Kaohsiung Harbor Poised for Major Comeback

After years of decline in its global ranking, Kaohsiung Harbor is poised to make a major comeback this year with growth in both freight volume and trade value expected thanks to a number of factors, including the effects of the Economic Cooperation Framework Agreement (ECFA) between Taiwan and China, the inauguration of new docks, and the expansion of the harbor's free trade zone.

For starters, the implementation of ECFA on Jan. 1, 2011 is likely to encourage more enterprises in China to transship their goods through Kaohsiung to take advantage of its favorable geographic location, a boon which will reinforce the effects of the continuing upturn in global shipping.

Moreover, Kaohsiung is likely to become a delivery port of the London Metal Exchange (LME) in the second half this year, a status that will initially add 600,000 metric tons to the harbor's annual transshipment volume, rising to 1 million tons later on.

Thanks to the global economic upturn and the thawing cross-strait relations, Kaohsiung Harbor's container volume grew 7% to 9.15 million TEUs (twenty-foot equivalent units) in 2010, ending two years of decline. This growth rate still lagged behind Singapore and Hong Kong, however, which both scored increases of 10%.

The surge in shipping volume will coincide with the imminent inauguration of two new docks at Kaohsiung's sixth container terminal. The docks are being built by the Yang Ming Marine Transport Corp. and will have a combined annual capacity of 1.5 million TEUs.

Along with the increase in shipping volume, the Kaohsiung Harbor Bureau will step up the expansion of its trade value by intensifying the development of the Kaohsiung Fee Trade Zone, whose trading value is already skyrocketing: up 118% last year, to NT$19 billion (US$633 million at NT$30:US$1). As part of that effort the bureau will establish a logistics park to accommodate logistics operators, and will introduce the entry of green-energy firms into the free trade zone.

In addition, the development of Kaohsiung Harbor will benefit from the establishment of a state-run enterprise to take over the operation of Taiwan's four major harbors, Kaohsiung, Taichung, Keelung, and Hualien, leaving the harbor bureaus to concentrate on administration. The prospective firm, scheduled to begin operating by the end of this year, will bring the greater efficiency and flexibility needed for the further development of Kaohsiung and the three other harbors.

Encouraged by those favorable developments, Kaohsiung Harbor is targeting a shipping volume of more than 10 million TEUs this year. This will help restore Kaohsiung to its once-exalted status among the world's top container ports. Due partly to the massive migration of Taiwanese manufacturers to China and the rapid emergence of Chinese harbors, Kaohsiung saw its global ranking among container harbors slip to 12th place in 2008, down from a high of third place.