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I was Head of Corporate Planning at Westport (Malaysia) in 1995. I invented & implemented Westport’s 7-hour strategy, fast port business processes, and re-did its 30-yr financial feasibility, from ground zero; and a lot more, before leaving Malaysia for good. Strategy & business process reengineering at Westport was a once in a lifetime opportunity, and I must say that Westport has done well for itself. I now live in the US.

In 2008 Westport handled 4.97 million TEUs, versus Port of Singaopre Authority’s Singapore-based 29 million TEUs. That is Westport has grown from zero to 1/6th the size of Singapore. Well done. Could not have been done without the correct strategy and business processes, I had developed and implemented.  And I can do it again in any other port.

Here is my advice for ports in 2009-2011 timeframe is:

(1) Focus on TEUs, and not profitability.

(2) Keep your costs in check but don’t slash costs, as that is the fastest way to ensure that you will be the slowest to bounce back when the economy recovers.

(3) Keep your current borrowings in check & I hope that PSA gets it current borrowings back in line.

 The US economy is a very significant driver of the world economy but it has a ‘weakness’. The US is substantially (about 70%) a consumer driven economy. Therefore, as long as oil prices remain high (>$60/barrel) don’t expect the economy to pick up any time soon, probably after 2010, but I hope I’m wrong.

 Even though the statement “global financial crisis rapidly deteriorated into a major global slump and recession” is true, it is not entirely correct. There is data to show that the oil price spike of 2006-2008 triggered the housing bust that lead to the Wall St. crash and subsequent global financial crisis. So watch the oil price.

Disclosure: I’m a capitalist too, and my musings & opinions on this blog are for informational/educational purposes and part of my efforts to learn from the mistakes of other people. Hope you do, too. These musings are not to be taken as financial advise, and are based on data that is assumed to be correct. Therefore, my opinions are subject to change without notice. This blog is not intended to either negate or advocate any persons, entity, product, services or political position.

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