Interview: Rupert Bray
How do you manage a global supply chain through a pandemic, and what will be the legacy of the Covid-19 outbreak in supply chain management?
RUPERT BRAY: Papua New Guinea’s transport and logistics sector is already characterised by an oversupply of service providers. Some businesses will survive, while others will be forced to close. New partnerships forged between companies will likely remain to ensure high-valued, end-to-end service solutions.
The shipping segment is adjusting its network capacity to manage volume fluctuations, as well as accommodating quarantine restrictions at international ports. There is increased demand for planning and modelling, and an emphasis on closer cooperation and communication with customers to understand the impact of the Covid-19 pandemic on supply chains. The pandemic may prove to be a catalyst that drives improvements such as increased synergy and cooperation throughout the supply chain; improved coordination among government agencies at national, provincial and local levels; the digital transformation of the supply chain, which will do much to enhance the management of tonnage supply and demand; and an enhanced capacity to plan, prepare and respond to future major interruptions.
In addition to implementing personal protective equipment requirements, companies are redesigning work processes to minimise contact. Firms have invested in IT, and, where possible, employees are working from home. There is now an overwhelming reliance on web-based conferencing. Together with an increase in digital alternatives to replace paper communication, these changes are likely to remain to a certain extent once the pandemic has passed.
What role can strategic overseas investors play in fulfilling PNG’s transport and logistics aspirations?
BRAY: Strategic foreign partners have an important capacity-building role to play in PNG’s transport and logistics sector, especially in regards to training. Quality educational opportunities and the right types of technical training are in short supply. As such, there is an opportunity for overseas investors who focus on training and education to explore what this young and entrepreneurial country has to offer. There is space for institutions, universities and colleges to offer a broader range of distance learning opportunities.
In addition to training there is considerable potential for foreign involvement in improving cold chain infrastructure, and thus helping PNG grow both its domestic and international fresh produce markets. A limited and poorly maintained road network, as well as an unreliable supply of electricity, are key challenges that must be overcome for the sector to flourish.
To what extent has your short- to medium-term outlook for the transport and logistics sector changed since the onset of the Covid-19 pandemic?
BRAY: The recovery from the pandemic is likely to be slow. However, businesses in PNG, including those in the transport and logistics sector, may fare better than elsewhere given PNG’s substantial mineral wealth and its largely domestically focused economy.
It is possible that the much-delayed Wafi-Golpu, Papua LNG and P’nyang projects will be approved in late 2020. The combined stimulus that these huge projects would provide post-pandemic would be welcomed by the industry, and would provide the catalyst for PNG to emerge stronger from the pandemic. However, the prospect of these not being approved before 2022 concerns stakeholders in the sector – particularly given the added uncertainty due to elections during this period.
Major resource projects aside, the immediate future for maritime businesses in PNG is proving to be better than anticipated. For example, although lower than the level recorded 2019, freight volumes through May 2020 expanded compared to 2019. As uncertainty ebbs, further gradual increases are anticipated as PNG continues its inexorable march to development.
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