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How can shifting all container operations from Johor Port to Port of Tanjung
Pelepas (PTP) stop cargo leakages from the country to Singapore?
The question is raised in view of the proposed plan to move all container
operations to PTP, while Johor Port in Pasir Gudang, would handle all other
cargoes such as bulk and liquid shipments.
While many sceptics are keen to look at the increased transportation costs,
let us first see the bigger picture that is of national interest.
Currently, close to one million TEUs (20-ft equivalent units) are being fed
to Singapore by sea and land annually.
Of this, 300,000 TEUs come from Johor Port and 400,000 TEUs are from Port
Klang. A further 300,000 TEUs are being trucked by land to Singapore for
shipment to overseas destinations.
Cargoes meant for Malaysia but imported through ports in Singapore are worth
about RM33bil per annum.
And cargoes being sent to Singapore from Malaysia are worth RM106bil per
annum, of which only a small percentage is for Singapore’s consumption while
the rest are being re-exported.
Ports in Johor control only 15% of the region’s total container volume. This
is very low compared with PSA’s market share of 67%.
Thus, the rationale for the move of transferring all container operations to
PTP is apparent – allowing the two ports to focus on their core activities
and making them stronger specialised ports.
In terms of capacity and infrastructure, PTP has ample space to cater to the
increasing growth in world container trade at about 7 % per annum.
Then came the issue of handling increasing size of vessels, in which PTP has
the upper hand. Bigger vessels will be attracted to call at PTP if they have
the right amount of hinterland as well as transhipment cargoes since all the
facilities, efficiency and water depth are already in place.
Thus, rather than Johor Port feeding the containers to Singapore, PTP plans
to secure more shipping lines to berth their huge vessels to stop the cargo
leakage.
As PTP and Johor Port are under the same parent company, the rationalisation
would eliminate internal competition between the two ports in Johor.
A lot of energy and resources are wasted and it is better for the ports in
Johor to compete with Port of Singapore (PSA) rather than with each other.
But the exercise also has to address the issues of increased cost, longer
delivery time and shipping lines' cut-off time for shippers located in Pasir
Gudang.
According to an industry player, the move will raise the haulage cost for
shippers located in Pasir Gudang.
“PTP is located 60km to 70km away from Pasir Gudang and that will reflect an
increased haulage rate from RM391.40 to RM783.70 per container.
“Also, while Pasir Gudang is only located at the back of Johor Port, the
trip to PTP will take 45 minutes to one hour,” he said.
With the congested road to PTP, shippers will have a problem adhering to the
cut-off time to load their containers on board.
Additionally, he said, PTP must be able to lure more shipping lines to call
at its port as soon as the rationalisation takes place to avoid more
leakages than the present amount.
Currently, Wan Hai, KMTC, Dongnama Shipping, Pacific International Line,
Cosco and PACC shipping lines provide direct calls from Johor Port to East
Asia.
For shipments to the US and Europe, the port feeds its containers to Port
Klang and Singapore.
PTP as a transhipment hub has three major shipping lines calling. They are
Maersk, Evergreen and Orient Express Line plus other smaller liners.
In this respect, PTP must beef up its role not only as a transhipment hub,
but also an export and import port in order not to disrupt the production of
the shippers in Pasir Gudang.
Will the shipping lines from Johor Port shift to PTP?
Not likely if they have a long-term agreement with PSA but if PTP succeeds
in creating a critical mass for liners, they may change their mind.
Also, how can Johor Port replace its container business?
Johor Port anticipates handling more than one million TEUs this year and the
move will certainly affect the port's income.
The Transport Ministry and MMC Corp Bhd will do an in-depth study but the
final decision on the move will take into account stakeholders’ interests.
MMC, which holds a 100% stake in Johor Port and a 70% stake in PTP, is
reported to have a special task force to study the feasibility of the move.
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