After a big drop in container throughput in 2015, last year saw container traffic in Singapore stabilise and PSA hopes to see an increase in 2017, while its international business continues to grow
PSA International (PSA) handled 67.63 million teu its terminals around the world during 2016. Overall volume increased by 5.5 per cent over 2015. PSA Singapore Terminals suffered a marginal fall of 0.1 per cent to 30.59 million teu but this was a far smaller drop than in 2015 and was more than compensated by PSA terminals outside Singapore handling 37.04 million teu, a 10.6 per cent increase over 2015.
Tan Chong Meng, PSA group chief executive, commented: “We had to grapple with sluggish global trade, weak demand for container shipment, sustained excess shipping capacity and depressed freight rates. Against this unsettling landscape, the PSA Group managed to achieve positive growth.
“The tough business environment is likely to continue into 2017 but that is not the whole story. We may witness more system-wide changes brought on by the convergence of slow market growth, emerging technologies and new business needs. Rapid consolidations in the container liner industry are giving rise to uncertainties as well as opportunities. New shipping service deployments and products will hit the market, demanding adjustments and adaptations by not only terminal operators, but players big and small in the global supply chain.
“At PSA, we believe these challenges will spur us to be more focused on our customers’ needs, and more innovative in our pursuit of win-win solutions. I am confident that we will emerge stronger from these hard times.”
The continuing importance of the port of Singapore to the local economy and in regional and global trade is evidenced by the fact that in 2016 the United Nations Conference on Trade and Development (UNCTAD) ranked Singapore as the second most connected country in the world for the second year in a row, based on port connectivity to global trade. The World Economic Forum (WEF) placed Singapore as having the second best port infrastructure in the world.
Overall in 2016, according to figures from the Maritime and Port Authority of Singapore (MPA), the aggregate gross tonnage of all vessels arriving in Singapore during 2016 was up by 6.3 per cent from 2015 to 2.66 billion gt. Container ships, tankers and bulk carriers, each contributed about 30 per cent of that total.
Total container throughput in Singapore was 30.9 million teu, after adding to PSA’s own throughput containers handled at other terminals. This was the same as in 2015. Total cargo of all types handled in Singapore in 2016 increased by 3 per cent over the previous year to 593.3 million tonnes.
It is expected that in 2017 container throughput will resume modest upward growth, reflecting an improvement in global container traffic and additional business generated as the new joint-venture berths come into operation.
As the new Pasir Panjang Container Terminal takes shape and operations there build up, PSA secured major deals with leading carriers for long-term commitments. Cosco Shipping Ports (formerly Cosco Pacific), part of recently merged Chinese container company China Cosco Shipping’s joint-venture, Cosco-PSA upgraded its earlier agreement to operate container berths at Pasir Panjang from two berths to three, starting in 2017. These are able to handle the largest container ships in service. The Chinese company sees this investment as part of China's Maritime Silk Road (One Belt, One Road) strategy.
Another major container operator, France’s CMA CGM, which in 2016 completed its acquisition of Singapore-based Neptune Orient Lines, has also formed a joint venture with PSA. CMA CGM-PSA Lion Terminal will operate four berths at Pasir Panjang Phases 3 and 4.
As the latest phases of the Pasir Panjang development come into operation, 2016 saw construction of the first phase of the new Tuas Terminal development get underway. This is a key feature of Singapore’s Next Generation Port strategy. Phase 1 of Tuas Terminal will comprise 20 container berths able to handle a total of 20 million teu annually and will feature the latest automated container handling technology. When fully complete, Tuas Terminal will have a total capacity of 65 million teu. Phase 1 is due to come into operation by about 2025 and the whole four-phase project is scheduled to take about 30 years to finish.
As new facilities come into operation some of the older container terminals closest to the city centre – Tanjong Pagar, Keppel and Brani – will gradually be closed. Tanjong Pagar is slated for redevelopment into commercial and residential uses. Their leases run out in 2027, but work is expected to be transferred before then. After that all container handling, including at the new Pasir Panjang terminals, is expected to move to Tuas by 2040. PSA Singapore has already started moving some container business from the oldest, Tanjong Pagar Terminal to Pasir Panjang.
