ASEAN Ports Association Malaysia (MAPA)

Port of Tanjung Pelepas (PTP), the country’s premier transhipment terminal, is working towards increasing hinterland cargo volume to achieve a more sustainable business model, says chief executive officer Captain Ismail Hashim.

On average, PTP now handled 95% transhipment and 5% hinterland cargo, he said.

“We feel that we have to strike a better balance to achieve a more sustainable business model,” he told StarBiz via e-mail.

Development in Iskandar Malaysia, which included logistics, would in turn support hinterland cargo growth, he said.

An aerial view of Port of Tanjung Pelepas.The port now has 12 berths and a terminal handling capacity of 10 million TEUs per year.

“In this respect, PTP, along with its sister companies Johor Port and Senai Airport, will play complementing roles to further strengthen the logistics sector in Johor.

“The presence of strong logistics infrastructure in Iskandar Malaysia and Johor will attract investors, manufacturers and industries that are looking for strong and efficient logistics backbone,” Ismail said.

This would result in an increase in Johor’s hinterland volume, he added.

PTP’s 1,000-acre free-zone land has also been successful in attracting brands, contributing to the hinterland volume of PTP.

“Companies which are already rooted in Pelepas Free Zone include Ciba Vision, Flextronics, BMW, JST as well as logistics players such as Maersk Logistics, Nagai Nitto, Schenker Logistics and Century Logistics.

“We are continuously marketing the free-zone land to attract more players,” Ismail said.

The port’s aims to quadruple its volume in the next 20 years augurs well for hinterland cargo.

Ismail said in line with the expected increase in volume and its long-term goal, PTP would have to expand its port infrastructure.

“Some of the factors that shipping lines look for when deciding on a port of call is the accessibility to the port, operational efficiency and capability to handle current and future volumes (scalability).

“In the case of PTP, we belief we will be able to achieve this due to the value propositions that we have to offer,” he said.

PTP currently has 12 berths and a terminal-handling capacity of 10 million TEUs (twenty-foot equivalent units) per annum.

Ismail said it had the space and potential to build up to 95 berths with a terminal-handling capacity of more than 100 million TEUs.

PTP handled about 5.6 million TEUs last year.

On the current business environment, Ismail said it had been very challenging for all port operators globally due to the economic downturn.

“However, PTP has shown outstanding performance in weathering this stormy condition, especially in the second half of the year,” he said.

He noted that PTP registered a 3.4% increase in volume as at September compared with the same period last year.

“Despite the downturn, we expect to see some growth this year via the new services introduced through our existing and new customers such as CMA CGM,” he said.

By: Sharidan M. Ali

THE Port Klang Authority (PKA), the regulator of Northport and Westports, plans to review the tariff structure at both terminals to bring their rates on a par with their neighbours’.

“People perceive that cheap tariff is the main reason why a shipping line calls at a port. I think that is the least of the reasons, but rather it’s about the efficiency and cost-effectiveness,” PKA general manager Lim Thean Shiang told Business Times in an interview.

He said Port Klang’s tariffs on most of the services it provides have remained unchanged since 1965.

It was reported that current handling charges for a 20-foot and a 40-foot container are RM230 and RM345 respectively. For transhipment, it costs RM140 for a 20-foot box and RM210 for a 40-footer.

“It is not about making more profit, but about helping port operators improve their infrastructure and facilities.

“If they don’t get higher tariffs, it is difficult for them to reinvest (in new equipment and facilities); and, if they don’t reinvest, we will never catch up with other (international) ports,” Lim said.

Citing Hamburg as an example, he said that 70 per cent of its operations is automated. Its port charges are about five to six times higher than those at Port Klang.

He has asked that the PKA’s research and development team collect tariff rates of ports in the region, which has several world-class ports, as a benchmark.

Once a review is done, a proposal will be sent to the Minister of Transport for approval.

On another matter, Lim said the port authority had put the dredging of the north channel on hold. It will study the viability of expanding the south channel instead.

The initial plan was to dredge the north channel in two stages to a depth of 15 metres, from 11.3m.

Work to deepen the channel to 13.3m has been completed, but further dredging to 15 metres is pending approval.

Expansion of the south channel waterway from 365m to 500m will allow for two-way traffic.

Lim said the final decision on which project to proceed with will consider the economic and safety benefits to be derived.

While both projects will need about the same amount of capital outlay, further dredging of the north channel would be more costly owing to the maintenance dredging needed to upkeep the depth at 15m.

“I am from the private sector, and it’s all about dollars and cents. All decisions should be based on commercial gain,” Lim said.

By : Presenna Nambiar