90 per cent of global trade is sea-borne and shipping industry is critical to the global supply chain due to its efficiency and cost-effectiveness in facilitating the carriage of the global trade. Jakob Friis Sorensen, Managing Director, APM Terminals Pipavav [GPPL] talks about the immediate risks to the industry and taking steps to mitigate them.
How do you see the impact of COVID-19 pandemic on trade and logistics industry?
With two-thirds of the world’s population in a lockdown, shipping and logistics industry is bound to bear the brunt as 90 per cent of global trade is sea-borne. COVID-19 has impacted the global demand and supply, impacting the trade in varying proportions across different geographies. It has led to the disruption of supply chain which heavily relies on manpower and is the backbone of logistics. Reduced manpower in the system, as mandated by the government for safety reasons, has slowed down the supply chain. For now, the industries are focusing on the current challenges and trying best to continue the operations with minimum disruptions possible.
What are the immediate risks to the industry and how are you mitigating them?
Firstly, we must note that shipping and logistics has been deemed ‘essential services’ by the government and that these should continue to function even while the country is under a lockdown. We, as a port, have the responsibility towards keeping the global trade running and therefore are taking all possible precautions while keeping our operations running.
However, during the lockdown, due to the acute shortage of manpower, containers have started piling up at ports leading to congestion. The other challenges which are also arising primarily because of the same reason are a longer turnaround time at ports, there is a demand shock that is impacting volumes, and ultimately the disruption in last-mile delivery. That said, we are working on various solutions for our customers to ensure that we reduce the disruption in supply chains. These include increased evacuation by rail which has been functioning normally or even better in some cases due to the passenger trains not being in the system at the moment and thus reducing congestion at our port. Vessels calling the port are arriving and sailing and our employees are working with all necessary safety gear on, to secure essential business continuity while complying all guidelines for COVID-19 issued by statutory authorities. We have continued to accept and evacuate container or cargo arriving by vessel, rail and road. Port customs house, clearance and other business activities at the port remain operational. We are collaborating with surrounding villages where our people live and providing the communities in those villages with all possible support.
We are closely monitoring the overall situation and are committed to ensure safe operations for our people and ensuring that we safeguard our customers’ supply chains.
How prepared do you think the industry is to sail through this challenge?
The shipping industry is critical to the global supply chain due to its efficiency and cost-effectiveness in facilitating the carriage of the global trade. The lockdown has reinstated the importance of having endless access to essential commodities, such as food and medical supplies, and the indispensable role of the logistic sector in meeting the multiplying need for them. The rapid spread of coronavirus has had a major impact on global shipping markets, with the slump in demand for goods from China having a ripple effect on everything from container ships
to oil tankers.
Overall, the industry has been taken by surprise. This disruption has undermined the supply chains of industries across the world. Shipping lines and ports have to adhere to new regulations. The situation, as we see it, is an ever evolving one, as we are still in the midst of the pandemic and countries have continued to keep their land borders shut while industries are gradually opening up.
How are the initiatives of APM Terminal Pipavav in technology, innovations and infrastructure assets, helping in addressing the current issues in the country?
We are engaged in providing essential services, considering we handle essential goods and commodities such as fuel, medical supplies, food grains etc., which are the lifeline of our country. The port has adopted standard crisis protocol at both the international and local levels as per the various relevant guidelines of Government of India, Government of Gujarat, Gujarat Maritime Board and other statutory bodies/administration. In addition to those, we also have our own internal protocols which are being followed very strictly for the safety of our people, our vendors and our customers. We continue to operate within normal parameters without any significant disruption. In addition to providing a safe working environment for our colleagues and stakeholders at port, we have also reached out to communities in and around the port to provide necessary support as we battle the COVID-19 pandemic together.
Since the lockdown announcement, we have successfully handled more than 35 vessels and more than 175 rakes handling our customers’ cargo including essential commodities. All these vessels and rakes were handled without any delays and well within normal operating parameters. We have sufficient yard capacity and have created additional yard space to facilitate cargo flows and help address any emergent supply chain needs.
What is your take on the government’s response so far?
The local authorities ranging from the State Government to the Central Government, freight forwarders, the local police, Railways and local transporters are working in a coordinated manner to ensure the wheels of the supply chain keep moving. All these constituents along with the port have played a pivotal role in keeping the supply chain on without any disruption.