Taiwan shipping companies are eagerly awaiting the opening of direct links between China and Taiwan, but according to a recent assessment by the government, increased commerce will come at a cost.
According to the report made by the Institute of Transportation under the Ministry of Transportation and Communications, Keelung, Taichung and Kaohsiung harbors will face stiffer competition from China following the establishment of direct shipping ties across the Taiwan Strait regardless of whatever advantages result from the new openness.
The assessment forecasts that by 2004, direct cross-strait shipping will save as much as NT$1 billion in transshipment fees for Taiwan shipping companies should the links be opened.
The institute made the forecast on the grounds that direct shipping links will save transshipment costs of US$100 for each TEU (20 ft equivalent unit) containers and that the number of cross-strait transshipment TEUs will increase to 1 million units in 2004.
The international ports at Keelung, Taichung and Kaohsiung will benefit most by the opening of direct cross-strait shipping, the institute said.
Keelung Port in northern Taiwan is expected to handle a much larger number of cross-strait transshipped containers because it is located closer to Fuzhou Port in China's Fujian province. In addition, Keelung Port's harbor duties are cheaper than those ports in neighboring Japan and South Korea.
Taichung Port in central Taiwan has the potential to integrate various levels of industries on both sides of the Strait because of its vast hinterland and comprehensive loading, unloading, warehousing and distribution and processing facilities following the linkage, according to the assessment.
Kaohsiung Port in southern Taiwan, the world's fourth-largest container port, will move a step closer toward its goal of transforming into a shipping hub through direct cross-strait shipping, as the government is streamlining the port's operation.
The institute said the pursuit of profits will be the major motivation for local shipping firms when considering cross-strait routes.
Should actual profits end up being less than expected, it will be difficult to attract Taiwan-based shippers.
As cross-strait negotiations have been suspended since 1996, the institute proposed that the private sector on both sides of the Strait take the initiative to conduct bilateral negotiations.
According to its assessment, private organizations can sign cooperative pacts under the supervision of the respective government authorities on both sides of the Strait. The policy is an effort to circumvent sticky political issues that constantly interfere with trade.
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