- THE ROLE OF MCH AS THE MAIN GATEWAY PORT TO THE MALDIVES,
- AND THE CHALLENGES FACED AS IT STEERS TOWARDS TRANSFORMATION
For decades, the Malé Commercial Harbor (MCH) has been central to shipping activities in this chain of islands. Strategic importance, geographical significance, and a constant need for import goods, have transformed this already busy area to
a modern and bustling container port. However, with the need for import goods rising even more steeply. MCH is nearing its brink with operations, with swift plans of expansion and further modernization underway. For the first edition of the Maldives Maritime Journal, we sat down with Mr. Shahid Ali, Chief Executive Officer
of the Maldives Ports Limited, parent company of Male’ Commercial Harbor, to discuss its role as the main gateway port of the Maldives, and the challenges it faces as it steers towards transformation.
MMJ: What aspects of the Male’ Commercial Harbor make it a hub for maritime activities in the Maldives?
CEO: The Male’ Commercial Harbor or Maldives Ports Limited, is located at the center of the Maldives. It is central not just in terms of geography, but also central to all the economic activities that are ongoing in the country. The main airport serving the capital, Velana International Airport is located just next to the port. A number of resorts, as well as the industrial developments are located near Male’. This strategic and geographic advantages of the location is really important in terms of the nation’s logistical operations, for example, most of the cargo jets inbound to Maldives comes through the central region and it gets distributed throughout the country.
MMJ: You have mentioned some aspects as to why this port is significant in this area. Now for such an important gateway to the Maldives, what work is being done to upgrade it, in order to further establish it as the main port of the Maldives?
CEO: The main issue right now at the Male’ Commercial Harbor is the space constraint, as well as the Quay wall limitation. It makes it particularly susceptible to for a tight bottleneck for the port operations. Increasing the capacity has been a challenge as we have very limited space available.
There is no scope for expansion of any land space in the current Male’ Commercial Harbor area. To compensate for that, we have been working on the government strategic plan to relocate the port to a more spacious area. It is not an immediate term solution that’s available. We are talking about work that would probably take 3 to 4 years to come to fruition, as of now we are trying to improve our services by adding more equipment, improving our processes, as well as utilizing the space that’s available in our Hulhumale’ terminal. The bottleneck still persists, and to ease it for the short term, we have added a lot of container handling equipment to our fleet. We have added more marine vessels, and we have upgraded some of our equipment and vessels, so that our operation can be optimized even within the current constraints.
MMJ: Its quite an interesting prospect that you have mentioned, to relocate the port to Gulhifalhu, or Thilafushi, areas with more space, in order to ease its operations. What are some of the changes that customers can expect with such a drastic change?
CEO: Right now, the main bottleneck we have is the berthing capacity here at the male commercial harbor, at any given time there are 3 or 4 ships at the port, if we bring one vessel alongside, the rest has to wait in queue. It takes more time because it is a light-range operation, using tugs and barges.
The shipping lines look for a faster turnaround time, the consignees, look at getting their goods cleared within the shortest time period. The second bottleneck is the limited ground slots for containers to be cleared, so at any given day we could clear maybe 250 containers at most.
There are at times requests for clearing more than 300 containers a day which we cannot accommodate just because of ground slots not being available.
As a port we should be able to serve the vessels, and the shipping lines efficiently. At the same time, we should be able to cater to our customers, primarily the consignees, to access their goods and cargo in a reasonable time. The key word here, is “efficiency”.
That will eventually lead to lowering of cost of goods being sold in the country, and eventually will have a positive impact on our economy. If we are able to optimize this operation by shortening the ship turnaround time, then obviously the freight rates or the cost of vessels being in the port becomes less, Furthermore, the containers, all the containers that are being unloaded to male, should be emptied quickly enough so that we can load the empty containers and send them back for loading within a reasonable timeframe.
MMJ: So, do you think this proposed change of location would aid the operations?
CEO: The master plan for Gulhifalhu has been completed already, with technical input from MPL as well along with the Ministry of Planning, Housing and Infrastructure the main entity that’s undertaking the project. The masterplan includes a quay wall that will allow to bring
alongside 3 vessels once. Currently our vessel turnaround takes 3 to 4 days, this change would allow a vessel would be served within 24hours, cutting down the time duration by more than 24 hours.
As for space, we will be able to establish a proper container freight station, so that the clearing of goods will be available even on the first day of the container landing in the port, allowing consignees to take out their goods immediately. This improves the efficiency of port operations and reduces the cost for the consignees as well.
MMJ: How are the current facilities accommodating the ships in terms of services. International ports have strict schedules and other services catering to the ships, how are the facilities at the Male’ Commercial Harbor?
CEO: Male commercial port is a bit different to container ports around the world, because this place wasn’t built as a container terminal, we do not have gentry cranes or ship to shore cranes to handle containers from vessels. We are currently using ship to gear to unload the containers, and since we have only one berth, there will be one or two ships that are being unloaded simultaneously, and maybe 2 or 3 vessels at anchorage.
Weather has a huge impact on anchorage operations, sometimes not allowing the vessel to be operated, just like when it is alongside at a berth. We do not have a specific timeline as to how long they can stay.
We try our best, even with the limitations, to complete the processes within the shortest time period possible, targeting to clear vessels with capacity of 1,000 TEUs in about 3 days. At anchorage, a vessel of similar capacity could take 5 to 7 days.
With the new port we would have strict schedules, clearly defining how long a vessel can be berthed. There will be proper timeslots available for ships to berth, and then the cast of times can be scheduled just as any other port. Being dependent on weather and other bottlenecks does not allow us to maintain a schedule right now.
MMJ: How would you describe the level of technology, in terms of software programs and the machineries being used at the Male’ Commercial Harbor?
