bristol port - pestel and swot

CIM membership number: 38425209

Examination centre: London Metropolitan University

PESTEL analysis

P1 The project for the new deep sea container terminal has been approved by the Government.

The governmental support comes from both the local and national authorities, as it is believed this

new facility (which anyway will not be built until the economy has recovered and demand has

grown) will help boosting the local economy, improve the national ports sector and create more

than 1000 new jobs.

P2 A parliamentary committee had been debating about the construction of a barrage across the

Severn Estuary to generate sustainable energy that would supply up to 5% of the UK’s electricity

output. If the barrage was built, Bristol Port would be severely affected because of the lower

water levels which could not allow big ships to pass through the area. Recently, a report published

by the Government’s Energy and Climate Change Committee suggested to find alternatives to the

barriage and the Government knocked back its building proposal.

P3 Continuous concern about environment has arisen among governments of developed countries

and taxes on fuel have been advocated as a way to reduce carbon emission. Fuel duty is increasing

especially on fuels which are intended for transportation and this results in higher costs for

delivering goods: it becomes then necessary to minimize the distances travelled by cargo owners.

The proximity of Bristol Port to industrial areas and inland container destinations allow the Port to

gain a major competitive advantage against the other competitors in the South and East of the

Country.

E1 After a steady period of growth, UK’s ports’ traffic faced a remarkable drop in the recent years.

Traffic still remains lower than pre-crisis levels. Although encouraging signals are showing a

potential recovery of the global economy and, in particular, of the British economy in the EU

scenario, a significant increase in trade is yet to come.

E2 Container traffic, compared with the total seaborne trade, grew faster and represents at the

moment the main aspect of global port activities. Bristol Port accounts for only about 1% of the

total of the container units handled by the 15 major UK ports (percentage relatively lower than its

market share of 1,9% in terms of total volume of traffic) and the investment in the deep sea

container terminal could represent a new asset to use against the competition and a further

source of income. It is to be considered though that the container shipping industry will be

registering a particular growth in the developing countries and, elsewhere, commodities tend to

be found and supplied locally.

E3 In UK, a general stagnation of export has characterized the last two decades and, in particular,

marine shipping is affected by a significant decrease of liquid bulk traffic. Coal import fell down

completely and, cause or consequence of this, Bristol Port is losing (as customer) its most

profitable source, a coal power station which is about to close.

E4 A sector in which UK is performing quite well is cars export. Many global manufacturers based

their production in the region surrounding Bristol Port, that, being ranked fifth for import/export

of vehicles among all the other ports in UK, can probably continue to count on this trade as major

origin of revenue.

S1 Developed countries, UK inclusive, are experiencing the phenomenon of population ageing.

This ongoing process is likely to cause a shift in consuming behaviours, since elder people tend to

increase categories of expenditure as (for example) services for health care, spending less on

consumer goods. In the long term, that may result in a reduced activity in the distribution chain.



S2 Population in UK is gradually moving toward the South of the Country. This could be beneficial

for Bristol Port as more people, business activities and residential areas will be concentrate closer

to the Port than before.

T1 Since decades, globalization, standardization and the need to reach economies of scale made

necessary for the biggest ports to manage efficiently the process of containerisation. Today, the

major challenge is to be able to accommodate ships continuously bigger in size and capacity.

Consequently, ports’ terminals need to adapt to these dimensions and provide adequate facilities

and infrastructure to freight companies, especially the ones operating worldwide.

T2 Different kinds of facilities to let fuel enters/leaves the port need to be developed, since new

materials, such as biomass (in particular next to Bristol Port) will be used to create energy by

modern power stations.

En1 In order to get not only environmental sustainability, but also social commitment, ports and

terminals are expected to guarantee safety for employees in all the operations (even exceding the

existing regulation imposed by the Government) due to the possible expansion and adoption of

new facilities and machinery. The responsibility for the social environment shown by the Bristol

Port Company regards also the important role played in helping the local economy, thanks to the

investments made in the past and planned in the future short term.

En2 Global warming issues remain the primary concern of any industry. Being able to provide

services producing the lowest carbon emissions possible gives a decisive competitive advantage,

besides contributing in the preservation of the natural environment.

En3 Many stakeholders, among which a few non departmental public bodies and a well known

charity (RSPB) have been involved in the evaluation of the impact of the new deep sea container

terminal on the surrounding natural system: the Bristol Port Company is facing the preservation of

the wildlife habitat and will be asked to compensate the unavoidable damages caused to the

landscape. The measures applied are intended to keep safe both the fauna and people (a 120

hectares of new habitat on a local peninsula will be created and protections against flooding from

the Severn Estuary will be improved as well).

