Terminal Operators Conference

2019

Presented by: David Wignall

Date: April 2019

Is the future that different from the past?

The future of ships

The airliner comparison

Travel agents

Mckinsey’s and TT Club’s view

• Digital disruption depicts a world in which new entrants—start-ups and e-commerce firms—use digital technology, data, and analytics to optimize the end-to-end value chain, disrupting the incumbents.

• Digital reinvention also envisages the transformation of the industry by digital innovation, but aggressively led by the current players. In this future, incumbents successfully transform to bring new value-adding services to their customers.

• The third wave of globalization foresees a world of continuing rapid trade growth. It assumes that rising economies, such as India and Africa, realize their manufacturing and export potential, with global supply chains smoothed by digital advances.

• “Peak container” and consolidation depicts a darker trade story. It imagines a future of trade wars, geopolitical tensions, and “near-shoring,” in which international trade is in decline. The industry is forced to consolidate.

Seaport commentary

• Digital disruption depicts a world where the new entrants use other peoples assets to better effect than they do OR they don’t take the risk on the assets something already visibly present in the sector… Existing players need to ensure their investment is not used by others.

• Digital reinvention this seems to be a strategy being pursued by some of the largest shipping lines which sees them compete with their own customers; this seeks to ensure they don’t get played by others seeking to benefit from their assets.

• The third wave of globalization is not independent from the first two but a view on population and trade growth. It needs a careful look at the container generating capability of those regions that are clearly destined to grow further, India and Africa.

• “Peak container” and consolidation is again not independent of the first two but a view on trade growth and the industries reaction to those. Is the industry able to stop building ships? Do ports care providing their terminal investments are depreciated before the retreat bites?

Medium term question on trade

Top 10 Re-shoring Reasons Mentions

1 Delivery time improvement 34%

2 Total Cost of ownership 29%

3 Quality improvement 28%

4 Freight Cost improvement 27%

5 Wage Cost improvement 25%

6 Customer Responsiveness improvement 25%

7 Image / Brand (prefer US) 17%

8 Higher productivity 13%

9 Innovation/ Differentiation/ Improvement 12%

10 Inventory improvement 12%

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

1,400,000,000

1,600,000,000

1950 1970 1990 2010 2030 2050

Population Growth in China, India, Europe, Nigeria and USA

China India Europe USA Nigeria

Long terms questions on trade

SE Asia Port development (and S Asia)

• Thailand, overbuilt and pressing for more

• Vietnam, overbuilt

• Malaysia, in balance or overbuilt

• Singapore, ambitious

• Cambodia, a strategic need (perhaps)

• Myanmar, a strategic need

• Indonesia, a country of many parts:– Jakarta

– Surabaya

– Semarang

– Makassar

– Belawan

• Bangladesh, one big opportunity or 3, Bay, Payra Laldia?

How do you become a SMART port?

Becoming “smart” means becoming more attractive and competitive. It means doing

more with less.

The role of a Port Authority

A port authority must act as a conductor whose musicians are shipping companies, flow makers and logistic integrators.

Attractive and Competitive

• Cost– Efficiency

– Productivity

• Providing the solutions the users want– Port centred logistics

– Cross docking

• Delivering new opportunities

Port Community Systems

Port of Amsterdam

The circular economy…Amsterdam has become a pioneering platform that receives waste from the Greater London area. This activity generates a lot of research and development projects with local universities and engineering schools. It is also a real project, which in the space of few years has brought economic, financial and technological benefitThere are four main aspects. 1.the a port functions as a 'matchmaker'

by bringing together producing and recycling industries with the aim of re-using energy.

2.accommodate industries which treat, collect and ship waste.

3.Acts as a logistical hub for the importing and exporting of waste materials

4.The ports' industrial clusters can help to use of waste and resources.

Port of HamburgHamburg has implemented sensors, camera systems and smart lights on roads in order to monitor traffic, anticipate the lifting of a bridge or clear a road after an accident, facilitate the movement of barges when the traffic is saturated, etc. This type of “smart” innovation is allows the improvement of the overall productivity of terminals and port complexes, mitigates the effects of pre-and post-routing movements on the population while reducing contamination, and even decreases the number of accidents.

UK Ports example: ABP Newport

Canal Bekasi Laut

Thank you