The Battle of the Asian Transshipment Hubs: Psa Vs Ptp (C)

Abstract

Competition had arrived in the Southeast Asia ports industry and was not going to disappear. Group Chairman Dr. Yeo Ning Hong and his executive team had set the ambitious goal for the state-owned Port of Singapore Authority (PSA) upon its incorporation in 1997 to earn status as the Worlds Port of Call. PSA operated the Port of Singapore, which was the dominant transshipment hub in Southeast Asia. The Port of Singapore had long been among the worlds busiest ports and was a model of efficiency and operational excellence within the industry. But the events of the first few years of the millennium proved a challenge to PSAs competitive mettle. By the end of 2001, PSA had lost two key customers to an emergent competitor, the upstart Port of Tanjung Pelepas (PTP) in neighboring Malaysia. In 2002, Chinese shipper COSCO Pacific was considering a shift to PTP. And by 2003, for the first time in 20 years, PSA laid off staff, and both PSA and government officials were in overdrive trying to explain the reasons behind the layoffs. This three-case series explores competitive strategies in a mature industry within the context of Asia Pacific.