Da Chan port takes first shipment

PUBLISHED : Tuesday, 22 July, 2008, 12:00am
UPDATED : Tuesday, 22 July, 2008, 12:00am

After its quay cranes stood idle for most of the past seven months, Da Chan Bay Terminal One, the latest port facility to come on stream in Shenzhen, finally started its first export operations yesterday with a Japanese shipping line.

Da Chan Bay Terminal One, in which Modern Terminals holds 65 per cent, completed the first two of five berths in December.

However, a mainland customs facility was not in place until the end of May, resulting in a major obstacle to attracting shipping lines to call at the port.

'The first five months were very frustrating,' said port chief executive Andrew Miliken. The terminal could handle only empty containers as customs was not available at the port for laden box clearance. After the implementation of customs facilities on-site, Mr Miliken said it could speed up negotiations with potential shippers.

Yesterday, Mitsui OSK Lines agreed to launch a weekly Africa service at the port, deploying seven vessels of an average capacity of 1,600 20-foot equivalent units (teu). In January, Da Chan received its maiden call from a Chile-based shipping company, which stopped at Da Chan in its eastbound service (import service).

Two new berths at Yantian Port, phase three, came on stream in September and October and also have not garnered much business this year. A downturn in shipments to the United States and the slowdown in international trade resulted in negative growth for Yantian Port and halved growth in Shenzhen to 7 per cent in the first half.

But Mr Miliken said he was confident about long-term growth at Shenzhen. 'In every two years, you need a Da Chan [Terminal One] but it takes more than two years to build [a facility like Da Chan],' he said. 'Capacity is not an issue here.' Shenzhen handled 21 million teu last year.

However, Yantian and Shekou Port in Shenzhen are also gearing up their port facilities. Three berths at Da Chan and one berth at Shekou will come on stream by the end of the year. Yantian phase four, with seven berths, is also on the drawing board.

'I predict that Shenzhen will have 10 per cent spare capacity this year and 15 per cent spare capacity in the next,' said Geoffrey Cheng, transport analyst at Daiwa Institute of Research. 'The pressure for a price war among port operators is growing.'

An industry veteran also forecast that overcapacity in the Pearl River Delta, including Guangzhou, would further widen to 30 per cent in the next five years in light of new capacity planned in Nanshan, Zhuhai and Dongguang.

Standing idle

Terminal operations were held up by the lack of a customs facility

Mitsui OSK Lines will launch a weekly Africa service, deploying seven vessels of an average capacity of, in teu: 1,600