While PSA is investing heavily in new terminals, in the short-term it has faced a slowdown in throughput growth and increasing competition from nearby Malaysian hubs, based on their lower handling costs, and which are also investing in container handling facilities.
Although China Cosco Shipping has committed to Singapore’s Pasir Panjang facility, China is investing in rival port developments in Malaysia, as part of the Maritime Silk Road initiative. For example, the joint China-Malaysia Melaka Gateway project includes container terminals, rail links and shiprepair facilities. There are fears that this could challenge Singapore’s long held position as the leading container port in Southeast Asia, though PSA and the Singapore Government have expressed scepticism about its impact.
As part of its drive towards installing the latest technology to its new terminals and hinterland infrastructure, PSA International subsidiary PSA Corp and Singapore’s Ministry of Transport have signed agreements with Scania and Toyota Tsusho to design, develop and test an autonomous truck platooning system for use on Singapore’s public roads. The concept comprises one human-driven truck leading a convoy of driverless trucks. The initial trials, running from January 2017 to early 2018, will focus on designing and testing the technology. The second phase, running until late 2019, will involve containers moving from one terminal to another, along a 10km route between PSA’s Brani and Pasir Panjang terminals.
Ong Kim Pong, regional chief executive for Southeast Asia at PSA International, said: “As PSA prepares for our future terminals at Tuas, it is timely that we move on to the next steps in developing autonomous truck platooning technology. I am excited by the progress being made, as it underlines our joint commitment to being future-ready, while also helping us continue to serve our customers better through fast and efficient inter-terminal container movement.”
PSA International extending its outreach
Beyond Singapore, PSA International is a major international port operator, with interests in 40 terminals in 16 countries, and is looking at opportunities for further expansion.
Among recent developments, the joint venture container terminal New Priok Container Terminal One at Tanjung Priok in Indonesia, built by PSA International, Japan’s NYK Line and Mitsui & Co, and PT Pelabuhan Indonesia, started operations in August 2016.
A joint statement by the four participants said: “Jakarta’s Tanjung Priok port is the most important and largest port in Indonesia, handling the majority of Indonesia’s vibrant trade. There is an immediate need to increase the port capacity and handling capacity.”
The terminal has an initial annual capacity of 1.5 million teu and can handle container ships with a draught of up to 16m. A further three terminals are planned for completion by 2023, which will give the facility total capacity of 18 million teu. Its handling equipment includes electrically-powered rubber-tyred gantry cranes to reduce its carbon footprint.
In India, PSA International subsidiary Bharat Mumbai Container Terminals has recently ordered new rubber-tyred and rail-mounted gantry cranes for the new Nhava Sheva T4 facility near Mumbai. The terminal is due to start operations in 2018.
The opening up of Cuba to US and international trade is likely to provide a boost for PSA International’s terminal at the developing port of Mariel, on Cuba’s northwest coast, which is set to become a major hub. The terminal opened in January 2014 and has seen significant growth in container throughput to about 400,000 teu in 2016. It has capacity to handle up to 800,000 teu annually. Dredging of the main channel, due to be completed in 2017, will enable larger ships, up to neo-Panamax size, to use the facility. There are plans to increase annual capacity up to 3 million teu.
PSA International’s investments are not confined to port-based container terminals but extend to related inland infrastructure. For example, it has invested in an inland rail container terminal network operated by joint venture China United International Rail Container Co (CUIRC) which is developing a network of 18 rail container terminals at strategic locations in China, of which 10 are already in operation.
PSA International has acquired a 15.33 per cent stake through acquisition of Hong Kong-based Luck Glory International. Other partners in this joint venture are China Railway Container Transport Corp, NWS Holdings Limited, China International Marine Containers Group and Deutsche Bahn subsidiary DB Mobility Logistics. PSA International has stakes in container terminals at 11 ports in China.
