value added service in the port environment 2005

BMT Maritime Consultants 1

Value-added Service in the port environment,

sharpening the competitive edge

Richard Szuflak – Director of European Operations,

BMT Maritime Consultants Pty Ltd


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


What is a port ?

Different Ownership Structures

Different responsibilities

Marine Approach

Quay (Depth)

Land

Civil Infrastructure

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Port

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Concessionaire

The landlord model is the one that we will consider

Because most ports are developed under this model


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


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


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.


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


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


Marketing Advantage of the Port Authority

Nautical Access, dredging program

Night Access

Faster turnaround of vessels – no delays

Better hinterland connections

Easy Customs

EDI Services

Security

Commercially driven

Vision for the future; shippers and shipping companies like to know that their growth is taken into account and in advance

Competitive

AdvantageVision


Marketing Advantage of the Terminal

Faster discharging/loading

rates

More storage/parking

Flexibility, like working 24/24

Web based services:

invoicing, reporting…

Better price mix

Services that other don’t offer

Commercially driven

Willingness to study

customers needs and

requirements

Capacity to adapt

Competitive

AdvantageVision


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.


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


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


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


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!


VAS after the cargo has left your port

Control the Logistics Chain

– Develop freight forwarding

– Trucking

– Inland transport management

Improve the Logistics Chain

– EDI


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


Benefits of VAS

Long-term contracts

More visibility on your

business

Less influence from

competitors

Secure Investments

Show your willingness to

accompany your customer


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


Analyse of the Current Market Position

Path analysis


Look Ahead of the Game

Analysis of new ferry line concept

Actual pattern of transport flows from

Spain to Scandinavia

Forecasting & simulating transport flows with

the STAN European Freight Model (STAN EFM)


Look Ahead of the Game


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?


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 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


Thank You

BMT Maritime Consultants

Leader in port & logistics business intelligence & advisory services