INTRODUCTION

ASEAN member countries widely recognize that transport is among the key catalysts for socio-economic development and international competitiveness, in view of its role as a critical logistics and services support sector. Transport is an important pillar for ASEAN’s economic integration, especially in linking ASEAN closely together and in binding the ASEAN community that is vital for the future.

Infrastructure facilities, principally in transport, communications and energy, are the lifeblood and nervous system of an integrated regional economy. They make trade in goods and services and capital flows possible and easier. Their availability and efficiency are a major factor in investment decisions. They themselves are the subjects and objects of trade and investment. Their construction and operation stimulate economic activity.

Shipping has long been the major form of transport as well as an essential communication link connecting Southeast Asia and the rest of the world. It has also been the main cargo trade artery between the various countries of the region, and in some, to domestic commerce as well. Most ASEAN countries are maritime economies, looking out on the regional seas and beyond to the sea lanes of the Indian and Pacific Oceans. ASEAN roads, railways and inland waterways systems are port-oriented, having been traditionally laid out to carry the natural resources to the sea and then to the industrial world for processing. The land and ocean transport systems that bind the ASEAN countries to the global markets for their principal exports and vital imports pass principally to and from the hinterlands, the seaports and across the seas.

ASEAN TRADE PROFILE

The ASEAN countries are strategically situated in a trading area which accounts for 17% of the global liner market. In 1970, ASEAN’s exports were estimated at 89 million M.T. and imports of about 53 million M.T. Internal trade was 17.7% (15.9 million M.T.) with a value of US$ 935 million. Intra-ASEAN exports were valued at US$ 73.4 billion in 1998, or 78 times the 1970 level.

The fallout from the financial and economic crisis was evident from the contraction in intra-regional trade. Using trade values from seven ASEAN countries (excluding Cambodia, Laos and Myanmar), intra-ASEAN exports declined sharply by 13.8% from US$ 87.2 billion in 1997 to US$ 73.4 billion in 1998.

Table 1 – Intra-ASEAN Exports,1997-98 (US$ million)

Country

1997

1998

Change
(in value term)

Change
(%)

Brunei Darussalam

496.42

220.83

-275.59

-55.5

Indonesia

8,850.95

9,346.72

495.77

5.6

Malaysia

23,248.72

21,611.41

-1,637.31

-7.0

Philippines

3,436.17

3,821.03

384.86

11.2

Singapore

35,793.85

27,676.83

-8,117.02

-22.7

Thailand

13,525.72

8,314.67

-5,211.05

-38.5

Vietnam

1,832.89

2,373.40

540.51

29.5

Total

87,184.7

73,364.9

-13,819.8

15.9

Source: ASEAN Secretariat

ASEAN exports to dialogue partners declined by 5.5%, while imports fell by 27.03%. Exports to Asia fell by large quantities (16.4% with Japan, 25.5% with Korea). Exports to the USA also fell by 6%. A small increase was recorded with EU (2.2%), with China (2.84%), but large gains were made with Canada (24.1%), Australia (14.4%) and India (19.85%). Imports declined across the board from all ASEAN’s Dialogue Partners. Major decline occurred in imports from the EU (US$ 16.5 billion) and Japan (US$23 billion).

Table 2 – ASEAN Trade, 1997 – 98 (US$ million)

Countries

Exports

Imports

1997

1998

Change (%)

1997

1998

Change (%)

US

70,030.37

65,848.72

-5.97

61,695.0

52,673.8

-14.62

Japan

42,008.58

35,122.43

-16.39

71,264.2

48,249.3

-32.30

EU

46,086.72

47,102.70

2.20

51,009.8

34,558.0

-32.25

Australia

6,418.41

7,339.45

14.35

7,963.9

5,813.3

-27.00

Canada

1,881.92

2,335.69

24.11

2,568.0

1,812.5

-29.42

New Zealand

773.78

775.25

0.19

1,297.1

877.3

-32.36

ROK

10,667.77

7,949.36

-25.48

14,857.4

9,556.8

-35.68

China

9,167.89

9,428.44

2.84

13,482.9

11,655.7

-13.55

India

4,473.19

5,360.23

19.83

4,395.5

1,811.9

-58.78

Russia

876.06

502.11

-42.69

1,115.6

566.5

-49.22

DIALOGUE PARTNERS

192,384.62

181,764.38

-5.52

229,694.4

167,575.1

-27.03

Rest of the World

64,993.62

70,050.47

7.78

61,701.1

47,439.8

-23.11

ALL

257,318.31

251,814.84

-2.14

291,350.53

215,014.81

-26.20

N.B. Excludes Cambodia, Laos, Myanmar and Vietnam.
Source: ASEAN Secretariat

Overall, the rate of growth of total ASEAN exports in 1998 decreased by 5.8 % (a reduction of US$ 19.9 billion), while ASEAN imports fell by 24.5% from US$ 356 billion in 1997 to US$ 268.8 billion in 1998.

