PSA International’s “three hard truths”

Mr Tan claimed that PSA International had significantly increased its profitability “by bringing people together” Mr Tan claimed that PSA International had significantly increased its profitability “by bringing people together”
Industry Database

Cargo change, technology that will enable and disrupt, and cross integration: these are the “three hard truths” for port operator PSA International, according to group chief executive Tan Chong Meng.

Speaking at TOC Asia, Mr Tan described the industry as “not exactly hunky dory”, noting that there remained a lot of recurring ideas about a traditional supply chain’s level of connectedness, with people pointing to continued inefficiency and poor visibility.

He said that supply chain reliability continued to be challenged last year, and that now, efforts needed to be focused upon improvement in this field.

At the event, Mr Tan reflected on the improvement PSA International had made in comparison to 2014, claiming that the company had significantly increased its profitability “by bringing people together”.

“What a difference a few years have made,” he said. “2014 was still early days for the megaship phenomenon and was one of the most challenging years for delivering reliability.

“Profitability was compromised. … Now we have a reshaped, remixed industry.”

Changing cargo profile

Discussing the idea that cargo will alter as one of his company’s “hard truths”, however, Mr Tan said that this concept was “a revelation for PSA [International]” and that it had begun to realise that it has to think about the future.

“All movements affecting the last mile will come back to affect the middle mile,” he commented.

Mr Tan also claimed that technology will disrupt and “be a key enabler. Ecommerce is happening at rocket speed, doubling every four years — that is quite scary.”

He added that “60% of [Singapore’s] ecommerce trade comes from across borders”, also claiming that cross-integration has already begun.

While speaking, Mr Tan also discussed the Tuas mega-port that PSA International is constructing, stating that the company needed to give much more attention to relationships between the facility and the port’s manufacturing and logistics users.

“This is a new area of focus. We are looking more closely at opportunities beyond the port perimeter,” he said.

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