servitization nikolaos valantasis

CONTEMPORARY COMPETITIVE STRATEGIES OF UK CONTAINER PORTS

IN THE ERA OF SERVITISATION

1

Nikolaos

Valantasis-Kanellos [email protected]

Maja

Piecyk [email protected]

Nigel

Caldwell [email protected]

Heriot Watt University

Logistics Research Centre

Agenda

Research Background

Ports’ business environment

Port centric logistics and importance for the UK

Methodology

Propositions development

Primary data collection

“Next steps” of the research

2

Ports business networks or clusters of interdepended

organisations which cooperate for the holistic development

of the system

(van der Lugt 2013, de Langen 2004)

Contemporary business environment and understanding of ports

3

• Increasing economic

globalisation

• Reshaped market (Notteboom 2007)

Ports from traditional role to the

provision of VAS and a focus on

supply chain integration (Demirbas et al. 2014)

2000s: Realisation of the increased

benefits derived from the provision of on-

site warehousing and other logistics VAS

for containerised goods

Port Centric Logistics

(Mangan et al. 2008)

The UK ports paradigm

4

• National Dock Labour Scheme,

and containerisation

• Relocation of DCs inlands

during 1960s-1970s

• Privatisation schemes

UK ports’ development not in

accordance with ports in mainland

Europe

(Asteris and Collins 2009, Demirbas et al. 2014,

Baird 2013)

Focus on cargo and ship handling

services lost competitiveness to

European ports (logistics platforms)

(Pettit and Beresford 2009, Rodrigue and Notteboom 2010)

Port centric services

Traditional Port Services

+

Freight Forwarding services

Cargo Inspection and quality control

Custom clearance

Pre-retailing services

State of the art warehousing and warehousing managing systems

Multi user warehouses with leasing opportunities

Packing, relabeling, maintenance and light manufacturing services

Hazardous goods specialised services

Inland Transportation

Multimodal connections (rail, barge, short sea shipping, road)

Inlands distribution and cargo tracking

Ancillary services and container repair and maintenance

5

PCL provider at the key container ports in the UK

Port Authority and PCL

provider

PCL services by

another Port

Authority

PCL services by a

third party (e.g. 3PL

or retailer)

Port of Felixstowe ● ● ●

Port of Southampton ●

Port of Tilbury ●

Port of Liverpool ●

Thamesport ●

Port of Grangemouth ●

Belfast Harbour ● ●

Port of Hull ●

Tees and Hartlespool ●

Port of Immingham ●

Bristol ●

Clyde ●

Tyne ● ●

London Gateway ● 6

Critique and relevance for the UK distribution system

7

Critique

PCL is an extension of already

applied practices observed

(Pettit and Beresford 2009, Monios and Wilmsmeier 2012,

Rodrigue and Notteboom 2010, Demirbas et al. 2014)

Relevance for UK

Increased imports – vast majority by

seaports as a result of new sourcing

patterns

UK Distribution network developed in

the 80s is no longer efficient

Need for reconfiguration according to

the notion that maritime freight passes

through ports

PCL is a vital aspect of this new

design

PCL as a lagged strategic

response of UK ports and

other type of organisations

that aim to increase their

value proposition by the

addition of logistics VAS

Research Objectives

1. Increase the understanding of PCL and the

nature of organisations that offer these

services.

2. Identify the reasons why various types of

companies offer PCL services.

3. Identify how PCL providers perceive value.

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Methodology

Qualitative exploratory research – enhance

the understanding regarding PCL and the value

perceived by their provider of PCL services

Phase 1 – Development of research

propositions

Phase 2 – Primary Data collection

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Identification of drivers of servitisation

Financial

(2 propositions)

Strategic

(3 propositions)

Marketing

(3 propositions)

Environmental

(1 proposition)

Servitisation Drivers

10 ● Baines et al. 2009 ● Zahir et al. 2013

Systematic Literature Review of PCL literature

1 • Collection of relevant material

2 • Descriptive analysis of the collected material

3 • Category selection

4 • Material evaluation

4 steps followed by Seuring and Müller 2008

Conceptual Framework 11

Initial literature search findings

12

Type of publication Number of publications

Academic papers in peer reviewed

journals

34

Government reports 6

Conference papers 6

Periodical publications 28

White papers 3

TOTAL 77

Keyword search in major business management databases such as:

Elsevier, Emerald, Business Source Premier,

and library services such as:

EBSCO.

Distribution of PCL related papers among academic peer reviewed journals

13

Name of Journal Number of papers Maritime Economics and Logistics 5 Maritime Policy and Management 5

International Journal of Production Economics 3

Journal of Transport Geography 3

International Journal of Logistics Management 2

International Journal of Physical Distribution and Logistics Management 2

Supply Chain Management: An international Journal 2 Transport Reviews 2

European Journal of Transport and Infrastructure Research 1

International Journal of Logistics: Research and Applications 1

Journal of Management and Science 1 Land Use Policy 1 OR Insight 1 Research in Transport Economics 1

Research in Transportation Business and Management 1 Research in Transportation Economics 1 Transport Policy 1 Transportation Research Part A: Policy and Practice 1

34 papers in 18 academic peer reviewed journals

2008 2009 2010 2011 2012 2013 2014

Number of papers 1 3 6 9 7 5 3

0

1

2

3

4

5

6

7

8

9

10

Distribution of PCL related academic papers over the period 2008-2014

14

*

• : 2014 (January-June)

1. Financial aspect

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a. PCL providers experience higher profit margins and

increased revenue by the provision of VAS

b. The provision of PCL services can be perceived as a

stable source of revenue

2. Strategic aspect

16

a. PCL providers achieve CA by the addition of value

capabilities

b. The provision of PCL VAS enables the creation of

SCA

c. PCL providers can achieve differentiation by the

provision of those services

3. Marketing aspect

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a. PCL can be perceived as a response to the increased

demand for warehousing and other logistics VAS at the

points of import.

b. Provision of VAS as tailored solutions

c. PCL creates customer loyalty and supplier

dependency that will develop transactional exchanges

to long term relationships (stronger network

capabilities).

4. Environmental aspect

18

PCL enables the creation of environmental benefits

based on increased container load utilisation and

reduction in road kilometres

Phase 2 – Primary data collection

Face to face or telephone interviews with PCL

providers in the UK (POC, 3PLs, retailers)

June 2014

Participation in industry conference for the

establishment of initial contacts

August 2014

Identification of “persons of interest” – purposive

and expert sampling

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Phase 2 – Primary data collection

September 2014

Pilot study - one representative from each type of

PCL provider

October 2014 - ongoing

Invitations in waves to potential participants.

Starting point “key PCL provider” at each of the

targeted port networks

“snowball effect” for further contacts

Target 35 interviews – long way to go…

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Thank you for your attention!

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