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By anyone’s standards, 2020 was a most unusual and challenging year. Yet, in the face of economic and business uncertainty and constant worries about how the new strain of coronavirus could impact our health and wellbeing, at Hutchison Ports Thailand (HPT) we did still manage to meet several notable milestones.

What happened to container handling volumes?

Ever since COVID was first detected, China became the first country to be hit with business disruptions that caused a knock-on effect to supply chains and the global economy. If we break up the year into three distinct thirds, between January and April our container handling volumes at HPT were quite steady and we even managed to record a little bit of growth. In the early months, it was very easy to be led into a false sense of security as nobody was talking about a complete implosion in global trade.

However, if you looked carefully at the data at the time, the signs were already there. May to August saw a significant dip as much of the world essentially stopped consuming and in response, shipping lines had no choice but to blank sailings or consolidate their schedules. According to some of our shipping line customers, critical goods were still moving at this time and there was also a surge in exports of products associated with home improvements to the US and Europe, as large swathes of the population were locked-down at home in response to the pandemic. The increasing use of e-commerce platforms appears to have played a significant part in facilitating the movement of goods during this period.

Then all of a sudden starting in September, we saw a noticeable pick up in container handling volumes as the major economies started to open up again. And this trend continued for the remainder of the year – pent up demand perhaps!

What was our reaction to the crisis?

First and foremost, when it became apparent that Thailand would not escape from the effects of the pandemic, we immediately set up our own COVID prevention committee which was tasked with protecting the health of both our employees and outside users of our terminals at Laem Chabang Port. We set up best practice workplace guidelines which included strictly enforced social distancing, hygiene, and temperature checking protocols – all necessary steps required to maintain a 24-hour operation to support the movement of critical goods. Particular attention was paid to protecting our “front line” colleagues, many of whom were required to interact daily with vessel crew and other terminal users.

The second important decision we made was, despite the very real financial pressures on our company, we did not at any time contemplate a reduction to our workforce as a way of realizing short-term cost savings.  Our business is naturally exposed to the ups and downs of the economy and in our experience, if the terminal is under-resourced when there is a sudden bounce back in volumes, productivity will be adversely impacted with resulting port congestion.

Yes, decisions were made to reduce or defer any spending of a discretionary nature but we continued to invest in our key projects such as the ongoing development of Terminal D, and we even decided to speed up the development of some of our planned technology enhancements to give us more business continuity protection in the future.

By laying the foundations for a safe, secure, and properly resourced terminal, we still managed to achieve some critical milestones in 2020 despite the challenges posed by the pandemic. In April, we received delivery of 6 autonomous (driverless) trucks for testing and trials. These trucks incorporate some of the latest available technology and are safe, intelligent, and environmentally friendly. If the testing and integration with our terminal operating system are successful, we will consider ordering some of these trucks for deployment at Terminal D.

On 30th July, we welcomed the MSC MINA to HPT which at 399M length overall and with a capacity of 23,656 TEUs is one of the largest container vessels currently in operation and is certainly by far the largest vessel ever to call Thailand. And on 9th December, we celebrated the handling of our 30 millionth TEU of containers since we commenced operations in Laem Chabang in 2002, a significant milestone for both HPT and the Hutchison Ports Group.

Looking forward to 2021

Although the consensus is that the global economy will grow modestly in 2021, the post-COVID global GDP will still be lower than previously forecasted by analysts before the pandemic. If we assume that container growth will follow a similar trend, we are looking at a U-shaped recovery at best and a “hockey stick” recovery at worst in terms of our handling volumes.

Whilst we remain cautiously optimistic regarding prospects for 2021 and beyond, especially in the light of recent announcements regarding COVID vaccines with a high level of efficacy, we are also planning for the worst including the possibility of a second wave of COVID infections in Thailand. Indeed, as I write, we have seen a sudden increase in local infections which has led to some initial government-mandated restrictions on our daily lives. We shall therefore remain vigilant and ensure that we have all the necessary protocols and contingencies in place to protect the health of our employees and to maintain a 24-hour operation for our customers and terminal users in the event of a further national lockdown.

That said, we will continue to invest in our various initiatives to both expand our handling capacity and implement new technology at our terminals. At Terminal D, we plan to start the construction of the remaining container yard stacking area and to purchase additional super post Panamax ship-to-shore cranes and rubber-tired yard cranes, all electrically operated and using remote control technology. We shall continue with the testing program for the autonomous trucks at Terminal D and also progress with our plans to implement new technology to support such functions as e-delivery orders, automated truck gate-in and gate-out processes, and a supply chain digital platform.

I should also add that Hutchison Ports increasingly recognizes the importance of sustainable development and an important goal for 2021 will be for HPT to make further strides to not only reduce our carbon footprint in the area around Laem Chabang Port but also to further develop our employee and community outreach initiatives. Our goal is that on completion, Terminal D will not only be one of the most advanced container terminals in the world but will also “tick the boxes” in terms of being safe and green.

That’s all for now but before I close, I would like to take this opportunity to wish all our employees and followers a happy, successful, and most importantly, healthy 2021. Stay tuned for more updates about our company from both myself and our corporate communications team.

Stephen

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