MODERN PORT MANAGEMENT:
PORT PRODUCTIVITY, PORT MANAGEMENT, AND THE PORT BUSINESS INDUSTRY IN THE 21ST CENTURY
TABLE OF CONTENTS
I. Introduction
II. Port Improvements in the 21st Century
A. External Forces
B. Private Participation
C. Diversified Investors and Operators
III. Port productivity
IV. Importance of Proper Port Management in Increasing Port Productivity
V. Conclusion
VI. Recommendations
VII. References
I. Introduction
Changes in the global environment as well as the demands of the current commercial setting have influenced the industries all over the world. Operations of the modern organisation as well as their consequent industries tends to realise the need to satisfy these demands in order to acquire value on their assets and resources and consequently a higher level of competitive advantage over the other players in the industry. This is the same in the context of the port business environment. The changes brought about by the developments in every aspect of business have triggered an impetus for adopting certain modifications to meet these demands. This paper intends to look into these demands and the improvements made in the port business industry. In the same manner, measures of port productivity will be taken into consideration. Moreover, elements that affect the improvements in the context of port productivity will also be discussed. A discussion on the proper means of port management will be discussed in line with these arguments and observations pertaining to the improvement of port productivity. The contents of this paper will primarily be composed of the professional encounters with the company that I work with. With these arguments and observations, a set of recommendations will be provided which is also based in the conclusions formulated in this paper.
II. Port Improvements in the 21st Century
Traditionally, ports have been the primary tool of the state in terms of gaining international power and trading opportunities. This is because at those periods, sea-faring vessels were the primary, if not the sole, means of gaining access to any part of the world. The following discussions will comprise of several improvements that hugely influenced the development and basic operations of port businesses. Specifically, these are based on my personal observations and encounters in my organisation.
A. External Forces
On this account, elements like competition and the emergence of new technology has become major issues in the modern port business sector. Specifically, the port business industry now possesses the propensity to compete with other national ports. This means that ports are now becoming increasingly receptive to accepting a paradigm shift from being mere state-controlled areas where sea vessels could dock to an aggressive body that intends to establish a name in the global setting. In the same regard, ports which are still under the control of the state is placed in a tight situation given that their ability to be more responsive and even to the more basic act of mobilising their assets are rather limited and constricted. This is based on the apparent reason that they have to go through official channels to get things done.
B. Private Participation
Recent trends also show signs of the private sector slowly creeping in the port business industry. In the case of my company, private corporations are now being contracted to deal with the infrastructure needs of the port. This shows that the public sector, which initially took charge of all the workings involved in the ports have now realised the potential offered by the services of the private sector. The participation of the private sector has now been heavily considered in my organisation such that their involvement is slowly broadened to consultation and even outsourcing endeavours of the port business industry.
Though this method has been already implemented in other state mandates like public works and highways, this is still rather new in the context of ports. Moreover, there is a small part of the operations of the port that has been under the management of a private institution. This shows that collaboration between private and public entities is possible and could eventually push for a greater advantage to the state. In as much as the context of provision of public service is concerned, the contribution of the private sector has greatly improved the efficiency of this element. In considering this observation, it should be emphasised that the improvements in ports could also be attributed to these private corporations. In a sense, there is great potential in considering the idea of private institutions managing ports in the future.
C. Diversified Investors and Operators
In relation to the discussions above regarding the collaboration with the private sector, I have also observed that the port business industry has slowly been peppered with diverse types of investors and operations that seek profit in the said business. For instance, the company that I work in has chanced upon a proposal from a company seeking to supply the port with labourers, dockers and stevedores to be exact. This company poses as an agency for these employees and appears to have a strong international operation.
Another type of investors that have contributed to the development of ports is seen from the shipping lines, both major and minor ones. Specific consideration by these investors is manifested in their intention to help the port authorities in maintaining the ports and docking stations of these vessels. In the same account, these eventually developed into actual investments on the acquisition of a formal terminal on these ports. In the case of my company, these investments in terminals tend to be on the top sources of capital.
And lastly, there is these investors that tends to seek land near ports that they could use as areas for temporary storage and even warehousing. These are prevalent in importing and exporting companies that operates on a just-in-time scheme on their logistic operations. Seeing these elements added in the operations in the port business industry, there is no surprise why the pursuit of port productivity has become considerably complicated and continuously becoming a complex system everyday.
III. Port productivity
In the work of (2004, in , 2004) he defined the productivity of the port as the “measure of its ability to move cargo through it within a unit of time under actual conditions.” This definition manifests an assumption that ports merely operate to move cargo. On the whole, our company tends to veer away from this rather restricted view of port productivity. Based on the mission-vision statement of our company, productivity tends to be a measure on the overall performance of the port as a whole.
