4 minute read
Expect the Unexpected
The pre-covid normal is gone and there is a need to adapt to a new set of market conditions. This was the game-changing view presented at the recent IAPH World Ports Conference. Felicity Landon reviews the highlights
We are not going back to ‘normal’ – the global supply chain has shifted, delegates were warned at the International Association of Ports and Harbors’ world port conference in Vancouver.
Noel Hacegaba, Deputy Executive Director at the Port of Long Beach, made this assessment during a session considering port authorities’ perspectives on supply chain resilience and performance.
The ports industry has seen disruption in the past but, post-Covid, “any crystal ball you might have used in the past is now obsolete,” he said.
“Expect the unexpected, plan not just for recovery but for continuity, revisit your strategic plans more often, look at the bigger picture,” he urged ports. “In the past, port authorities like ours would focus on what happens inside the gates – especially landlord ports like ours,” he said. “It was a very traditional model, and arm’s length relationship with tenants. That is not the case anymore. We have to be at the table; we have to lead.”
Stéphane Raison, CEO and Chairman of the Management Board of HAROPA Port, France, agreed: “We have had more than two years of COVID-19 and we can’t say now if we are finished, because, as we see in China, we have a lot of congestion because of COVID-19,” he said. “So, we also have supply chain challenges for 2022.”
He also highlighted the war in Ukraine and the consequent blocking of grain exports. “All the challenges we face are more important now if you compare to 2019,” he said. “It is very difficult to adapt to the situation because each year you have more difficulties, more work to do to be sure that you will deliver all that the customer demands.”
STICKS AND CARROTS
The speakers were asked about ‘sticks’ – including charges for containers not collected – and ‘carrots’ for tackling port congestion and improving container flow.
Hacegaba said: “So far, we have had to use the stick in an unprecedented fashion – but it was necessary and we stand behind the actions we have taken. What is key here, looking ahead beyond the disruption, is that we are not going back to normal. The global supply chain has shifted.”
High throughput is expected to continue in the years ahead, he said. “So, we have got to do what we can to make sure the throughput can be handled as efficiently as possible.”
To put this into perspective, he said, there are two billion square feet of warehousing and distribution space within 60 miles of the Port of Long Beach. “You would think that is enough – but it simply isn’t enough. So we need to find a way to process more containers. We have to look for ways to drive up intermodal business.”
There has been a lot of frustration around the congestion and delays but there is no ‘stand-out villain’, delegates were told.
Hacegaba said: “This is a work in progress. A port means different things to different stakeholders. We have been at the centre of all of that because the interests don’t necessarily align. But when you are in a crisis like the last two years, it helps to bring everyone together to see the bigger picture – and understanding the only way through this is to work together.
“It has brought us closer to the stakeholders. We are constantly tracking what is happening on the ground, on the water, and what we can do to move containers out of the port as quickly as possible. We are working closer together than ever before.”
MORE ASSERTIVE ROLE?
Could landlord ports take a more assertive role?
Hacegaba said: “When we revisit the leases and agreements, we are going make sure there are measures in place so that we can track the metrics. We need to have some level of control over the progress on the ground of how fast and how reliably containers are moving – even though we have some language in our existing leases, I think we can do a better job going forward of cementing and solidifying that, so we, even as a landlord port, can have some visibility into that and try to drive some of the process improvements we all need.”
Reflecting on the pandemic, he concluded: “We never would have envisaged the role we played – putting up test sites, vaccinating 10,000 seafarers, working with our terminals and shipping lines to expedite containers carrying PPE and medical supplies. It was never in our vision but we did it thanks to the great support of our board and stakeholders who came together and incredible staff.
“It shows that over a decade of running scenarios and exercises through our incident management training, it actually worked. You never could have planned for something like this but the processes we put in place actually did their job.”
8 Noel Hacegaba,
