Sappio calls for US ports to enhance productivity
By Paul Scott Abbott, AJOT
At a time of overabundance of cargo ships that lack fuel-efficient economies of scale, it is essential that U.S. port terminals achieve better productivity, according to ocean carrier industry veteran Robert Sappio.
“Productivity has got to improve,” Sappio said in an Oct. 25 presentation at the American Association of Port Authorities’ convention in Mobile, Ala.
Sappio, who served three decades as an APL Ltd. executive and in July was named president and chief executive officer of Rickmers Americas, said labor, management and government must all work together to facilitate productivity gains.
Robert Sappio, president and chief executive officer of Rickmers America, says productivity improvements are needed at U.S. ports. (Photo by Paul Scott Abbott, AJOT)
Maximizing terminal throughput and capabilities for efficiently handling larger vessels becomes increasingly important as carriers have stepped up orders for ships that can handle more containers at a lower slot cost in an era of $700-a-ton bunker fuel, Sappio said.
This latest trend has made containerships delivered just a few years ago already obsolete, he said, commenting, “There are too many ships nobody wants, demand for ships nobody has and a chorus of calls for nobody to order anything.”
Port productivity is far from the only challenge for container lines at a time of great volatility in operating and fuel costs, demand, and freight and charter rates, he added, saying, “The last three years have produced a more volatile trading environment across all sectors of shipping than our industry has ever seen.”
Sappio also cited challenges associated with a changing regulatory environment, potential for labor disruptions, more stringent environmental requirements (including for fuels with lower sulfur content), global economic uncertainty, and lack of a clear and efficient model for chassis management.