The volume of international freight traffic has a strong relationship with international trade. Assuming that ASEAN economic integration proceeds smoothly, with a progressive reduction in tariff barriers, improvement in transport corridors and effective rules and regulations governing transit transport and international trade in place, the overall regional trade scenario will be as shown in Table 3.

Table 3 – International Trade Forecast (US$ Million)

Intra-ASEAN

ASEAN Exports

Imports to ASEAN

Total

1997

148,871 (21.3%)

258,251 (37.0%)

291,520 (41.7%)

698,642

2004

245,614 (24.8%)

353,979 (35.8%)

390,102 (39.4%)

989,695

2010

431,924 (27.6%)

538,926 (34.4%)

594,172 (38.0%)

1,565,022

2020

969,197 (32.3%)

964,311 (32.2%)

1,063,186 (35.5%)

2,996,694

Source: ASEAN Transport Cooperation Framework Plan, July 1999.

PRESENT STATE OF ASEAN PORTS AND SHIPPING

Five ASEAN countries (Indonesia, Malaysia, the Philippines, Singapore and Thailand) are among the 35 most important maritime nations. In 1997, these five countries had a total of 2,143 vessels (of 1,000 GRT and above) with a combined tonnage of 32.7 million DWT, or about 7.7% and 4.6 % of the worldwide fleet, respectively. In terms of container port, these five countries handled about 21.53 million TEUs, or about 14.6 % of world container traffic in 1996. The major ASEAN ports of Singapore, Bangkok, Manila, Tanjung Priok and Port Klang also handled a total of 19.9 million TEUs and 22 million TEUs in 1996 and 1997, respectively.

There is a large number of seaports in the ASEAN region serving various international and domestic transport requirements. Two archipelagic countries, Indonesia and the Philippines, have developed hierarchical national seaports network system. The Philippine Ports Authority (PPA) manages 19 base ports and 89 national ports. The network is further supplemented by several hundreds of municipal and private ports supporting local economic activities. In Indonesia, there are five major ports; Belawan, Tanjung Priok (Jakarta), Tanjung Emas (Semarang), Tanjung Perak (Surabaya) and Makassar (Ujung Pandang). There are also 107 primary ports, 544 government ports, and 1,233 private ports, serving remote and underdeveloped areas. The existing regional maritime transport system is shown in Figure 1. The ASEAN ports and shipping profiles are presented in Tables 4 and 5.


Figure 1 – Regional Maritime Transport System

Source: ASEAN Transport Cooperation Framework Plan, July 1999.

The present state of ASEAN shipping vary due to geographical conditions and other factors, as follows:

 

  • Malaysia has well-developed coastal shipping for domestic services and reported to be currently facing over-capacity;

 

  • Indonesia and the Philippines have large domestic fleet, but with small or limited international fleet. Five categories of shipping services are available in Indonesia; namely: international, traditional, ocean-going, pioneer and special services.

 

  • Myanmar, Thailand and Vietnam, having long coastal lines, do not have well-developed coastal shipping, but are very keen on having their national fleet in international shipping operation;

 

  • Singapore holding the seventh-largest merchant fleet in the world has been very active in international shipping; and

 

  • Laos has two ocean-going vessels under the Vietnamese flag despite being a landlocked country.

At the regional level, Singapore serves as a regional hub. In 1998, Singapore recorded 15.14 million TEUs, the biggest port handling volume in the world. The transhipment rate was estimated at 80% in 1997. The relative strength of Singapore port is attributed to modern infrastructure and facilities with sufficient capacity, expeditious clearance systems, EDI-based port-documentation procedures, efficient and convenient port services and availability of 400 shipping lines with direct links to more than 700 ports worldwide. Neighboring countries rely heavily on Singapore as a transhipment port not only for inter-regional services, but also for intra-ASEAN goods transport.

To attract direct container cargo services, Malaysia and Thailand have started to expand direct links with the ports outside the region through Port Klang and Laem Chabang, respectively. For instance, Port Klang has developed 15-meter deep container berth to accommodate Post Panamax-type vessels of 80,000 to 100,000 DWT with a capacity of more than 6,000 TEUs. Port Klang has now 67 direct line services and 38 feeder services to/from 300 ports worldwide. Brunei Darussalam, Indonesia and the Philippines have also similar plans for deep seaport development and containerization. Cambodia, Myanmar and Vietnam, who do not have deep seaports and modern container berths, have ongoing studies for port improvement and upgrading.

