It is no secret that the Asian continent is dominating the world’s maritime trade industry.
The Port of Singapore is the world’s largest publicly owned port, as well as the busiest container transhipment hub globally, consistently ranking atop the Xinhua-Baltic International Shipping Centre Development Index’s lists of the world’s top ports for an accumulated total of 7 consecutive years, a record it is predicted to extend. Hong Kong has also consecutively appeared in the list’s top 4, whilst China’s Shanghai frequently makes a recurring appearance in the Top 10.
Notably, London was the only non-Asian port city to be featured in the 2018 list’s top 5, highlighting just how pronounced Asian dominance in the global shipping market is. How has the continent managed to essentially lead the entire world’s shipping market by such a wide margin, however?
The Asian Infrastructure Boom
Asia’s thriving status as the leading continent in the world’s maritime transport industry can be traced back to one phenomenon: the Asian Infrastructure Boom of the late 1980s and early 1990s.
The Boom itself hails back to the 1960s when, inspired by the success and prosperity Japan achieved through its industrialisation nearly a century prior, the newly independent Singapore together with Taiwan, South Korea and Hong Kong (now known as the Four Asian Tiger economies) actively pursued a transition from a primarily agrarian economy to an industrial one through several government policies. By the time of the Boom, the Tigers had managed to achieve a staggering 7.5% growth annually for 3 decades, elevating them to ‘developed country’ status as well as transforming them into some of the most developed nations in the world.
In addition to the Tigers’ industrialisation, the People’s Republic of China concurrently entered an era of industrialisation, whilst the Socialist Republic of Vietnam entered its self-proclaimed ‘Socialist Industrialisation’ phase in the 1980s. Notably, the Chinese and Vietnamese populations (and consequently, their labour force) were and continue to be significantly larger than the Tigers’, dwarfing them by comparison. The Tigers’ immense export rates coupled with the colossal Chinese and Vietnamese rates resulted in massive Asian export rates.
As products were exported outside of Asia en masse, an almost gargantuan demand for the importation of raw materials into the continent was created as well. Iron ore and concentrate demand in the Chinese market was sky-high for example, with import rates more than quadrupling between the early 90s and late 2000s.
This resulted in an instantaneous need for modernised infrastructure, both maritime and on land, resulting in the development of several projects designed to accommodate the region’s thriving export and import rates as well as the emerging shipping industry.
China: An Economic Powerhouse
Having the largest population in the entire Asian continent allowed China to spearhead and become the face of Asia’s industrial revolution, whilst its sizeable coastline, one of the continent’s largest, and its stringent government policies essentially nationalised and monopolized the Asian market’s largest shipping industry.
As a result, the lucrative Chinese shipping industry was inaccessible to foreign companies, who were effectively banished from the market for several years.
By 1988 however, the country began taking steps towards easing its restrictive measures, like the Cargo Reservation Policy. Eventually, foreign shipping companies could enter the market and be treated in the same way Chinese firms were.
By the start of the new millennium, foreign shipping companies began thriving in Asia, eventually overtaking the Chinese lead especially in the container market. Today, foreign shipping companies have become some of the biggest players in the Asian market.
The Big Western Shipping Players in Asia Today
Despite years of the Chinese state’s rigorous monopolisation measures, upon their full repeal by the early 2000s, western shipping companies began flourishing in the region. This final opening of the floodgates allowed the Asian Boom to expand to its full potential and the continent itself to cement its supremacy in the shipping sector.
This could not have been achieved without the entrenched presence of the following European shipping giants, who still play a major role in the Asian market:
AAL: Established in 1995, AAL Shipping provides multiple services including chartering, liner services and fixed trade route services. Although the Dutch shipping giant enjoys success in various regions of the world with several offices worldwide, its achievements can be particularly felt in the Asian market, where they are currently headquartered in Singapore. It should be noted that this shipping powerhouse’s multipurpose liner service played an integral role in the Asian Infrastructure Boom when it supplied the continent with steel from Australian mines.
Presently, AAL operates a powerful fleet of multipurpose vessels that specialise in heavy item transportation.
BBC Chartering: Founded in Germany in 1997, BBC Chartering has expanded tremendously, with offices in China, Vietnam, the UK, Australia, and Denmark. In 2004, owing to its success in the Asian market, the German shipping giant established its headquarters in Singapore, where it continues to play a vital role in regularly serving and connecting major markets in Asia and Europe.
BBC Chartering currently commands a sizeable fleet of multipurpose heavy lift vessels.
SAL Heavy Lift: This shipping heavyweight traces its roots back to Germany in 1980, where it is still headquartered. Although SAL is based in Europe unlike its rivals, its considerable 22 heavy-lift vessel fleet operates heavily in the Asian market, especially in the fields of Offshore Platform Installation off the coast of India’s Kakinada, and Maritime Transport Services to oil rigs in Singapore’s Batam and Malaysia’s Bokor.