Can Ports Keep Up With the Changing Needs of Container Lines?
A recent article in SupplyChainBrain discusses the changing size of ships, the ever-shifting alliances and mergers among the container lines, and the consequences for the ports. Could a port catch it all? Or an even better question might be, should a port catch it all? GLDPartners is well placed to help the ports understand the shifting industrial needs and to position their assets for success.
The larger container ships continue to create considerable operational challenges for Shipping Lines, Terminal Operators and Shippers. The cut off day for outbound cargo is not 1-2 days anymore, but 3 or even 4 days before the ship is sailing. And a ship might arrive on a Sunday but your container is not discharged until Wednesday. Cranes have to travel longer distances over the ships to pick up containers, stowage planning is getting more complicated; terminal handling and storage, onward transportation, and distribution centers are affected. To what benefit? Could it be that the Emperor has no clothes, and that the total transportation cost would be lower if we didn’t have the megaships?
The shifting alliances is another problem affecting the ports, but is generally an intra-port issue unless we talk about complementary ports as for example Long Beach/Los Angeles and Rotterdam/Antwerp. Destination ports with a reasonably sized captive market will always receive calls from shipping lines, but its gateway status might be in jeopardy due to failing infrastructure, higher cost, less competitive routing or shifting markets. The decision to invest or upgrade needs to be carefully calculated, and Portcentric investments could help the port become more attractive, grow its captive market and increase multimodal activities. Transshipment hubs are different as they are only a necessary operating cost to maintain efficient ship operation and a slight cost advantage could move the cargo from one port to another.
So, is it necessary for medium and small ports to keep up with the changing needs of the container lines? The short answer is yes – at least to some extent; the cascading of medium size ships from the main East-West trade means that most ports will see larger ships than in the past. But it is also important for terminal operators and port authorities to properly understand each port’s competitive advantage and the current and future hinterland markets to correctly size the opportunity. Empty terminals are costly, and a “Build and they will come Philosophy” is usually not successful. Market Segmentation, Hinterland Logistics and Finance are three areas where GLDPartners are focusing.
