THE RISE OF SHENZEN PORT

Shenzhen port tipped to overtake HK in 2012 


Shenzhen port is forecast to handle 25 million TEUs this year while 
Hong Kong throughput is likely to be around 23.5 million TEUs



Shenzhen is set to overtake Hong Kong as the world's third-busiest container port this year for the first time ever on an annual basis. 

This comes as total box volumes through Shenzhen's four main facilities have continued to climb despite the downturn in global trade, reported the South China Morning Post. 

By comparison, volumes through Hong Kong have dropped, especially from river trade and barge business. 

Hong Kong is set to handle about 23.2 million TEUs this year, according to Post estimates based on throughput figures between January and October. The full-year estimates take into account the expected slack trade season in November and December. 

Industry observers supported the estimates. Jon Windham, head of the Asian industrials equity research at Barclays in Hong Kong, forecast the port would handle 23.5 million TEUs in 2012. By comparison he thought Shenzhen would pull pass Hong Kong to handle 25 million TEUs. 

Sunny Ho Lap-kee, executive director of the Hong Kong Shippers' Council, added: "Your calculation might be right. [The] forecast is far from good." 

Alan Lee Yiu-kwong, head of the Hong Kong Container Terminal Operators Association, said: "Yes, we are losing out". He said Shenzhen would certainly overtake Hong Kong next year if it failed to do so this year. 

Lee pointed out that Hong Kong had technically lost the No 3 spot for several years because 60 per cent of Hong Kong's container volumes is transhipment cargo. As a result each container is counted twice. 

He said container traffic through Shenzhen, Guangzhou and other south China ports are "practically all direct shipments". This meant each container is only counted once. 

Latest figures from the Port Development Council show Hong Kong handled 19.4 million TEUs in the first 10 months of 2012, down 4.4 per cent compared with the same period last year. 

While container volumes grew by a marginal 0.8 per cent to 14.6 million TEUs at the nine Kwai Chung container terminals between January and October, throughput slumped 17.2 per cent to 4.8 million TEUs at facilities outside Kwai Chung. 

Windham forecast that Shanghai would remain the world's top container port this year, handling 34.9 million TEUs. Singapore would be in the No 2 spot with 31.6 million TEUs. 

A MAJOR PORT LOSING GROUND

Hong Kong losing ground as major port


“The government is now talking about a 2030 master plan. Will this be useful when the 2020 plan is in the rubbish can?" asked Alan Lee Yiu-kwong, head of the Hong Kong Container Terminal Operators Association


A raft of issues ranging from a lack of government support to a lack of facilities and new height restrictions in Kwai Chung are eroding Hong Kong's competitiveness as a top global port, a leading terminal executive said.

Alan Lee Yiu-kwong, head of the Hong Kong Container Terminal Operators Association, outlined seven factors that not only hindered development of the port but were responsible for Hong Kong losing ground to neighbouring Shenzhen, reported the South China Morning Post.

Hong Kong is likely be overtaken this year by Shenzhen as the world's third-busiest container port. Estimates indicate Hong Kong will handle 23.2 million TEUs compared with Shenzhen, which is set to handle 25 million TEUs.

"We are losing competitiveness because of the seven issues I mentioned," said Lee, who represents the five terminal operators at Kwai Chung port, including Hongkong International Terminals, DP World and Modern Terminals.

Explaining the problems, Lee said there was a shortage of back-up land and berths for barges, which caused congestion and disrupted port operations last year.

These shortages are exacerbated by new height restrictions in Kwai Chung that prevent terminal operators from developing the existing container yards, either by building over the yards or clearing the yards of containers to build new logistics facilities.

The restrictions are contained in amendments to the draft Kwai Chung outline zoning plan, which were hotly contested in a Town Planning Board meeting on October 12, although the board rejected making any change to the amendments.

Lee said the government's failure to implement any of the recommendations outlined in the 2020 port master plan that was completed in 2004 was also a part of the problem.

The plan included five initiatives to improve port-operating efficiencies and cross-border connectivity. Lee said the government "is now talking about a 2030 master plan. I ask the question, will this be useful when the 2020 plan is in the rubbish can?"

STATUS OF AMPANG LRT

KUALA LUMPUR (July 11, 2012): Syarikat Prasarana Negara Bhd (Prasarana) has yet to make a final decision on the awarding of contracts for the Ampang Light Rail Transit (LRT) extension project work.

