Ports of partnerships
For ports, making the right partnerships is now more important than ever. Maurice Jansen explains
Amsterdam and Rotterdam are opposites in almost every way: Ajax football club in Amsterdam, Feyenoord in Rotterdam; tourists in Amsterdam, containers in Rotterdam; posh people in Amsterdam, working class in Rotterdam. In the port business, both ports have been competing for centuries, but this may soon be history. Amsterdam has set its mind on becoming a metropolitan port; next to being the best and biggest port in Europe, Rotterdam wants to be on top of the tourist charts. How? Through partnerships.
Last year, the Port of Amsterdam published its port vision for 2030. With Antwerp and Rotterdam as its closest neighbours and competitors, the main question must have been how to meet and beat competition in this fierce port landscape. It considered that meeting Rotterdam's volumes is not achievable, nor is beating Antwerp in terms of the size of the chemical cluster. In fact, Amsterdam has come to realise that big is not always best and so the Port of Amsterdam has come up with an unexpected strategy: the port of partnerships, creating value beyond horizons.
Key to vision is increasing value and sustaining growth through partnerships. With the slogan ‘the port of partnerships’, the port authority of Amsterdam is ahead of the pack, both in terms of conceptual understanding of the needs of stakeholders in and around the port, and also in its business proposition towards customers. The widening of the North Sea locks will allow access of ships with a length of 500-545 metres, a width of 65-70 meters and a draught of 18 meters. This is sufficient to accommodate further growth for the main industrial activities and also to bring in larger cruise vessels, a vital link in its vision to become a metropolitan port.
In addition, the port has actively sought cooperation with the city, Schiphol Amsterdam Airport, and knowledge and research institutes. It has even partnered with competitors on a joint port community system with Rotterdam and with Antwerp and Rotterdam on the development of the TEN-T (trans-European transport networks) corridors to the South and East. It also connects with ports overseas.
However, while a vision that fosters sustainability and society is one thing, the road towards true corporate ‘societal’ responsibility is not an easy one. It requires a balance between economic goals like prosperity, employment and economic growth and societal goals. At one end of the spectrum, strategic goals are to maximise throughput and thereby profits, primarily coming from maximising ship calls and optimising space productivity. Resources are allocated to maximise productivity, while knowledge transfer stays within the firm. At the other end of the spectrum, port authorities who pursue societal goals as well as economic goals, allocate and share resources for developing new business models with partners. Growing the business is a collective objective based on new business models.
Many port authorities know all too well their obligation towards their direct stakeholders, also known as their ‘license to operate’. But in order for port authorities to expand beyond the borders of their territory, they engage with their stakeholder for a ‘license to grow’. But this will not be enough to sustain growth. Many busy ports are congested and struggling to alleviate congestion, which is a clear case of overlooking negative externalities of trade volume growth. Port infrastructure capacity is a prerequisite, but competitive edge has to come from smart services and innovative solutions. To oversee, interpret, be flexible and adapt to changes in economy as well as in society requires good co-ordination between the partners in the port community. Only then can space be allocated on time for finding new port customers.
To illustrate the next level of transition towards sustainable port partnerships, here are two examples of how Dutch port authorities have put into practice new ‘foreland’ and ‘hinterland’ strategies. The Port of Amsterdam is building a collaborative foreland strategy through its Port Development Partnership (PDP), a network of 18 Dutch leader firms in port development. PDP is the bridge between African ports, transport industries, and Dutch companies and knowledge institutes in the ports and logistics sector.
PDP aims to achieve the sustainable and long-term development of Africa’s main ports. PDP sees sustainability not as an obligation but as an economic driver. Human resource development (HRD) is perceived as a critical pillar for integrating sustainable practices into African development of ports and coastal zones. With Dutch education institute STC-Group in the partnership, the HRD element is built into the partnership from the start.
The second example is Inlandlinks. Inlandlinks is the initiative started in 2011 by the Port of Rotterdam Authority, in collaboration of VITO, the association of inland terminals. Sustainability, accessibility and transparency were the keywords for developing a platform which would help shippers and forwarders find information on hinterland transport alternatives, such as the locations of inland terminals, available facilities, services of barge and rail operators, and route planning. The average number of visitors to the Inlandlinks website per month is 4,000 and the number of connected terminals grew in 2014 by 20, to almost 80. The number of shipping companies who feature container depots in the network has increased to fifteen. Together, they account for about 60% of Rotterdam’s total container throughput.
Inlandlinks started as a platform with static information, but it is interesting to see how additional dynamic services are now being developed on this platform. Shipping lines are connected for reducing haulage of empty containers. The most recent addition is the departure schedules of barge and rail operators. The next step could be to add real-time information of supply and demand of cargo needs and capacity which would allow shippers and freight forwarders to plan more in advance for pre- and on-carriage in Rotterdam's hinterland.
But moving to the next level of partnerships is easier said than done. The question is how to build partnerships in such a way that the externalities can be balanced with the economic motives for developing infrastructure. Companies still need to make bottom-line profits, and space is always scarce in densely populated coastal areas. Transition to a sustainable port is a matter of setting long term strategies, with a commitment to turn words in activities: build, maintain and strengthen connections continuously within the port cluster, between ports and with adjacent cities, with inland ports in the hinterland, with other cargo generating clusters – like tourism, agriculture, or the food processing industry - as well as with strategic partner ports overseas.
Dutch ports are well underway in becoming ports of partnerships, even between the two rivals Amsterdam and Rotterdam.
Maurice Jansen is senior manager innovation, research & development at STC-Group, Rotterdam. He is engaged in a research project on port strategy with a focus on sustainable port public-private partnerships.
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