The APSN workshop on “Restructuring of Shipping and Port Industry: Trends and Challenges” was held successfully on August 15-16, 2017 in Ho Chi Minh City, Viet Nam. The workshop is hosted by APSN, and co-hosted by Vietnam Maritime Administration (VINAMARINE). More than 100 participants from 13 APEC member economies attended the workshop.
The APEC Port Services Network (APSN) is a non-profit organization established on May 18, 2008 in response to the directives of the 14th APEC Economic Leaders’ Meeting held in 2006. Currently, 18 of 21 APEC member economies have joined APSN. The APSN is a premier platform for communication and collaboration among port and port-related industries in the Asia-Pacific region. The APSN also creates a unique channel for dialogues between industries and competent authorities on various issues of common interests, by which the views of industries would be well presented.
At the opening session, Ms. Joyce Henry, President of the APSN Council, opened the workshop and thanked the Ministry of Transport, Viet Nam for hosting the APSN workshop. Mr. Le Cong Minh, President of Vietnam Ports Association welcomed all participants to Viet Nam, and hoped everyone have a good time in Viet Nam.
Dr. Bui Thien Thu, Deputy Administrator of VINAMARINE delivered a keynote speech on “the Challenges of Viet Nam Shipping and Port Industry”, and Dr. Geraldine Knatz, APSN Senior Consultant/Professor of University of Southern California, Former President of IAPH, Former Executive Director of the Port of Los Angeles, made a keynote speech on “Restructuring of Shipping and Port Industry: Trends and Challenges”.
There are sessions for presentations and panel discussion and also an interactive session at the workshop. Speakers from China Waterborne Transport Research Institute (WTI); COSCO SHIPPING Ports Limited; Maritime Administration of U.S. Department of Transportation; Maersk China; Drewry Shipping Consultants Ltd.; Port of Everett; Port Klang; Port Authority of Thailand; Vietnam Ports Association; the Association of Canadian Port Authorities delivered excellent presentations on the restructuring of port industry, the Shipping Alliance, and the Mega ship’s influence on ports.
The year of 2018 marks the 10th anniversary of APSN and the APSN will celebrate the10th anniversary in conjunction with the APEC Port Connectivity Conference, and the representatives of APEC port industry will be invited to attend the APSN events and exchange ideas and share views together.
Excellent Ideas Shared by Guest Speakers
Dr. Geraldine Knatz, APSN Senior Consultant/Professor, University of Southern California/ Former President of IAPH/ Former Executive Director of the Port of Los Angeles
With world trade growth at a much slower pace and possibly more consolidation coming among the ocean carriers, we can expect to see more port reactions that involve collaboration and integration. Many of the world ports are not bystanders to the process of integration of the supply chain. The ones that take action will the ones that survive.
Dr. Bui Thien Thu, Deputy Administrator of Vietnam Maritime Administration (VINAMARINE)
Viet Nam has 3,260km coast line and 44 seaports, the challenges of the port in Viet Nam are small ports, low productivity, internal competition, tight budget, high social cost, increased logistics cost, tight budget, high social cost, increased logistics cost. The Viet Nam government hope to cooperation with other ports to share the port management experience; increase port operation efficiency, reduce logistics costs and control environment at seaport through application of science and technology.
National fleet of Vietnam small, scattered; the structure of the fleet is unreasonable; and lack of container ships and specialized-vessels; modernization of the low fleets.
SOLUTIONS TO STATE MANAGEMENT AGENCIES are to review, amend, supplement and perfect the legal system; speed up the restructuring of inefficient businesses; financial solution: support for investment capital; extends the payment of taxes; solutions on taxes; accelerate the review of sea transport planning up to 2020 and orientation to 2030 and specialized projects; having a certain policy of protection for the seagoing ship without breaching the commitments with the international organizations; protection of domestic transportation rights having a certain policy of protection for the seagoing ship without breaching the commitments with the international organizations; protection of domestic transportation rights; renovation of human resources training; and promote international cooperation on the sea.
SOLUTIONS FOR SHIPPING ENTERPRISES are to: strengthen the renewal and upgrading fleet; enhance the management and operation of the fleet; apply information technology to the management and operation of the fleet; strictly observe the provisions of domestic law and international conventions, minimizing the detention of ships and raising the prestige of the fleet; improve service quality to attract and retain customers; enhance the professional skill level for crews running international routes.”
