Ports need investment to avoid congestion becoming worse

A leading container shipping line expects port congestion to get worse unless there is more investment in infrastructure. APL Ltd, the container shipping unit of Neptune Orient Lines Ltd, said only 46% of containers arrived on time in the first quarter of 2007, a record low.

The Singapore-based company said delays in European ports were even worse than the global average, with less than 30% of container traffic arriving on time.

"Congestion will slow future economic growth rates, add enormous costs to supply chains and could lead companies to reconsider their sourcing strategies," said APL chief executive officer Ron Widdows, quoted by Bloomberg.

He added that by 2010, global container volumes were expected to be double what they had been in 2000.

Widdows said consumer economies, such as the United States and Europe, needed to expand their ports and become more efficient and that emerging countries, including India and Vietnam, needed to  build and expand ports, roads and railways.

Widdows is the chairman of the 12-member Transpacific Stabilisation Agreement, which accounts for about 70% of containerised trade between the United States and Asia.

Industry observers say container shipping capacity is expected to reach a record 12 million twenty foot equivalent units (TEUs) next year, 20% more than this year.