Calling the shots under COVID-19

We have, however, not yet arrived at this nirvana with new strains of the virus hitting home hard in the UK and South Africa, and growing concern that this a phenomenon that will be repeated in other countries worldwide.

With the roll-out of vaccines only just underway, it is clear that working under Covid will remain a reality for the foreseeable future at least and that this may yet become even more challenging.

Looking back on recent experience, however, it is not all bad news – the ports sector and some elements of the shipping world have managed rather well in the bizarre new world we operate in. Maritime traffic has not fallen back as much as expected by various analysts and notably in the container sector.

Drewry, for example, now estimates 2020 global container port throughput as coming in at just over three per cent under the 2019 volume of 801mTEU. This represents a significant upward revision of earlier Covid influenced forecasts.

Generally, the ports and shipping sector has displayed a remarkable versatility in making the best of things under Covid-19 Top of the tree when it comes to making a profit is container liner shipping which through the agile management of available capacity will, when all the figures are known for 2020, likely report its best year yet.

Drewry estimates the sector will achieve an operating profit of US$11 billion for the year, another upwardly revised forecast from the figure of US$9.2 billion reported in June 2020. The container terminal operating sector has also displayed a high degree of resourcefulness. Across the board, there has been a discernible scaling back of projects designed to add new terminal capacity.

Drewry puts a number on it suggesting that over the next five years global container terminal capacity will grow at an average annual rate of 2.1 per cent, equivalent to 25m TEU per year as opposed to the average 40m TEU per annum registered over the previous decade. Capacity management here too is expected to bolster returns.

There are two other notable trends in the ports sector that PS expects to see advance significantly. The first is digitalisation. Covid-19 has basically acted as a catalyst to diverse elements of the digital world and influential new technologies can be expected to further accelerate its take-up – 5G/Wi-Fi 6, AI, Advanced Data Analytics and Robot Process Automation for instance. Digitalisation will extend its influence right along the supply chain with ports and terminals representing a critical interface in this respect.

Second, there has been little wavering during the pandemic on the part of both port authorities and terminal operators in their commitment to build carbon-free businesses. Activity in this area continues in priority mode from administration through to operations with diverse new initiatives surfacing on a regular basis.

Generally, the ports and shipping sector has to-date responded well under the negative influence of the pandemic. Equally positive, going forward, it has identified clear goals and positive paths via which to achieve them minimising risk and maximising reward in the process.