L1 The accreditation (ISO 9001:2000) granted by the International Organization for

Standardization imply that all the procedures described under this particular regulation have to be

met and followed entirely. Complying with these rules allows the Company to minimize internal

damage risks and demonstrate work effectiveness to its clients, even though it may require more

operational controls and time to carry out activities.

L2 The Bristol Port Company benefits from a long lease (150 years) of their dock estate. That

permits the Company to set objectives in the long term and make investments with no risk of

expropriation.



SWOT analysis

STRENGHTS

St1 Profitable company, well run and with

investments capability.

St2 Convenient location.

St3 Technically advanced; easy access to

transport infrastructure.

St4 Extended service portfolio.

St5 Flexible and adaptable business.

WEAKNESSES

W1 Small SME; small market share.

W2 Loss of coal power station as customer.

W3 Still no deep sea capacity.

W4 Wildlife issues yet to be solved.

OPPORTUNITIES

O1 Steady growth of seaborne trade and of

container shipping sector in particular.

O2 High level of cars export in UK.

O3 Two new potential biomass power stations

as customers. Biomass energy to be produced

in more quantity in the near future.

04 Possibility to improve its performance

among the busiest ports of UK.

THREATS

Th1 Ongoing recession: potential repercus-

sions in investments and vehicles market.

Th2 Fierce competition; other ports’ develop-

ment.

Th3 Tidal barrage across the River Severn.

Th4 Downturn in crude oil shipments.

Th5 Possible wildlife environmentalist actions.



STRENGHTS - Substantial growth of annual revenue (from £22 million to £78 million) and volume

of traffic (from 4 million tonnes to 12 million) have been seen since privatisation. In the last 22

years, £300 million has been invested to innovate facilities and train an efficient workforce and

management (St1). Based in an economical distribution location, Bristol Port operates in a florid

industrial area and it is closer to the majority of UK’s container market than other ports in the

south (St2). The dock is served with specialised equipment to handle modern container vessels (up

to 130,000 DWT), to lift heavy cargo, manage project gargo and accommodate RoRo vessels;

motorways and rail connections are well integrated into the national network; about 1 million

squares metres of warehousing, external storage space and wholesale distribution space are

offered (St3). Referring to the BCG model, car shipments and import of aviation fuel are “cash

cows” and the biomass serving the new potential customers may represent a future “star”.

Additionally, Bristol Port has bulk and fresh produce terminals, the latter strategically important

for the retail industry (St4). The legal form of First Corporate Shipping Limited (Ltd) allows the

Company to be dynamic, responsive to changes and flexible with customers’ requirements (St5).

WEAKNESSES – Being a relatively small enterprise makes Bristol Port vulnerable to a few changes;

they may not be able to face a price-war as the whole market is dominated by a restricted number

of players (the top 5 ports account for about the 50% of the market). The performance in liquid

and dry bulk shipment is poor and these two cargo types represent in tonnage 2/3 of the total port

traffic in UK (W1). Immediate lack of income will be derived by the loss of its biggest customer, a

coal power station (W2). The new deep sea container terminal will not be built as long as there are

no positive economic conditions and, in the meantime, competitors have the chance to make the

first move: without this facility, Bristol Port remains in a weaker position especially respect its first

competitor in the area, Liverpool Port (W3). Furthermore, in order to build the terminal, Bristol

Port has to create (in advance) a safe habitat for the local wildlife as compensation (W4).

OPPORTUNITIES – Despite economic uncertainty, an increase in seaborn traffic was registered

after the crisis and containerisation continues to play an essential role in manufactured goods

shipment: links and close relationships with emerging economies would be therefore effective

(O1). Solid cars manufacturers companies located nearby will need Bristol Port for their

import/export activities (O2). E.ON and Helius Energy could bring into Bristol Port biomass matter,

which may represent a considerable source of energy in the future (O3). A few favorable factors

can help Bristol Port to create a kind of monopoly in the south-west: governmental carbon

emission policies makes the Port convenient for its proximity to critical areas; referring to the

Ansoff matrix, product development strategy is reachable thanks to the ability to offer various

services, market penetration may be granted by the new deep sea container terminal and market

extension can be pursued as new customers are going to be involved and new markets can be

served. The capability to focus in particular sectors and differentiate the offer is necessary (O4).

THREATS – Bristol Port is waiting for a consistent economic growth in order to proceed with the

investments planned; import/export of cars may be seriously affected if the european car market

carries on shrinking (Th1). The major competitors are all developing new infrastructure and

facilities, principally to keep their competitive advantage in the cargo containerisation sector (Th2).

A serious threat is the Severn Tidal Barrage, that would limit the activity of Bristol Port (Th3). The

decline in crude oil traffic represents a minor threat since Bristol Port, compared with other ports,

has never performed significantly well in it (Th4). If the environmental issues will not be properly

managed, Bristol Port may experience obstacles and adverse actions from pressure groups (Th5).

bristol port - pestel and swot

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