Learning about the port operating industry from the CEO of PSA Halifax

Tuesday, June 16, 2020
by Gabriel, AFM

As part of our International Study Trip we were lucky to have a meeting with Kelvin Tan, Deputy CEO of PSA Halifax who has over 18 years’ experience working in the logistics industry. Kelvin provided tremendous insight to our class on the impact COVID-19 has had on the port operating industry and the company’s recent investment in technology like AI and machine-learning.

In his current role, Kevin helps strengthen PSA’s key Atlantic ports and expansions into North America.With holdings in over 50 coastal and inland terminals across 19 countries, PSA International is currently one of the world’s largest port operators. Prior to PSA, Kelvin was the former CEO of Ashcroft Terminal and CFO of Mersin International Port. Kelvin graduated from the Imperial College of London with a Masters in Chemical Engineering and is a Certified Internal Auditor (CIA).

During our virtual morning meeting, Kelvin helped highlight the logistics trade imbalance in the port operating industry and detailed the current backup plans that many companies are implementing as a precaution. What I found fascinating in our meeting with Kelvin was his view on how port operators are only impacted in the short-term due to COVID-19 (as trade has gone down). Reflecting upon my ECON 101 course, the most efficient means of operating a business is to have an equilibrium where the supply meets the demands of a good. This pandemic has caused a logistics trade imbalance resulting in a supply and demand issue. Given that China is a massive player in manufacturing goods and they experienced a shut down when other countries were still thriving, this created a time lag in the supply of goods available. Now that China’s production has increased while the consumption demand in Canada has decreased, this time lag is further extended.

Kelvin points out that this issue will be resolved in the long term as port operators and logistics will find a new equilibrium. As a result of the time lag, a lingering question in my mind was how the port operators are dealing with excess goods that are not claimed or picked up. Luckily, Kelvin answered my question by showing us some of the contingency plans that port operators made, including creating a temporary solution of leasing inland containers depots.  

While conducting research on PSA International before our meeting, I was very intrigued by the extent of the investments that the company is making toward AI technology, machine learning and cloud computing. Just like many other companies, my initial belief as to why PSA was investing in new technology was to gain a competitive advantage and increase their efficiency– and this assumption was partially true. Kelvin provided an example of how AI technology can help the operators mirror the container layouts virtually and on land which ultimately increases their port operation efficiency. Additionally, PSA can now predict the next destination of the cargo containers prior to their destination being finalized by the client, thereby adding more value to their services.

Kelvin also challenged my assumptions about competitor advantage and proposed an alternate view. He explained that another purpose of increasing the investments in technology is to improve the safety and working conditions of the ports. Ports are historically a dangerous place to work and Kelvin iterated that technology can help with the “segregation of man and machine” and eliminate the possibility of having fatalities. Additionally, technology can redesign the role of ‘port operator’.

If I was given the choice of being a port operator or having an office role, I would most likely choose the office role. And PSA realizes this, that their future workforce is changing and that they are not as interested in pursuing a role in manual labour.

This discussion about technology tied back to what another industry professional our class met with said. Chia-yi Chua, Counsel at McCarthy Tétrault stated how Singapore’s culture involves over planning and over thinking. PSA is an example of how a company is able to be forward-thinking and plan ahead on how to capture more human capital in the future.

Ultimately, I found this meeting with Kelvin to be very fascinating as it opened my eyes to an industry that is essential in helping us get our day-to-day goods and supplies.

Learn more about SAF International Study Trip