Group President and CEO of PSA Corporation Ltd., Ng Chee Keong

Courtesy PSA Corporation Ltd.

With over 95 percent of the world’s cargo moving across oceans each day, the speed and efficiency of transshipment ports to receive, handle and redistribute massive numbers of cargo containers is critical for increased international trade.

Singapore has become the world’s largest container transshipment hub (Hong Kong being the biggest container port overall). Service, efficiency – and a strategic geographic location – have helped the Port of Singapore to secure more than 20 percent of the world’s total transshipment business.

The operator of the Port of Singapore is a company called PSA Corporation, today the largest container terminal operator in a single location and a leading provider of integrated port and logistics services in the world.

In 2001, PSA handled 19.13 million Twenty-foot Equivalent Units (TEUs; 1 TEU is equal to a container measuring 8 x 8.5 x 20 feet) of containers worldwide, including 15.52 million TEUs in Singapore. PSA is projecting it will handle 17 million TEUs in its Singapore operations this year. Globally, the company and its 13 overseas port projects handle the equivalent of one out of every ten containers shipped worldwide or 25 million TEUs per annum.

Handling such vast numbers of containers fast may be the name of the game but recent events have also raised concerns about cargo security. The terrorist attacks in New York and Washington have led to calls to improve global supply chain security at ports such as in Singapore. Government and industry executives have come together to form an organization called the Strategic Council for Security Technology, chaired by General John Coburn, formerly the commanding general of the U.S. Army Material Command, to review technical options to the issue of supply chain security.

“We have always been concerned about security and want to make sure such security concerns are being addressed,” says Ng Chee Keong, Group President and CEO of PSA Corporation Limited, who is a founding member of the Strategic Council. “Otherwise, the consequences can be enormous.”

Ng believes the U.S.-Singapore Free Trade Agreement will be good for his transshipment business. “Any initiative that encourages trade will have a positive effect,” he says.

But, he notes, while container trade growth in Southeast Asia has been growing at six to seven percent per year, trade from China has been growing 30-50 percent per year. The FTA is a good way, he says, to counter the rapid expansion of Chinese trade in the region.

PSA Corporation, the successor to the Port of Singapore Authority, was formed in 1964 as a governmental statutory board. In order to stay ahead in the increasingly competitive port industry, the company was corporatized in 1997 to become PSA Corporation.

Port of Singapore, the busiest trans-shipment port in the world by tonnage, aims to be the most secure as well.

Courtesy PSA Corporation Ltd.

Cargo handling at the new Pasir Panjang Terminal is now computerized.

Photo Paul Douglass

Since then, PSA’s focus has been on improving port management and finding ever more efficient ways of handling cargo containers. Another focus has been providing service to its customers.

Mr. Ng says the company prides itself on its professionalism and its ability to “unitize the box” – seeking to cluster related services ranging from logistics software to security control. “This helps us stay ahead of the competition,” he says.

With a workforce of 6,000, PSA operates a kind of global cargo mailroom. More than 40,000 TEU’s from an average of 60 container ships a day are loaded and offloaded at Singapore. A ship that enters the Port of Singapore that offloads cargo destined for, say, Japan, Indonesia and the Philippines may also take on other cargo bound for China, India or Europe. Each cargo container must be identified and routed to its next transport link for the trip to its ultimate destination.

PSA has become a leader in developing and implementing technology to improve port efficiency. In the hi-tech department, PSA developed PORTNET®, a port community system that allows shipping lines to secure needed berths and marine services quickly and easily via the internet. Another key proprietary technology developed by PSA is called CITOS, or Computer Integrated Terminal Operations System. CITOS plans and directs every activity performed at the port terminal and relays instructions on computer screens to truck drivers on the docks about where and when to move cargo.

Much of the cargo handling at its new Pasir Panjang Terminal is now done by remote control. Human operators use video monitors and joy sticks to guide distant dock cranes to pick up a particular container. But once the human operator performs the initial task of securing the container to the crane, the PSA computer takes over from there to move the container to the desired location within the yard.

PSA has major expansion plans. The first phase of Pasir Panjang Terminal added six new berths to the port’s berth capacity of 31 in 2000. But rather than merely adding berths to serve more ships, the company is aiming to raise the handling capacity of each berth. Mr. Ng says the company can handle between 500-600,000 TEU’s per berth now and that they are targeting 750,000 TEU’s per berth per year and more in the near term.

PSA’s port management technology has proven so successful that it is now exporting its systems to ports overseas. PORTNET®‚ is being installed at ports in China, Italy, Seattle and South Africa while CITOS has been exported to ports in China and Yemen, among others.

“The best feedback is usage,” says Mr. Ng. PORTNET® boasts of an average of 70 million transactions by its users every year.

Despite its operational successes, however, PSA Corp has been under pressure in recent years from the neighboring rival ports, offering deep discounts.

But ships hubbing at PSA have an unrivaled choice of ships and port connections, thanks to the dense network of common feeder ships plying between Singapore and the numerous ports spread throughout the region’s archipelago.

Today, as “The World's Port of Call,” PSA provides every shipper through Singapore a choice of 250 shipping lines with connections to 600 ports in 123 countries. This includes daily sailings to every major port in the world.

Singapore’s strong social cohesion and greater operating efficiencies also mean that shipping lines and shippers won’t have to worry that their cargo will be held up by unexpected labor strikes or other costly disruptions. Historically, union-management relations at the Port of Singapore have been excellent. This point – operational reliability – may be regarded by shippers as a major reason for choosing the Port of Singapore and PSA Corp over other ports in Asia, even when unit labor costs may be marginally higher.

PSA’s 30-year history of container operations and its reputation for innovation and responsiveness have not gone unnoticed. In fact, PSA has become so famous for its service that in September 2002 PSA Corporation was formally recognized - along side such established brand names as Citibank, Visa and Energizer - as a global premium brand. At a presentation ceremony, the London-based Superbrands organization recognized PSA Corporation as a global superbrand following a selection criteria that includes market dominance, longevity, goodwill, customer loyalty and overall market acceptance.

PSA’s global brand recognition is not surprising. Its state-of-the-art logistical efficiency has won it numerous international awards, including being voted Best Container Terminal Operator in Asia for 13 straight years by The Asian Freight Industry Awards (AFIA).

Building on its success at home, PSA is actively expanding its operations overseas. PSA participates in 13 port development projects in eight countries, including Belgium, Brunei, China, India, Italy, Korea, Portugal and Yemen.

For further information about PSA Corporation, see www.psa.com.sg.