Table 4 – Primary Ports of ASEAN Countries

No. of Berths

Total Length

Port Depth

Port Traffic 1997

Port/Country

Conventional

(including oil, bulk, multifunctional berths

Container

(Including exclusive berths for container handling)

of Berths (m)

(m)

Cargo

(000 tons)

Container (000 TEUs)

Muara/Brunei

Darusalam

4

3

861

10-11

2,379

84

Sihanoukville/

Cambodia

3

0

350

8

794

61

Tanjung Priok/

Indonesia

14

6

8,911

12

28,643

1,820

Port Klang/

Malaysia

31

13

8,648

15

56,766

1,684

Yangon/

Myanmar

15

2

2,550

9

7,977

96

Manila/

Philippines

87

9

7,592

3.3-12.5

11,081

2,117

Singapore/

Singapore

43

37

n.a.

15

312,200

15,140

Laem Chabang/

Thailand

5

5

2,250

6.5-14

2,211

1,036

Saigon/Vietnam

19

0

2,084

5.5-10.8

7,210

77

Source: ASEAN Transport Cooperation Framework Plan, July 1999.

Table – 5 Shipping Fleet Profile, 1997

Domestic

(Inclusive of coastal and inter-island shipping except river transport)

International

National Shipping Lines

(In some countries, national shipping lines are state- enterprises.)

COUNTRY

No.

Total Tonnage

(000 GRT)

No.

Total Tonnage

(000 GRT)

Brunei

Darusalam

n.a.

n.a

n.a

n.a

None

Indonesia

10,643

7,462

31

358

P.T. Djakarta Lloyd

Lao PDR

-

-

2

5

Lao PDR

Malaysia

934

1,485

390

10,472

MISC, etc.

Myanmar

8

7

17

119

Myanmar Five

Star Line

Philippines

958

2,815

Neg

Neg

None

Singapore

-

-

3,400

22,600

Neptune etc

Thailand

35

14 (nrt)

229

2,778

Thai Maritime

Navigation

Vietnam

247

175

216

728

VOSCO etc

Source: ASEAN Transport Cooperation Framework Plan, July 1999.

A recently completed ASEAN transport study concluded that container growth in ASEAN is to slow down by 4-7% between 1997 and 2004 due to the impact of the economic crisis. After 2004, container traffic growth is expected to increase to about 9% a year matching the previous 1985 – 1995 growth levels. At the same time, direct shipping movement within the region will increase as more routes become economically viable. This will reduce the growth in transhipment cargo at Singapore port. By 2020, total container growth throughout is expected to be 2.4 – 4.9 times higher than in its 1997 level, with the largest increases in Myanmar, Cambodia, and Vietnam. The overall container traffic forecast, by country, is shown in Table 6.

 

Table 6 – Container Traffic Forecast, by Country

Country

Container Traffic

(000 TEUs)

1997

2004

2010

2020

Brunei Darussalam

79

200

300

800

Cambodia

36

100

300

900

Indonesia

2,792

3,800

7,100

14,800

Malaysia

3,070

5,000

9,500

19,600

Myanmar

96

300

1,200

3,300

Philippines

2,631

4,900

8,700

15,300

Singapore

14,750

20,600

31,200

52,500

Thailand

2,181

3,700

6,200

12,300

Vietnam

672

1,700

3,600

9,400

Total

26,307

40,300

68,100

128,900

Source: ASEAN Transport Cooperation Framework Plan, July 1999.

To meet future containerization opportunities, member countries plan to implement container port development activities as shown in Table 7.

 

Table 7 – Port Capacity Requirements

Country

Port

Development Plan

Brunei Darussalam

Muara

Needs additional berths; deepen channel to 13 m

Cambodia

Sihanoukville

2 berths (240 m in width, 8.5 m in draft, Year 2005)

Indonesia

Tanjung Priok

Terminal III: 4 berths (900 m in length, Year 1998)

Malaysia

Port Kelang

Penang

Johor

10 berths (250 m in length X 15 m I n depth, Year 2000 – 2006

3 Berths (Year 2005)

4 Berths (200), 5 Berths (2005)

Myanmar

Thilawa

Yangon

5 Berths (1,000 m, under construction since 1995 September, 25 years BOT Project)

1 Berth (1,000 m in l length X 33 m in width X 10 m in draft, 25 years BOT)

Philippines

Manila

MICT: 1 Berth (300 m in length, 1998)

Singapore

Pasir Panjang: 6 Berth (draft 15 m, Year 1999)

Thailand

Laem Chabang

Phase 2: 5 Berths (500 – 700 m in length X 16 m in depth/berth, from Year 2000 to 2005)

Vietnam

Ho Chi Minh (Saigon)

VICT: 3 Berths (55 m in length X 10 m in depth, Year 1998

Source: ESCAP Inter-regional Container Shipping Study, 1997.

