Ghani Rais Azka

29118007
YP 59 A
Homework 2
Strategic Decision Making and Negotiation (MM5009)

Overview:The Battle of The Asian Transshipment Hubs: PSA Versus PTP

Port of Singapore Authority (PSA) faced a problem that there are two competitors from
Malaysia that can be threats for their business. Those are Port Klang and Port of Tanjing Pelepas
(PTP). Even though their service scale is not as large as PSA, they offer a 30 – 40 % cheaper price
and located in strategic location too. The turning point of PSA when their largest customer, Danish
container giant Maersk Sealand, acquired a 30% stake in Pelabuhan Tanjung Pelepas Sdn. Bhd,
allowing it to operate a dedicated terminal within PTP. The Maersk shift, at almost 2 million TEUs
annually.

Evergreen Marine became the second main line shipper to relocate its transshipment hub
operation from the Port os Singapore to PTP. This shift resulted in the transfer of another 1.2
million TEUs to the fledgling port. This situation is uncomfortable for Port of Singapore because
this shift of the two main customers has an impact of their revenue. The Malaysian tycoon Syed
Mokhtar Al-Bukhary involved in financing PTP as they offer low rates and ownership stake as a
pull factor for Maersk Sealand and Evergreen Marine to shift. Evergreen Marine’s director of
shipping in Singapore, Patrick T.C. Poon said that Evergreen will go where the costs are less. This
take 2 years for PSA to completely realize that PTP has become their rivalry in Southeast Asia.

This situation became a challenge for PSA to maintain their position as the largest port in
Southeast Asia. This appraisal result is lower price and offer an ownership can become pull factor
of the customers to shift. Several possibilitites were discussed, illustrating the complexity of the
decisions that lay ahead. PSA considering to match PTP’s price by cut the port charges by 30-
40%, offer a virtual terminal agreement (VTA), which allowed a shipper to enjoy the benefits of a
dedicated terminal at a multi-user port, such as priority processing status and guaranteed berths
upon arrival, without dedicating an entire terminal for its sole use, make an agreement with PTP
to stabilize price, segment the market, or offer combined port services. Another alternatives would
be to persist with the tried-and-true strategy that had worked so well against Port Klang which is
focusing on internal improvements.
 Ghani Rais Azka
29118007
YP 59 A
Threats Opportunities Concerns Seriousness Urgency Growth Analysis Help Needed
1. PSA need to
1. PORTNET Potential
Competitor 1. Develop cooperate with
and CITOS Opportunity
start to more another institution
enabled the Analysis (More
develop sophisticated to develop the
port to operate sophisticated
proprietary operating system, train their
efficient and operating
Operation state-of art system to High Medium High IT and Research
faster system make
information make and Development
2. PSA can the operation
technology operation of division, the
process 15.2 more efficient
(IT) similar PSA more deadline for this
millions TEUs and TEUs can
to PSA's efficient task is within a
annualy be processed)
CITOS year
PSA need to
compare the
service and price
of the competitor,
need quality
1. Should control, every
1. Another
PSA do Decision stakeholder should
strategic 1. PSA
price war or Analysis (PSA maintain the
port nearby premium price
maintain the should quality, need well
Charge & Service PSA with with premium High High High
premium maintain their trained finance
good quality quality of
quality quality and employeed,
service and services
service and prices) bussiness
lower price
prices development
employees and
consultant for
pricing strategy,
this task have to be
done immediately
 Ghani Rais Azka
29118007
YP 59 A
Need information
of which terminal
that can be fully
operated by the
shipping company
2. Another
Decision as the main
strategic 2. Allow
Analysis (PSA customer, need
port shipping
should provide contractor to build
allowing company to
Medium Medium Medium few particular few terminal for
shipping operate
terminal for main customer,
company to dedicated
primary bussiness
operate terminal or
customer) development,
dedicated opposed
finance, public
terminal
relation will in
charge in this task,
the deadline is 2
years
1. Port
Klang in
Need information
strategic
of aspect that
location
should be
with lower
1. Deliver improved, need an
price for its Potential
superior auditor for
service 1. PTP Opportunity
service in checking the
2. PTP in inviting PSA Analysis
terms of performance,
Competitor strategic to cooperate High High High (Superior
efficiency, every stakeholder
location for mutual service can
technology, in the company
provide low benefit attract many
and network should make sure
price service customers)
connectivity the service of PSA
with well
is superior, the
experiences
deadline is within
port operator
a year
(Maersk
Sealand)
 Ghani Rais Azka
29118007
YP 59 A
3. PTP
Need information
withdraw
about segment of
PSA's two Potential
the market of PTP,
main 2. Cooperate Problem
what kink of
customers with PTP to Analysis
services that can
(Maersk make (Make
be colaborate,
Sealand and agreement in Agreement to
High High High need public
Evergreen aspect of stabilize price,
relation for
Marine) prices, segment the
negotiating the
4. Port of market, and market, and
price, segment the
Hong Kong service offer combined
market and the
as the port services)
services, the
busiest port
deadline is 1 year
in the world
1. PSA Need to consider
leverage the power of
Port of Decision Maersk Sealand as
1. Joint
Dalian's Analysis (PSA a joint venture
venture
1. Joint strategic should give partner and
partner
venture importance leverage opponent, need a
(Maersk
(Maersk to Maersk to Dalian's bussiness
Sealand)
Sealand) gain some strategic to development to
Joint Venture become High High High
cooperate with concessions gain some make strategy for
PSA's
PSA in other in its home concession in this decision, need
opposition
port (Port of competition order to get public relation to
in the
Dalian) with PTP or bargaining negotiate with
competition
leave the power with Maersk Sealand to
with PTP
Port of PTP) gain concessions,
Dalian out the deadline is
of the fray within a year