Ariq Wynalda (29118031)

YP59C

PSA CASE OVERVIEW

East Asia had long played an important role in global trade, container ships were the
primary means of transportation to distribute goods and raw materials there. The bulk of Asian
shipping traffic ran through the stretch of water between Singapore, Malaysia and Indonesia.
Any vessel traveling from East Asia to either Europe or the East Coast of the U.S would have to
pass through these countries water.
Port of Singapore Authority (PSA) provides marine services to the maritime and shipping
community. They include pilotage and port and terminal towage. PSA has established their
image as a premium-service port in South East Asia. PSA Marine owns and operates a fleet of
over 80 vessels in Singapore, Malaysia, Hong Kong, China, India, Australia and Oman. PSA was
the jewel of Singapore’s post-independence economic policy. Formed in 1964 by the ruling
government, PSA’s main mission was to administer the Port of Singapore and provide port
services and facilities. Upon its incorporation in 1997 they set up their ultimate goal to earn
status as the World’s Port of Call. PSA’s annual container-handling volumes at asian ports were
expected to increase from 107 million TEUs in 2001 to 300 million TEUs by 2015.
Located 30 minutes drive away from Port of Singapore lies a big developing port which
was formed in November, 1999, called Port of Tanjung Pelepas of Malaysia (PTP).
Geographically PTP has the same advantage like PSA, both are in an ideal position to capture
transshipment trade volumes in South East Asia. Backed by a huge financing support from Syed
Mokhtar Al-Bukhary, it is expected for PTP to handle an annual capacity of 2.5 million
containers and later in the future can handle about 4 to 5 million containers a year. PTP also have
a generous land bank of 1.953 acres in the southern state of Johor being set aside for port
development. PTP also have good hinterland connectivity throughout malaysia. With low labor
cost, low leases and malaysia’s vast labor pool they penetrate the business with a very cheap
service cost compared to PSA’s Port of Singapore, roughly 30% to 40% cheaper. It is also said
that they have a similar system technology that can match PSA’s current technology (CITOS).
In December, 2000, Maersk who was the largest customer of Port of Singapore shifted all its
transshipment hub operations to PTP. It was the biggest single move in the Asian port industry
and caught PSA executives by surprise. PTP struck gold again in October 2001, when Evergreen
Marine became the second main line shipper to shift its transshipment hub operations from the
Port of Singapore to PTP. After all this, PTP publicly declared its ambitious goal of challenging
the mighty Port of SIngapore to become East Asia’s leading transshipment hub.

Categories Threat Opportunity Concern

Cost PTP has low labor PSA could focus on Its all about how PSA
cost and vast labor improving their taste effectively
pool, hence, they can of “premium” service differentiate their
offer lower service and quality. Be bold premium value to
cost compared to and lead the market. their customers.
PSA.

Technology As of now PTP has a PSA could improve How to be the leading
similar system that their tech better port organizer
can compete with because they have through a cutting
PSA’s current CITOS. the necessary IT edge technology.
skills, experience and
finance.

Geographic PTP’s hinterland is - How to expand TEUs

very ideal for annually quota
transshipments and knowing Singapore’s
the port is still on land serious
developing stage with limitation.
no land limitation.

Categories Seriousness Urgency Impact Analysis Needed

Cost H M H DA - Best solution is to keep focusing

on their premium service value.

Technology H H H PPA - The plan is to be the best at

technology so that PSA can further be
market leader for years to come.

Geographic M L H Situation Appraisal - No effective

solution nor plan found.
Categories Information Expertise Who When

Cost External and Research and Research and 1 to 2 years.

Internal cost Development Development
details, strategic skills and department.
capabilities and FInancing skills.
competitive
advantages.

Technology Latest IT IT skills and IT department. 2 to 4 years.

knowledges and Financing skills.
its cost
projection.

Geographic Infrastructure Six Sigma Black Engineers. 5 to 10 years.

details, Belts, Financing
construction skills and
details and Six Engineering
Sigma skills.
application. And
its cost
projection.