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Company SpecificsFounded: 1819, with the arrival of Sir Stamford Raffles
Headquarters: 460 Alexandra Road, PSA Building, Singapore 119963
Parent Company: Temasek Holdings
• Handles one-fifth of the world’s total container transshipment throughput, amounting to 27.1 million twenty-foot equivalent units (TEUs) of containers in 2007
• Four container terminals and two multipurpose terminals that link shippers to a network of 200 shipping lines, with connections to 600 ports in 123 countries.
• One of the largest refrigerated container (reefer) ports with over 5,000 reefer points, handling more than a million reefers in 2007
HostMs. Stella Jiang, Senior Management Associate
Critical to the economy
The port and its efficient operation are critical to Singapore’s economy because the island city-state lacks land and natural resources. Essential goods and resources for domestic consumption must be routinely brought in through the port. However, the port serves primarily as a transshipment hub and temporary storage area for goods bound for other destinations. The port operations generated nearly US$3B in revenue in 2007, with 45% accounted for as net income.
To remain competitive, PSA chooses to innovate through automation and the use of intelligence systems. Proprietary software from ILOG and other partners help solve complex “scheduling, sequencing, timetabling, routing and dispatching problems with large numbers of irregular constraints.” Security is also largely automated. PSA Singapore makes use of automated information to identify and screen high-risk containers, as well as anti-intrusion sensors, satellite tracking, RFID technologies and networked software. Remaining competitive also requires heavy capital investments in port infrastructure expansions and upgrades. Large-scale land reclamation projects are currently underway to expand the port facilities.
The financial success of any port depends largely on the number of businesses using the port as part of their supply network, which in turn depends on the number of vessels and shipping lines calling at the port. Shipping lines tend to choose ports based on a number of factors, including cost, service level and connectivity to other ports.
Alternative ports in the region bring competitive pressure to PSA to lower customer service fees, likely a welcome relief to shipping lines faced with a recent sustained rise in fuel costs. Malaysia, for example, offers competitive services and continues to pursue rapid port expansion. With port expansion come economies of scale, placing Malaysia port operators on a potentially equal footing with PSA Singapore in the longer term. Furthermore, land may become a constraint for PSA. There are communities within the immediate vicinity of the port, and on-going land reclamation (involving the creation of new land) may have significant social and political consequences. Limits on land availability and use, and the rise of regional competitors could be significant factors for PSA Singapore executives to consider as they craft their long-term strategic goals.
Posted by: R. Stratulate
Our host used a model of the PSA facility to preview our tour path.
The number of ships in the harbor was astounding.
Containers and handling equipment fill all areas of the port facilities.
Professors Toppel and Tsay enjoyed the view of Singapore.