GUANGZHOU - Maersk Line International Ltd, the world's largest carrier of shipping containers by volume, will open its third gateway in China at Nansha port in Guangdong province, said Soren Karas, head of the company's South China cluster.

The company will also add five shipping routes to Nansha port, including three between China and Europe and one to the Middle East, Karas said.

Karas also said the decision was prompted by China's booming trade volume and mounting demand from customers in the western area of the Pearl River Delta.

The delta is one of the country's dominant business hubs and is home to a number of large export-oriented manufacturing centers, such as Foshan, Zhuhai and Zhongshan.

"We believe it is the right time to establish our third big gateway in China," said Karas.

Despite concerns over a slowdown in the nation's economic growth, the company remains confidant about a rise in China's international trade volume during the next five years.

Tim Smith, Maersk Line's chief executive officer for the North Asia region, said the company expects the annual growth of Asia-Europe trade to register between 5 to 8 percent for the next five years.

"The increase in trade volume is usually 2 to 3 percentage points higher than GDP growth. China has a high growth base (a situation that will continue to pertain, even if there is a slowdown) and we still see potential for healthy trade growth," Karas said.

The Copenhagen-based shipping giant is currently running two major gateway ports in China: Hong Kong port and Yantian port in Shenzhen, Guangdong province.

Wu Yunying, an analyst with Changjiang Securities Co, said the company's move will intensify competition among ports in South China. "Maersk has been very active in China for the past few years. Their new gateway will attract some customers away from Hong Kong and Yantian," she said.

Currently, exported goods from the western Pearl River Delta region are moved by road to be shipped from Hong Kong or Yantian.

The new gateway will save a road transportation fee of between $100 and $170 for each truck, the company said, which means cost savings for customers.

"While reducing the supply chain costs for our existing customers in the western Pearl River Delta, we are also looking forward to attracting new customers in the region," Karas said.

As part of the province's 12th Five-Year Plan (2011-2015), Guangdong's economic blueprint for the next five years, Nansha port is a focus for development.

In 2010, the port handled 7.16 million twenty-foot equivalent units (TEUs) of containers, with 2 million TEUs of exports.

APM Terminals, a provider of terminal services and an independent division within the AP Moller-Maersk Group, will invest in Nansha's third-phase construction, but the exact amount of investment is still undecided, the company said.

Moller-Maersk was a 20 percent shareholder in the port's second-phase construction back in 2006, with an investment of 4 billion yuan ($610 million).

In February, Moller-Maersk placed an order for 10 of the largest-ever cargo-box ships, which will be delivered in the next five years and will be used for carriage between Asia and Europe.

China Daily

(China Daily 03/24/2011 page16)