The Directions And Future Challengers

PORT KLANG IN THE YEARS AHEAD - AN OVERVIEW OF OPINIONS FROM PORT TERMINAL OPERATORS

WESTPORT

Datuk G Gnanalingam,

Executive Chairman, Kelang Multi Terminal Sdn Bhd

Q. What, in your opinion, would be important trends in cargo and ship handling that could be witnessed (or expected) in the years ahead at Port Klang beginning with the new millennium?

Ans: In the next millennium, the key trends in cargo and ship handling will be the size of ships and the volume of cargo that each one of them will discharge and load at ports. The average size of ships 20 years ago was 1,000 TEUs, and is now 5,000 TEUs.

But we have seen the launch of 8,000 TEUs vessels, whilst theoreticians predict that the world will soon see 15,000 TEUs ships. As ships grow bigger, ports will need deeper channels and berths to accommodate them.

Westport is well-positioned to handle bigger ships and greater volumes because of our 15 metre draft and dedication towards 25-30 moves per hour per crane.

Whilst there are many ports for shipping lines to call, some will emerge as transhipment hubs. Port Klang is fortunate that we have a sizeable volume of indigenous cargo with which to attract shipping lines, and the capacity today to handle transhipment cargo at a very attractive tariff. As such, we are positive in our forecast not only for the growth of Westport but also for Port Klang.

The key issue is to remain supply driven as the growth of containerisation in the last decade has been faster than the response by Ports to build capacity.

Q. How and what measures/strategies would you take for the terminal to cope with the changes that are expected?

Ans: The strategies that Westport will adopt to cope with the trends in the next millennium are as follows:-

First, the company will be passionate about productivity and committed towards leaving no stone unturned to achieve 30 moves per hour per crane. This will propel us to Top Ten status not merely in terms of volume, but more importantly, in terms of efficiency.

I believe that achieving Top Ten status for efficiency will be a better guarantee for the success of Port Klang than merely being blessed by the sheer availability of local cargo.

The second major trend will be to increase transhipment volume to achieve the nation's load and hub centre status.

The third strategy is to be supply driven. In the year 2000, Westport will have 12 quay cranes, a 1800 metre terminal, an additional 50 acres of yard, and 25 new trailers. The port's yard capacity will quadruple to 45,000 boxes per week. All these will ensure our berth capacity increase from 1 million to 1.8 million boxes, whilst yard capacity doubles from 1.2 million to 2.4 million boxes. Westport's ultimate capacity is about 20 million TEUs.

Q What can port users expects from your terminal in the form of a higher level of service and efficiency with the changes?

Ans: Westport is of the firm belief that berth, yard and equipment capacities are merely the basics. In the long-term, it is productivity and efficiency that will ensure our future. As such, we are single-minded in terms of Fastport Standards, faster turnaround, and berth on arrival, all of which translates into cost savings for shipping lines.

The key issue for Port Klang is to simplify documentation and standardise tariff so that the cost of operations in Port Klang is transparent. Currently, the cost of logistics in Malaysia is compounded by numerous players and contractors in the logistics chain.

The success of DHL and UPS in the air cargo industry must definitely trickle down and be emulated by the port industry. As such, single billing, one-stop centres will be norm of the future.

Port Klang will have to unshackle a lot of its age-old practices. There is no use in having first-class airports and ports if we are going to remain out-classed in terms of the rest of the logistics chain.

In the next millennium, we will have to go beyond merely IT-driven systems and EDI to Web sites, E-Commerce and E-Knowledge, which requires a paradigm shift in management intelligence. Distance that used to be measured in length and time will now be measured in terms of cost to ensure greater efficiency and connectivity for the consumer.

Q. Do you see any specific changes in the demand structure for port services and facilities?

Ans: The demand structures for port services and facilities in Port Klang is definitely be on the rise. Port Klang has grown from 1.4 million TEU in 1996 to 2.5 million in 1999. This is expected to grow to 3.1 million in the year 2000.

Whilst it is true that many of our shippers still prefer to use regional ports, we believe it is the shipping lines who will help redirect these shippers to Port Klang. When cost savings are apparent to both cargo owners and vessel owners, Port Klang needs only to have the capacity to handle the growing volume.

Q What are, in your view, major challenges Port Klang is expected to face in responding to the demand in the years ahead?

Ans: The major challenges for Port Klang in the years ahead will be to remain supply-driven, to ensure berth on arrival, and fast turnaround, based on high productivity, zero service failures and accuracy of information dispatch.

In order to sustain Port Klang's progress,KPA will have to handle a lot of the requirements in-house, just as Dubai Ports Authority and Cyberjaya Authority. This will include the administrative and legislative issues, tariff considerations, and port industry players' needs, visas, licenses and incentives to facilitate Port Klang's continued growth.

In the next millennium, perhaps licenses for players in the logistics chain will be issued based on management expertise, IT capabilities and international linkages, as AFTA and the WTO would necessitate greater play by the local players in the global market. Go Global But Think Local will only be meaningful if the local players go global. As such, the local license-holders must have a "Glo-cal" approach to the world of logistics.