ASEAN COOPERATION IN THE MARITIME TRANSPORT SECTOR

PAST COOPERATION PROGRAMS

ASEAN has long history of cooperation in the maritime transport sector. For instance, an ASEAN Resolution on Shipping and Trade was adopted by the 10th ASEAN Economic Ministers Meeting (AEM) held in Bangkok in October 1980 and reaffirmed at the 11th AEM held in Jakarta in May 1981. This resolution, among others, recognized the importance of shipping and ports to the development and expansion of ASEAN trade and economy through collective measures to promote and strengthen ASEAN self-reliance and cooperation in shipping and accelerate the improvement and development of ASEAN ports. The economic ministers also mooted the setting-up of an ASEAN Lines Service in 1981. At the Third ASEAN Summit in 1987, the ASEAN leaders agreed to pursue new initiatives such as the introduction of Brokers Telegraph System, Inter-ASEAN Bulk Pool System, Point-to-Point Shipping Services, and the establishment of Freight Booking and Cargo Consolidation Centres. There were numerous training programs for the ASEAN port sector, under the aegis of the ASEAN Ports Authorities (APA), funded mainly by the European Union.

In line with the Fifth ASEAN Summit of 1995, and in pursuit of the implementation of the ASEAN Plan of Action in Transport 1996 -–1998, ASEAN cooperation was focused on Safety of Maritime Transport and Prevention of Pollution from Ships as a theme issue. In particular, ASEAN cooperation was geared towards ensuring that ASEAN ships shall be of good quality, well-maintained and manned by competent seafarers along international standards, and in the collective implementation of regional harmonized standards for safe operation of ships and the prevention of marine pollution. Member countries were urged to provide measures for the eventual ratification and/or implementation of the conventions, protocols and agreements adopted by the International Maritime Organizations (IMO). Member countries also engaged in improving shipping services in the ASEAN sub-regional groups of BIMP-EAGA, IMS-GT and IMT-GT.

Under the ASEAN Framework Agreement on Services (AFAS), the past years saw the conclusion of the first round of negotiations as mandated by the Fifth ASEAN Summit, whereby maritime transport was among the seven priority services sectors. The negotiations on the maritime transport sector involved national commitments in international freight and passenger transport, freight forwarding services, maritime auxiliary services and maritime cargo handling services, among others. Two packages of these GATS-plus commitments were completed. Member countries have agreed to progressively liberalize trade in services by initiating a new round of negotiations covering all services sectors and modes of supply beginning in 1999 and ending in 2001.

CURRENT COOPERATION THRUSTS/ACTIVITIES

ASEAN VISION 2020/HANOI PLAN OF ACTION: TRANSPORT

Under the ASEAN Vision 2020 adopted in the Second Informal ASEAN Summit held in Kuala Lumpur in December 1997, the ASEAN leaders envisioned the following goal for the transport sector:

“meet the ever increasing demand for improved infrastructure and communications by developing an integrated and harmonised trans-ASEAN transportation network and harnessing technology advances in telecommunications and information technology, especially in linking the planned information highways/multimedia corridors in ASEAN, promoting open sky policy, developing multi-modal transport, facilitating goods in transit and integrating telecommunications networks through greater interconnectivity, coordination of frequencies and mutual recognition of equipment – type approval procedures.”

Subsequently, the Transport Action Agenda under the Hanoi Plan of Action adopted at the Sixth ASEAN Summit held in December 1998 provided the following cooperation thrust in the ASEAN maritime transport sector:

“Develop a Maritime/Shipping Policy for ASEAN to cover, among others, transhipment, enhancing the competitiveness of ASEAN ports, further liberalization of maritime transport services, and integration of maritime transport in the intermodal and logistics chain.”

SUCCESSOR PLAN OF ACTION IN TRANSPORT 1999 – 2004

For the implementation of the Transport Action Agenda under the Hanoi Plan of Action, the Fifth ASEAN Transport Ministers (ATM) Meeting held on 15 – 16 September 1999 in Ha Noi adopted the Successor Plan of Action in Transport 1999-2004 to achieve, among others, a harmonized, coordinated and integrated transportation system in the ASEAN region, through the following broad-based strategies:

  • Development of Infrastructure
  • Promotion of Competitive Transport Services
  • Capacity Building Initiatives (Institutional and Human Resources Development)
  • Improving Transport Safety and Environment
  • Greater Private Sector Participation / Involvement

More specifically, the strategic thrust for the ASEAN maritime sector for the period 1999-2004 is to create a competitive policy environment for the ASEAN maritime transport sector, in which the private sector is encouraged to invest in infrastructure and in operating transport services, where ports have improved capacity, efficiency and productivity and shipping has a liberalized regime; and with due recognition to maritime safety and the environment.

