Northport, Malaysia's top container port, is bracing for growing regional competition amid an expected global slowdown in box traffic as a result of the economic decline in the United States. The port's recent expansion into value-added services is expected to cushion the decline in traffic and the port hopes to still show marginal growth this year.
Northport managing director and chief executive officer Basheer Hassan Abdul Kader told Cargonews Asia that a resurgence is expected in the handling of conventional and bulk cargo with the drive towards higher productivity and greater efficiency.
"We are taking measures to ensure higher optimisation of our resources, especially in efficient use or deployment of equipment and yard management, through new terminal and yard layout designs, greater automation and wider IT application,' he said.
The Port Klang port handled 2.8 million TEUs in 2007, up a mere 5.6 percent from the previous year. Sixty-four per cent of the container traffic was direct imports and exports and the remaining transhipment. Despite the small growth in throughput, the port showed a significant improvement in earnings with a US$198.12 million turnover and $49.37 million profit-before-tax, Basheer said.
"This speaks well of Northport's performance in its efforts to focus on value-added services and logistical integration coupled with the push for higher productivity and greater efficiency," he added.
The port, like other ports in the region, is bracing for a tough 2008. The Malaysian government has forecast a 5.5 to six percent growth in the economy this year. The Malaysian Institute of Economic Research (MIER) has forecast a slower growth of 4.5 per cent, if there is a US recession.
With the expected change for the worse in the economic weather, Northport is stepping up productivity and efficiency at the port.
"One of the advantages we have is we have a strong base in the handling of national cargo," said Basheer. "This offers major global shipping lines the critical mass, or a desired threshold volume, to call at Northport.
"We are also building on this cargo base by fostering cargo consolidation within the free zone which is a critical link to our new approach of fostering greater growth at the port."
Northport has more than a million sq feet of covered space at the Customs-free zone.
"Our strategy," Basheer said, "is to foster trade from neighbouring ports in the region, especially Indonesia, an approach that we have adopted to offer shipping lines a wider cargo base."
Basheer admitted that the container shipping industry is becoming highly competitive, especially in transhipment traffic. "This trend is expected to continue with the maturing of container markets," he said. "So Northport must continually strive for higher productivity and greater efficiency and not just look for higher cargo volume, which has no real marginal value or returns."
Basheer revealed that the dredging of the Northern Approach Channel at Port Klang has been completed, allowing ships with deep draught to navigate safely into the port.
"With a prevailing high tidal range of about 5m, the deepening of the channel to 13.5m will offer a total depth of 18m, which is more than adequate for keel clearance of new generation ships of up to 12,000 TEUs," he said.
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