Mr Saut Hutauruk
Executive Director (Trade)
Samudera Shipping Line Ltd

Year 2001 had been a tumultuous year for the global economy in general and the container shipping industry in particular. The slowdown in the US economy had a severe impact to Asian cargo flow, which was exacerbated by the sluggish economy of Japan and Europe.

This was further aggravated by the September 11 incident. The slow down in cargo volume was accompanied by a significant capacity build up resulting from the fresh deliveries of mega carriers. This caused freight rates to nosedive resulting in severe erosion of profit for all players across the board.

Against this backdrop, Samudera did reasonably well in terms of volume. This year's total lifting is expected to be approximately at a similar level as that of last year. This year, as in past years, the majority of our annual volume passed through PSA. The volume achievement was possible due to more market penetration in areas such as Middle East, Indian Subcontinent and China. During this year, Samudera established its own entity in Dubai, signaling its commitment to serve and develop the Gulf market.

Samudera, along with other regional feeder operators, plays a unique and important role in the global container shipping. Considerations of economy of scale is pushing the industry towards the deployment of bigger vessels, which implies more hub-to-hub service, not calling at too many ports and faster turnaround at the hub ports. While the Main Line Operators are playing this role, feeder operators are complementing this with efficient connections between the outlying spoke ports and the hub port, thus offering frequency of service to the cargo owners. In this context, the relationship between successful hub ports such as PSA and feeder operators such as Samudera can be seen as a symbiotic one.

Looking ahead for Year 2002, it is believed that the growth in cargo volume will not be significant enough to absorb the capacity build up, and consequently the freight rates are expected to remain depressed. Hence, cost efficiency will be the key word. Cost leadership will influence the survivability of the players during the anticipated difficult times ahead. Samudera hopes and believes that, PSA, as a premier and extremely successful hub port, will play an engaged role in such efforts in the industry.