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Port Report: Port of Singapore box volumes flat in 2019’s first quarter

(Photo: Ministry of Transport)

FreightWaves puts Singapore, the world’s second-busiest box port, under the microscope –  examining box throughput, general cargo, bulk oil, non-bulk oil and ship registries.

Container throughput at the port of Singapore was flat in the first three months of 2019, with only a marginal percentage increase compared to the same period last year.

Singapore’s throughput in the first quarter of 2019 stood at 8,904 million twenty-foot equivalent units (TEU), which is a marginal 0.44 percent increase over the same period last year. The port recorded 2.99 million TEU in January; 2.74 million TEU in February and 3.13 million TEU in March. That appears to be pretty standard for Singapore; last year, the month with the lowest box throughput was February with 2.82 million TEU and the month with the highest throughput was May with 3.18 million TEU.

The average monthly throughput for the first three months of 2019 is just under 2.97 million TEU, which is marginally up by 2 percent from the average figure of 2.91 million TEU for the first three months of 2018. The monthly mean average for the 12 months of 2018 was 3.05 million TEU.

To put these figures in context, the busiest port in the United States is Los Angeles, which recorded a box throughput of 9.5 million TEU in 2018. The Port of Long Beach in California had a box throughput 8.09 million TEU in 2018.

Singapore is one of the world’s busiest box ports by container throughput. In annual box-count lists, it typically takes the globe’s number two spot, behind Shanghai, China. Singapore has had three years of consecutive growth: 30.9 million TEU in 2016, 33.7 million TEU in 2017 and 36.6 million TEU in 2018. Singapore is not just a box port though.

It handled 6.2 million metric tons of non-containerized general cargo in the first three months of 2019, which is up 2.4 percent on the 6.08 million metric tons recorded in the first three months of 2018. A metric ton is 2,204.6 U.S. pounds. The port handled 24.3 million metric tons of non-containerized conventional cargo in 2018.

During the first quarter of 2019, bulk oil cargoes handled at Singapore were 53.4 million tons, which is down 4.3 percent from the corresponding period in 2018. The port handled a total of 221.5 million tons of bulk oil in 2018.

The volume of non-oil bulk cargoes stood at 4.34 million tons in the first quarter of 2019, which is an increase of 2.8 percent compared with the first three months of 2018. Singapore handled 16.85 million tons of non-oil bulk cargoes in 2018.

There were 50,280 vessel calls at the port of Singapore in the first three months of 2019, which is down by 5.3 percent compared to the first quarter of 2018. Cargo-related calls accounted for 22 percent of all vessel calls in the first quarter of 2019, which was the single largest discrete reason for calling at Singapore. The next most popular reason for ships to call at Singapore was bunker fuel-related with 20 percent of all calls. The third most popular identifiable reason to call at Singapore was for reasons related to supply, and that accounted for 14 percent of all ship calls in 2019’s first quarter. The vast majority of calls, 21,535 ship calls, were for “other” reasons. There was little change in the reasons for ships calls between the first quarter of 2018 and the first quarter of 2019. In 2018, there were 208,925 port calls at Singapore.

Shipowners can choose which flag to fly on their ships. That is important for a variety of reasons and particularly because the law that applies on the ship is the law of the national registry.  Singapore is also an internationally regarded ship registry. In the month of March 2019, preliminary data suggests that there were 4,472 ships flying the Singaporean flag and those vessels had a total gross tonnage of just under 93.08 million tons. Gross tonnage is a measure of space not weight. It measures all the internal space of a vessel and is important in a variety of ways – for example, taxes and tolls are often levied on the gross tonnage of a ship.

The mean average number of ships registered in Singapore over the first three months was 4,470 vessels, with an average total gross tonnage of 92.6 million gross tons.

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Australian shippers in uproar on DP World fees

Shippers and trucking companies in Australia are reeling owing to the unilateral imposition of infrastructure surcharges by marine box terminal operators. Hikes in surcharges have been in the order of hundreds of percent. And, in one case, it was an increase in excess of 2,300 percent.

Infrastructure surcharges have been around in Australia since 2010, according to the federal competition watchdog, the Australian Competition and Consumer Commission. But in April 2017 terminal operator DP World Australia really started the current money-grab. The terminal operator was charging a $3.45 (US$2.87) charge per box at its Melbourne terminal. Then came the flurry of increases. By January 1, 2009, the infrastructure surcharge was A$85.30 (US$60) a box.

That’s a 2,372 percent increase

And, of course, DP World Australia imposed and/or hiked surcharges at all four of its Australian terminals. The other terminal operators took advantage of this exciting new revenue source too. Today, all the major operators at all the major box terminals have imposed big infrastructure surcharges. The money-grab shows little sign of ending as Hutchison Ports Australia is about to massively hike its infrastructure surcharge from $10.45 a box at Sydney to A$35.84 a box.

Marine terminal operators justify the surcharges by arguing they need to recover the costs of landside investment to ensure a healthy local industry. Terminal operators also argue that the costs can simply be passed on to others in the supply chain and that, ultimately, it the final consumer will bear the burden.

Shippers and truckers reject those arguments.

The industry consensus is that marine terminal operators have been suffering from increased competition from new entrants into their sector. Meanwhile consolidation of their customers through insolvencies, acquistion and alliances has handed pricing power to the shipping lines. Terminal operators have lost revenues and they have to find some way to make it back. Hence the surcharges.

Shippers and truckers argue that box terminal operators should be charging their customers, the box-shipping lines. Shipper representatives also complain about the cost of surcharges. Local industry association, the Freight & Trade Alliance, gives the example of a paper and recyclables exporter that will have to pay an extra A$3m (US$2.15 million) to ship 42,000 boxes in 2019.

Truckers appear to be caught in a particularly hard place. Firstly, they complain that surcharges are detrimental to cashflow. Surcharges have to be paid within 28 days and truckers often don’t get their own bills paid in that time. Trucker representatives say truckers cannot always pass on the cost of surcharges – and that’s a view backed up by the federal competition regulator which has investigated the issue.

Truckers also complain that handling surcharges causes them to incur extra costs (such as debt financing costs) which, in some cases, can even threaten the viability of their businesses. Truckers are also subject to pay-to-play a regime. If truckers don’t pay the surcharges then they will be locked out of the terminal.

And that would put them out of business.  

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Jim Wilson, Australia Correspondent

Sydney-based journalist and photojournalist, Jim Wilson, is the Australia Correspondent for FreightWaves. Since beginning his journalism career in 2000, Jim has primarily worked as a business reporter, editor, and manager for maritime publications in Europe, the Middle East, Asia, and Australia. He has won several awards for logistics-related journalism and has had photography published in the global maritime press. Jim has also run publications focused on human resources management, workplace health and safety, venture capital, and law. He holds a degree in law and legal practice.

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