Name : I Made Devantara

Student ID : 29118149
Decision Making
THE BATTLE OF THE ASSIAN TRANSSHIPMENT HUBS: PSA VERSUS PTP(A)

Port served a role of import/export gateway and transhipment hubs. Both operation is
growing more and more complex gradually because of the growth of the container trade and
increasing competition in port industry, thus high efficiency and high utilization rate are
essential. The operation efficiency and the development require high cost, so the
commercialization is the only way. Ports are not only need strategic location to a major route
but also need a competitive basic price, quality and value-added service. PSA was the
operator of the busiest port in the Southeast Asia and was the model of efficiency and
operation excellence within the industry. Threat emerge from upstart competitor PTP in
neighbouring Malaysia. The Lost of over 3 million TEUs to PTP bring almost 15% revenue
reduced for PSA.
PSA need to find a strategy to cope with PTP rapid growth to prevent more loss in the
future. The loss of Maersk and Evergreen to PTP could be worse if Hanjin Also shift to PTP.
Internal Improvement is necessary for PSA to cope with PTP. There is an option of
Cooperation offering from PTP to help PSA growth. The decision made by PSA is affecting
the progress of PSA main goal to became the World’s Port of Call.
2. List Threats and Opportunities

Threat
Operation -The growth of the container trade
increasing the complexity thus require
more operation efficiency and capacity
to fulfil.
Ownership -PSA is Owned by the government, so
there’ll be some constraint because of
the regulation and bureaucracy
Pricing -PSA Requires high pricing because the
labour and limited area, in opposite of
PTP that has low labour cost and wider
area.
Shipping Industry -The complexities of shipping industry
make shipping company difficult to
shift its operation to other port, a lost
customer means a high revenue lost for
continuous time.
Opportunity
-By Increasing capacity and effectivity
the demand can be fulfilled and more
profit could be gained.
-Increase revenue and power through
government backups
-Higher price could be a higher profit
and could be more appealing if provided
by higher quality and services.
-A gain of a customer means a
continuous profit.
 Competitor -PTP is growing fast and PSA could -PSA has more connectivity and better
lose more customer to PTP for its low service quality than PTP, thus giving a
price and its policy for company to premium price with higher margin is
operate its own terminal. reasonable.
-PSA had bigger competitor when -With its worldwide connectivity and
going worldwide market like P&O. PTP’s cooperation offering, PSA can
focus on its growth to enter global
market for growth, covering it’s
growing loss from PTP with larger
growing profitable opportunity.
3. Separate and Clarify Concern
Concern 1: PSA has limited land for expansion but PSA need increase its capacity to cope
with the rapid growth of container trade.
Concern 2: PSA Considered to have premium service with premium price but the tight
competition of shipping industry makes shippers need to consider not only the network
connectivity and speed but also price.

Concern 3: PTP rapid growth endangering PSA to lose even more of long term with contract
customer.

Concern 4: Accepting PTP’s offering to cooperate for mutual benefit.

4. Set Priority Using Current Impact, Future, and Time Frame

Concern Current Impact Future Impact Time Frame
Concern 1: PSA has Declining growth the Unfulfilled demand 50% of expected Asian
limited land for of revenue for would go to port that can shipping growth and PSA
expansion but PSA PSA and cope with the growth of must cope with it to
need increase its Increasing growth container trade (PTP & prevent overdemand.
 capacity to cope with of Revenue for Klang) (HIGH) (HIGH)
the rapid growth of competitor.
container trade. (HIGH)

Concern 2: PSA Declining Freight PSA would lose more Developing Service
Considered to have Rate over the customer if they couldn’t quality and time to
premium service with year because the provide them with more overcome the pricing
premium price but the tight competition benefit, Hanjin lan would problem before hanjin
tight competition of in shipping shift to PTP. (HIGH) contract end. De
shipping industry industry could (HIGH)
makes shippers need to force customer to
consider not only the lower price port
network connectivity (exm : Maersk
and speed but also and evergreen)
price. (MED)

Concern 3: PTP rapid The lost of PTP(2 years of operation) PTP’s Accelerated
growth PSA to lose Maersk and shift PSA(37 years of Expansion plan using
even more of long term evergreen operation) as the busiest soft loan from Malaysian
with contract customer. because of the port if PSA has slower govt would endanger
pricing. (HIGH) growth rate. (HIGH) PSA to continuous loss if
PSA couldn’t catch up
with it. (HIGH)
Concern 4: Accepting Providing PSA to PSA would be PTP & PSA collaboration
PTP’s offering to stabilize its core considerable ports within can overcome the 50%
cooperate for mutual operation global market. growth rate of Asian
benefit. (MED) allowing them to (MED) shipping.
focus on global (MED)
market. (MED)

5. Determining Analysis Needed

Concern Analysis Needed

Concern 1: PSA has limited land for Potential Problem Analysis
expansion but PSA need increase its
For further Development, there’s must be a
capacity to cope with the rapid growth of
 container trade. way of capacity expansion.

Concern 2: PSA Considered to have Situation Appraisal Analysis

premium service with premium price but the
PSA need to find a way to provide better
tight competition of shipping industry
makes shippers need to consider not only service quality and time to overweight high
the network connectivity and speed but also
price.
price.

Concern 3: PTP rapid growth PSA to lose Potential Problem Analysis

even more of long term with contract
PSA must cope with PTP growth, if not the
customer.
further loss will harm PSA.
Concern 4: Accepting PTP’s offering to Select Opportunity Analysis
cooperate for mutual benefit. The collaboration can help PSA grow
worldwide and sustain its core operation.

6. Determine Help Needed

Concern Help Needed

Concern 1: PSA has limited land for
expansion but PSA need increase its
capacity to cope with the rapid growth of
container trade.
The Calculation of expansion Cost and
Strategic Planning, Finance and Business
development expertise, HR and Finance
 Div, 20 years
Concern 2: PSA Considered to have The Business strategy and further
premium service with premium price but the
Development for quality of service,
tight competition of shipping industry
makes shippers need to consider not only Marketing & Operation Expertise,
the network connectivity and speed but also
Marketing & Operation div, 1-2 Years
price.

Concern 3: PTP rapid growth PSA to lose Strategic Business development to cope
even more of long term with contract
with PTP, Finance HR and Operation
customer.
expertise, HR & Operation Div, 1- 5 Year,
Concern 4: Accepting PTP’s offering to Negotiation plan and strategic decision
cooperate for mutual benefit. making, HR expertise, HR div, 1-20 years
plan