Mega-alliances a double edged sword for transshipment hubs: Drewry

Mega-alliances a double edged sword for transshipment hubs: Drewry

Mega-alliances a double edged sword for transshipment hubs: Drewry Shipping consultancy Drewry said in a recent report that the growing trend towards mega-alliances could either backfire on or benefit transshipment hubs, which are anxious to cope with the changing tides in the marine industry.

According to the report, hubs in Asia suffered losses, such as Singapore where throughput declined 5% in the first six months of the year, and Hong Kong, where volume decreased 10%.

The clients who utilize the ports, which are ocean carriers, are under pressure to reduce cost of operations and some of their initiatives have propelled the shift towards direct port calls, at the expense of transshipment.

Increased demand and new terminals in emerging markets such as Indonesia, Vietnam and Malaysia have also stoked the move towards direct services.

As a result, the large alliances that are emerging from these market conditions means that transshipment heavy ports are at risk of losing large chunks of their market as business could be gained and lost in larger volumes.

Still, Drewry said the trend could also work for transshipment hubs as the new alliances could also benefit them as they have adequate capacity to accommodate high volume traffic in their ports.