Categories: 1-Ports Coronavirus Info, Business, UK Major Ports GroupPublished On: 28.04.2020712 words3.6 min read

UKMPG BLOG: A robust and resilient sector to be proud of – A ports perspective on the COVID19 crisis

I hate Teams. I am warming slightly to Zoom. The less said about Hangout the better.

Like many people I have been forced into a new world of virtual meeting apps. In the context of the huge health and economic challenges faced by many I remind myself that I’m lucky to have such ‘problems’. But these apps have provided me with a privileged ring side seat on how the ports sector has been responding the current phase of the COVID19 crisis.

In a word – magnificently. We have always prided ourselves on being a robust and resilient sector. That has been demonstrated again in the current challenging circumstances. It is a sector I’m very proud to be part of.

It has been anything but plain sailing. We have had to move quickly to put in place new ways of safe working. We have faced big drops in some cargo types with volatility and uncertainty in others. And we don’t live in a bubble. The challenges of customers, logistics companies and tenants who hire our facilities also significantly impact us – a spreading ‘liquidity contagion’.

The ports sector has really risen to the challenges of the COVID19 crisis with a tremendous response by ports all across the sector, their operators and their staff. Absence levels amongst staff have been very low. There have been fantastic displays of flexibility and pragmatism in ways of working both on ports and remotely. Ports have worked closely with shippers and cargo owners to provide solutions, like repurposing storage space. There have been new examples of how ports have come together to share best practice on everything from keeping our colleagues safe and well to how we handle vessels with potentially infected crew. And we have worked as closely as we can with Government at national and local levels.

All of this has meant that our ports – the UK’s main gateways with the world, handling 95% of our international trade – have stayed open and busy. The food, medicines and, yes, paper for toilet rolls that we all rely on have kept flowing through our ports.

The big challenges are not over. Some persist and others will emerge. As we look at the current and following quarter, we see activity levels perhaps 30%+ down – a big problem for asset intensive operations that depend on high levels of utilisation. The robust nature and prudent management of the sector means ports are in decent shape to weather some period of downturn. But a prolonged downturn puts pressure on everyone and some short term ‘solutions’ (such as deferring charges and rent) don’t solve underlying problems – they just shift the pain and store up issues for later.

Getting onto the route to recovery is possible. It is absolutely necessary. But it won’t be easy. For ports every pound we burn through now in weathering the storm is a pound less we have to invest in the facilities the UK needs and which bring prosperity to our coastal communities. The investment landscape will be more challenging. Business cases will be more stress tested. Capital providers may have higher thresholds for providing investment cash.

Port operators still have the ambition to grow and develop but there is a role for Government too. We all recognise that the COVID19 crisis has left a massive hole in public finances but there are useful financial and non-cash nudges to investment sentiment that Government could make. Improvements to planning rules, accelerated write-off treatment for investment and infrastructure development guarantees are some examples.

So what of the future? Clearly it is too early to say. There are still huge health challenges for the UK and indeed world to overcome. But it seems reasonable to believe that some of the changes in work we are experiencing – more flexibility, remote/digital working and close interaction with customers – have gone from nice-to-haves to key parts of doing business. Accelerated evolution maybe, if not necessarily, seismic revolution. For me that means making peace with virtual meeting apps. And remembering where the mute button is on each of them.

30 Park Street
London
SE1 9EQ
Tel. +44 (0) 20 7260 1785
E-mail: info@ukmajorports.org.uk
Tim Morris
Chief Executive Officer