China Merchants Port in multimodal network

Technological Innovation Transforming the Future of Port Logistics

<div> “Regional co-operation and technological application are the mainstreams of industry development.” — Dr Robin Li, Vice President, China Merchants Port Holdings <img style="float: left; margin: 0 15px 15px 0;" src="/conference/almac/wp-content/uploads/sites/37/2022/07/cmport-02.jpeg" width="50%" height="auto" /><div style="text-align: justify;">The COVID-19 pandemic has hastened online operations for the port logistics and “technology-led” would be the most important trend for ports. China Merchants Port Holdings Co. Ltd. (China Merchants Port) believes that advances in digitalisation and intelligent transformation are the winning cards for port. China Merchants Port Holdings is a world-class comprehensive port service provider with a network covering 50 ports on the mainland as well as in various other countries and regions in the world. It is the second largest shareholder of Modern Terminals Ltd., which operates seven container berths and two feeder berths in Hong Kong. As a subsidiary of the China Merchants Group, the company’s headquarters is in Hong Kong. While the COVID-19 pandemic and the Delta variant will remain the biggest uncertainty, global economic recovery can be expected, thus boosting a steady growth in the demand for global maritime trade. This will also contribute to the sustained development of our port logistics market. In the long run, the global port logistics is believed to face changes from four directions: 1. changes in global economic patterns, that is, alterations in the comparative advantages of different countries; 2. changes in the import-export pattern, referring to variations in the progress and direction of economic development in different countries; 3. changes in customer groups, meaning changes in company business patterns and consumer behaviour, and 4. changes in digitalisation and intelligent transformation, specifically the impact of science and technology on supply chain management. Dr Robin Li, Vice President of China Merchants Port believes in Hong Kong’s leading advantage in the port logistics industry. “Hong Kong is an important international transit hub. It not only enjoys more international, flexible policies as a free port than its mainland counterparts, but also leads the world in trade and customs facilitation,” he says, adding that the reliability of Hong Kong’s transportation and logistics infrastructure and logistics services is among the best in the world. Easy access, an international airport with large handling capacity, free port status and reliable logistics services all help to make Hong Kong an ideal cargo transit port for distributing goods to other countries and regions, and tapping the growing demand in Mainland China and other Asian countries for high-end goods. “Hong Kong’s container throughput still ranks among the top few in the world in spite of keen competition from nearby ports. This actually reflects our sound logistics infrastructural support and professional logistics service capability,” he notes. The way forward Dr Li mentions that regional co-operation and technological application are the development mainstream. “Hong Kong industry players should seize development opportunities in the the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), and extend its strengths and experience in shipping, port and logistics services to other cities in this area, and expand the market to the whole world through the GBA.” With respect to the current development of port logistics in Hong Kong, Dr Li mentions that it is essential to develop and strengthen Hong Kong’s marine-related services, such as cargo transit and professional shipping services in conjunction with other ports in the GBA, as well as promote co-operation with other ports in the GBA. Also, the industry players should consider continuing strategic co-operation with leading areas in the field of information technology to achieve the strategic intelligent digital transformation of port enterprises and inject new vitality into the port logistics business. “We will follow the global technological development trends closely and think for the long term with the present in mind, in an effort to make the transformation and upgrading of ports owned and operated by our group a success,” he stresses. The company’s Mawan Smart Port at Shekou, Shenzhen, which came into operation in late June 2021, is a case in point. Dr Li explains, “The Port of Mawan has been in operation for over 30 years, in its early years as a port for the labour-intensive bulk cargo business. Great efforts have been made to promote technological advances since port transformation commenced in 2017.” Through co-operation with leading internet technology companies, the Mawan Smart Port now boasts nine integrated smart elements, including the China Merchants Core (a smart business platform), the China Merchants ePort (a one-stop online customer service platform), artificial intelligence, 5G application, the BeiDou Navigation Satellite System, automation, smart customs, blockchain and green low-carbon operation. Post-transformation, the Mawan Smart Port now covers an area of 983,600 square metres, with a total berth shoreline length of 1,930 metres and a total of five berths, including two 200,000-tonne-class special container berths, which can accommodate the world’s largest container liners, the largest of which are in South China. The