Ocean shipping forecast: 120 M TEUs by 2011

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Ocean carriers are expected to handle around 120 million twenty-foot equivalent units (TEU) by 2011 from the present volume of 74 million TEUs, according to APL Philippines Regional Sales director Edgar Milla during the recently concluded PortCalls Cargo Economics Conference at the Hyatt Regency Manila.

He said Asia is expected to gobble up half of global containerized exports in the next ten years, adding this would mean more opportunities as well greater competition for ocean carriers.

“The rising cost of labor in the so-called developing nations has led to a migration of sourcing and production to lower cost and increasingly high-quality regions, primarily in Asia,” he noted.

This has transformed the dynamics of world trade as indicated by the robust growth in container volumes from Asia to the US and to Europe over the past few years, he added.

Milla also sees an increase in capacity building by 2006. “Come 2006, newbuildings including the ultra-large container ships are scheduled to enter the global market. This will ease the immediate capacity problems, but forecast growth especially from China means that new capacity will be absorbed quickly,” he said.

As a result, ports and terminals and other port infrastructure will have to be upgraded. This will also make the ocean carriers’ job far more complex, he said.

“Proximity to demand locations, deeper draft, new equipment, low costs and hinterland connectivity are just some of the increasingly important factors for ocean carriers when planning their networks,” he pointed out.

Meanwhile, Milla said while Philippine exports remain robust, there is the need to re-evaluate strategies for competiveness – both in traditional and new industries.

In terms of foreign investments, he said, the Philippines remains a viable alternative to China.

“According to the Economist Intelligence Unit, foreign investment is set to rebound to more than $2 billion over the next few years,” he noted.