• Thu
  • Jul 31, 2014
  • Updated: 12:48pm

Survey forecasts strong growth in short-sea trade

PUBLISHED : Wednesday, 17 September, 1997, 12:00am
UPDATED : Wednesday, 17 September, 1997, 12:00am

Asia's short-sea, intra-regional traffic will continue to expand dramatically over the next five to 10 years.


Asia has been the fastest-growing area for short-sea traffic since 1985, according to a recent study by London Drewry Shipping Consultants.


Overall the Asia region has experienced average growth levels of 16.7 per cent a year since 1985, when it accounted for 3.2 million teu (20 ft equivalent units) of the 8.2 million teu of cargo trans-shipped globally.


By 1996 it had increased to 18.9 million teu a year, more than half of the world total of 35.5 million teu.


'In Asia, the hierarchy of economies is gradually giving rise to massive intra-regional trade as manufacturing activity seeks out low-wage countries, underpinned by the rapid growth in tiger economies and the awakening giant of China,' the report said.


Drewry forecasts global trans-shipment activity will more than double to 70 million teu of port handling moves by 2005.


On these trends, Asian ports will account for more than half of this increase.


'Burgeoning hub-port requirements will result in the need for the equivalent of another Singapore every three years [up to 2005] just to cope with the forecast growth in trans-shipment and related feeder trade, let alone intra-regional trade growth,' the Drewry study said.


Drewry said that of the two markets, feeder trade growth in almost all cases was expected to be more buoyant than intra-regional trade.


The combined size of world feeder markets is expected to overtake the intra-regional markets by 2005.


The dramatic annual growth of trans-shipment cargo traffic outside Asia - 19.4 per cent in the Middle East and India, 10.8 per cent in Europe and 10.4 per cent elsewhere in 1996 - has caused tremendous opportunities for port operators.


Hutchison Whampoa and P&O Ports, the latter largely operating out of Australia, are investing in such diverse places as India, Thailand and the Caribbean.


Drewry predicted the development of new hub ports such as Aden and Salalah in the Middle East would threaten hubs of the Arabian Gulf.


'The east coast of South America is another area where trans-shipment and feeder activity is set to grow very rapidly, once the costs of cargo handling in Brazilian ports decline to international levels,' Drewry said.


But the short-sea trade is intensely competitive, despite this huge growth.


Both Asia and Europe are experiencing downward pressure on freight rates.


European operators also face strong competition from the completion of a tunnel link between continental Europe and Sweden which will undoubtedly affect shipping operations and freight rates in the Baltic.


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