The Business Year

PA20_TR_PPC JARED ZERBE

PANAMA - Transport

Jared Zerbe

CEO, Hutchison Ports PPC

Bio

Before coming to Panama as the CEO of Hutchison Ports PPC, Jared H. Zerbe was the CEO for Tanzania International Container Terminal Services Limited. He has worked in a number of senior commercial roles and legal roles, and he is licensed as a solicitor in England and Wales. With a JD from Boston University, he is a licensed attorney in the US. Zerbe also has a master’s in international corporate management from the University of Pittsburgh and studied law in the UK, obtaining his qualified foreign lawyer certificates at BPPE in London.

“In 2023, we are implementing an entirely new approach with one of our main customers. We will take a partnership approach to do many joint operations and work toward digitalization.”

How is Hutchison Ports PPC working toward sustainability?

For the past 25 years, Environmental, Social, and Governance (ESG) has not been as much of a focus as it is now. Today, however, there is a driving force for us to focus on ESG from a business perspective. We have been focused heavily on trying to minimize our impact and, as far as I know, we are the only port in Panama to have identified the sources of generation and emission of Greenhouse Gases and declared them before the Ministry of Environment as our baseline to gradually reduce the carbon footprint of our two ports. We have had a policy in place for a long time for the reduction of our emissions, the usage of solar energy, and increase the level of equipment electrification for our operations which have let us to set stronger targets for the next two or three years than we had previously done in the past. We are making commitments with our customers to move forward in the coming years and have a certain percentage of our energy consumption from renewable sources. In terms of overall energy reduction, we are also working on a project in the next three years to switch all our lighting to LED.

Balboa and Cristobal ports are very different entities. Can you elaborate on their advantages and particularities?

When we got the Port of Balboa, it was just a small berth, and we completely upgraded and modernized it, increasing its capacity to more than 5 million TEUs. In Cristobal, the situation is different. We have not completely modernized or rebuilt the entire port, and it is not yet as modern as Balboa. What we can offer at Cristobal, though, especially for our main customer MSC, is a tailored approach. Its vessels can stay for two to three days, and we provide extreme flexibility; in Balboa, we are not quite as flexible with our customers because we have so much activity there. In Cristobal, there is a more service-oriented, tailored approach. Modernizing Cristobal would cost up to USD600 million, and we are currently evaluating a business case for making such an investment. We are also looking at other smaller investments for the equipment, berths, and so on. Another factor is that the government has signed an MoU with MSC & TIL to have a new terminal built in Isla Margarita. If this project materializes, it will change the dynamics and add significantly more capacity. That terminal will be operated by our major customer in Cristobal, MSC, and if our biggest customer is given a new terminal, that would also be a major factor in our investment decisions.

How is Hutchison Ports PPC seeking to reshape the business model of the sector?

In 2023, we are implementing an entirely new approach with one of our main customers. We will take a partnership approach to do many joint operations and work toward digitalization. For example, right now when a vessel ship comes in, we unload, load, and handle the movement of containers; however, with the new approach, the shipping line would do its end-to-end planning together with us. The new business model will focus on how we can better help our customers. We have implemented some pilot programs with this customer now but will be implementing it for all its services in 2023. We see that some lines are forming new business models becoming less of shipping line and more like a FEDEX or DHL. We want to support and help our customers with the planning, and that is a level of innovation that will eventually come to the rest of the industry. We are one of the leading ports in this respect, working with our customers to do joint planning, and there are only one or two other ports globally looking at this business model. The first part would be manual, though the goal over the next five or six years is to be fully automatic and digitalized. By 2023, this will be one of our main goals. There will also be a continuation of many of the ESG initiatives that we have done in the past, and we will significantly ramp them up in the coming years. These are currently the main focuses for us next year.

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