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Monday, September 26, 2016

Westports confident of 11% volume growth

Monday, 26 September 2016
Westports confident of 11% volume growth

PETALING JAYA: Westports Holdings Bhd is optimistic to chart an 11% growth in volume this year despite the challenges and changes that are taking place in the shipping industry, according to its executive chairman Tan Sri G. Gnanalingam.

“We are optimistic to chart double-digit growth this year despite the changes in shipping alliances. South-East Asia shipping still has a lot of room to grow,” said Gnanalingam.

In earlier news reports, Westports has anticipated single-digit growth due to uncertainty in the global economy.

Westports’ container operations handled 4.9 million TEUs for the first half of this year.

Transhipment containers increased to 3.6 million TEUs while the group handled 1.3 million TEUs of gateway containers

Last year, the port operator handled 9.1 million TEUs of containers that reflected an 8% growth year-on-year.

The struggling shipping industry will see some realignments next year as key liners in existing container shipping alliances form new and different alliances next year.

First, Westports’ major main line operator, French liner CMA CGM, could potentially shift some of its shipping traffic from Westports to Singapore following its takeover of Singapore shipper Neptune Orient Lines (NOL) to expand its presence in trans-Pacific routes.

Four of the world’s biggest shipping lines, CMA CGM, COSCO Container Lines, Evergreen Line and Orient Overseas Container Line signed a memorandum of understanding to form a new alliance on April 20.

The recent merger of German carrier Hapag-Lloyd and United Arab Shipping Co in July will also see some changes in their operations and routes.

This month also saw the bankruptcy of Hanjin Shipping Co, South Korea’s largest and the world’s eighth by capacity.

Elaborating on this, Gnanalingam said when he first started 20 years ago, there were about 300 shipping lines globally, but the numbers declined to 200 companies, then 100 and to 35-40 shipping lines now.

“It all started when shipping lines were in the big race to increase their market share, building ships when freight rates were at the peak prior to the global economic downturn in 2009. They assume the volume was going to grow and were more interested in market share than profit.

“But this is nothing new in the shipping industry. The problem now is still oversupply and undercutting. At the end of the day, the stronger will get bigger and the weak will be taken over,” he said.

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