“We have yet to make a final decision on the work contracts. It is unethical for us to comment at the moment. We will provide all the details after the Finance Ministry announces its decision,” Prasarana’s media affairs manager Azhar Ghazali told theSun today.

NEW CEO AT NORTHPORT

Monday June 25, 2012

Abi Sofian takes on challenge

Northport (M) Bhd CEO Abi Sofian Abdul Hamid is set to prove that he is not just the seasoned operations guy at Northport but also someone who can take care of the dollars and cents, and a be good employer. In his first ever media interview, the port’s new top brass shares with StarBiz reporter Sharidan M. Ali his thoughts, vision and business direction of the company.

PETALING JAYA: Lenggong-born Abi Sofian is not a new face in the port industry especially in Northport where he started his career back in 1991.

He was part of the team led by Northport former managing director (MD) and chief executive officer (CEO) Datuk Basheer Hassan Abdul Kader, which navigated the the merger of Klang Container Terminal (KCT) and Klang Multi Terminal into Northport.

When he was younger, Abi Sofian, 50, did not think that he would end up in the port industry until it was time for him to settle down.

“I came to Port Klang as a civil engineer with an Australian consultancy firm which was involved in the upgrading of facilities at KCT.

Abi Sofian: ‘There are still areas with good potential to be realised. Developing a s trategic human capital is one area.’

“At the end of the project in 1993, I was asked whether I was interested in joining KCT.

“Having spent about two and a half years working literally above water, I thought it was a good opportunity for me to finally settle down at one place and learn more about marine engineering from civil engineering practices,” he said.

Soon after, KCT set up a facilities department to look after all engineering related works other than those involving terminal equipment. “I was re-designated as facilities engineer. My involvement later expanded to include corporate matters such as looking at lease terms on infrastructure, facilities aspects, contracts for civil works and corporate branding. I took my new responsibilities quite seriously and I decided to study law in 1996.”

As Northport was established, Abi Sofian found the issues in the port operations very challenging and exciting.

“I began to interact with other departments especially the business units as they needed my involvement in their capacity planning.

“With further exposures in the port industry like government agencies, regulators, business groups, I supposed I was then embedded in the port industry,” he said.

Northport, which is owned by NCB Holdings Bhd, appointed Abi Sofian CEO in April. “I was totally surprised when I was offered the job. I did not have the slightest idea that the person would be me.”

Rather than feeling pleased, he considers the job a challenge.

“I intend to take the port to greater heights by continuing what Datuk Basheer had left behind and introduce some new things to further improve the operations,” he said.

The affable and ever-smiling Abi Sofian said years of involvement in the operations of the terminal was an advantage. He can now focus on sharpening his skills in corporate and financial aspects.

According to Abi Sofian, Basheer placed a good working structure in defining the business profiles of Northport as well as the harmonious working relationship between employees and management team.

This conducive environment would be retained, he said.

“In spite of this, I believed there are still areas with good potential to be realised. Developing a strategic human capital is one area.

“I believe a fully developed employee will not only able to positively contribute to the company but the nation as well.

“I am also a true believer in key performance index but we have to spend some time to come out with the right and realistic target and benchmarks.

“Of course as a trained engineer, I subscribe to the importance of systems and processes as well,” he said.

Focusing on the port business, Abi Sofian is an ardent believer in bottom line performance.

“Although I admit that the volume growth is important, we do not deliver the containers to the shareholders, we deliver profit,” he said adding that Northport was targeteting to handle 3.2 to 3.3 million twenty-foot equivalent units (TEUs) this year from about 3.11 million TEUs in 2011.

Abi Sofian said the port would continue to improve its revenue but it would also be looking at cost management to continue get better margins.

“And as a service provider we also must not forget about the quality of service. In a nutshell, all these criteria are the keys to business sustainability,” he said adding that high value boxes also bring better margins to the port.

To a question about whether Northport had been conservative in its annual volume target, Abi Sofian said it was just being realistic. “As the main gateway of import and export, our volume growth is in line with the gross domestic product growth.”

“As of last year, 60% of our volume were import and export boxes while the remainder were transshipments Again, the most important matter is the profit per box that we can achieved rather than how many boxes we can do,” he said.

