An US$8.0bn investment in the port of Singapore will enable the facility to remain competitive and hold on to its transhipment role in the medium to long term. The development plan is good news for the port as it faces stiff competition from Shanghai, which overtook it as the world's number-one container port in 2010.
The world's busiest transhipment hub, Singapore has announced that it will invest US$8.0bn to double its container port capacity. The government of Singapore plans for some of the new berths at the site in Tuas to be operational by 2022. Once the work is completed the port will be able to handle 65mn twenty-foot equivalent units (TEUs) each year.
The government's investment comes at a time when its port has been struggling to fight off competition from rapidly growing regional neighbours. China's port of Shanghai overtook Singapore to become the world's busiest container handling facility in 2010.
|Singapore Playing Catch-up Since 2010|
|Ports Of Singapore and Shanghai Container Throughput, 2008-2017 (TEUs)|
In 2010 Shanghai and Singapore handled 29.1mn TEUs and 28.4mn TEUs, respectively, and we expect this trend to continue in the short and medium term. We project that Shanghai will retain its lead over Singapore in 2013, with the ports handling 33.3mn TEUs and 32mn TEUs, respectively. Over our medium-term outlook, we expect Shanghai to still be handling more container volumes than Singapore by 2018, reaching 38.1mn TEUs and 37mn TEUs, respectively. We believe that the Singaporean government's investment in developing its port will be a major boost to the city-state's maritime sector. The port investment will mean developing a deep-sea port that will be able to cater for mega vessels; the trend within container shipping has become 'bigger is better', and with a deep-sea facility Singapore will be able to keep pace.