An extra something at the negotiating table
Adding value is now a must to attract and maintain customers, reports Alex Hughes
Competition between ports is undeniably increasing and the pressure is on to stand that inch taller than the rest.
Port of Oakland maritime director John Driscoll sees the problem as particularly pressing in the US and believes that services that can differentiate ports will therefore be a “big determinant of success in the next decade”.
“Carriers, shippers and supply chain managers all seek efficiency and cost effectiveness in the transportation of cargo. As a result, port-related services that can help them save time and money have become increasingly important to them,” he adds.
The Port of Oakland is therefore evolving into a multidimensional logistics centre, developing new capabilities that can set it apart from competitors.
The most recent of these was the opening in November 2018 of Lineage Cool Port Oakland. Cool Port is a partnership of Lineage Logistics and Dreisbach Enterprises on 100,000 square metres of property leases at the port. It’s unique in the US, being a 26,000 square metre cold storage distribution centre in the heart of the port, adjacent to its new rail yard and just across the street from its marine terminals.
“Cool Port enables shippers to transport chilled and frozen product — such as beef and pork — in bulk via rail or truck. Once inside, cargo can be instantly trans-loaded into 40-foot ocean containers and whisked across the street to waiting container ships for export,” says Mr Driscoll.
The Port of Oakland’s next major value-added service will be the Seaport Logistics Complex. This will be a campus of distribution and trans-loading facilities also at the very centre of the port complex. Construction is due to commence this year on the first 43,000-square metre building. Just as at Cool Port, shippers will be able to transport cargo to the Seaport Logistics Complex for efficient, lower-cost supply chain management. The new complex is scheduled to open in 2020.
Mr Driscoll notes that the port is currently negotiating to provide another value-added service: a Truck Service Center. This 32,000-square metre facility will meet all the needs of port drayage drivers, from fuel and food to overnight parking, again all located at the heart of the port.
“This not only makes it easier for thousands of drivers to do business in Oakland, but also it eases the traffic burden on city streets by keeping drivers inside the port’s footprint,” says Mr Driscoll.
Significantly, the City of Oakland is also developing logistics capability on property it owns just across the fence from the Seaport Logistics Complex. One building for distribution and warehousing has been completed and is operational, a second is nearing completion, and the third will start construction later this year. Although these are not port developments, they should attract more cargo to Oakland.
Barcelona service goals
The Port of Barcelona also claims that value-added services are essential for it to fulfil its mission of contributing to the competitiveness of its customers by providing efficient services that meet their needs for maritime transport, land transport and logistics services.
“No modern port can nowadays function without offering value-added services,” a spokesperson for the port authority told Port Strategy. “As a port authority, we therefore offer a whole raft of these. However, we don’t regard these services as a cost per se, but rather as part of our strategy to carry out our main functions of managing and promoting the port.”
The port’s strategy over the last two decades has been based on three main pillars: infrastructure expansion, connectivity with the hinterland and, very importantly, customer orientation, offering added value services which make the logistics chains that pass through the port more competitive and sustainable.
“We also actively encourage terminal operators to provide added value services, especially in terms of railway connectivity. For example, the port’s two container terminals (APM Terminals and BEST Hutchison), have set up their own rail operators (APM Railway and Sinergy) that offer regular rail services with key hinterland points,” says the spokesperson.
The port authority has also established a presence at ten rail-connected hinterland freight terminals, where service provision offers the same quality standards as in the port itself.
When listing the various added value services that it offers, invariably the adjacent Logistics Activities Zone (ZAL) is mentioned first. It is Spain’s leading such facility, with more than 120 clients located in the 239-hectare area that exclusively specialises in value added logistics.
In addition, the port authority also emphasises the importance of its customer service platform (SAC), which is the most direct link that the port has with the market that it serves.
“Its main objective is to provide both transparency and reliability to the passage of goods through the port,” says the spokesperson, noting that this helps to overcome the complexity of port operations.
The port authority also sees its role as one of identifying and communicating market needs to the overall logistics community while ensuring that importers and exporters have access to the maximum amount of information regarding available services and infrastructure.
“Also falling within our remit is the management of queries and complaints; looking into queries regarding port costs; offering a traceability service; and also undertaking incident management. Furthermore, we believe that it is vital to provide training courses for shippers on the overall operation of the port, on internationalisation procedures, foreign markets, and so on.”
However, one of the services that the port is particularly proud of is PortLinks, a tool that allows users to build transport chains when importing or exporting a container between any port in the world and a European location while passing through Barcelona.
“Port Links offers transit times, distances, information on CO2 emissions and other pollutants, transport links and information on the passage of the container through the port,” explains the spokesperson, pointing out that this helps users to accurately identify costs and transit times.
One of the other great successes has been the Port of Barcelona’s introduction of its Efficiency Network quality standard. A total of 84 port community companies now have this certification, which guarantees reliability, transparency and security in the logistics chains for goods that pass through the port.
“A study has shown that companies signing up to the brand, besides being 15% more efficient, also increase their business activity by 9%,” says the spokesperson.
Barcelona has long been associated with shipping lines serving destinations in Asia. It has therefore leveraged this connectivity to launch Barceloc, a free advisory service for Asian companies interested in establishing their logistics distribution centres in Barcelona.
“In addition to all of the above, the Port of Barcelona is fortunate to occupy a position at the heart of a unique logistics hub, which brings together the maritime port, El Prat international airport, the ZAL, the Barcelona Free Trade Zone, and Mercabarna, a large wholesale market.”
Duisburg’s hub function
In Germany, Duisburg handles around 131m tonnes annually and, in 2017, posted a container throughput of 4.1m teu. Given these figures, chief executive Erich Staake claims to have developed the facility into “the leading logistics turntable in Central Europe”. In essence, this means that Duisburg functions as a hub for the transport of goods to and from Central Europe.
“The availability of value-added services is very important for modern ports and we encourage terminal operators to provide these,” says Mr Staake. “The duisport Group sees itself as a partner of the logistics industry and makes its own contribution towards optimising transport chains to deliver to and from industry and retail. Nowadays, about 300 logistics orientated companies are based in the Port of Duisburg and they generate added value in excess of about €3bn per year. Altogether, more than 50,000 jobs depend on the port, more than twice as many as recently as 20 years ago.”
The port is nowadays a full-service supplier for the logistics industry in the Rhine and Ruhr region. This has even resulted in land development beyond the actual port, including settlement management for logistics and industrial companies, the development of port and logistics concepts, transport services, industrial packaging and contract logistics.
Mr Staake points out that, in partnership with others, the duisport Group has implemented trans-continental train connections between Duisburg and China, where there are links to Chengdu, Wuhan and Chongqing.
In terms of packaging logistics, the port is now involved in providing logistics services for mechanical and plant engineering all over the world - including at facilities specifically set up by duisport in Belgium, France, China and India.
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