Port operators expect strong momentum in volume growth

The industry players have reacted swiftly to adopt strict cost management, as well as heighten operational efficiencies and productivity


JOHOR Port Bhd sees a strong momentum in volume growth it has sustained so far this year, based on the volume being handled at the port.

Johor Port CEO Md Derick Basir said cargo volume has improved significantly from the beginning of the third quarter of 2020, and with the reopening of China’s economy, subsequently, allowing trade activities to restart.

He said the port industry and the demand of its services are a “derived demand”, making it highly correlated with the manufacturing sector that depends on the global consumer demand.

“As Covid-19 has significantly affected the global economy and business climate beginning the end of 2019 until today, we can see that the port industry has had to react swiftly to adopt strict cost management and heighten operational efficiencies and productivity.

“As the economies around the world gradually improve, for example the reopening of China’s economy and the strengthening of consumer demand across the globe, we can only expect the port industry to be one of the main beneficiaries,” he told The Malaysian Reserve (TMR).

Furthermore, upon the adoption of strict cost management and improved efficiencies during the peak of the pandemic, now instilled as the new modus operandi for many within the ports industry, the return to normal cargo volume will only contribute to enhanced profitability for the port industry.

The transportation and logistics sector, which includes port operations, has been classified as “essential” by the Ministry of Transport ever since the first Movement Control Order (MCO) imposed in March 2020, and continues to be the case until today.

Johor Port continues to operate at an optimum level to ensure that there is no disruption to the import, export and logistics activities.

The port’s employees directly involved in crucial terminal operations will only be deployed based on the daily operational requirements.

Md Derick said they were fortunate in the sense that there was no serious congestion issue at Johor Port due to the various operational measures that have been implemented.

Some of the operational measures that have been enforced to counteract potential congestion include increasing the stacking height of containers at the yard in anticipation of longer dwell time of containers, mobilising part of the export yard to be converted into interim import yard and designating other suitable areas within the port as standby yards.

During the MCO, all non-essential factories have been ordered to shut down. The decision posed difficulties for the ships loading items from overseas to discharge and distribute the cargo.

Despite this challenge, Penang Port Sdn Bhd is still able to cater to the needs of its port users and fulfil their requirements accordingly, albeit with some challenges in terms of time for the deliverables.

“As for the export business, Penang Port experienced a shortage of volumes due to the closure of factories during the MCO. Nevertheless, we prepared to support the essential services in terms of export activities.

“For the shipping and port industry, the Covid-19 has created vessel delay issues, (and) container shortage issues especially to ports in intra-Asia route,” Penang Port CEO

Datuk Sasedharan Vasudevan told TMR. The supply and demand as well as the logistics chain disruption affect the shipping industry globally which indirectly contributes to the volatility in volume in port throughput worldwide.

Penang Port adopted and strictly complied to National Security Council’s required standard operating procedures (SOPs) during this pandemic.

Prior approval from the appropriate authorities is compulsory to be obtained by the port users and vendors to operate inside the port terminals in line with the direction made by the government.

Similarly, employees directly involved in crucial terminal operations will only be deployed based on the daily operational requirements to uphold strict safety standards.

Meanwhile, the employees who are not directly involved in terminal operations will be minimised.

On ferry services, Sasedharan said during MCO, in line with the government SOPs, all operators of land and sea public transportation are allowed to operate at 50% of passenger capacities.

“Moving forward, Penang Port will continue to play a crucial role to flatten the curve and in ensuring all employees, port users and vendors are free from Covid-19 by establishing a safe working culture,” he said.