Laem Chabang port faces a likely oversupply position once four terminals launch operations this year while demand remains tepid, with only a slight growth in the number of containers passing through the port.

Although the deep-sea port on the Chon Buri coast can handle giant vessels, trading companies are still reluctant to use it since the railway that would facilitate land shipment of goods at lower cost is unfinished.

While freight-handling capacity will surge this year, the port still has no railway links.

Chalermkiat Salakkum, managing director of Laem Chabang Port, said last week that LCMT Co's A0 wharf will be operable in April and Hong Kong-based Hutchison's C0, C1 and C2 piers will go into service between next month and the end of the year.

"The increase in jetties will cause an oversupply situation, compared with the number of vessels and containers at the port. This will also put pressure on wharf operators as competition [for business] steps up," he said.

Last year, about four million containers passed through Laem Chabang. Over the next five years, the facility is expected to handle up to 10 million containers if all the winners of concessions open terminals as expected.

"Major players in the wharf-service business will likely compete fiercely to capture customers, resulting in a loss to some operators," Chalermkiat said.

Customers might also suffer from lower efficiency in servicing, he said.

If the operators provide a lower quality of service, it's up to the Port Authority of Thailand to regulate them, he said.

Laem Chabang is a destination port, carrying out both loading and unloading of vessels. It needs a high volume of arriving and departing ships and containers to operate efficiently.

To compete with deep-sea ports in other countries such as Malaysia and Vietnam, the terminal operators should do whatever is necessary to attract cargo ships to pick up and deliver freight at Laem Chabang, especially those from southern China, Chalermkiat said.

Expansion of port facilities should speed up the laying of double-track railroads connecting other parts of the country to the harbour. When in place, the rail routes will greatly augment the existing transportation modes, mainly trucking. A rail network will boost freight traffic to and from the port and spin off economies of scale.

"We will have to keep operating costs as low as possible while providing fast and quality service. Otherwise, shippers will turn to other ports," Chalermkiat said.

The proposed Pak Bara deep-sea port in the southern province of Satun will poach some types of vessels away from Laem Chabang, he said.

The government should give thorough consideration for the sake of the country's logistics policy as to whether that project is really worth the investment, he added.

Watcharapong Thongrung

The Nation