Is the maritime industry on the road to recovery?

Aerial shot of a massive cargo ship arriving in the Port of Long Beach, California.

Taking a look at the state of the supply chain alone you could be lulled into believing we are on the road to recovery from the COVID-19 pandemic despite European nations now tightening restrictions on their populations and other regions reporting a rise in cases.

This week, commencing 12 October, the West Coast Port of Los Angeles and Port of Oakland both reported that traffic through their ports was beginning to recover with Los Angeles reporting its busiest September in history, as well as its best quarter.

Meanwhile, Oakland also experienced a record-breaking month with a 5% increase in imported TEU for September 2020.

In Europe the Port of Antwerp handled more than one million TEU in one month for the first time since April 2020.

In Singapore the CMA CGM Jacques Saade broke the vessel utilisation record after leaving the Port of Singapore with 20,723 TEU on board. The record coincides with the Port of Singapore announcing its TEU traffic increased 3.21% year-on-year (YoY) in September 2020, a sign that it is also recovering from the worst effects of the COVID-19 pandemic.

While the recovery is ongoing at the worlds ports the reality of the pandemic continues to wipe through those employed in the industry with A.P. Moller-Maersk announcing 2,000 redundancies are likely within the supply chain giant as a result of the pandemic.

The carrier made the redundancy announcement in the Q3 results issues on 13 October in which Søren Skou, CEO of Maersk, said the outlook for 2021 remains uncertain due to the pandemic.

The redundancies are being implemented as part of a restructuring package which aims to save costs.

This is despite many noting that the carriers have fared relatively well during this year of crisis because of increased freight rates, lower bunker fuel prices and operational savings due to cancellations of sailings.

History made

While shipping lines are battling with the impact of COVID-19, MSC became part of a historic vessel call as one of its containerships became the first to travel between the UAE and Israel after it called at the Port of Haifa on 11 October.

On 12 October, the Israeli cabinet unanimously ratified a peace treaty with the UAE. The treaty includes agreements to work together on infrastructure development and technological innovation.

Other connections between the UAE and Israel have been ongoing in the supply chain world with Dubai-based DP World having signed several memorandums of understanding (MoU) with DoverTower, a company owned by Shlomi Fogel, the co-owner of Israel Shipyards and Port of Eilat.

These moves signify greater cooperation with Israel and its middle eastern neighbours.

Investment and development continue

Politics and pandemics aside, ports are continuing to invest in digitalisation, sustainability and growth initiatives.

There has been a growing need for shore-based power for seagoing vessels as a clean power source and at the Port of Rotterdam has announced a rollout of such power solutions. 

In a statement, the Authority said it wants a “significant share” of seagoing vessels to plug in once they have moored along one of the Port’s quays by 2030. This will allow them to power down their diesel generators while berthed and cut emissions output.

Meanwhile, in South America, Contecon Guayaquil S.A. (CGSA), International Container Terminal Services’s (ICTSI) subsidiary in Ecuador, will invest $18 million to boost the Port of Guayaquil’s capacity to handle neo-panamax vessels. This is part of a spend that could total up to $30 million as part of a commitment to increase and promote Ecuador’s foreign trade.

Similarly, in Africa investment is continuing and SIFAX Group, a Nigerian multi-sector conglomerate, has opened a new container terminal at the Port of Lagos.

The aim for SIFAX and the new container terminal is to improve the processing of cargo and Nigerian trade.

The new terminal, which would be a model terminal and sit on 11 acres of land, will leverage on technology and innovations to deliver an unparalleled customer experience as well as cutting-edge inland container services.

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