Mr. ZHANG Baochen, Chairman of the Academic Committee, China Waterborne Transport Research Institute
The consolidation of large port and shipping companies is conducive to improving service networks, lowering operation costs and sharpening competitive edge. However, overly centralized shipping and port resources could adversely affect service quality, and industry giants' increased bargaining power will lead to changes in the interest pattern of related parties. As Chinese companies are going international at a faster pace, they have to accumulate experience to address various issues regarding how to better cope with the actual conditions, cultures and markets of their investment destinations.”
Mr. Jens Eskelund, Managing Director of Maersk China Ltd.
Shipping is not out of the storm yet, but gradually improving demand, better supply/demand balance and industry consolidation provides a platform for improved performance for the shipping industry going forward.
Mr. Les Reardanz, CEO of Port of Everett, the United States of America
The United States ports face increasing and demanding infrastructure challenges to accommodate the sea changes occurring in the shipping industry in order to provide the necessary supporting infrastructure. Ships continue to increase in size, requiring ports to have increased sea lane access, deeper berth dredging depths, increased landside and on dock infrastructure, and the appropriate landside connections. These supporting infrastructure requirements come with challenges to include, by way of example, environmental regulations to construct the projects, financing issues, and customer and permitting timing issues.
Mr. Lonnie Kishiyama, Director of Office of International Activities Maritime Administration (MARAD), Department of Transportation, the United States of America
The U.S. Maritime Administration (MARAD) discussed Port Infrastructure Restructuring for the Changing Shipping Industry, and specifically, the U.S. Maritime Administration’s Port Initiatives. MARAD presented on two initiatives that impact U.S. port projects and funding both inside and outside the gates. The first is the Port Planning and Investment Toolkit. This toolkit is a collection of best practices and tools that ports can use to develop investment grade infrastructure improvement plans. The second is the PortTalk regional maritime collaboration initiative. PortTalk collaborations are facilitated, day-long sessions where stakeholders from an individual State or region work together towards the development of their maritime transportation plans and projects. MARAD also discussed a variety of U.S. port infrastructure grant and loan programs. Lastly, MARAD provided an overview of the U.S. Marine Highway Program.
Mr. Desmond Lim, Chief Commercial Officer, Jurong Port, Singapore
Global economy slowdown, regional competition, environmental issues, security threat, labour crunch, land intensification needs, all these problems let multipurpose ports embrace technology and innovation.
Dr. Yungsok Choe, Senior Researcher, Maritime Policy Research Department, Maritime Industry Research Division, Korea Maritime Institute
Having suffered under the global shipping recession and from competition over low freight rates, Hanjin Shipping, the largest shipping company in Korea and the 7th in the world has gone bankrupt. Hanjin tried to secure contracted carriage by requesting Stay Orders in foreign countries and the Korean government expedited to help Hajin process deliveries. An inter-ministerial task force was formed to help and find alternative transportation for cargo. Currently, three major shipping alliances dominate the liner business and many small-medium sized liners are being pressured to be consolidated or merged. In the meantime, in Korea, Hyundai Merchant Marine and SM Line are expanding capacity and business in the absence of Hanjin Shipping. The Korean government recognizes the importance of seaborne transportation with guaranteed efficient and stable operations. Thus it places emphasis on restructuring and strengthening competitiveness of the shipping industry. With this in mind, in order to maintain the healthy maritime industry, we all need to make efforts to focus on collaboration and cooperation in the APEC region.
Mr. Aden Wong, Project Manager, Senior Consultant, Drewry Shipping Consultants Ltd.
The liner industry, in its present state, cannot make sustainable profits. Underlying fundamentals have led to issues such as overcapacity and intense price competition. When coupled with industry fragmentation and inelastic demand, the liner industry has been mired in a prolonged period of crisis. But sustained profitability is possible with 2 key changes: the end of chasing economies of scale and consolidation within the industry. Recent shifts in the shipping industry have shown that these changes are already taking place. With an improving demand outlook on the horizon, the liner industry could be on the verge of entering a period of sustained profitability amid a conductive operating environment.
Ms. Huang Li, General Manager of Planning & Research Department of COSCO SHIPPING Ports Limited
The liner consolidation has a great impact on the shipping industry in terms of less big customers, big competition and more uncertainties. The Belt and Road Initiative injects new motivation into the development of global economy, and economies along B&R are faced with accelerated development, but local infrastructure and logistics are falling behind, so it is an opportunity for the port industry.