CEO: I would say that IT infrastructure is pretty good here at MPL. The My Bandharu portal, a container operation and clearing program that consignees can use to track and process their clearing operations online. It was built in house and it is a very efficient portal that we are developing and improving everyday with the feedback we receive. We increased our online services due to the pandemic, changing most of the payment mechanisms onto an online platform with payment gateways. Submission and requests for clearing, even from the shipper’s side, are available from this portal
Most of the processes such as port operations, clearance and shipping operations have been made online and automated through our inhouse software. We are also working on developing an Enterprise Resource Planning system, of which the physical implementation started last year. We are hoping that the ERP system will go live by mid-February. Once ERP is established, our overall operations and the efficiency not just on the frontline, but within our back end, including finance, procurement, inventory and other departments will be automated. This will eventually improve the efficiency of our in-house operations.
MMJ: Continuing the conversation about development, you’ve mentioned the strategic importance of the Maldives in terms of the shipping operations. With regard to that, is there a possibility of establishing a port of similar scale, if not bigger, in the south or north of the Maldives.
CEO: Since Maldives is still relatively a very small country in comparison to even some of our neighboring countries, our total throughput to is still low, for a gateway port, mainly because our imports are around 60000 to 70000 TUs per annum. If we were to establish another port of a similar scale, it could lead to cannibalization of the other port that has been in operation.
Establishing a similar port in the north or south would lead to cargo volume for Male’ Commercial Harbor to be cannibalized. There is scope to develop other ports, but maybe not at the same scale as Male’, because in order to achieve an economy of scale for having a port of this size, and investing in the capital infrastructure including machinery and all the other infrastructure would be practically or financially unviable if there isn’t a significant volume. But yes, there is scope for a port to be developed in the north or south, but not as a primary gateway port but as a secondary gateway port. This is the situation currently, but in time if there is improvement or increase in the total overall volumes, then the possibility definitely exists
MMJ: At the heart of all the operations, this is still a company. Where do the customers rank in this company’s hierarchy?
CEO: Since this is the primary gateway ports to the Maldives, it is one of the key economic strategic players for the nation. Economically the operations are crucial to the Maldives, even with the limitations in our infrastructure, we are fairly doing well in serving our customers.
Shippers are satisfied with the level of services we are rendering to the ships, and some of them are very pleased with the way we are handling the ships and how we are managing the various aspects of ship operations. Along with the time it takes to serve the vessels, the operations are being looked into very favorably, because it’s a unique operation that we are carrying out in the Maldives, unlike in any other container port. Without having ship to shore cranes, with just a single berth, and also having anchorage operations at the same time, the effort and the logistics that is involved, is being carried out quite well, so they appreciate what we are doing at MPL. Of course, there is room for improvement, which we are working on everyday. With every slight bit of improvement, it actually cuts costs for shippers and consignees, so yes, I believe we are fairly well ranked by customers.
MMJ: That’s where id like to focus my next question. There has been a recent revision of tariff rates, and many other changes. As CEO, what is your vision, how important is it for you to put an effort to make this company profitable, and make the services more convenient for the customers?
CEO: Well, the most important thing is the level of service that we are giving to customers. We at MPL feel that the customers should feel that what we are doing is actually benefitting them, that’s the key to improving our service. Every tariff change or every process change or every regulation that has been implemented, the first thing we do is consult our customers and stakeholders to see what impact it will have on them. We listen to their concerns and make sure that they understand the reason behind every change that we implement.
In the case of recent tariff changes, we lowered some of the tariffs that were on the higher side for the customers. Furthermore, some tariffs that have been standing for a long time have been revised to reflect the market, the cost of operations and to reflect some of the ongoing market rates that are available in other similar ports in Maldives. Our main task is to improve our service and cut the costs for the customers as well as the company, as we have been doing so over the years. It is also important that the company stays profitable, so that we can improve our service for the forthcoming years.
MMJ: Many big companies in the Maldives engage in numerous Corporate Social Responsibility Ventures, or CSR acts. What are some of the ventures here at MPL?
CEO: Every year we do contribute a lot to improve some of the issues in our society. We work with Maldives Police Service, in trying to combat and reduce crimes across throughout the country. There is a program conducted by the Maldives Police Service, to address the issue of crime, across all walks. The Target audience for this program are the youth and other factions of the society. We contribute financially, as well as actively work with them in undertaking such programs.
We also contribute to the society in the education sector, by providing much needed facilities such as digital aid. We also work with some of the environmental NGOs , especially those that focus on the the marine environment. We also work other NGOs that are working to improve the conditions for the less fortunate in the society, society such as the Children’s Shelter, and other NGOs that work with children, to secure their rights.
MMJ: Lastly, with the COVID 19 pandemic, the outlook for maritime industry and many other industries have changed drastically. As the CEO of the prime port of the Maldives, what is your outlook for the Male’ Commercial Harbor, and the maritime industry as a whole?
CEO: Its definitive that the COVID 19 pandemic has really been an eye opener, something that changed the way everybody worked. The physical impact across all industries have been profound. Looking at the maritime industry, the cargo volumes of just Male’ came down by 50 percent. This is due to the lockdowns and other brakes economically. Many ports were shut down, a lot of lockdowns at the ports and containers, numerous ships were stranded in lots of places.
However once we got a hold of the situation and once the restrictions at the ports eased along with the effort put in by the logistics sector, we have seen that the sector has rebounded. If you look at 2021, we have seen cargo volumes and activities almost coming back to 90 percent of pre pandemic levels. This sector has been very resilient and it has come back reasonably quickly. As a result, we can see improvement in our economy and that the maritime industry has started working really well. I think the prospects for growth and development is immense. It will continue growing even in 2022. Our forecast is looking positive for growth over 2021