Overseas Port Management (S) Pte Ltd

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BKPS Sabang Port Seminar

Singapore Transshipment Hub Success Story

by
MMJ Subramaniam Managing Director, OPM 28th August 2013

Overseas Port Management (S) Pte Ltd

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Overseas Port Management (OPM)

OPMs core business:
Port Management & Consultancy

Management/Project Management
Aden Container Terminal, Yemen. Bandar Abbas CT (#T1), Iran Bandar Abbas CT (#T2), Iran Tripoli Port (Master Plan & Equipment M&R), LIbya Port Sudan (T/S Strategy & Equipment M&R), Sudan

Consultancy
In 14 countries: China, India, Thailand, Philippines, Indonesia, Australia, Aden, Egypt, Ajman, Syria, Jordan, Saudi Arabia, Kenya, Libya, Sudan

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OPM A Spin-Off from Port of Singapore (PSA)

OPM, my company, can be considered in many ways a spinoff from PSA but not in shareholding. Our roots are in the PSA, strengthened by experts from other international terminal operators as well as from shipping & logistics companies. My OPM colleagues & I are thankful for our PSA experience but now we have our own identity and our own journey. OPM manages container terminals of up to 6m TEUs.

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Key Factors for Singapores Success in Containerization in the 70s

Strategic Location Political Will Efficient Labor Support & Productivity Good industrial relations 24-hour, 365-day working Port Supportive Environment

Overseas Port Management (S) Pte Ltd Singapore - Strategic Location

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Overseas Port Management (S) Pte Ltd Strategic Location A Natural Advantage

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Between Europe, ME, India & Far East, US West Coast. Between North and South (Indonesia, Australia & NZ). An natural entrepot center in SEA. Ships must pass Singapore at some point from West to East & North to South and vice versa.

(Sabang also has the same advantages potentially)

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Political Will
Modern container ports first appeared in US and Europe in the late 60s. In 1969, Singapore Govt decided to develop Singapore into a modern container port. Much opposition to the idea at the time, ironically mainly from the port management itself. Govt steadfastness, courage & foresight gave Singapore a first mover advantage in region. Lesson 1: Political Will is the foremost, overriding factor for success

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Disciplined Labor
Singapore labor scene not always what it is today. In the 50s, 60s, militant labor, strikes, work stoppages, slowdowns were common.

Why? Partly a result of poor wages & employment terms & manipulations by politicians for their own ends.
Govt intervened & came up with formula for tripartite consultation between labor, employers & Govt. Policy: fm confrontation to consultation.

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No Retrenchment but Re-training

PSA had more than 11,000 port workers before containerization. Govt ordered a no retrenchment policy in PSA when containerization started in 1972.

PSA was to re-train the workers to equip them with new skills for the container port.
Now PSA work force in Singapore is around 6,000, thru a natural process of attrition. Lesson 2: Disciplined Labor & Good Industrial Relations are critical.
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24-hour,365-day Working Port

PSA worked 2 shifts up to late 60s. A new policy & milestone with start of containerization 3 shifts Result: The port that never sleeps. Rationale no delays to container ships, productivity and growing competition. Lesson 3: Productivity counts

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A Supportive Environment
A container port needs a large pool of well trained and skilled labor. Govt instituted steps to ensure good education and training facilities. Primary, secondary school system, Institute of Technical Education, Polytechnics & Universities. Transparent laws and regulations & good governance in private and public sectors. Commercial infrastructure, e.g. banks, active traders, freight forwarders, etc. Lesson 4: PSA couldnt have done it in isolation. It needed a supportive environment.

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The Outcome
Tanjong Pagar Container Terminal (3 berths) was officially commissioned in early 1972 Handled 1 million TEUs by 1981 this took ten years. In 2012, Singapore handled 31.26 million TEUs. Among the worlds largest refrigerated (reefer) ports handling 1.44 million reefer TEUs in 2012. Voted best Container Terminal (Asia) 23 times

(Asian Freight & Supply Chain Award)

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1972: MV Nihon at Official Opening of Tanjong Pagar Container Terminal

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The Growth Years 1981-1992

26000000 24000000 22000000 20000000 18000000 16000000 14000000 12000000 10000000 8000000 6000000 4000000 2000000 0
23980000

17086900

11850000

TEU

5092900 1554200

14000

191000

865000

1970 1975 1980 1985 1990 1995 2000 2006

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The Growth Years fm 1981 to 1993

It took 10 years for PSA to achieve the first 1m TEUs in container throughput. In the next 10 yrs PSA achieved 8.3m TEU.

PSA became world No.1 container port in 1993 with 9.3m TEU-throughput.
I was fortunate to be operating all the PSA container terminals from 1978-1993 as Chief Traffic Manager.

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PSA Tanjong Pagar Breakbulk Terminal

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PSA Tanjong Pagar CT Today

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PSA Breakbulk Wharves Before Conversion

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PSA Keppel Container Terminal Converted

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Brani Container Terminal

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Vision & Planning

PSA did not rest on its laurels as a hub port. Its Vision: A world class port; a super-hub for the largest container ships, a catch-up port for transshipment business. Means to achieve the end: Planning & Technology Its Planning Focus: man-machine-system. Methodology: have the right type & amount of men & machines, and the right system to make most effective use of the men and machines.
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Information Technology & Systems

Strong emphasis on use of information technology. Fm Manual to Electronic, EDP to EDI, Man-centric to System-centric to drive efficiency and productivity. PSA wrote its own terminal operating system CITOS. Pioneered Portnet a EDI port community system to interface port with ship lines, shippers, fowarders, customs and other stake holders. Automated gate, yard, berthing systems.
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Controlling Operations Remotely

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Resource Allocation System

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Continuous Improvements in Infrastructure & Equipment

In the 70s PSA had one container terminal, 4 berths, 10 container quay cranes. By 1990, 2 terminals, 23 berths & 56 quay. In 2013, 4 terminals, 52 berths & 188 quay cranes. Quick turnaround of vessels at berth achieved through not only high crane productivity but high crane intensity on ships. More berths and equipment enable fast connectivity between mother and feeder vessels.

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Continuous Improvement in Supportive National Infrastructure

PSA did not, and does not, operate in an isolated environment. It exists in the larger national, social and economic environment. Key components in National Infrastructure: Banking, Telecommunications, transparent comprehensive Laws continued to be enhanced. Wage increases were linked to productivity. Govt and PSA adopted policy of life-long training to continuously upgrade skills & acquire new skills.

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Continuing Growth at Home from 2nd Half of 90s to Present

PSA continued to grow in 2nd half 90s to present. It planned for a container handling capacity of over 30m TEUs. Result: a new hi-tech Pasir Panjang Container Terminal.

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Pasir Panjang Container Terminal

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4 Groups of Terminals in PSA

Keppel Tanjong Pagar

Pasir Panjang

Brani

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Conclusion
What Singapore has done, you can do in Sabang, on a progressive basis. Adapt the Singpapore lessons to your own circumstances: Political Will to succeed above all else. Disciplined Labor & Good Industrial Relations. Train and Upgrade Skills continuously. Focus on Productivity. Build up a Supportive National Environment.
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Conclusion
Convert break-bulk cargo to containers, where possible. Have a Vision and Plan. Use Information Technology and Systems to drive efficiency and productivity. Upgrade infrastructure and equipment in relation to demand.

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