Sam Whelan penned a report on the alliance of four companies managing terminals at the Kwai Tsing terminals in Hong Kong.
Apparently shippers are furious. They believe there will be collusion and rates will rise as a result. Rates are already higher in Hong Kong than the mainland, and the Hong Kong fees add more cost.
The firms say it’s only to make the port more efficient and gain higher throughput. Volume handled has been declining in 2018 compared to the prior year.
It’s true that greater cooperation would most likely improve port throughput. Coordinating yard movements and berth use would offer possibilities for gains. I’m not sure it would have to be at the level of fixing prices. Improving port and yard bottlenecks is an important activity for firms in port management today.
But you can bet shippers will be on their guard for any collusion on pricing, especially when there’s a falling need for services. And since it’s China that is involved– these are Chinese firms– we can’t rule out geopolitical considerations that would be collusive. WE need to watch this one and see how the volumes and prices play out, just like the shippers will.
via Shipper hackles rise as Hong Kong box terminals announce operating alliance – The Loadstar
January 10, 2019 in Logistics, Ports, Production Operations, Shipping, Strategy, Supply Chains
Tagged alliances, China, performance, port management, ports, Shipping, supply chains, transportation
Ben Meyer in American Shipper has summarized a McKinsey report on port automation and port modernization. One interesting point in the discussion is that port operators are actually not seeing productivity gains in automated ports. Throughputs are actually slower. They have some explanations for this, but it is a real problem.
It struck me that automation is often seen as going hand in hand with better visibility of cargoes in the port and readiness for delivery. to the extent that the software requires automation, there may be a correlation here that does not bode well in the medium term.
In the long term it may well turn out better, but meanwhile, the customer may suffer.
via Cost, operational challenges hinder port automation
December 13, 2018 in Logistics, Ports, Production Operations, Shipping, Strategy, Supply Chains
Tagged automation, infrastructure, performance, ports, productivity, technology
Lee Hong Liang has written an interesting article about the call for standards in maritime documentation. To my view, it’s no doubt needed badly, and has been for years. The desires of maritime operators to work as local optimizers has hurt their presence in supply chains, which are the ultimate cooperative enterprise. That won’t do any more, especially with supply chains themselves changing so fast in the light of trade wars and operating location changes.
Devolution of supply chains is occurring, if I can borrow a word from the port governance literature. Now they are more focused on insuring end to end performance rather than perpetuating themselves to get ‘volume’. There are too many external factors driving changes. Trump’s trade wars are just the ultimate hyper-push to this trend.
Apparently INTTRA has been purchased by another firm, so it remains to be seen how much impact this will have. But the effort is much appreciated.
via INTTRA urges industry-led standards for containers and logistics