing needs of our shipping line customers. In addition, we are also preparing for a future where logistics and supply chain needs are transformed by new technology, trade, manufacturing and e-commerce dynamics”.
This has become the Singapore mantra. Speaking in mid 2017, Singapore’s Minister of Transport Mr Khaw Boon Wan said Singapore is “acutely aware” other ports aspire to take its position. As well as raising its game in automation and technology he stressed that PSA “must remain relevant to your customers. They are facing tough competition; they are confronting the challenges brought about by digitalisation. They are at risk of being disrupted by new players. Have your ears close to them, respond to their fast-changing needs, and work with them as your partners”.
Tan Chong Men said PSA is cognizant that global trends “will have further impact on the form and flow of the global supply chain. PSA Management, Unions and Staff will continue to journey closely alongside our customers and partners as we contribute to the shaping of our industry amidst the widening ripples of change”.