The strategic importance of this investment for PSA International was outlined by Mr Tan. “The CUIRC project is a game changer for PSA and fits into our overall strategy for China. With our current presence in major China gateway ports, PSA is well positioned to develop synergies with CUIRC to grow integrated sea–rail intermodal operations across the world’s second largest economy.”
Last year also saw PSA International set up a venture capital initiative aimed at providing funding to encourage start-up enterprises that are seeking to create “innovative logistics solutions fusing information and communications technology including Internet of Things, cloud, data analytics, artificial intelligence, optimisation and engineering including robotics and automation in container and cargo handling operations.”
PSA unboXed was launched with an initial fund of S$20 million. Selected start-ups receive up to S$50,000 in seed funding initially, and are provided with incubator facilities at PSA’s Pasir Panjang Terminal building. They will be able to develop and test ideas for the real market at PSA Singapore Terminals. They will also have the opportunity to introduce their innovations to the global maritime logistics chain through PSA's global terminal network.
Mr Tan said: “The port is one of most important points of convergence in global supply chains. Being one of the world’s largest port operators gives PSA the unique platform to instigate and support game changers in our industry. Through PSA unboXed, we want to encourage creative ideas that can improve and revamp logistics technology, increase port productivity and enhance integration, security and performance across global supply chain logistics. This incubator programme is in line with PSA’s continued focus on port and related logistics innovation and we hope to benefit from a broadened technology horizon.”
Jurong promotes multi-purpose capability
Jurong Port has adapted and relaunched part of the former Jurong Container Terminal as a new, dedicated multipurpose facility. Jurong Combi Terminal is aimed at handling containers and general cargo on multi-purpose and small container vessels rather than larger, pure container ships.
Jurong’s Combi Terminal comprises three dedicated deepwater berths of 575m in length with a 15.7m draught alongside. The quay cranes have been adapted to handle general cargo and containers, and mobile harbour cranes can be deployed to handle heavy-lift cargo. The main advantage of this new approach is that multipurpose vessels no longer need to call at separate terminals or berths to load or unload different cargo types. This development is expected to increase Jurong Port’s cargo throughput and improve its berth utilisation.
Ooi Boon Hoe, chief executive of Jurong Port, said: “The establishment of our Combi Terminal is a significant milestone for Jurong Port to become a world-class multipurpose port operator and a one-stop solution provider integrating berth planning, cargo handling, storage and supporting services. With our Combi Terminal, customers that carry diverse cargo types on their vessels enjoy the flexibility of shortened ship turnaround time.”
The revamped terminal attracted Pilbara Express Line to operate a new direct liner service between Jurong Port and Dampier in Northwestern Australia. Other regular customers at the Combi Terminal include ANL and Eng Lee Shipping Co.
Mr Ooi said that overall cargo throughput at Jurong Port is expected to remain approximately flat in 2017, mainly due to global trading conditions, but that upgrades to its facilities will put it in a strong position to benefit when trade improves.
Law Chung Ming, group director of transport and logistics for International Enterprise Singapore, which has been working with Jurong Port to expand its business globally, said: “The Combi Terminal adds to Singapore’s position as a premier transshipment hub.
Jurong Port is also investing in smart technology to support this multi-purpose cargo handling strategy. Its Smart Gate information technology solution has been custom designed to reflect the port’s cargo handling profile with a wide variety of cargo types. Mr Ooi said: “An off-the shelf solution would not have been suitable because the port handles a wide variety of cargo, each with its unique set of considerations. The ability to customise and integrate various technologies, such as Smart Gate, is a critical step towards a next generation multipurpose port.”
