Malaysia's Premiere Logistics Hub: Port of Tanjung Pelepas

The Port of Tanjung Pelepas (PTP) is the pride of Malaysia’s maritime supply chain.

A transshipment hub with a capacity of 12.5 million TEU, located in Iskandar Puteri, Johor Bahru District, Johor, PTP boasts the nation’s most advanced container terminal.

PTP celebrated a key milestone in January this year, becoming the first container terminal in Malaysia to surpass 11 million TEU, a 14 per cent growth on its yearly volume reaching 11.2 million TEU.

Joint owners APM Terminals (APMT) and MMC Group have invested some $178 million in its facility for 2022. Targeting the 15 million TEU mark in the coming years, PTP prioritised a swathe of digital expansion projects.

 

CONNECTING THE TERMINAL

In June, PTP entered an agreement to deploy Innovez One’s AI- powered Port Management Information System (PMIS) to optimise its scheduling processes. Innovez One’s MarineM solution integration is now fully underway at the port, utilising AI to instantly reallocate resources if a vessel’s ETA changes, making the port resilient in the face of a volatile shipping landscape.

In September, PTP successfully implemented Navis RTG Optimization to improve utilisation of its rubber-tyred gantry fleet and reduce handling costs per container.

PTP operates facilities that include 172 rubber-tyred gantry cranes to manage container stacking on-site,putting precision in container movements at a premium.

A continued sticking point in the sector is choosing digital solutions to invest in. Such an investment on digital applications can be a tough decision for a port operator to make when comparing software costs to investment in a new quay crane, for example.

Joe Schofield, Chief Operations Officer of PTP, told PTI: “PTP has always been investing into the latest technology to optimise operations and provide the best service. As technology adapts, so do we.

“We use our size of scale to collaborate with our vendors and they’re very keen to develop new technologies in that space. I think in the past it was always easy to seek approval for a new piece of equipment. It was all about hardware than bringing in software.

“We have found through our digital journey that shareholders are seeing the benefit of software versus infrastructure and capital works.When we connect everything via an Internet of Things ecosystem, we are getting much more benefit out of our current fleets without buying any more steel.”

Internally, for example, one of the biggest successes the port has had is engaging its workforce on digital technologies.

“We have mobile applications with our workforce so they can track each shift, feeling part of each success,” Schofield said.

“Nearly 5,000 people have live incentives they can see on each shift and how the company is running. As an organisation, every single person down to the operator on the ground floor knows exactly what we’re trying to achieve.”

Nilesh Timbadia, Head of Information Technology Division at PTP, added: “We want our operators to be able to interact with technology better and be more efficient. The technology we use [places] the control back into the equipment operator’s hand rather than managing tasks from a control room, so that operators are able to make quicker, faster decisions.”

 

GLOBAL IMPACT

Like many other ports, PTP has a multi-year roadmap which is reviewed every six months to take into account global changes to the flow of containers. The global supply chain has been impacted throughout the year through a mix of COVID-19 lockdowns continuing in China; strike action from port and inland transport workers; and increased costs due to the Russia – Ukraine conflict.

Consequently, the term resiliency has been on the minds of many in the industry.

It is therefore imperative for PTP to efficiently respond to the disruption of global supply chains and be dynamic as well as robust with competition, especially when other neighbouring ports are coming online with a lot of capacity and the ongoing China’s zero-COVID 19 measures will continue to impact the market.

When looking at the current disruption, the biggest impact is clearly towards the vessel schedule – creating the biggest challenge of berth and yard capacity and congestion.

However, PTP has been very fortunate to be able to work closely with its customers and did not see many issues during COVID-19 since.

As a transshipment hub, PTP did not see as much of the congestion as the other gateway hubs due to its resilience and flexibility.

While other hubs had a 30 to 40 day wait for vessels, PTP’s longest wait time was of two days.

Timbadia added that in smoothening out the Malaysian supply chain against the disruption, PTP works in a major free trade zone, which is being expanded by 81 acres of Free Zone land currently under development.

“The Free Zone encourages the supply chain to smoothen trade processes between the Free Zone, and inland,” he said.
The “basics” on digitalisation, as Timbadia puts it, PTP has gotten right so far: the port is using a robust Navis TOS system, and its ERP system is now up and rolling.

2023 OUTLOOK

Moving into 2023, Timbadia outlines the port’s digital priorities. The port is heading deeper into data lakes and analytics, using data from various systems in the port to improve visualisation and intelligence for customer experience improvement. The port will make a move to consider implementation of a 5G wireless network at its terminal, moving on from its current system of 4G LTE.

“We will move to 5G due to the amount of data we will be collecting, and the speed it will need to be collected,” Timbadia said. Taking into account external geopolitical tensions currently, Timbadia said a continued collective focus will rest on cybersecurity. “We have to ensure that the port is protected in terms of cybersecurity, and our cybersecurity resilience and investments has just increased over the last two years as well,” he said.

The port has begun its own social engineering exercises on email phishing, as well as phone phishing trials with staff members. “The biggest cybersecurity weakness is people. With our trials, we can increase our training so people can spot phishing emails. We have also implemented a second layer of phishing blocking software with Cisco tools, building on the current Microsoft 365 tools we have available.”

On the nuts and bolts side of 2022, in the third quarter of the year PTP built a new empty stacking yard complete with 12 new empty handlers, to support the growing empty container volume market for PTP. In Q4, PTP has taken the delivery of seven quay cranes and 11 RTGs, purchased from 2021. The port has also recently signed a contract for three additional cranes due be delivered in Q3 2023.

The infrastructure investments are all part of PTP’s 2019 Ipsum Magna programme (Latin for 'great optimisation') to increase its terminal footprint capacity.
Schofield explained: “These larger cranes allow us to scale up under the Ipsum Magna programme which covers quay cranes, RTG fleets, and yard. We will soon issue a contract for a further RTGs for 2024, improving flexibility for our customers and increasing capacity.

“The Ipsum Magna project is also working on a massive refurbishment of our yard. We have one of the largest single fleets [of equipment] in the world. We have a dedicated team that looks at our holistic picture and the equipment investments that we need.”

With a focus toward 2023, the Ipsum Magna five-year plan continues. In 2023, work will begin on a 455-metre berth, bringing PTP up to nearly 5.5 kilometres of quay line in total. The berth will be operational by 2026, complete with quay cranes, RTGs, and potentially autonomous and electrical Prime Movers as part of PTP’s sustainability efforts.

Schofield said: “I think it's an exciting time for ports, and the logistics business at a whole. There are so many new shifts in the market and so many options about how you leverage them to get the best out of your business. I think it’s an exciting time to work in the port space.”

Marco Neelsen, Chief Executive Officer of Port of Tanjung Pelepas reiterated that the future looks exciting for PTP as the company moves forward with its digital strategy roadmap. “The transition of digitalisation and automation is speeding up in the entire maritime industry. To resecure efficient, sustainable operations and business competitiveness, PTP will continue to proactively invest in its assets and infrastructure aligned with PTP ESG agenda and digital strategy roadmap.”

“PTP is committed to continue with the journey and further create sustainable value for our customers, shareholders and other stakeholders,” added Neelsen