CANADA MANUFACTURING AND BRITISH MANUFACTURING COMPARED

Canada Creates Manufacturing Jobs

By Martin Murray, About.com GuideJune 15, 2012

As British manufacturing slumps, the factories in Canada are busier than ever, according to Statistics Canada, as almost 115,000 manufacturing jobs over the past six months, the most over any similar period on record. This puts Canada on top of the top 34 richest nations in the world. So how does a country that has high wages, low productivity, and a strong currency, create more jobs than Germany, USA, Japan, and every other developed nation?

Many economists believe that Canadian manufacturers are concentrating on the local market rather than exports due to the strong value of the Canadian Dollar. Another sign of the strength of the manufacturing sector is the new PMI figure which has now reached 54.7 for May, up from 53.3 in April. The PMI is now at its highest level since September 2011. As far as orders, the numbers were also up in May, to the highest level in five months. 

British Manufacturing Declines

The manufacturing sector in the UK is suffering according to the latest figures from the government's Office for National Statistics. Economists were expecting an increase in April's figures and an overall half percent increase since the beginning of the year. However, the actual figures were disappointing with April's figures falling 0.7 percent, which means a 0.3 percent decline for the year.

Economists are predicting a slower second quarter for British manufacturing due to extra public holidays due to Jubilee celebrations, the summer Olympics and the weakness in the economies of other European nations.

Not all manufacturing sectors saw a decline in April; the transport equipment and electronics sector posted the highest increases in manufacturing output. In total, seven manufacturing sectors fell with six managing an increase. 

SHIPPING - back in the black?

Maersk CEO says container rates back in the black 

Container shipping freight rates are profitable again and could rise further if trade picks up over the summer, the head of A P Moller-Maersk, the Danish shipping and oil group, said, reported Reuters.

The recovery in rates could signal a brighter outlook for the global shipping industry, which has struggled to emerge from a four-year slump caused by oversupply of vessels and weak demand due to the sluggish world economy.

"At the moment, freight rates are at a level where container transport is earning money," chief executive Nils Smedegaard Andersen said in a presentation to the Danish Society of Financial Analysts.

"We are still working to get higher rates," Andersen said. "We hope there will be a pick-up in world trade after the summer."
Last month, Andersen had said recent rate increases meant most container shipping lines were probably operating at breakeven levels.

This contrasts with last year when rates plunged towards the middle of the year, which took A P Moller-Maersk's Maersk Line into the red for the year.

Results this year for Maersk Line, the world's biggest container shipping group and a barometer of world trade, are expected to stay negative or "up to neutral," assuming that a rate recovery since March continues, the group has said.

Andersen said last month in the company's first-quarter results presentation that he hoped Maersk Line would get into positive territory this year, but that would require higher freight rates.
But he said on Thursday that the oversupply of ships weighing down the industry would persist for several more years.

"We think there will be overcapacity in container shipping until 2016-17," he said.

Andersen said Maersk Line had the fleet capacity it needed to maintain its market share and did not plan to buy more vessels.
Maersk Line has said its global container shipping market share was 15.5 percent in 2011 and it had 17.8 percent of the market on Asia-Europe routes.

"With the capacity we have, we are well equipped for the next years," Andersen said. At some point, we will go out and order containers, but we have no plans to go out and buy ships."

"We have roughly the ship capacity that's needed to maintain our market share in the next five years," he said.

SHIPPING - restructuring causes job losses

Maersk to restructure, terminate 400 jobs

Danish oil and shipping group A P Moller-Maersk said it would slash about 400 jobs as part of a restructuring of its struggling container shipping division Maersk Line.

The group said in a statement that a key objective of the reorganisation was faster decision-making and that about 250 of the job cuts would be at its Copenhagen headquarters, reported Reuters.

The shipping industry has been hit hard during the global economic downturn as weak demand and excess capacity knocked freight rates to loss-making levels.

Maersk said last month it expected 2012 results "slightly lower" than in 2011, a modest improvement on previous guidance, but below analysts' hopes.

Maersk Line reported a loss of US$599 million in the first quarter. In a stark illustration of the damage caused by excess tonnage in a poor rate environment, Maersk Line’s volume increased by 18 percent while the average freight rate declined by nine percent compared to the first quarter last year.