The scrapping Tanjung Pelepas’ proposal to absorb Johor Port’s container business represents the missing of a golden opportunity.
The Malaysian port of Tanjung Pelepas certainly started with a bang. Shortly after the port opened in 2000 it managed to reel in Maersk, which moved a large part of its Southeast Asian operations over from Singapore.
Maersk was unhappy at its inability to secure a dedicated terminal at the PSA wharves in Singapore and voted with its feet. Four years later and another main line defection again raised questions about the sustainability of Singapore as the region’s maritime hub.
It was a good time to be covering the industry with the mouthwatering prospect of an epic PTP versus port of Singapore battle.
That all fizzled out and a decade later it is Singapore that has firmly established itself as the region’s hub port, not just in containers but also in all manner of cargo and maritime services.
PTP, on the other hand, is meandering along and never quite managing to regain the momentum it captured with the Maersk and Evergreen coups. Port Klang remains the country’s leading container port with a market share of 48 percent, against PTP’s 35 percent.
The global financial crisis never helped. Malaysia was hit as hard as any other developing country and this impacted its exports. Transshipment in Asia slowed, and this did not help.
By the end of 2009, PTP had handled 6.6 million TEUs, up 7.5 percent on 2008. Not bad, except when the port opened, executives were making bold statements of how it would be handling 10 million boxes before the end of the decade.
Then last month, a resuscitated plan for PTP to take over the container handling of Johor Port, situated 70-odd kilometers away, was again scrapped. The plan was for Johor Port to handle only bulk traffic.
It was an unpopular plan when first hatched in 2006 after MMC Corp, which owns 70 of PTP, bought Johor Port, and it is an unpopular plan now. Manufacturers in Johor resisted, citing increased transportation costs of trucking boxes to PTP.
Unpopular or not, a good idea has been cast aside. PTP’s interest in absorbing Johor’s container traffic was to achieve balance. Ninety-five percent of its throughput is transshipment containers, which boost handling figures but do little for increasing revenue.
If the Tanjung Pelepas CEO’s plans to quadruple its throughput in the next 20 years are to be realised, there is an urgent need for the port to rapidly increase its share of hinterland cargo and taking over the Johor boxes would have been a good start.