Maersk Line lower costs and supply chain waste for commodity traders

Jun 25, 2013
Singapore, 25 June 2013 - Commodity traders have benefited from increased supply chain efficiency and lower costs by shipping commodities with Maersk Line and storing them in its main transshipment port in Southeast Asia, the Port of Tanjung Pelepas in Johor, Malaysia.
Commodities such as cotton have typically been shipped from source to destination directly. For example a container shipment from Africa to China would take 35 days. By shipping the cotton and storing it in the Port of Tanjung Pelepas, it is much closer to the customers in Asia. Traders can react to customers’ orders on much shorter notice, and the cotton can be sent from Malaysia to China in 7 days instead.
Traders can sell the short-haul cotton at a premium over the traded price, because of the quick availability of the cotton to buyers and the lower risk of price fluctuations. It is also be easier for traders to get bank financing because of the shortened time between placement of orders and receipt of goods by customers.
Maersk Line further offers traders the option of storing the containers as they were shipped from origin, containing the commodity, at the Port of Tanjung Pelepas. There is no need to remove the cotton for storage in warehouses, and then re-stuff it into containers for shipment to destination.
Commodity traders in Singapore attracted by benefits
Commodity traders based in Singapore are seeing the advantages of shipping and storing the commodities in the Port of Tanjung Pelepas. The number of commodity traders which have set up their regional or global offshore trading headquarters in Singapore has been increasing, due to the country’s premiere trade and financial hub status, and attractive tax concessions offered under the government’s Global Trader Programme.
“Warehousing includes storage and re-handling fees, and is more expensive especially in land-scarce Singapore. Storing the commodities in containers at the spacious and strategically-located Port of Tanjung Pelepas is a more cost effective alternative. We have successfully helped a trader which ships 2,000 containers of cotton a year to save S$1.7 million,” said Bjarne Foldager, Maersk Line Cluster Manager for Malaysia, Singapore & Brunei.
“Commodities is an exciting segment for us, driven by increasing exports out of emerging countries such as Africa, and increasing demand from Asia due to manufacturing and rising domestic consumption,” said Foldager.
“With more traders operating from Singapore, more can stand to benefit from our solution to store commodities at the nearby Port of Tanjung Pelepas. We have been working on perfecting this solution with cotton traders, and are looking to explore new commodities such as resins and base metals,” Foldager added.
About Maersk Line
Maersk Line is a division of the A.P. Moller-Maersk Group and is the leading liner shipping company in the world serving customers across the globe. With dedicated employees in 325 offices across 125 countries and a fleet of around 600 vessels along with 3.4 million TEU containers, we have the global reach and resources to accommodate our customers’ broad transportation needs.

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