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Port operators to expect more for less

LONDON: April 14, 2016. APM Terminals CEO Kim Fejfer has called for a “shake-up” and more infrastructure investment among port operators in order to contribute to the efficiency of shipping lines.

Noting the need for change has been more pronounced in the past two years than in the past twenty, he said changes in ocean shipping require not only investment and increased efficiency at the individual port level, but port configurations need to adapt to cope with current trade flows, increased ship sizes, and demands for the lowest possible cost.

Article APM Los AngelesSpeaking at a liner shipping conference in London, Fejfer said ports must find a way to cope with the cascading of large vessels into smaller trade lanes; the liner industry consolidation that is reshaping port call selection and frequency; and the demand by shipping lines for lower prices and better efficiency to protect their thin margins.

“In the past we handled 13,000 TEU vessels. Now we handle vessels 50 percent larger - and you need to be ready to handle these 20,000 TEU ships in all your ports or watch the business move elsewhere,” he declared.

Acknowledging that the lowest cost operator now wins the business, he said a decade ago a large terminal with a 900 meter quay could handle three or more vessels simultaneously; now with vessels of 400 meters in length, the same terminal with a reinforced quayside, larger STS cranes and deeper depth can only accommodate two ultra-large vessels at once to handle the same number of container moves.

“Now there is a need for more yard space, larger gates and more manning to handle the volume peaks in the terminal infrastructure. These result in additional costs to the terminal operator that the shipping lines are not ready to pay for,” he added.

“In today’s competitive environment, we need to become more standardized across our global portfolios, apply more technology to our terminal processes, use our scale, use more flexibility with our labor and partner with customers to get to the next level of efficiency in the industry,” said Fejfer.

Noting the ports of Los Angeles and Long Beach have 15 different container terminals, he suggested the various alliances that call at the ports are creating cost and waste in transfers: “If port operators are to contribute to the efficiency of shipping lines we have to drive rationalization, consolidation and segmentation. There will be clear winners and losers in the coming years,” he assured his audience.

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