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Yangshan carrot-and-stick approach pays off
POSTED: 4:41 p.m. EDT, September 14,2007

Shanghai, the world¨s second busiest container port handled 2.3 million TEUs in August and 17.1 million TEUs in the first eight months, up 17.8 percent and 22.4 percent respectively for the same periods last year.

The momentum is set to continue as liner operators anticipate the opening of the four-berth, third phase at Yangshan, which is expected to be up and running by the end of this year.

The figures and the positive response have given the port operator enough confidence to grant more freedom of choice to its customers.

When the first phase of Yangshan opened in 2005, the port authority forced carriers to move all Asia-Europe services from Waigaoqiao to Yangshan, which caused resentment among shipping lines and shippers. The authority further irritated users last October when it told Asia-South America services to transfer to Yangshan.

Taking a carrot-and-stick approach, the port operator also increased container handling charges at Waigaoqiao by about 20 percent, creating a price advantage for Yangshan port. It also subsidised moving costs for shipping lines shifting to Yangshan.

These efforts have brought results, as the first and second phase of Yangshan terminals are almost full, with more than 40 services using the facilities every week.

Some shipping lines, including French liner CMA CGM, have voluntarily moved services outside the Asia-Europe and Asia-South America trades to Yangshan. CMA CGM said most of its services calling at Shanghai now berth at Yangshan.

From: cargonewsasia
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