Patience is a virtue
Employing local people in port concessions isn’t always easy, as Felicity Landon reports
Let’s start with a positive message: in July this year, the Nectar Group reported that it had achieved a port and company record at its Beira bulk terminal – loading 15,411 tonnes of coal on to a vessel in one eight-hour shift. This meant the vessel could be turned round in less than 24 hours to provide, as Nectar said, huge cost savings to all involved parties.
How did Nectar get to this point? Not easily, it seems. Nectar has operated and maintained the 5m tonnes per annum TCC8 coal terminal in Mozambique for nearly four years and a conversation with Han Ozturk, the group’s operations director, makes clear just how challenging the journey has been from start-up to results like this.
When it comes to finding the right formula and the right workforce for a high-volume bulk terminal in a developing country, he says, simply: “You need to be really patient and just keep going. Finding the right formula is different every time. Beira shows that you do actually start getting results – but it takes so much longer than it might elsewhere.”
What, then, are the challenges? Nectar has plenty of experience, with terminal operations across the world, including Africa, the Middle East and South America. Mr Ozturk, who is also chairman of the Dry Bulks Terminals Group, says: “One of the first challenges we had [for Beira] was finding people with any experience and knowledge locally in areas such as operations, technical and maintenance. We employ 200 people at Beira, of which 185 are local. But for us, especially on the operational side, we took on board at least 45 people who had really nothing to do with shipping or ports – from farming, for example. We spent six months training these people to operate the machinery to be used in the terminal because we had no other choice. Bringing in expats to do that sort of job just wouldn’t have been feasible.”
He also points out that many such bulk port or terminal developments involving minerals, iron ore, coal or other commodities in remote locations are going hand in hand with what is happening in the background – i.e. the mine itself.
“The mines attract a lot of people as well – big mining companies can affect the market, employing whatever they can find locally. That distorts the market a little bit because they start paying over the odds for people who don’t have experience or knowledge or special skills.”
And, there’s an issue that adds insult to injury: “You maybe take on people who don’t have the knowledge or experience, you spend a lot on training them, you start getting something in place in a year or two years’ time; and suddenly, because everyone else is in the same boat, these big boys in the mines start poaching. So we can spend a lot of time training, they pay a lot of money that we can’t afford, and we start losing people.”
In West Africa, Nectar has recently taken on bulk terminal operations at Freetown, Sierra Leone. Here, qualifications have been an unexpected issue. “We advertised extensively for mechanics and electricians and received 3,000 applications for 50-60 jobs. We came across a lot of people who had been to college, done the technical courses and achieved certain certificates – yet when we started interviewing them and asking basic technical questions, and when it came to practical application, they seemed to know almost nothing.”
Nectar had to change its approach and employ expats for half of its technical workforce, he says: “Because we couldn’t rely on local knowledge and expertise to operate the equipment we were bringing into the terminal.”
Beefing up the local knowledge with expats certainly isn’t ideal, he says: “The danger is that the balance shifts and the expats take on all the workload and responsibility, while the locals become like ‘helpers’. It would be very nice to run the operation with 90%-95% locals. It would reduce our costs significantly, but it always seems to be a struggle.”
Project licences and concessions often mean the operator has to agree, or is under pressure, to have a high percentage of local people in the workforce. Nectar is committed as a company and wants to work with local people but it isn’t as easy as it looks, says Mr Ozturk.
“And in many of these countries, there is politics involved. For example, coming into a port with 200-300 current employees, you immediately have pressure to take on board a high number of these employees, irrespective of whether they have the relevant skills or knowledge. So it isn’t a fair situation for the operator or investor. You have to put in a proviso – ‘provided they have relevant skills’ – but they still expect you to take them on.”
And, of course, there are cultural differences. Routine checks of equipment, preventative maintenance and continuous training programmes for health and safety can all be completely new concepts for many workforces. It is, says Mr Ozturk, a matter of changing mindsets and introducing an entirely different approach in the workplace.
Finally, there can be the challenge of unions, particularly in Africa. “We have had significant problems trying to deal with the unions and their demands, which we feel most of the time are unreasonable and unwarranted.
“We try to make some rules; we will sit down in December and agree terms for the next year, but that never happens. Every two months we get letters from the union making various demands for pay rises, etc. If we don’t engage with them, we immediately get threats of strike action. It isn’t that we don’t want to work with the local rules and regulations, or entertain unions, but in many countries there doesn’t seem to be a set of rules governing how unions should operate. They seem to do almost whatever they like and there is no rationale.”
One way around this, he says, is to reduce as much as possible the directly employed local workforce and use subcontracting as much as possible. “That is not the optimal way of running a terminal because we don’t have direct control over whether they work safely and how they perform, but we have to weigh this against dealing with constant union problems.”
He concludes: “We do work in difficult places. Not everyone wants to go and set up operations in these locations because it isn’t easy and it takes much longer to get results than it would in a European terminal. It is a completely different culture and outlook as far as the local workforce is concerned. But after a long time, you do start to get results.”
Better connected equals better candidates
The internet has made a huge difference when it comes to sourcing and recruiting executives to work in more remotely located ports, says Phil Parry, chairman of maritime HR specialist Spinnaker Global.
“We have found that the world has become a smaller, more connected place where it isn’t as difficult as it once was to recruit port professionals into remote areas,” he says.
There are some very adventurous people out there, he says – “and this is an industry that attracts people with a sense of adventure. I am always amazed that the jobs for some of these places can be filled. There are people who will go and live somewhere fairly remote for either a short period of a project or even for a permanent position.”
Andrew Feakins, managing director of recruitment specialist Impact People Strategies, adds: “I think there is a great deal of similarity in the challenges for this type of bulk, breakbulk or even tank terminal business, because ultimately when operators open a terminal, it is going to be a case of ‘do we move someone from one of our existing terminals to run this or do we have to bring in someone fresh?’ Very often it is a merry-go-round, with people in one position for three to four years and then ready for a change and a new challenge in a different country or even continent.”
Greenfield sites present particular challenges, he says, requiring incredible detail and skill to manage, oversee and ultimately run the facility. “That includes stakeholder management, civil works, budgetary work, site management and relationships with contractors, the government and stakeholders who are maybe party to the acquisition – much of this being beyond your standard general manager or chief executive-run terminal. There may also be a language requirement and there are the challenges of being in a remote and/or dangerous location.”
Mr Feakins says there is a major shift going on across the industry. First, the proliferation of deeper water ports will require individuals with a different set of skills to handle the equipment. Second, automation will see the traditional labour element becoming increasingly redundant while, in parallel, the new breed of manager will need to be more technical expert than workforce organiser, with more understanding of computer systems and technology than stevedores.
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