Transshipment v.s. Direct shipment : evaluating the chances of success for Tuas Mega Port

• Main Author: Lee, Cheng Chong
• Other Authors: -
• Format: Final Year Project
• Language: English
• Published: Nanyang Technological University 2021
• Subjects: Engineering::Maritime studies::Maritime management and business
• Online Access: https://hdl.handle.net/10356/150334
• Institution: Nanyang Technological University

Transshipment is a strategy utilized by container shipping companies to efficiently transport cargo from one country to another without having to develop direct services to these ports. This helps improve cost efficiency in operations, allowing companies to maintain profit despite being in an industry that is running on very tight margins. Various developments such as transshipment hubs and mega-ships were built to capitalize on the cost savings associated with this strategy. The Port of Singapore is one successful case showcasing the advantages of transshipment. However, in the face of new developments in the industry, it is indeterminate as to whether transshipment will remain a viable strategy in the future. Inherently, Singapore is a country that is heavily reliant on transshipment as its core strategy for business. The upcoming Tuas Mega Port development, scheduled for completion in 2040, is a hefty capital investment and is expected to significantly increase Singapore’s competitiveness in the transshipment scene. With little import and export volume, transshipment is the only way we can compete with other ports in the region. It is thus important to investigate the relevance of this strategy and any upcoming developments that may render transshipment obsolete. This paper would thus assess the viability of transshipment as a strategy used in the shipping industry in the future, with a specific focus on liner companies and whether transshipment will continue to be the best way for them to maintain their competitiveness and improve their profit margins. Interviews with various key stakeholders in the maritime industry were conducted to gather insights and to provide a holistic overview of the current transshipment situation. This was further backed up by analysis of current literature to determine the outlook for transshipment in the coming years, and whether the Tuas Mega Port development can be successful in increasing Singapore’s share of the transshipment pie.