Asia trade growth threatened by poor port infrastructure

Insufficient port capacity and productivity are looming large as restraints on trade growth, with Asia likely to suffer the most if delays in upgrading infrastructure threaten the sustainability of thriving intra-regional trade.

For many working in the logistics industry, last year will be remembered as one of gridlock on the docks, with a number of ports around the world, including Hong Kong, Shanghai, Qingdao, Manila, Rotterdam and those on the US west coast, suffering from congestion.

Tim Wickmann, the chief executive of MCC Transport, the intra-Asia container shipping arm of AP Moller-Maersk Group, was among those who dealt with delayed shipments on a daily basis. "In my 25 years' experience in shipping, 2014 was the worst I've seen in terminal congestion in Asia," he said. "Congestion in Manila and Hong Kong was a huge problem for us."

Wickmann estimated trade growth would create three million extra handling moves for Asian terminals.

"However, we have a situation where many ports in Asia are close to their maximum capacity and are not developing fast enough to cater for this growth," he said. "Inadequate port capacity and related infrastructure is the single biggest challenge to intra-Asia trade growth."

Ports have historically been forced to play catch-up with shipping lines, which are racing to introduce newer and larger vessels to achieve economies of scale. Standard container lifts at global ports saw compound annual growth of 9.8 per cent between 1975 and last year, according to Clarksons, the world's largest shipping data provider.

Still, experts remain divided on who should be held accountable for the logjams.