The measure of our company’s productivity tends to cover not only the movement of cargo but also the movement of vessels, maintenance of terminals as well as the warehouses that the company manages. To some extent, the task appears to be rather ambitious. However, in terms of measuring the actual productivity of the port, the overall performance of the company in financial terms as well as the efficiency in its operations reflects this element.
However, in keeping with the definition ofs (2004), the port productivity of our company tends to have improved considerably with our use of information systems that complement our operations. Specifically, our company have improved the operations as it implemented the use of electronic data interchange (EDI).
In using such technology in our operations, our company has improved our mandate in serving as the key link in the distribution chain in the global perspective. In a sense, it has allowed the company to veer away from any added losses in our resources. In the same manner, our company have similarly made improvements in terms of the provision of services to the public.
A more specific outcome of using such technology is the cutback in the times at which the employees of the port are at rest. This means that the technology has allowed the company to make the most of the capabilities and working time demanded from the employees. In the same manner, the queue in the line of lorries have also been noticed to have significantly lessened. This is similarly true in the processing of documents among the export shipping companies.
In employing an automation scheme and improving the IT capacities our company has been able to keep a strong grasp with its goals by constantly being flexible operations. This has been supported by the study of (1993, ) claiming that having a stable and competent IT capability, companies like our own will be able to hurdle any challenges and changes that the external environment may offer.
IV. Conclusion
The issue of port productivity has been the focus of these discussions, however, it must be emphasised that the internal and external elements of the port business environment should also be considered. This is shown in the discussions of the improvements that have been made in the port business (external) and the importance of proper port management (internal). In knowing the actual demands of the port business environment a specific company could adjust its own management processes and specific port actions that could improve their port productivity.
Specific actions have been noted above like adding machinery or expanding the range of operations may well contribute to overall port productivity. However, these are mere port actions deal with specific parts of the overall operations of the organisation. Adding up a crane would only add speed on the operations; including an additional port area only improves the number of vessels accommodated. These are mere strokes needed to accomplish a goal far greater than sheer efficiency and increase of clients. In order to sustain this level of port productivity, the organisation must be able to find a balance between the demands of the port industry, particularly the demands of the level of competition, internationalisation, and possible contributions of the private sector. It must recognise these demands such that the management of the ports could shift towards a system that could complement these ever-changing demands. Thus, this study claims that the harmony between the external and internal elements influencing the port industry tends to be a valuable measure in determining port productivity.
V. Recommendations
The following recommendations are based on the conclusions above as well as the arguments and observations made in the paper.
- Make an outline of the competitive landscape of the industry
As established in the discussions above, the port business has evolved from being the sole area of access and way out of trade in states. It has acquired a commercial status, which also entails that the industry has formed some type of competition among ports all over the globe. In knowing the competitive landscape of the particular port organisation it will have some idea on how and what details of the port management processes it will change to gain a competitive advantage over the rest of the players in the industry. Classic marketing tools like Porter’s Five Forces Model may prove to be rather valuable in determining the external environment and the level of competition and rivalry present in it. It is advisable that port organisations employ such schemes to improve their port productivity and seek other means of self-development.
- Recognise the port dynamics that may influence the trends of the external environment
The company should also be always on its toes on the developments in terms of globalisation trends and change in technologies. To be specific, the company should always be aware of the recent changes on policies, treaties, and directives from trading blocs and international organisations like the World Trade Organisation and the European Union. Changes in tariffs and other barriers to trading could influence the number of clients that could possibly seek the services of the port. In the same account, changes in terms of technology as it becomes one of the tools used by ports to attract possible clients. The company has to start employing IT technologies in the collection of their services offered. In some cases, IT technologies are used to monitor traffic and other real time information that users could consult with regards to detecting cargo and other important documents. In doing so, the company will eventually provide possible clients value for their money.
- Be aware of the possible challenges and potential opportunities in the industry
A recent trend, as discussed above, seen in port business has bee considered both an opportunity and a challenge in the industry. Specifically, the slow access of the private sector on the port industry has becoming an imminent issue. The company should realise the potential of this. However, it is recommended that the company make the most of what private sector is offering. Nevertheless, this does not mean that the company should place full control to the highest bidder. This paper merely suggests the there are certain operations of port management that could perform well if the command is given to the private sector. Certain activities like towing and maintenance could be contracted to the private sector. In this manner, the company is still in total control of the decision-making and other executive actions that will influence its future in the port business industry.
VI. References
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