MALAYSIAN ports are expected to see further throughput growth this year but will face stiff competition from each other and regional terminals, especially in capturing transshipment traffic.

Local ports will also have to deal with new security measures such as the US-led container security initiative (CSI) and the International Ship and Port Security Facility (ISPS) Code recently adopted by the International Maritime Organisation.

While Port Klang and Port of Tanjung Pelepas (PTP) have already established themselves as premier transshipment hubs, 2003 will see both ports wrestling with strong contenders such as Shanghai and other Chinese ports as well as neighbouring Indonesia and Thailand, all of whom are fighting for a piece of the viable transshipment market.

According to a study done by the United Nations Economic and Social Commission for Asia and the Pacific, Singapore would continue to retain the most transshipments volume over the next few years but Port Klang and PTP would also capture substantial amounts in the region.

The study predicted that ports in the Asia-Pacific region are projected to handle 155.1mil TEUs by the year 006 and the figure will increase to 215.6mil TEUs by 2011.

Malaysian port operators view this in an optimistic light, that although competition is growing, there will be enough traffic to be passed around.

A senior official of a local terminal felt that with container volumes rising, the escalation will be shared by those who have the capacity and capability to handle the additional volume.

Indeed local ports have geared up to meet the extra capacity. In Port Klang, Northport has converted its conventional berths to handle containers and is positioning itself as a transshipment center by receiving barge traffic from Indonesia, Bangladesh and India.

Westport too recently completed a container yard with a capacity of 16ha costing RM33mil and is looking at expanding its container linear berth from the current 2km to 4.5km.

PTP meanwhile has embarked on the construction of two additional berths of 350m each which will be completed by early 2004.

The study predicted that Malaysian ports would handle about eight million TEUs by 2006.

Chinese ports would handle the most volume with 28.5mil TEUs, followed by Singapore (23.4mil TEUs), Hong Kong (20.3mil TEUs), South Korea (15.6mil TEUs), Japan (14.9mil TEUs), and Taiwan (13.4mil TEUs).

Already Port Klang and PTP have recorded impressive growth figures. Last year Northport handled 2.4mil boxes and Westport slightly more than two million TEUs while PTP hit 2.66mil TEUs.

Although PTP pulled off a coup last year by winning over Evergreen to get some one million TEUs causing a dent to the PSA Corp’s volumes, the “threat” posed by Singapore is still very real.

In reaction to Evergreen’s migration and fearing further loss of other mainlines, the republic took the step of offering 50% discounts on handling charges for all empty containers in Singapore from July 1 last year for a 12-month period.

The discount is over and above all the discounts and rebates its customers currently enjoy under their current terms and arrangements. PSA is also giving a further 10% rebate off all bills at PSA’s cargo terminals.

The move is reportedly causing PSA to give subsidies amounting to S$400mil to please shipping lines.

To counteract the effect, Northport and Westport, which had so far been seen to be competing with one another, announced an alliance of sorts to cooperate and not undercut.

Port Klang also stands to benefit in transshipment activity from the recent dedicated se-air cargo link initiated by MASkargo taking off seriously.

The move will see cargo from Asean countries such as Indonesia, Cambodia and other Asian countries such as Bangladesh being feedered by sea to Port Klang before being air-flown to their final destinations.

The success of the Malaysia-Thailand container landbridge operated by KTMB has also become a means of cargo growth for local ports.

Besides the price wars and battle to win over shipping lines, local ports now also have to deal with enhanced security steps following the terrorist attack threats.

One such measure is the US-Customs CSI which will see American Customs officials placed at strategic orts worldwide to scan cargo bound for the US.

Malaysian ports are not among the top 20 list which includes Singapore and Rotterdam but local port operators have expressed willingness to join the programme.

This is because being part of the CSI is seen as crucial in remaining competitive and ensuring that ships continue to call.

No port would want to be left out and deemed ‘unsafe’ by shippers and shipping lines and the loss of business as a consequence would be enormous.

Malaysian ports also need to brace and prepare themselves to face the coming into force of the ISPS Code next year which require the preparation of detailed security plans for their terminals and the appointing of security officers.

Each terminal has to have a Port Facility Security Assessment within its territory that serves ships engaged on international voyages.

This is basically a risk analysis of all aspects of a port facility’s operation to determine which parts of it are more susceptible, and/or more likely, to be the subject of attack.

Ships using port facilities may be subject to port State control inspections and additional control measures.

The relevant authorities may request the provision of information regarding the ship, its cargo, passengers and ship’s personnel prior to the ship’s entry into port.

There may be circumstances in which entry into port could be denied.