Slide in container freight rates may be beginning to level out
Freight rates on the major east-west container trades continued to slide this week – although ...
Singapore-based port operator PSA International said it managed to grow its container terminal business last year, despite “economic disruptions, rising protectionism and chaotic operating conditions”.
PSA handled 74.24m teu at its container terminals around the world, an increase of 9.8% on 2016.
Turnover increased by 7.8% to S$3.97bn (US$3bn) and net profit was up by 5.1% to S$1.23bn.
PSA group chairman Fock Siew Wah said: “2017 ended on a relatively positive note as global container throughput had its strongest showing since 2011, aided by stronger economic growth in many countries.
“The frenzied container liner shipping consolidation in 2016, which percolated into service deployment changes in 2017, also contributed towards PSA’s group throughput for the year.”
Indeed, the alliance reshuffle in April last year was a positive development for Singapore, as the throughput at PSA’s flagship terminals jumped 9% to 33.3m teu.
And the number of weekly calls at Singapore from the three alliances increased to 34 from 29 under the previous four-alliance structure..
According to consultant Alphaliner, Singapore’s gain was largely at the expense of Port Klang, which saw its weekly Asia-Europe services “more than halved”.
Looking forward, PSA said there were “challenges and opportunities” in 2018 and further ahead. It said: “The world and our industry will continue to be buffeted by an inexorable and accelerating pace of transformation and disruption in the way goods are produced, sold, transported and used.
“We are keenly aware that the dynamics of our industry remain highly changeable and competitive.”
Like its peers, PSA is having to deal with the new dynamics of a significantly smaller portfolio of liner customers and the consolidated liner industry is exerting downward pressure on stevedoring rates by not only demanding the lowest common denominator on rates, but also reductions for increased volumes.
However, PSA said it was looking to offer its liner clients added value by means of digital advancements.
“As we witness the current wave of digitalisation and acknowledge the increasing quest for cargo flow visibility, we believe PSA can work with our customers and partners to create a new suite of solutions that exploit the opportunities digitalisation offers,” it said.
PSA operates some 40 container terminals in 16 countries across Asia, Europe and the Americas.