Carriers look for stability in PH ports this year – MCC exec

0
478
Manila South Harbor
Manila South Harbor
Manila South Harbor. Photo courtesy of operator Asian Terminals Inc.

MCC Transport, the intra-Asia arm of Danish shipping giant A.P. Moller-Maersk, hopes operations in the Philippines stabilizes in 2015 following a tumultuous 2014 that was beset by port congestion.

“We are hoping for a more stable 2015 compared to the very turbulent 2014 which was impacted by the severe congestion in Manila,” Glenn McArtney, MCC country manager in the Philippines told PortCalls in a recent email.

“On the volume side, our objective is to follow the growth in the market and not increasing our market share,” McArtney added.

MCC has three weekly calls at the Manila International Container Terminal, one at Manila South Harbor, two at Batangas port, and one at Subic port. In the south, MCC has four services in Davao, one in Cagayan de Oro, and two in General Santos.

Besides international operations, MCC, under MCC Transport Philippines founded in 2007, is also engaged in domestic operations, one for a Manila-Cagayan-Cebu-Manila loop and the other for a Manila-General Santos-Davao-Manila loop.

McArtney said the country’s domestic trade is “very competitive with a number of well-established players offering multiple departures per week from key ports.

“Our business model is slightly different since we operate our domestic service the same way we operate our international services, i.e., with fixed weekly departures. As with the international business, we are looking for stability in the domestic market,” the shipping line executive added.

Asked about the Philippines’ potential to become a logistics hub, McArtney said, “In our opinion, the Philippines is geographically well placed to develop into a major transshipment hub for containers, but it would require very large investments.”

McArtney also pointed out that there are already well-known transshipment hubs like Singapore, Hong Kong, and Tanjung Pelepas in Malaysia.

However, these ports, with the ongoing growth in containerized trade especially in Asia, “will have to further expand to keep up, and this may open up opportunities in places like the Philippines.”

Calls by mega-ships not likely soon

As for bigger vessels calling the Philippines, McArtney said, “There is no fixed minimum number but overall we do not expect that the Philippines will be seeing very large container vessels in the coming years due to the fragmented nature of the shipping business into the Philippines.”

A large part of Philippine volume, the liner executive said, originates from other Asian countries where there are significantly more active lines compared to the Far East-Europe or Transpacific trades.

McArtney noted that the biggest vessel currently calling the country is around 4,000 twenty-foot equivalent units (TEUs) “but they are not fully utilized, and several are deployed here often only because their owners cannot deploy them elsewhere.”

According to MCC chief executive officer Tim Wickmann, a speaker at last month’s 8th Philippine Ports and Shipping Conference and Exhibit, large ships in general make sense if “trade dynamics allows it and if you can fill them up.”

This is why, according to Wickmann, there are “constellations” or partnerships between two or more shipping lines. An example is 2M, the partnership made between giants Maersk Line and MSC to be able to fill their big vessels. However, for intra-Asia, Wickmann said “the drivers of our trade here are not supporting big vessels.”

Panamax ships are already big vessels for intra-Asia, Wickmann noted. He said MCC tried operating two Panamax vessels with Japanese carrier NYK, but after a year went back to smaller vessels.

Wickmann said bigger vessels in intra-Asia “don’t make sense.”

“You lose flexibility. You lose the chance of double dipping,” Wickmann said, adding that when using a big ship, one tends to focus on filling one vessel for a week than offering three or four services per week.

He said ships in the class of 14,000 TEUs to 15,000 TEUs are “much better to use than those intra-Asia Panamax.”

During the Philippine Ports conference, a participant requested carriers to expedite their processing of documents. Wickmann admitted that the shipping industry is one of the most cumbersome when it comes to documentation. He noted though there are times when “everyone wants to have their documents exactly at the same time and therefore there will be some delays.”

“But we’re working very hard on it,” Wickmann continued.

MCC will be putting up an office in Batangas so consignees using the Southern Luzon port will not need to do their documentation in Manila.

However, Wickmann said his view is that “shipping needs to move to a completely online environment.”

He said this was not impossible, and that if the airline industry could do it, then “shipping lines can do it.” – Roumina Pablo