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Kalmar: A European origin with an Asian Future

Kalmar: A European origin with an Asian Future


Interview with Mr Peter McLean, Senior Vice President, Kalmar APAC

It is no secret that the outlook for Asia Pacific is expected to remain largely positive in the next two years. According to the World Bank, the economies of developing East Asia and Pacific are projected to expand at 6.2 per cent in 2017 and 6.1 per cent in 2018. For the rest of the region, including the large economies in Southeast Asia, growth is expected to pick up to five per cent in 2017 and 5.1 per cent in 2018, up from 4.9 per cent in 2016. In addition to a strong consumer demand in its traditional Western markets, the region is also benefitting from a steep rise in middle class.

It is no surprise then that Western companies here are keen to invest in and capitalise on Asia Pacific’s success.

“We may be a European company, and the heart of our business lies in Europe. But Europe does not offer the growth that Asia Pacific or South Africa does in terms of new opportunities. This is why we are very excited to be here, and to watch Asia’s level of technology automation and innovation rising to Europe’s standard. In fact, I believe Australia is one of the most automated countries in the world today,” says Mr Peter McLean, Senior Vice President, Kalmar APAC.

In this issue of Supply Chain Asia magazine, Mr McLean will share his views on the high level of automation in Australia, the change in profile of a typical port worker, and the future of industrial automation in the region.

Automation is infectious

According to a 2015 report by the Committee for Economic Development of Australia, more than five million jobs, almost 40 per cent of Australian jobs, have a moderate to high likelihood of disappearing in the next 10 to 15 years due to technological advancements.

“Australia kickstarted its automation drive as a necessity to combat the country’s high cost of living and low volumes. Its supply chain and logistics infrastructure needs to be efficient in serving customers. So when one port started to upgrade itself and provide its customers with efficient services, the competition spikes and competing ports rush to upgrade themselves as well and offer the same level of services so they will miss out on the business. It is an infectious process that molds Australia to what it has become today,“ explains the Australian-born senior vice president, who is now based in Singapore.

For example, in 2012, the competitive environment at the Port of Brisbane became tougher with the arrival of a third operator. The port’s other two operators had already implemented automated systems and equipment. DPW Brisbane realised that it would have to make more efficient use of its terminal space while delivering excellent customer service. This leads to them working with Kalmar to provide shuttle carriers that operate between the ship-to-shore cranes and ASCs to transfer containers between vessels and the land. The automation project eventually increased the terminal’s capacity to become one of the most highly automated ports in the world.

“I believe a similar trend will occur to the rest of Asia as automation becomes increasingly critical in China. We are already witnessing the investment in Singapore, and with that investment will come reliability to the shipping companies and boost the standard of reliable services. In order to compete, parties will need to provide the same reliability and efficiency,” adds Mr McLean, who has been with Kalmar for over seven years.

OBOR for the win

With the establishment of OBOR, a massive infrastructure programme linking China with Africa, Asia and Europe through a network of ports, railways, roads and industrial parks, Mr McLean believes that the future only looks brighter in Asia Pacific. “There are a lot of opportunities for logistics being born out of OBOR. Because of the extensive scale of the project, you do not feel the competition. There are opportunities for everyone due to OBOR, and I see every sector of the industry benefitting from this, even air and ocean freight,” explains the senior executive.

OBOR encompasses over 60 countries representing 60 per cent of the global population and about one-third of the world’s gross domestic product. The China Development Bank alone has earmarked US$890bn (S$1.24tr) for some 900 projects. One particular country that reiterates the benefits of OBOR is Malaysia, with Prime Minister Datuk Seri Najib Tun Razak saying that through this initiative, transportation and movement of goods would be much easier and cheaper and would also enable local entrepreneurs to penetrate a larger market. In addition, Malaysia has also recently signed nine Business-to-Business Memoranda of Understanding with China amounting to US$22.7bn (RM31.26bn).

“Malaysia is just one of the countries that is set to greatly benefit from OBOR. Perhaps when things settle down and the project has been fulfilled, it may be a different playing field. But for now, during the construction and conceptual phases, there are opportunities for everyone in the logistics industry. We see this as a positive step for Asia Pacific and China,” elaborates Mr McLean.

A safer port environment

Kalmar has released a renewed vision for cargo handling in 2060. According to the company, “terminals will be complete logistic ecosystems that act as global interchange points for an on-demand society”. In addition, “artificial intelligence, combined with human experience and knowledge, will help us solve highly complex problems”.

“By 2060, port workers will likely be working in the background in a very safe environment, such as in an office with a remote control desk. There will be very few risks to their safety, unlike today,” explains the senior vice president. “The other benefit of port automation is that it is consistent. What this mean is that with automation, every move it takes to handle the container can now be consistently managed and it actually reduces the damage between the container and the port equipment. So, at the end of the day, human interaction with machines is now safer and this applies to machine interaction with each other too.” he adds.

Port workers of the future

While no one can argue the benefits of automation adoption and providing safe roles for workers, the issue remains that many of today’s port jobs will be replaced by robots or automation, just like in Australia.

“Change is hard for most of us. But I believe that if all parties, such as companies, employers, respective government bodies and institutions work together, we can produce the talent of the next generation. Granted, automation has escalated beyond our expectations for the past decade or so ago. This resulted in some discrepancies between the available talent today and the type of talent the industry actually needs. This is how we know we should have started working with universities much earlier and we have now built strong partnerships with universities. It is everyone’s responsibilities to develop the industry with the given opportunities,” says Mr McLean.

Mr McLean is very much an avid supporter of re-training and believes in not being complacent at work, which is how he got to work at Kalmar. “I look for opportunities every day. That’s how I keep myself on the move and ensure my team stays relevant and updated in this industry. The opportunities in logistics are endless. This keeps my job exciting and I cannot wait to learn more each day,” says the Australian.