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Value Added Service In The Port Environment 2005

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This paper describes some aspects of market differenciation for ports.

This paper describes some aspects of market differenciation for ports.

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  • 1. Value-added Service in the port environment, sharpening the competitive edge Richard Szuflak – Director of European Operations, BMT Maritime Consultants Pty Ltd BMT Maritime Consultants 1
  • 2. Value-added Services in Port  What is a port?  What are Value-added Services (VAS)?  Why should ports look for added-value?  Where is added-value?  Examples (all examples may not be from the Baltic Region)  A toll that helps BMT Maritime Consultants 2
  • 3. What is a port ?  Different Ownership Structures  Different responsibilities Owner Port Marine Approach Port Owner Port Owner Quay (Depth) Full ownership Concessionaire Land Concessionaire Civil Infrastructure Operations Concessionaire  The landlord model is the one that we will consider  Because most ports are developed under this model BMT Maritime Consultants 3
  • 4. Added-value services for ports – general view  Port authorities create added-value  Ports often link added-value with:  The number of jobs created within the port and the port system (industries/logistics)  The amount of taxes paid to Governments  Turnover or Brut Margin gained from port and related activities  The global economic impact of a port on a region BMT Maritime Consultants 4
  • 5. But in reality:  VAS is a marketing advantage  VAS is any service that differentiate positively a port (or a terminal) from its competitors  VAS are activities that:  Increase turnover and margin  Create a better stand over competitors  Build customer’s loyalty  VAS are about services and marketing  They sell the advantages of your port and terminal BMT Maritime Consultants 5
  • 6. Why?  Because customers have an abundant choice  Because customers are less loyal  Because competition is harder Therefore, in an open market, only specific and dedicated services will help maintaining high margin, keep existing clients and attract new ones. BMT Maritime Consultants 6
  • 7. Selling your Port’s Advantages Best performance is achieved when both port authority and Terminals work together • Port Authority – Market its advantages versus other competing ports in the region – Stress the port’s future development • Port Facility or Terminal – Market its advantages towards users – Different sectors and different requirements: bulk, general cargoes, containers or passengers/RORO – Depends on your own technical and service advantages BMT Maritime Consultants 7
  • 8. It is a customer’s perspective… … but also your competitor’s perspective …and don’t forget your customer’s competitors Added-value Services build Loyalty BMT Maritime Consultants 8
  • 9. Marketing Advantage of the Port Authority Competitive Vision Advantage  Nautical Access, dredging  Commercially driven program  Vision for the future; shippers  Night Access and shipping companies like to know that their growth is  Faster turnaround of vessels taken into account and in – no delays advance  Better hinterland connections  Easy Customs  EDI Services  Security BMT Maritime Consultants 9
  • 10. Marketing Advantage of the Terminal Competitive Vision Advantage  Faster discharging/loading  Commercially driven rates  Willingness to study  More storage/parking customers needs and requirements  Flexibility, like working 24/24  Capacity to adapt  Web based services: invoicing, reporting…  Better price mix  Services that other don’t offer BMT Maritime Consultants 10
  • 11. Before cargo reach your port  You should be on the maps and lists of your: – Existing Clients – Competitor’s of your clients – Competitor’s Clients  This does not “make” money but creates a clear vision of your will to develop competitive environment for the Clients using your facility  In case of any difficulty at another place, potential clients should know if you are up to the job. BMT Maritime Consultants 11
  • 12. Examples  Port Marketing Activities: you can appoint a port marketing agent that will visit clients and prospects on your behalf. This is mostly used by port authorities but terminals can do it as well: Rotterdam or Dunkirk  Alliances with other Ports: Look at ports or regions where you think the growth rate is the best, or from which you receive/load an important part of your cargoes. Team-up with ports there, exchange information, dominate this market by your knowledge; Port of Georgia in the US have increased their market share of Australian cargo from 43% to 76% by teaming up with the Port of Sydney BMT Maritime Consultants 12
  • 13. Examples  Improve the hinterland connections: – The Port of Dunkirk has obtained from the French Government authorization to load trucks at 44 tons instead 40 tons  Provide services not available elsewhere: – The Port of Turku in Finland is the only one with a train harbor  Freeport operations for the Ports of Riga and Ventspils  In 2001, I have developed the first bonded warehouse operations in Vietnam for a private port; this has had a huge impact on business with trading houses BMT Maritime Consultants 13
  • 14. VAS when the cargo are at your port  Enhance your market position  Develop services that “attach” customers to you  That’s the easiest part because you can measure and take decision/action:  Investment  IRR and ROI  Increase turnover and brut margin  Cash-flow impact BMT Maritime Consultants 14
  • 15. Examples  The Port of Kokkola has developed an All Weather Terminal (AWT) to load/unload even in blizzard conditions.  Port of Klaipeda Information System  Generally speaking, dedicated or specific operations for a given customer will boost “normal” traffics with this customer; Northern Manuport in Antwerp has invested into a specific debulking linked with a dedicated storage area that has resulted in handling much larger volumes: 10 = 100! BMT Maritime Consultants 15
  • 16. VAS after the cargo has left your port  Control the Logistics Chain – Develop freight forwarding – Trucking – Inland transport management  Improve the Logistics Chain – EDI BMT Maritime Consultants 16
  • 17. Examples  PD Ports in UK has developed a wide range of trucking and forwarding services as a prolongation of their port’s services  Northern Manuport in Antwerp has created a J-V with barge operators and operates a fleet of barges to supply their customers based inland  Invest in inland depots to control the flow from your ports up to the final customer BMT Maritime Consultants 17
  • 18. Benefits of VAS  Long-term contracts  More visibility on your business  Less influence from competitors  Secure Investments  Show your willingness to accompany your customer BMT Maritime Consultants 18
  • 19. How to find VAS?  BMT develop a toll helping port to strengthen their market positioning  Look at the current market position: – Understand and control logistics chain better – Find out where your customers are  Look ahead of the game: – Behave as your (future) customer: – Figure out how and why he would use your port or terminal – Use information to outline how he can improve his competitiveness – Work and test the case and then sell BMT Maritime Consultants 19
  • 20. Analyse of the Current Market Position Path analysis BMT Maritime Consultants 20
  • 21. Look Ahead of the Game Forecasting & simulating transport flows with the STAN European Freight Model (STAN EFM) Analysis of new ferry line concept  Actual pattern of transport flows from Spain to Scandinavia BMT Maritime Consultants 21
  • 22. Look Ahead of the Game BMT Maritime Consultants 22
  • 23. With EFM (European Freight Model)  You know better: – Where your Clients are? – What’s your competitive position? – What’s happening to traffic flows when logistics changes (price, access, speed, reliability)? – What are the likely volumes and flows in the future? – What will happen with congestion issues? BMT Maritime Consultants 23
  • 24. Final Differentiate positively yourself from the competition and do things that will enhance your competitive position Think where you are best and develop a strong argument around your strong points. Think about your customers needs. To help you, use specific tools. BMT Maritime Consultants 24
  • 25. BMT transportation market advisory services Recognising the growing requirements of the port and logistics industry BMT is focusing on enhancing its transportation sector capabilities to assist its customers in:  Operational improvements  Reducing and optimising transport costs  Increasing overall efficiency  Improving financial performance  Business planning for optimal returns BMT Maritime Consultants 25
  • 26. Thank You BMT Maritime Consultants Leader in port & logistics business intelligence & advisory services BMT Maritime Consultants 26

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