IAPH World Ports Conference: European Ports in favor of globalization and free trade
24 Jun 2021 16:00 Shipping News
Due to the coronavirus pandemic, this year’s IAPH World Ports Conference is being held from June 21 to June 25, 2021, in a hybrid, mostly digital format. The IAPH Regional Session Europe was held on June 21 as part of the international conference’s agenda. Not only European IAPH members, but also participants from around the world attended this time. The session focused on supply chain resilience and the position of European ports within the trends and forces shaping the global economy.
A multitude of events in recent years temporarily disrupted production in many companies worldwide. Shocks that affect global production are growing more frequent and severe. Ports and logistics chains will have to adapt to this situation, to provide stability despite regular disturbances. The COVID-19 pandemic and the Suez Canal blockade have proven that disruption can be expected at any time, and the consequences of climate change or geopolitical conflicts increasingly threaten established processes and supply chains, as well.
Knut Alicke, Partner at McKinsey & Company, stated: “Our analyses show that all industries have experienced 1-2 month long disruptions in the supply chain every 3.7 years on the average – this will continue in the future. Companies will have to calculate their prices to compensate for these interruptions, which in the course of a decade can eat up about 40 percent of a year’s profits. Therefore, those responsible for supply chains in various areas will have to re-think.”
Several options for strengthening value chain resilience were presented during the meeting. In the keynote, Knut Alicke also examined the feasibility of movement based on industry economics as well as the possibility that governments might act to bolster domestic production of some goods that they deem essential or strategic from a national security or competitiveness perspective.
Knut Alicke added: “Resilience, a company’s capability to deal with crisis situations, is more than just a buzz word. Companies have to consider more than just where goods are produced. Companies need to create a new balance between just-in-time production with lean supply chains and minimal stockpiles on the one hand and long-term resilience on the other. Among the measures that companies can take to increase resilience are detailed structuring of the lower levels in the supply chains and their digital interlinking to increase transparency, building up their own capacity as well as that of their suppliers so as to provide for flexible production at various sites, increasing stock, and improving their balance sheets.”
Jens Meier, CEO of Hamburg Port Authority, who hosted the IAPH regional meeting for the second time as IAPH Vice President Europe, organized this session bringing the message that global supply chains are still a source of strength, not weakness. A more globalized world makes port operations and their efficiency more challenging. However, their resilience comes from multiple sources of supply and constant adaptation to shocks to reduce the cost of disruptions and the time it takes to recover. During the panel discussion, he said, “The previous disruptions have given us the opportunity to be very well prepared. I always try to strengthen the whole supply chain process and the way to succeed is through partnerships in data sharing and digitalization.” Jens Meier believes that ports have an opportunity to emerge from the current crisis more agile and innovative while benefiting from all the advantages that global trade offers.
Barbara Scheel Agersnap, CEO of Copenhagen Malmö Port, said: “Disruptions, such as COVID-19 and the blockage in the Suez Canal, will occur, but in order to enhance resilience and keep global supply chains intact, we, the actors within the logistics chain, must see ourselves as partners, not as customers and suppliers, with a great deal of shared responsibility and interdependence.” She added, “Digitization is key, also for Copenhagen Malmö Port, which has initiated a joint collaboration with TradeLens, a blockchain platform, to ensure a more seamless collaboration between the involved actors. Furthermore, ports have to be recognized as critical infrastructure and given the necessary conditions to function 24/7, all year long, connecting the blue motorways of the sea with a strong hinterland.”
Robin Mortimer, CEO Port of London Authority, said: “Throughout this pandemic it has been critical to be flexible not just with the strategy but also from frontline behaviour. The key to resilience for Port of London Authority has been the people and the strength of stakeholder relationships to understand an ever-changing environment.”
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