For ports to survive in today’s volatile shipping market, what changes should be made? According to an article published by the Journal of Commerce on April 14, 2016, “ports should invest, consolidate and rationalize” to cope up with the rapid changes seen in the shipping industry over the last several years.
During the Global Liner Shipping Conference in London, the CEO of APM Terminal, Kim Fejfer, mentioned that the current shipping changes will not only require investment and increased efficiency at the individual port level, but the ports’ configurations need to adjust to the “present trade flows, increase in ship sizes and the demands for lower shipment costs.”
According to the article, the slowdown in global trade growth has led company liners to compete on network efficiency and leverage global alliances to save on shipping costs.
Below are some of the key trends seen in today’s changing shipping market:
- The deployment of mega-ships, which are now commonplace in smaller ports.
- The liner industry’s consolidation, reshaping “port call selection and frequency.”
- Downward cost pressure for liners, resulting in demands for ports to lower prices.
Additionally, for ports to accommodate changes in the shipping industry, they have to:
- Increase overall operational efficiency to handle higher volume of larger ships
- Increase investments in “yard space, larger gates, and more manning to adequately handle volume peaks.”
- Standardize their terminal processes using technology and encourage partnerships with labor and shippers
What other changes are necessary?
To sum up, ports need to invest more in improving infrastructure, as well as driving “rationalization, consolidation and segmentation” that will properly serve both small and large ships. As Fejfer stated, “to be successful in the shipping industry, ports have to offer strategic locations, ideal navigational access and deep water.”
Time will tell who the winners are and who are not.
Original Article: http://bit.ly/1Nlq5VU
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