The consultant’s port specialist Neil Davidson noted an “increasing imbalance” between the two, in a discussion at TOC Europe.
“Shipping lines are driving down sea transport cost savings through bigger ships and saving money for themselves, but this generally gets passed through to the customer not ports. This is generating significantly higher costs in other parts of the supply chain, particularly in ports and terminals.”
Mr Davidson questioned whether the port industry needs evolution or revolution to meet these cost challenges. “I don’t think evolution can give the kind of performance that the industry is looking for,” he said. “For that there has to be some kind of revolutionary change in container handling technology, which comes at a cost and a risk.”
While he recognised that automation will be part of the solution in many locations he cautioned against complete reliance on this: “I think we are going to be disappointed if we think automation is the magic bullet that will solve all the productivity problems.”
Mr Davidson suggested a number of alternative solutions for ports, including increasing terminal handling charges to shift back the balance; port alliances; ‘virtual’ terminals; greater collaboration between terminals and carriers; greater co-operation between local port authorities; and structural and organisational changes in landside transportation and logistics.
