Shipping still cost-efficient despite high oil prices
By Yang Huiwen
12 June 2008
The Straits Times
SKY-HIGH oil prices are likely to mean that even more world trade will be transported by sea as ships are cost-efficient, a local shipping industry leader says.
Already, over 90 per cent of global trade in tonnage terms is carried by ships.
'This will actually increase with high fuel costs,' Singapore Maritime Foundation chairman Teo Siong Seng, better known as S. S. Teo, told journalists at the launch of Sea Asia 2009, a shipping conference to be held in Singapore in April next year.
Total shipping costs still form only a very small fraction of the total value of the goods, making shipping 'the most efficient way of transporting goods over a distance', said Mr Teo.
'In fact, with the development of bigger container ships and more efficient ports like the Singapore port, it actually helps to bring down the costs of transportation.'
Mr Teo, who is also the managing director of Pacific International Lines, added: 'While all of us are concerned about costs, the shipowners ourselves are coming together to see how we can further optimise the utilisation of the vessels in order to keep the costs low.'
Maritime and Port Authority of Singapore chief executive Tay Lim Heng said: 'We do watch the cost component to make sure that Singapore remains competitive internationally.'
For example, port dues have not been revised for more than 10 years, so as to ensure Singapore remains competitive, he said.
Concessions are also given to encourage container liners to continue to hub and trade in Singapore, he added.
Total shipping costs still form only a very small fraction of the total value of the goods, making shipping 'the most efficient way of transporting goods over a distance', said Mr Teo.
