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Abu Dhabi Ports bullish on shipping container volume growth amid coronavirus crisis

State-owned Abu Dhabi Ports on Tuesday signalled that it was optimistic about container shipping volume growth this year despite the coronavirus pandemic that has hit the global maritime transport industry.

“We can expect continued growth in containerisation; the ports have not slowed down through this period. If anything we’ve seen an upswing based on demand [and] so we don’t see a major impact,” Robert Sutton, Abu Dhabi Ports’ head of logistics cluster, said at a webinar on global trade and logistics.

Mr Sutton, who was responding to a question from The National about the impact of the pandemic on the company’s performance this year, did not elaborate further on the outlook.

Movement restrictions, quarantines and expatriate labour disruptions caused by Covid-19 caught many companies across the world off guard.

“Why does that matter for the UAE? There is a high reliance upon workforce from overseas … [and] the high percentage of imports supplied into the UAE – if you put those together, you almost have the perfect storm,” Mr Sutton said.

The Covid-19 pandemic has presented both challenges and opportunities for the company, he said.

One opportunity is the increase in demand for essential items, he said.

Abu Dhabi Ports responded by managing increased inventory through redesigning government facilities such as cruise terminals, exhibitions halls and wedding halls that are not currently in use.

“We’ve been able to leverage those as temporary storage and distribution facilities to bring inventory closer to the community,” he said.

A sharp increase in online shopping during the restrictions also created an opportunity, but put “enormous” pressure on retailers’ systems and resources”, he said.

The Abu Dhabi Ports’ logistics cluster responded by setting up training centres for people laid off due to the downturn in the F&B sector, equipping them with new skills and sending them to its retail partners.

The pandemic is “a black swan event”, he said.

“We can expect change from this. It would be naive to think otherwise.”

One of the key areas of change is a more “risk-averse” approach to sourcing in the supply chain, he said.

Another is an increasing shift away from low-cost labour and higher adoption of automation, robotics and the use of data across the supply chain.

“Abu Dhabi Ports is making significant investment in infrastructure … a lot of companies will be scaling back and looking at their budgets … Abu Dhabi Ports is in a position where we choose to take the opportunity to make the investments and scale solutions and build ahead of the curve,” he said.

Asked if Abu Dhabi Ports will introduce preferential rates for its customers as companies grapple with cash shortages during the pandemic, Mr Sutton said such incentives are addressed based on individual cases.

“Abu Dhabi Ports works continuously with our customers to make sure that its services are commercially well-positioned,” he said.

“In terms of specific incentives then that would be handled on a case-to-case basis but we’re very happy to engage with customers.”

Abu Dhabi Ports has digitised more than 70 per cent of its processes in some areas of business, as the pandemic accelerates the global shipping industry’s drive to go digital and limit the costs of paperwork.

“We see progressively [that] the company will move more and more towards an aggressive digitisation and the use of greater technology, not only within the supply chain, but across its ports, real estate and its marine business,” Mr Sutton said.
Source: The National

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