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Value Added Service In The Port Environment 2005

This paper describes some aspects of market differenciation for ports.

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Value Added Service In The Port Environment 2005

  1. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 20. Analyse of the Current Market Position Path analysis BMT Maritime Consultants 20
  21. 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. 22. Look Ahead of the Game BMT Maritime Consultants 22
  23. 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. 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. 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. 26. Thank You BMT Maritime Consultants Leader in port & logistics business intelligence & advisory services BMT Maritime Consultants 26