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PSA has formed a joint-venture with HMM for container terminal operations in Singapore.
The move further strengthens its competitive grip on the South-east Asia transhipment market.
HMM-PSA Singapore Terminal (HPST) will commence operations before the end of the year, subject to regulatory approvals; PSA and HMM hold 58% and 42% respectively.
“This strategic partnership will offer long-term hubbing certainty to HMM’s fast-expanding global vessel fleet in PSA Singapore,” PSA said today.
“Besides volume and terminal capacity assurance, PSA and HMM will also collaborate in operational technology developments and innovations.”
Jae-hoon Bae, president and CEO of HMM, said: “HMM looks forward to creating greater synergy for our 24,000 teu vessels by securing berth on arrival and providing more reliable services for our customers through the joint venture.”
The new terminal will be another feather in the cap for PSA, which has successfully dominated the South-east Asia transhipment market by forming joint-ventures with shipping lines.
“It certainly strengthens PSA’s position,” said Jonathan Beard, infrastructure advisory partner at Ernst & Young. “It should facilitate PSA-HMM working together more collaboratively on terminal operations, enhanced productivity and services, and it should also help ‘lock-in’ cargo to Singapore in the highly competitive transhipment market.”
PSA already has joint-venture terminals with CMA CGM, Cosco, MSC and ONE, a member of THE shipping alliance alongside HMM. The strategy has left transhipment competitor Port Klang vulnerable, despite generally offering lower handling fees than its Malacca Straits rival.
Independent container shipping consultant HJ Tan said HPST was unlikely to make any immediate impact on market share, however. He told The Loadstar: “Since most of THE Alliance’s transhipment volumes are already handled at PSA, it would have been inconceivable for HMM to switch to Port Klang or Tanjung Pelepas, for example.
“Of the eight Asia-Europe services operated by THEA, all call at PSA, and it is the only one of the three global alliances not to call at Port Klang or Tanjung Pelepas on Asia-Europe services.
“There is therefore no immediate impact on the relative market shares, but it will further solidify PSA’s position with THE Alliance as two of the four members are now JV partners at PSA.
“The bigger battle will be for Evergreen, whose current arrangement at Tanjung Pelepas will be expiring.”