port can handle up to 3 million TEUs (twenty-foot equivalent unit) annually. “We think the Mawan Smart Port project is an excellent example of how Hong Kong’s port logistics sector can make positive deployments and deepen the application of information technology in the GBA,” says Dr Li. Asked about better consolidating its strengths in the global logistics supply chain, Dr Li suggests adopting advanced digital technologies to support the development of its shipping industry. Examples include the application of smart port technology; the development and application of smart waterways in Guangdong, Hong Kong and Macao; the application of the BeiDou Navigation Satellite System, and the integrated application of Internet-of-Things (IoT) and other technologies in shipping. Leveraging the “dual circulation” strategy Hong Kong is a highly market-oriented and international free economy underpinned by the rule of law. Regarding the future development of Hong Kong’s logistics sector, Dr Li highlights that the Hong Kong Port will remain an important hub for establishing Hong Kong as an international shipping centre and will serve as a critical link for dual domestic and international circulation leverage via the “dual circulation” strategy. “To this end, Hong Kong’s port logistics industry should actively leverage its unique advantages and become a participant in domestic circulation and a facilitator in international circulation during the 14th Five-Year Plan period. Its active participation in the GBA initiative will bring continuous impetus to Hong Kong’s economy.” He adds specifically that industry players should actively seize the development of the GBA, strengthen co-operation with ports in the Pearl River Delta region and develop high-end services related to port logistics. “At one end, we could lay the groundwork for the transformation and upgrading of the port logistics industry through digitalisation, automation and smart applications. At the other, we could also give due attention to integrating upstream and downstream resources in Hong Kong’s logistics supply chains, jointly develop niche supply chain services and continue enhancing the global competitiveness of Hong Kong’s logistics sector,” he adds. In recent years, green logistics has received increasing industry interest. China Merchants Port Holdings also strives to respond to the government’s carbon neutral and carbon peaking strategy by advancing innovative green development. In a bid to build green supply chains to achieve the vision of establishing green ports, the company encourages giving priority to sourcing environmentally friendly equipment and strengthening climate-change-related risk management. The company’s Shenzhen parent has always been at the forefront of industry developments. All the yards and quay cranes within the port area are powered by electricity, which is translated into an annual cut of fuel cost of about RMB1.107m and about 490 tonnes of exhaust gas emissions. Aside from this, the company’s electronic container trucks, sewage treatment and smart weather are examples of environmental technologies and equipment, leading potentially to an overall CO2 emissions reduction of more than 90%. The completion of the Mawan Smart Port project will also see a 90% CO2 emission cut compared to traditional ports. Dr Li confirms the environmental initiatives adopted in the company’s core port business include the adoption of new energy conservation technologies and products such as “fuel to electricity conversion” and “shore-based power supply for ships.” “We shall roll out a fuel to electricity conversion project for rubber-tyred container gantry cranes in Shantou Port, substituting fuel-powered equipment with electricity-powered equipment. By using clean low-carbon electricity to replace fuel, we aim to achieve zero exhaust emissions and raise our energy utilisation rates,” he adds. Dr Li also reveals that, “phase one construction of the shoreside electricity project at the Guang’ao Port Area of Shantou Port has been completed. Ships berthing in this port area can switch off their own generators and charge up with pier-side charging equipment, thereby minimising atmospheric emissions during berthing.” Also, at Colombo International Container Terminal (CICT) in Sri Lanka, China Merchants is committed to using energy-saving products to create a green, low-carbon port. “To this end, we have installed LED lights and fitted our rubber-tyred container gantry cranes with advanced electric lifters instead of traditional diesel-powered lifters. This can reduce carbon emissions by 6,502 tonnes a year and make CICT the first green pier in Sri Lanka,” says Dr Li. He concludes that green development is a complicated systems project, so the company is always exploring ways to improve green management in a bid to carry through the five major development concepts of “innovation, co-ordination, green technology, openness and sharing”—and practise green operations across all business areas. </div><div style="background-color: lightblue; width: 100%; height: auto;">On the first day of the conference (2 November 2021), Dr Li will share his insights on “Digitalisation and transformation in ports and supply chain management” at the InnoTalks session of 2pm. Please contact Mr Jake Lee from HKTDC now to schedule online meetings: Tel: (852) 2584 4335 E-mail: <a href="mailto:jake.kw.lee@hktdc.org">jake.kw.lee@hktdc.org</a></div></div>

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