Tension as Maersk dumps Taiwan

A Danish giant's decision to pull out of Kaohsiung is seen as a huge blow to the port's future as China gains ground.

The world's largest boxship player has denied it is abandoning its operations in Taiwan in order to concentrate on the growing Chinese market.

Maersk Line told TradeWinds that the decision to pull out of Kaohsiung Port was made as part of a global strategy, which considers each port as a "unique situation".

Tensions have been running high at Kaohsiung since APM Terminals handed over control of piers 76 and 77 to South Korea's Hanjin Pacific at the end of January.

APM had controlled four terminals at the port but will sever its links with Kaohsiung when the leases on its remaining two terminals expire in May.

Stevedores working for China Container Terminals Corp (CCTC) blockaded the port for 10 hours before the Chinese New Year holiday amid concerns over severance pay.

Maersk has distanced itself from the dispute, claiming it to be an internal matter between its contractor - CCTC - and the dock workers.

However, the local media has targeted the boxship giant for its decision to leave Kaohsiung, which has lost its status as one of Asia's leading ports in recent years because of the growing importance of hubs on the Chinese mainland.

Local newspaper The Liberty Times published a picture of the dock workers holding a banner saying "Maersk, Where is Your Conscience?!"

The Central News Agency quoted the head of the stevedores' campaign group as saying: "We have worked for Maersk for many years and never got a pay raise.

"Now Maersk is leaving and does not want to give us severance pay. That is too cruel." Local media also claim that up to 400 jobs would go as part of APM Terminal's decision to pull out of Kaohsiung.

The Liberty Times also linked the decision with APM Terminals' plans to build a new hub at Xiamen, the major port of China's Fujian province.

The port, which is situated on the other side of the Taiwan Strait, will contain four docks.

However, a spokesman for Maersk Asia said: "APM Terminals' decision to pull out of Kaohsiung is not related to our investments in Xiamen or any other port.

"It is part of a strategy where each port is a unique situation. "APM Terminals is currently looking at all the opportunities mindful of our priorities for managing through this crisis.

"We want to emerge from this crisis a strong and well-organised operator able to meet the needs of our clients in the most efficient way. Currently, we are reviewing all our investments and considering our options."

The spokesman also said CCTC is continuing its negotiations with its employees to resolve the dispute.

However, other reports claim that Maersk is involved in discussions with CCTC and that the port authority has stepped in to mediate.

The blockade on 9 February caused some delays at Kaohsiung. However, the bottleneck was relieved by APM Terminals arranging for vessels to unload at terminals operated by Hanjin.

Maersk Line, with 500 vessels, is the world's largest container line. Its decision to leave Taiwan will be seen as a hammerblow to Kaohsiung. It was among the world's top three container ports in the 1980s but the growth of ports on China's mainland has seen it slip down the league tables.

It has been overtaken by Qingdao and Shanghai in recent years, pushing it to number seven in the world in 2007 and out of the top 10 in 2008.

The Chinese-language United Daily News reports that seven of the world's top-10 busiest container ports in 2008 were Chinese. These were Shanghai, Hong Kong, Shenzhen, Guangzhou, Ningbo, Zhoushan and Qingdao, while the others were Singapore, Pusan and Dubai.

In the past three years, Kaohsiung's container volume has declined from 10.3 million TEUs in 2007 to 9.7 million TEUs in 2008 and 8.5 million TEUs in 2009.

The port bureau said recently: "Faced with increasing choices and the growth of the Chinese economy, as well as the impact from port growth in neighbouring countries, some shippers ship goods directly to the US and Europe, bypassing Kaohsiung Port."

Source: Cargo News Asia