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Singapore set to get box traffic boost from CMA CGM

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CMA CGM vessels at CPLT Phase 2 at Pasir Panjang Terminals. More than two-thirds of its 28 services that will call on Singapore every week from April 1 will be diverted from Port Klang.

Singapore

CMA CGM, the world's third-largest box carrier, has doubled its operating capacity in Singapore to four million TEUs (20-foot equivalent units) with the launch of phase two of CMA CGM PSA Lion Terminal (CPLT) on Monday.

Singapore stands to gain more container traffic at the expense of Port Klang from April when the Ocean Alliance, of which CMA CGM is a member, takes effect.

The launch event on Monday was officiated by French President Francois Hollande and Singapore Coordinating Minister for Infrastructure and Minister for Transport Khaw Boon Wan.

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CPLT is a joint venture between CMA CGM and PSA Singapore Terminals. It now boasts four berths with four million TEUs in total capacity, up from two million TEUs previously. The venture, which started operations in July 2016, has achieved gross berth productivity of over 160 moves per hour for mega vessels since the beginning of 2017.

This compared favourably to industry averages given that a high-case volume for a small ship is 80 moves while a large ship can go up to 200, according to Ocean Shipping Consultants director Jason Chiang.

PSA International group chief executive Tan Chong Meng said: "CPLT has handled over 600 vessels to date, which works out to more than three ships a day on average."

He described the terminal's performance as "encouragingly consistent . . . at high levels, relative to industry benchmarks".

He also noted the launch of the second phase of the venture as "timely in light of the liner alliance changes next month when the Ocean Alliance, which CMA CGM is a part of, goes full steam ahead".

Jean-Yves Duval, CMA CGM senior vice-president Asia, said that, ahead of Ocean Alliance kicking in from April 1, the French shipping company has lined up 28 services that will call at Singapore every week.

Mr Duval told BT: "More than two thirds of the 28 services were diverted from Port Klang to Singapore."

This is a significant boost to Singapore as Mr Duval explained that up to the launch of CPLT phase two, most transhipment volumes for CMA CGM had gone to Port Klang.

CMA CGM's target is to hit four million TEUs in total container handling volume at CPLT. Going by what was suggested by Mr Duval, most of these will be for transhipment as the ultimate goal is also for Singapore to be a transhipment hub for CMA CGM's container volumes in South-east Asia.

Mr Duval said that Singapore differs from Shanghai, in that transhipment even today is still a small part of the annual container volume handled by China's prominent port-city.

In contrast, transhipment accounted for 85 per cent of Singapore port's container throughput totalling 30.59 million TEUs in 2016.

Singapore has yet more to gain from April when Ocean Alliance comes into force. Alphaliner consultant HJ Tan said that Singapore's gains will come "mainly at Port Klang's expense as the number of weekly calls at the Malaysian port will fall from 14 to six".

"The shifts to Singapore are mainly due to CMA CGM and Cosco's decision to shift part of their regional transhipment operations from Westports (Port Klang) to PSA," Mr Tan explained.

China Cosco Shipping, Evergreen Line and Orient Overseas Container Line are the other members of Ocean Alliance.

Mr Duval also concurred that PSA stands to gain through "cooperation with CMA CGM and Ocean Alliance". But the French carrier is also out to tap efficiency gains from operating out of Singapore instead of Malaysia, which will be key in sustaining margins in a slower market.

Meanwhile, CMA CGM has transferred its regional office from Hong Kong to Singapore. Mr Duval said that the move was mainly motivated by potential synergies between CMA CGM and APL from April when the "two brands" will operate on the same Ocean Alliance services.

But the transfer of the regional office also coincided with expansion in some South-east Asian economies. Mr Duval said that container volumes in the region are expected to grow 5-7 per cent, much faster than the 3-5 per cent projected growth for volumes in China.

Last June, CMA CGM completed the acquisition of Neptune Orient Lines and its flagship APL brand.

Mr Duval said that APL had retained 100 per cent of its previous customers since the time of its acquisition. In six months, APL has launched 24 new maritime services. The NOL flagship brand also increased its fourth-quarter transported volumes by 5 per cent.

Singapore now hosts CMA CGM's third fleet centre outside its Marseille headquarters in France and regional office in Miami, US. The centre leverages navigation assistance tools and technologies to anticipate and mitigate any risks to the operations of the group's over 500-strong fleet.

Mr Duval said that CMA CGM expected to launch by mid-May a new training centre in Singapore. In October, Rodolphe Saade, who is now CMA CGM group chief executive, explained that the objective behind setting up the training centre was to identify staff with high potential in larger Asia to be trained in Singapore to become managers, directors and future leaders of CMA CGM's shore-based operations.

CMA CGM has over 2,800 employees in Asia, of which about 1,000 are based in Singapore.

The French shipping line ranks No 3 in the world after Maersk Line and Mediterranean Shipping Co.

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