Samoa Wants Regional Hub Port In Apia

Samoa has renewed calls for a regional hub port offering Apia as the most likely venue. The latest offer was made at the Association of Pacific Ports conference in Apia last September.

Samoa's fisheries minister Tuisugaletaua Aveau said a hub port would be the region's most appropriate transportation strategy given its limited resources and budgetary constraints.

"We need to adopt an economy of scale approach in order to minimise our transportation disadvantages," Tuisugaletaua told delegates. "Being small as we are, we need to consider pooling our resources together so that we can trade with the outside world more effectively than we have done in the past. We need to consider our transportation problem collectively and more cooperatively."

A hub makes more economic sense as it would reduce cost and improve transportation and process of cargo time, the minister said. With a total trade in the Pacific totalling US$6 billion in 2001, a hub port would be the way to go.

"Given that investment in a venture such as a hub port involves an enormous financial commitment, political stability should provide the strongest basis for long term security and a great degree of confidence to investors."

Relating his government's push for public reforms and sound economic growth, the minister said Samoa has also invested heavily in telecommunications and ports infrastructure.

"The extension to the Apia wharf was to have been completed in October. This new extension adds another 200 metres to the existing wharf. This extension will allow more and larger ships to call into Apia to load/unload cargo. The Apia port has the added advantage of having a large hinterland for further development for container and cargo storage facilities."

The minister did not mention it, but in stressing political stability he was obviously recognising that Apia's strongest contender for a hub port is Fiji's capital, Suva.

David Aidney, general manager of a leading freight forwarding business of William & Gosling in Fiji, agrees that Suva and its other city port of Lautoka could be strong contenders.

"The regional hub concept is certainly not new and in Fiji we have been harping about Fiji being at the Œhub of the Pacific' for sometime," said Aidney.

Fiji's strength is its geographic location, its good infrastructure and large volumes of imports and exports which help fill up the vessels both ways. Fiji currently has a number of carriers providing services to the region in some form or another. Given time, rationalisation may occur whereby larger vessel operators carrying cargo‹especially from Asia and Europe will prefer to discharge their containers for the other Pacific islands in Fiji to be on-carried by a smaller fixed day service operators." Fiji's problems, Aidney feels are high port charges and low stevedoring rates.

John MacLennan, chief executive of Pacific Forum Line says a regional hub is a good concept and one, which his company has adopted for some time. But he says the question of who should host a regional port is decided largely by multinationals that own shipping lines that service our part of the world. The first deciding factor as to where the hubbing will take place is naturally dictated by the ports serviced by the first carrier. For example, major lines such as Maersk, P & O Nedlloyd, etc, call at the main Australian and New Zealand ports and consequently these are the initial transfer points.

It must be remembered that an importer will receive a through rate from the point of purchase to final destination. Freight rates in general are still very depressed, margins are small and therefore once the first carrier has taken his cut, there is not a lot left for the second carrier who must also cover the cost of returning the first carriers container back to the hub port.

This can also make a third feedering leg totally uneconomical.

PFL which is Pacific based, is currently celebrating its 25th anniversary, our survival has been due to the fact that we have changed with the times and embraced new initiatives such as the hubbing/feedering concept. Ideally, we wish to see the feedering aspect expanded further a field in the Pacific basin. "However, it takes time to develop with the major obstacle being cost. Unless someone is prepared to underwrite losses, it is not going to be commercially viable and to satisfy everyone is difficult."

Another shipping line Tasman Orient Line (TOL) links the Pacific with Asia and has been doing this for 15 years.

Line's chief executive, Ulrich Stelling told Islands Business the hub port concept is not new as his company has been using Suva for such a role for years.

As part of our service framework we have been offering liner shipping services‹in association with NGPL/JSP‹to French Polynesia, Samoa, Tonga and other Pacific Islands destinations for many years via Suva.

"Cargo for East and South East Asia is being shipped on the TOL vessels directly to Suva twice a month and relayed to final destinations by connecting carrier (GBH). For TOL and its associates, hubbing in this region is nothing new as we have been using Suva as a hub port for a long time and we'll continue to promote and develop this activity also in the future."

He said the key would be to make the service as cost effective and efficient in the port of Suva. Like Aidney, Stelling feels productivity needs to improve in a big way.

Productivity has been declining over recent years as development of wharf facilities lag behind the growth in cargo volumes.

"This is an area of operation which we have been actively working on with the port authorities. MPAF (Maritime and Ports Authority of Fiji) and PTL (Ports Terminal Limited) has recognised the need to improve productivity by undertaking to strengthen both Suva and Lautoka wharves to allow direct discharge and the introduction of competition on the wharf."

The Tasman Orient Line executive said developing Suva into a hub would not require extensive and expensive investment given that many vessels like his carry their own onboard cargo gear.

"All our vessels have their own cargo gear and will continue to have their own onboard equipment also in future‹and therefore we do not require any shore equipment to promote Fiji as a hub port. This is a major advantage to the port company as there is no need for a multi-million dollar investment in shore equipment but allows Fiji to promote itself as a hub port unlike others in the Pacific who may have to invest in shore-cranes."

General manager of the Samoa Ports Authority Papalii Ulumalaetea John Ryan declined to answer questions submitted to him on the subject, saying "the line of questions are premature and outside the spirit of the minister's paper."

According to him, the proposal was made in the context of improving port security in line with recommendations from organisations like the International Maritime Organisation.