Chief Supply Chain Officer Forum: ‘strengthen our ports and upgrade logistics capabilities’

Ever since the sea container was introduced to the industry back in 1956 by the American entrepreneur Malcolm McLean and the 20 and 40-foot container became the international standard in 1961, the container has changed the logistics industry. The container allowed an efficient facilitation of intermodal transport between road, rail and water. Transportion over water has the lowest costs as compared to road, rail and air; and would naturally therefore be the preferred mode of transport. The container resulted in lower supply chain costs, inceasing trade volumens, increase of vessel sizes and development of pure transhipment hub ports. However, according to Ms. Arifah Abu Bakar, a student from Malaysia University of Science and Technology, delays at ports are not uncommon, resulting in long port times for vessels and dwell time of cargo in ports. According to her, important factors that contribute to delays are port infrastructure, port superstructure (container terminals with their large ship-to-shore cranes), port & terminal management, port authority policy, intermodal connections, and customs.

As the various trade agreement such as the ASEAN Economic Community (AEC) and the Trans Pacific Partnership are coming into place over the coming years, container volumes are expected to increase in ASEAN. The Chief Supply Chain Officer Forum, held in Singapore on 4 and 5 November, discussed with captains of industry the future of Asia supply chains and logistics. At this forum it was clear that in particular Malaysian and Vietnam ports could benefit from these trade agreements. However, as new ports are being developed in Indonesia, Vietnam, Thailand and Myanmar over the coming ten years, it is very important to further strengthen existing ports and upgrade logistics capabilities in AEC countries.

Four areas have been identified that will need to be addressed by ports and logistics businesses in the coming ten years in Asia:

1. Reduction of port times and cargo dwell time by enhancing its efficiency of physical operations and customs; Efficient ports are of pivotal importance to ensure low total supply chain costs of a country.
2. Extend control of the port hinterland; Key will be the development of an efficient transport network to connect hub seaports to surrounding countries via sea, rail, and road to support their hub function.
3. Upgrading of port logistics clusters through development of highly mechanised and automated Regional Distribution Centres (RDC). This new generation of Mega Distribution Centres, which are multi-user sites and largely solar based, will be much bigger than the current distribution centres we see in Malaysia today. These RDCs will need to be well connected with other ports and logistics clusters along the Trans ASEAN Transport Network, connecting Singapore, Malaysia, all the way to China.
4. Increase utilisation of transportation assets: trucks, vessels, rail shuttles and planes.

According to the Chief Supply Chain Officer Forum, collaboration between the logistics industry and universities as well as research firms is not very common in Asia. This needs to change according to the Forum for higher levels of innovation in the ports and logistics industry and securing sufficient supply of new talent.  The perception of the ports and logistics industry is not glamorous enough for many students, which today is dominated by men, which could benefit from a more diverse workforce.