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Best of times, worst of times: Making the intra-Asia trade all it can be
What Charles Dickens, author of the Tale of Two Cities, said of the French Revolutionary period, that it was the best of times and the worst of times, can easily be said of the volatile state of the intra-Asia shipping market today.
The market is growing and its prospects are promising, Rapid urbanisation is occurring throughout the ASEAN region, which inevitably leads to greater prosperity and greater demand for what the region produces while at the same time creating a virtuous circle of turning those local producers into consumers of foreign exports.
And on the cusp of an economic take off of its own is India, now ranked No 2 behind China among global emerging economies with overall cargo traffic at India's ports expected to increase 67 per cent to 1.75 billion tonnes this year from the 1.05 billion tonnes achieved in 2015.
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India's west coast dilemma: Betting on gateway Cochin or transshipment port Vizhinjam
Ever since it was conceived 25 years ago, Vizhinjam port has been dogged by several controversies, says Jose Paul, former chairman of Goa's Mormugao Port Trust, 1,324 kilometres to the north but only 780 kilometres north of its rival Cochin.
"The latest in the series of troubles seems to have arisen from the observations made by the Comptroller and Auditor General (CAG) on issues in the concession agreement entered by Kerala state government with Adani Ports," said Mr Paul, writing in The Hindu daily of Chennai.
"Based on the nature of the cargo handled, ports are classified into two: gateway ports and transshipment ports. At a transshipment port transfer of cargo takes place from a mother ship to a daughter ship. A gateway port depends largely on its export/import cargo originating from or destined to its hinterland," he said.
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Intra-Asia: Getting a grip on the world's biggest but least remunerative container tradeAfter nine years as CEO of MCC Transport, Maersk's Singapore-based intra-Asia unit, departing Tom Wickmann can look back on the biggest, most complex and least remunerative trade major league shipping has to offer.
"It's a charity," he says. "We were sailing the ships for free on many corridors. There is no contribution left to pay for the ships after paying for the variable costs.
"The freight rate only barely covers costs of moving the container onto the ship and off the ship again," said Mr Wickmann, who left Maersk last month after 27 years service.
"One of the scary parts about this is that the cost picture is as low as it has ever been. Chartering costs have never been lower and although the oil price has jumped a little, it is still very low from what we saw three, four years ago.
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Indonesia's challenge and the challenge of Indonesia
Textile dealers have always said Indonesia's shipping system slows growth of imports and exports alike, from incoming raw materials to outgoing finished products.
But with Jakarta's plans to make the world's fourth most populous country, with its 261 million people, a key player in tomorrow's intra-Asia trade, there are many ambitious plans afoot. A vital spinoff is trimming Indonesia's sky-high transport costs, and in the process, adding value to its exports as well as playing a central role in regional and global e-commerce, which in turns means vastly increasing re-export volumes.
But today, Indonesia still ranks 63rd out of 160 countries on last year's World Bank's Logistics Performance Index, measuring ease of trade, transit times, customs clearance and state of infrastructure.
Costs of shipping goods across the country stands at 27 per cent of GDP, according to a 2013 World Bank study compared with 13 per cent in Malaysia and eight per cent for Singapore.
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Intra Asia Trade Specialists |
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