Fundamental port sector change

No surprise there eh, but the problems that have come, and continue to come, in its wake are surprising in terms of both their individual and collective scale and impact. The headliners are: vessel schedule disruption; port and terminal congestion, all-time high freight rates, container and chassis imbalances, lack of inland transport distribution capacity, truck driver shortages, port workforce shortages and so on.

And throw into this mix other increasingly prominent areas of challenge such as the pressure to adopt e-friendly systems and plant, to get to grips with digitalisation including automation, and in developed economies in particular to find new paths with labour arrangements, then for sure 2021, and in all probability 2022, will go down as exceptional years.

Years of great challenge, especially when an already formidable situation is further complicated by remarkable one-off events such as the grounding of the Ever Given. The public face of the response by the ports sector tends to rest on operational matters – the prioritisation of essential port activities, measures to adapt workforce arrangements to the new operating conditions, enhanced coordination with public authorities to establish collectively the basis for response measures and so on.

But behind these higher profile type of changes, are a raft of other changes which promise, in many respects, to have a longer lasting effect. High up the list is a much stronger focus on risk management, signposted in mid-2020 by an iSpec Ports Industry Survey undertaken by Remy InfoSource, the lifecycle contract management specialist behind iSpec. This found that more than half of the port executive respondents (51 per cent) identified risk management as the key area they would like to improve on, up from 32 per cent in a 2018 iSpec Ports Industry Survey.

Managing the risk perception, by way of improved – clear and transparent – communication strategies is another noteworthy trend and is proving key to preserving reputation, avoiding tensions and undesired situations and, hence, ensuring business continuity.

Financial arrangements and investment is another area of change. The majority of port sector participants have undertaken some form of financial re-engineering as a result of COVID-19. In some cases, COVID-19 has had implications for the ability of ports to access capital and invest to meet their customers’ existing and future needs. Some investments have been deferred or even cancelled – in the hard-hit cruise sector for example but also in mainstream cargo areas.

Generally, project viability is coming under much more scrutiny – by public authorities, private operators and financial interests. The increased emphasis on digitalisation, and key elements such as automation, can also, in part at least, be seen to the source of greater union unrest.

Ironically, however, this unrest in the final analysis may prove to be a prime driver behind the wider adoption of automation for both front-line and back up functions. Without doubt the landscape of the international ports sector is undergoing fundamental change.