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Covid-19 supply chain disruption reinforced hub port role: PSA senior executive

The supply chain disruption caused by Covid-19 has reinforced the role of container hub ports according to a senior executive from terminal operator PSA International.

Wan Chee Foong, regional ceo of Middle East South Asia & head of business development, PSA International, told a webinar on Wednesday: “During this period the supply and demand shocks that occurred have certainly been disruptive but there is a silver lining it has reinforced the role of the hub ports that have in general fared better than the gateway ports.

“Just like the hub and spokes of a bicycle wheel hub ports have been especially critical in keeping global trade and supply chains connected during this pandemic. Regional hubs such as Singapore have indeed stepped up as key nodes in the supply chain during the pandemic going beyond just providing connectivity to enhancing connectedness in the supply chain,” Wan said during a panel discussion for the 14th Singapore Maritime Lecture, held online this year due to the Covid-19 pandemic.

Despite the sharp drop in global economic activity in the first half of the year due to widespread lockdowns Singapore’s port saw just a 1% contraction in container volumes to handle 17.48m teu, according to figures released by the Maritime & Port Authority of Singapore (MPA).

“During Covid-19 when the markets were undergoing severe supply chain disruptions the importance of such hubs became more pronounced,” he said.

Wan highlighted how PSA had been able to use a solution called Advanced Transhipment Management (ATM), developed prior to the current crisis. He said the solution allowed large cargo owners and shipping lines to use Singapore as a staging hub to optimise their supply chains by marrying cargo, regulatory and financial flows.

“In Q1 shipping lines adapted quickly and used Singapore as a hub to stage their inventory and containers bound for China leveraging the proximity of Singapore and extensive network connectivity,” Wan explained.

“Some countries also imposed restrictions on vessels and crews from China, but PSA Singapore became a safe haven and worked closely with our shipping line customers and key stakeholders such as MPA to overcome these restrictions to tranship the cargo from China onto fresh vessels and onward to destinations from Singapore.”

He added that PSA hubs in Panama and Portugal had also stepped up as key hubs to provide resilience to the global supply chain during the Covid-19 pandemic.