Jeff Theobald, President and CEO, Philadelphia Regional Port Authority

https://www.philaport.com
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Jeff Theobald

The challenge of many of us in the port industry is to be cognizant of the challenges of our industry as a whole, and to address those challenges accordingly. A simple audit of the marine transportation industry yields one glaring fact: Carriers are hurting these days. Due to dynamic forces, which the carriers themselves were active participants, rates do not support the major capital expenditure the lines have made on ships. To stem the bleeding, carriers are consolidating at unprecedented levels, and targeting more than ever those remaining cargoes, like refrigerated cargoes, that still command decent rates.

The challenges facing our ports, especially ports that consider themselves alternatives to the largest and busiest ports, is to take the above truths and find workable solutions. Because of tighter profit margins, carriers are looking for greater productivity, efficiencies, and market share from the ports they call. They want to avoid congestion. Time is money.

BCOs are also part of the mix, and they will also voice concerns about logistics efficiencies. Gone are the days when everyone simply accepted that it’s always been done that way, or in our industry’s case, shipped. Supply chain logistics has to make its case and prove itself over and over again. New and innovative approaches are required by those who want to make it through to a time when rates are once again more equitable.

A port can also get a leg up if it specializes in a cargo that a carrier still finds attractive to handle, such as refrigerated and perishable cargoes. There is also great value in carriers using alternative ports where congestion isn’t an issue. But, now more than ever, ports must look hard at the efficiencies of their operations and build infrastructure that allows carriers to add value to their portfolio of services.

These may seem obvious observations to some people, but I think that many ports fail to recognize the current realities. Not keeping an eye on future value propositions could limit growth potentials. It’s always wise to identify the customer’s issues. And then maybe you can create a dynamic environment where all parties succeed.