North American ports need to adapt to changes in customer demand and future industry trajectory, according to port and terminal operator APM Terminals.
Speaking at the Journal of Commerce’s annual Port Performance North America conference, APM Terminals head of Hub Terminals, Jack Craig spoke about the challenges ahead for North American ports and how they compare to other ports in the world.
“The customer landscape has changed and become much more competitive. We as an industry need to work together, adapt and respond or watch the cargo move elsewhere,” Craig said.
The vessel alliances now reshaping the industry have been a success for ocean carriers and their quest for cost savings, asset efficiency and economies of scale.
“Larger alliances, larger vessels and larger port call volumes per ship are a catalyst to improve performance at ports. The newly widened Panama Canal and heightened Bayonne Bridge in the Port of New York/New Jersey create new opportunities for larger ships plying the US east coast trade – and creates new demands on port infrastructure, port operations and all the stakeholders in the supply chain,” Craig continued.
With the lower bunker prices of recent years, terminal costs have now become the highest cost for liner operators, which creates increased pressure on terminal margins “as our customers are expecting us to find ways to help them reduce costs year over year.”
“Given the inflationary pressures built into large portions of a terminal’s cost base, this requires different thinking to remain competitive,” Craig informed.
He also talked about the role of technology in the ports business in the context that every industry is using technology to improve the customer experience, create a safer working environment and improve competitiveness.
“We can do this in a responsible way with our partners to grow the business, improve productivity and reliability for our customers and ensure the port industry business model is viable short and long term,” Craig concluded.