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The company running one of Asia's highest-profile port businesses is struggling to find new customers after the Port of Singapore fought back unexpectedly strongly to regain the upper hand in their eight-year-old rivalry.
The only big customers at the Port of Tanjung Pelepas, on the Malaysian peninsula neighbouring Singapore, remain Maersk Line - the world's largest container line and PTP's first customer when it opened in 2000 - and Taiwan's Evergreen Marine, which defected from Singapore in 2002.
The failure to win new customers has extinguished much of the optimism that accompanied the initial successes of the privately-owned port, owned 30 per cent by APM Terminals, the ports business of AP Moller-Maersk, Maersk Line's parent.
Government-owned PSA, which runs nearly all Singapore's terminals, has rebounded partly, executives at publicity-shy PSA suggest privately, because the defections of Maersk and Evergreen to PTP led to a major management shake-up.
The company now offers shipping lines joint ventures and dedicated berth space to commit them long-term. PSA's earlier refusal to grant Maersk such a joint venture helped to drive it to PTP.
However, PSA also, according to people involved in Asian shipping, refuses its normal discounts on port fees to operators of feeder ships that call at PTP as well as Singapore. The tactic has made feeder lines - which ferry containers between hub ports and those not served directly by long-distance ships - reluctant to call at PTP. The lack of feeder links in turn deters new deep-sea shipping lines from taking business to the port. Most depend on small feeder lines to gather cargo for them, unlike Maersk and Evergreen, which unusually operate their own feeder services.
Cross-strait rivalry
The cross-strait rivalry is typical of the uncompromising struggles between ports in the trans-shipment business.
Trans-shipment traffic - containers moved between ships - can switch ports far more easily than business going to and from inland destinations.
Keld Pedersen, senior general manager in PTP's operations division, admits that PSA's tactics have caused PTP problems.
"It's not making competition easier; that's for sure," he says. "But I still strongly believe there are ways to thrive in this setting."
He insists he will continue to advertise PTP's cost advantages in the hope of attracting new customers. PTP has much lower labour than costs Singapore, while the land being hacked from the surrounding mangrove swamp and reclaimed from the sea is far cheaper than that in crowded Singapore.
"We believe we have a strong value proposition that is, indeed, worth looking at," Pedersen says.
However, in trying to prevent PTP from developing a feeder network, PSA is defending its biggest advantage. As the world's busiest container port, it offers faster, more regular worldwide connections than nearly any other.
There are, nevertheless, signs that PTP is regaining some of the initiative. MISC, Malaysia's national shipping line, now has one service - a specialist service carrying Halal food - calling at PTP. Negotiations are under way to bring more of the carrier's services to the port.
Maersk Line could also switch more services to PTP after an existing contract between Maersk and PSA - inherited when Maersk took over P&O Nedlloyd, the former world number three line, in 2005 - expires.
Pedersen also insists that, even if it would prefer more traffic, PTP is a strong business even with only its present customers. It increased traffic last year by 15.3 per cent and handled 5.5 million twenty-foot equivalent units of containers, against the 12.5 per cent growth and 27.9 million TEUs of Singapore.
"The business works well, but we have even higher ambitions," Pedersen says.
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