Abu Dhabi Ports confident about container volume growth

Abu Dhabi Ports confident about container volume growth
Khalifa Port is the largest port in Abu Dhabi

Abu Dhabi Ports expects growth in containerisation, as it works to maintain supply chain continuity during the COVID-19 pandemic.

Speaking on a webinar, Robert Sutton, head of logistics cluster at Abu Dhabi Ports, commented: “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 so we don’t see a major impact.”

He described the pandemic as a “black swan event” which will lead to a more risk averse approach to sourcing, featuring a blended mix of offshore, near shore and onshore.

“There’ll be three investment strategies in the supply chain,” said Sutton. “Meeting those requirements means we have to create new partnerships. We have to be able to extend up and down the supply chain and perhaps build infrastructure which doesn’t exist today.”

In his view, while contracts are today influenced by the factors of service and price, business continuity will increasingly become a third factor as a result of the pandemic.

Until now, business continuity planning (BCP) by Abu Dhabi Ports has focused on issues like labour disputes and geopolitical conflicts rather than the restrictions of movement of people and dilution of the workforce through quarantine and testing, associated with COVID-19.

The UAE’s high reliance on foreign labour and the significant percentage of imports in the country’s food supply almost created the “perfect storm” according to Sutton.

However, previous investments made by Abu Dhabi Ports in technology and data have allowed the company to identify where disruptions in the supply chain are occurring, helping it make informed decisions about supply chain continuity, he noted.

Detailing the response to the pandemic, Sutton cited how the state-owned company has repurposed 50,000 sq m of facilities to serve as temporary storage and distribution facilities, increasing inventory levels.

Government facilities including cruise terminals, exhibition halls and wedding halls have all been repurposed to bring inventory closer to communities and to increase retailers’ supply chain capabilities without them having to invest and build a long term capital impact into their businesses.

More than 500 staff have been deployed to work with retail partners to help them cope with huge spikes in demand for online purchases.

“We set up training centres and we targeted people who were unemployed due to COVID-19 or underemployed,” said Sutton. “We could retrain them and then deploy them with our retail partners.”

Regarding future investments, he noted: “A lot of companies will be scaling back and looking at their budgets this year because there’s unbudgeted spend which is going to hit their P&L this year.

“Abu Dhabi Ports is in a position where we choose to take the opportunity to make investments to make sure we can scale solutions up ahead of the curve – the curve will come.”

Also speaking on the webinar, Amadou Diallo, DHL Global Forwarding, CEO for the Middle East and Africa, explained that logistics costs are rising due to the added complexity of dealing with travel restrictions and lower capacity.

He does not expect the relevance of China to decrease as a result of the pandemic, noting that there is still huge demand to satisfy in China, although he pointed out that there are opportunities for increased manufacturing in other markets.

Diallo stated: “The trend of moving manufacturing platforms from China to Bangladesh, to Vietnam, to other South East Asian countries already started a while ago. It’s the same with many manufacturing platforms being built in Ethiopia, Rwanda, Nigeria.

“There’s an opportunity for many African countries to become manufacturing platforms for Europe, America and the Middle East. They are closer geographically to those markets.”