NINTH EDITION 2020
NEW GOALS AND OBJECTIVES
Crippling economies are the onset of establishing new values to evaluate the quality of ventures.
Are we running out of time?
Better to be
safe than sorry
Are you on-track to achieving your goals?
ARE WE RUNNING OUT OF TIME?
Adopting greener and sustainable practices in ports have risen but, as a collective industry effort, action to mitigate climate change is too slow that the world is at risk of inescapable catastrophe. Just recently, the UN announced we had failed to meet a single target set over a decade ago to prevent the destruction of nature.
More commonly, environmental sustainability sits at the bottom of business goals while maximizing shareholder value or return on investment maintains top priority. However, the rise in pollution and temperatures, and destruction from natural disasters, combined with the ongoing battle with the disease has forced immediate attention.
Very quickly, the environmental impacts induced by poor practices are outpacing ports and terminals ability to precipitate adequate efforts to respond effectively. A Boston Consulting Group (BCG) generated a mid-year analysis which highlighted the increasing occurrence and magnitude of climate change on companies in the past year, revealing the 40 weather disasters totaled to more than $US1 billion for each event. Disruptions now occur, on average, every 3.7 years, and companies can expect to lose an average of higher than 40 per cent of their annual profits every decade.
The consequences are more prevalent with sites and companies neglecting their environmental responsibility, and experience extreme floods/rainfall and droughts which inflict significant damages to coastal transport infrastructure and services. Without policies or standard of practice to sustain the environment, the financial burden grows especially when involved with repairs from damaged equipment; road blockages because of natural fires or floods; clean-ups due to fuel and oil spillages; and high temperatures forcing terminal stalls. Therefore, considering the long-term impacts of every action will prove opportunistic, and arguably, necessary.
Deep adaptation has emerged as a new concept to address the misconception that climate change presents incremental challenges which can overcome in gradual stages. Instead, it proposes we anticipate disruptive and uncontrollable heights of climate change, accelerating starvation, destruction, migration, disease, and war. Monios and Wilmsmeier further exclaim existing port and shipping forecasts for uninterrupted growth are only factoring minor incremental policy changes already known to be insufficient for mitigation and adaptation. Executives or influential authorities in the maritime and logistics sector must identify the potential threats that may occur outside their peripherals or within their scope to prepare for an advanced adaptation schedule.
Green port management and profitability now go hand in hand as establishing working practices or production methods which minimize the impact on the environment will deliver more business value in the long-term. Ensuring the business is more sustainable extends further than just focusing on building goodwill, it more so develops quality, reliable, sustainable, and a resilient foundation for future planning.
BETTER TO BE SAFE THAN SORRY
Port personnel working on-site meet numerous situations which may threaten their safety. Committing care and diligence when handling dangerous goods, mandating equipment, and working in hazardous environments has surged as the frequency of incidents is accelerating.
The world was at a standstill as it witnessed the terror and destruction from the explosions in Beirut, Lebanon, early August. Home to two million people, the event inflicted devastating repercussions, costing almost 200 lives, injured thousands, and left 300,000 displaced. The detonation drilled down to the improper storage of 2,750 tons of ammonium nitrate placed within the proximity of a fire – questioning the quality of existing business practices instituted within ports.
After further investigation, weak enforcements by flag registries denying shipowners accountability was a counterpart attributing to the travesty. Ian Urbina, a New York Times reporter, revealed the explosion also derived from a variety of factors such as stricter immigration laws which regularly trapped stranded crews on deteriorating ships and lax rules. Other stemming causes depict the “maritime bureaucracy designed more to protect the anonymity of shipowners than to enable oversight and transparency of the industry.” Urbina alludes to the current challenges inherent in the maritime industry to instigate action and put forth safety.
With most of the port’s facilities destroyed, access to and from the sea and city has reached an abrupt halt. Being the nation’s principal port and now declaring incapable of processing any cargo, shackles the country’s supply chain. The severity of the damage is an estimated $15 billion, which indicates the likelihood of returning to the former state will not be feasible anytime soon. The unfortunate event was the onset of total safety reformation, highlighting proper training and reinforcement is crucial to fending off complacency.
Safety, among other factors, had also escalated in priority when undertaking ventures as it frames the scope of projects and governs operations within the terminal grounds. The sudden change derives from the series of events serving as reminders to fortify strict measures which prevent and ensure employees know how to abate oncoming dangers like machinery damage, fires, and accidents when loading or unloading containers.
Investing in proper training to educate employees of the potential dangers and hazards they may face on-site will inarguably set a safer working environment, as equipment mishandling or negligence when working minimizes. However, in the conditions beyond human capacity like heavy winds and rains – employees, along with port authorities must be trained to ensure that they are well informed and prepared to react in situations which compromises their safety.
ARE YOU ON TRACK TO ACHIEVING YOUR GOALS?
The global pandemic has enforced substantial change in the way logistics and trade operates. Prevalent strategies of expanding port infrastructures into rail operations to facilitate heightening demands for localizing trade have emerged to gage control over the throttle of blanked sailings. Combined with transforming business frameworks, an infrastructure supporting rail operations also offers a means to tackle areas with reduced terminal activity and strengthen environmental goals.
Now, many terminal operators across the world are seeking dependable and climate-smart solutions as an opportunity to stimulate activity realistically. Proposals by vendors to construct rail lines and extend rail services may alleviate carbon emissions up to 70% by 2030. The substantial figure equates to an annual drop of 724,000 kg carbon emissions and is comparable to having 2,000 fewer trucks on the road. Weakened economies are, therefore, realizing the real value of investing in building a modern gateway terminal operating at an international standard to boost the nation’s commerce as well as regional connectivity.
A focal shift from marine to intermodal operations is becoming a new paradigm for ports and terminals as an attempt to diversify their supply chain networks. McKinsey Global Institute recent studies reinforce this idea, indicating companies could convert a quarter of their global product sourcing within five years as they restructure their supplier networks to adopt either an onshore or near-shore approach. Concentrating on this mode of transport strives to encourage fewer shipment delays and shorten the distance between seller and buyer. The lesson of the significant disruptions to port operations, leading an onslaught on the economy has mitigated import dependence. Repairing and strengthening supply chain integration has, therefore, fueled the demand for rail transport.