Smart Gate is an enhancement to Jurong Port’s main cargo access gate, integrating various technologies in an innovative approach to achieve a single-touch experience for port users without compromising security. The technologies include two-tiered gate access with biometric verification using vascular vein technology which was selected and tested to have field-proven reliability and ease of use. They also include advanced dynamic lane management to manage vehicle entry based on traffic conditions and port requirements, CCTV with video content analytics, real-time intelligent logic processing to detect anomalies based on the inputs from various subsystems, and smart user interface design automatically highlighting areas of concern.
Jurong Port said that the introduction of Smart Gate has resulted in considerable productivity improvements, such as minimising vehicle waiting times and freeing up manpower, while port users enjoy a 60 per cent reduction in document processing time at the main gate.
Jurong Port boasts the world’s largest port-based solar energy generating facility following completion of the installation of a 9.5MW-peak facility. It began producing electricity in June 2016 in a joint project with Sunseap Leasing. The facility allows Jurong Port to offset more than 60 per cent of its electricity requirement with an estimated annual generation capability of more than 12 million kWh of solar energy. Mr Ooi said: “We will continue our green efforts and look for other opportunities to enhance our sustainability efforts.”
In January 2017 Jurong Port opened a new training facility to develop the skills of port workers in automation and other new mechanisation technologies. It will train and certify workers from Jurong Port and other local stevedoring companies. There are an estimated 18 stevedoring companies in Singapore employing a total of about 700 workers. The facility cost about S$2.8 million, including support from MPA.
The training centre is at Jurong Gateway and includes simulators for crane and other equipment operations. There is also a training yard located in the port to provide hands-on training.
Mr Ooi said that the academy is expected to benefit about 1,900 workers and help the port reduce labour dependency by 20 to 30 per cent. This will assist in meeting the challenges posed by an ageing workforce and the need to increase productivity.
New naphtha tanker facility
Petrochemical Corp of Singapore (PCS) is investing US$80 million in a new naphtha import facility in Singapore to enable larger tankers to be used. The new terminal comprises a tanker berth and associated storage facilities. It will be able to accommodate vessels of up to 70,000 dwt which is becoming the standard size for large naphtha cargoes. Storage tanks will have a total capacity of about 240l million. Construction of the new facility is due to be completed in the third quarter of 2017 with the first cargo expected in the fourth quarter.
Napththa is commonly used in the catalytic cracking process in oil refineries. PCS, a joint venture of Japan-Singapore Petrochemicals Co, Qatar Petroleum International and Shell Petrochemicals (Singapore) operates two crackers at its Jurong Island facility.
PCS managing director Akira Yonemura said: “This project will significantly strengthen our naphtha import logistics giving us not only better efficiencies but also the ability to optimise the feed to our crackers to maximise value.”
As well as trying to attract container traffic from Singapore, Malaysian ports are focusing on opportunities to win some of its tanker business. China is behind some of these investments – for example, the new Kuala Linggi International Port (KLIP) which is constructing oil terminals and storage capacity, and drydocking facilities able to handle very large crude carriers. It is also aiming to benefit from the fact that ship-to-ship transfers and floating storage are banned in Singapore anchorages.
However, answering a question in Singapore’s parliament, minister for transport Josephine Teo pointed out that KLIP’s proposed 1.5m3 million storage capacity is small compared with Singapore’s total of 20.5m3 million.
Cruise terminal honoured with ship naming
The Marina Bay Cruise Centre Singapore continues to attract additional cruise ship calls as leading operators look to exploit the massive potential for cruising in Asia. Its important role was recognised in January 2017 when cruise operator Seabourn, part of Carnival Corp, named its newbuild cruise ship Seabourn Encore while alongside the facility.
Lionel Yeo, chief executive of the Singapore Tourism Board, said: “This event is another milestone in our partnership with Seabourn and Carnival Corp. It is also testament to the growing appeal of Southeast Asia as the destination of choice for discerning travellers. We look forward to welcoming more of Carnival’s ships to Singapore.”
Singapore’s other main cruise facility, Singapore Cruise Centre, is located at Harbourfront along with the terminals for fast ferry services to destinations in Indonesia, and is used by cruise lines including Star Cruises.