Thus, ASEAN is embarking on the following 15 cooperative programs and activities through the STOM Working Group on Maritime Transport, with Indonesia and Singapore, as chairman and vice-chairman, respectively.

  • Development of a Hierarchical and Functional ASEAN–wide Ports System for Coordinated Infrastructure Development and Operation al Improvement Programs
    1. Development of the Priority ASEAN-wide Ports System
    2. Development of an ASEAN Maritime Transport Policy and Development Framework
    3. Engaging Effective Cooperation, Dialogue and Partnership between and amongst the ASEAN Ports Authorities, Shipowners, Freight Forwarders and Shippers’ Councils
    4. Development of a Port EDI Network
    5. Simplification and Harmonization of Port Documentation and Procedures
    6. Promotion of Regional Cruise Tourism.
  • Strengthening Institutional Capacity for Competitive Maritime Transport and Safer Shipping
    1. Progressive Implementation and/or Adoption of IMO Conventions
    2. Common ASEAN Near Coastal Voyages.
  • Intensifying Regional Cooperation for Safer and Environmentally Sustainable Shipping
    1. Intensified Cooperation on Port State Control (PSC) Activities
    2. Cooperation in Transboundary Oil Spill Prevention and Preparedness
    3. EDP-based Information System for Dangerous Goods
    4. Maritime Search and Rescue (SAR) Cooperation.
  • Strengthening Human Resources Capacity

    1. Networking of Maritime Training Centres/Educational Institutions
    2. Training of Trainors for ASEAN Seafarers’ Academies
    3. Reciprocal Recognition of Seafarers’ Licenses and Certificates.

Other major ASEAN transport cooperation programs under the Hanoi Plan of Action which have direct impact and relevance to the ASEAN maritime transport sector are the following:

  • The development of the trans-ASEAN transportation network as the trunkline or main corridor for the movement of goods and people in ASEAN, consisting of major road (interstate highway) and railway networks, principal ports and sea lanes for maritime traffic, inland waterway transport and major civil aviation links. The priority road network system has already been agreed and endorsed through a Ministerial Understanding on the Development of the ASEAN Highway Network Project signed by the ASEAN Transport Ministers in the Fifth ATM in Ha Noi in September 1999. The preliminary regional seaport system consisting of 33 ports is shown in Figure 2;

Figure 2 – Preliminary Regional Seaport System

Source: ASEAN Transport Cooperation Framework Plan, July 1999.

  • The implementation of the ASEAN Framework Agreement on the Facilitation of Goods in Transit which was signed during the Sixth ASEAN Summit. This agreement is designed to facilitate goods in transit, through the simplification and harmonization of transport, trade and customs regulations and requirements covering road and railways transport. A separate and complementary agreement on the Facilitation of Inter-State Transport will also be concluded for future implementation;

  • The implementation of the ASEAN Framework Agreement on Multimodal Transport which will make possible the door-to-door shipment of goods within the ASEAN region. Both framework agreements on Inter-State Transport and Multimodal Transport will be finalized in time for the Sixth ATM in Brunei Darussalam next year;

  • Further expansion and liberalization in the ASEAN maritime transport services sector in line with the ASEAN Framework Agreement on Services; and

  • The advanced implementation of the ASEAN Free Trade Area (AFTA), particularly for the six original signatories, by one year from 2003 to 2002. This means that by the beginning of 2002, their products under the AFTA coverage will be subject to tariffs of only 0-5 per cent and that the member country individually would commit to achieve a minimum of 85% of the AFTA-related products with tariffs of 0-5 per cent by the year 2000; to a minimum of 90% by the year 2001; and by 2002, for all products, with flexibility.

CONCLUSION

The ASEAN maritime transport sector undoubtedly is expected to play a major role in ASEAN’s economic integration, brought about by the growing interdependence of ASEAN with the global markets and in line with the accelerated implementation of AFTA. Its contribution will increase, as the essential function of trade is inseparable from the movement of goods. Thus, concerted and collective action is necessary for all the ASEAN member countries to have a well-developed transport infrastructure, to include a well-established and functioning ports and shipping network, as an integral part of an efficient trading system in an integrated regional economy.

ASEAN Secretariat
17 October 1999