Singapore handled 12.9 million TEUs in 1996, up 9.3 percent from 11.8 million in 1995. Only Hong Kong handled more containers, reaching 13.2 million TEUs in 1996. But the growth in Hong Kong's container traffic, 5.6 percent in 1996, is slower than Singapore's and may also be negatively affected by both the development of other Chinese ports and liberalized cross-straits shipping. Thus Singapore appears ready to overtake Hong Kong in 1997 in terms of TEUs handled. Singapore's other regional competitors are dwarfed by Singapore, with Taiwan's Kaohsiung handling 5.1 million TEUs, Indonesia's Tanjung Priok handling 1.6 million TEUs, and Malaysia's Port Klang handling 1.42 million TEUs in 1996.
Freight rates are low and show no sign of rising.
Increases in the size and number of ships plying the world's seas have oversaturated the market. In turn, shipping industry consolidation will force ports to contend with demands for greater operational efficiency and downward pressure on port rates. Only recently has PSA begun to pay serious attention to the price pressures facing shippers. PSA annoyed shipping lines in 1995 by raising port rates despite depressed international freight rates. However, when it again tried to raise port rates in 1996, it met with vocal resistance from the shipping lines.