While many ports in Asia are struggling with a slowdown in ocean trade due to the global economic crisis, Port of Tanjung Pelepas (PTP) at the southern tip of Johor in Malaysia is still attracting business.
“PTP has weathered stormy conditions outstandingly,“ says Captain Ismail Hashim, PTP’s chief executive. “In the first half of 2009, PTP outperformed the world’s three largest container ports – Singapore, Shanghai and Hong Kong – and next year we looking at double-digit growth.”
Just over a decade ago, PTP did not exist. Now it is one of the world’s busiest container ports, a rapidly growing logistics hub and widely regarded as one of the best ports in the world.
It is the regional home of two of the world’s biggest shipping lines – Maersk and Evergreen Marine Corporation – which shifted their operations to PTP from Singapore. “That competition spurred the Port of Singapore to greater heights of efficiency and now both ports are doing extremely well,” says Manu Bhaskaran, chief executive of independent economic and political analysts, Centennial Asia Advisors.
In the first 10 months of this year, PTP handled 4.9 million TEUs – the container measurement used by the shipping industry – and expects to handle six million TEUs by the end of the year, compared with 5.6 million TEUs in 2008.
PTP’s success is due to its efficiency, cost effectiveness and its location at the confluence of some of the world’s busiest shipping lanes in the Straits of Malacca. It is naturally sheltered, has deep waters and is one of only a handful of ports in the world capable of handling a new generation of ‘mega’ container ships. In addition, PTP has the latest cargo-handling equipment and an advanced IT system. It currently has 12 berths, but Mr Ismail says that the long-term plan is for PTP to build 95 berths and have capacity for 150 million TEUs.
Malaysia has invested more than $1bn in PTP and associated infrastructure such as roads and rail links. PTP has direct rail access to Singapore and southern Thailand and is 40 kilometres from Senai International Airport, which is expected to be the premier logistics hub and the second major airport in the region after Singapore’s Changi by 2025.
PTP is also one of the few ports in the world that is integrated into a free-zone area. With no customs formalities, the movement of goods to the port terminal is faster. It has attracted a growing number of investors, manufacturers and logistics specialists including Flextronics, BMW and Ciba Vision as well as Maersk Logistics, Nagai Nitto and Schenker Logistics. In addition to Maersk and Evergreen, PTP has signed an agreement with French shipping company CMA CGM which will increase traffic through the port. PTP chairman Mohd Sidik Shaik Osman says: “As world trade picks up, our vision is to be the port of choice in south-east Asia.”