Port marketing: organisation and planning

When we define marketing as an important function in port management we have to find an organisation system under which direct reporting of all market activities to the executive management level is ensured besides exercising direct control as far as these activities are concerned.
At the same time this organisation must ensure that all marketing activities are in line with the objective and strategies and strategies of the port management. To make this system workable, it is necessary to identify key person of the management, to whom the marketing executing has directly to report.
In the organisation chart a functional department for all marketing activities of a seaport is considered as essential requirement to fully concentrate on marketing strategy effectively increasing quantum of cargo to be handled both domestic as well as regional.
For an aggressive port marketing organisation the cost/revenue ratio for each service must be calculated. This is necessary especially when a deregulated charging practice besides the tariff will be developed and quick decisions to the benefit of the cargo volume have to be made. It is therefore necessary to have an efficient cost control system which makes it possible to relate the costs to the different port services.
PORT MARKETING STATISTICS: Port marketing data is used to define the market position and share of the port, its strategies and the marketing objectives and to control and influence the efficiency of the marketing department and the marketing mix, in order to forecast future market developments for port planning, etc.
Port statistics are therefore considered a necessary tool for efficient port management. To use this tool effectively, it is necessary to prepare the data in a comprehensive user-orientated way. The main problem for port statistics is the quality of the data-base which is available. Following types of information is needed"
(1) Quantitative statistics on the flow of cargo from the origin to the destinations which can be served by the port and the actual business handled through the port.
(2) Cost data to prepare alternative costings between different modes and ways of transport relating to the port and its competing ports.
(3) Qualitative information specially nature of cargo and its share in business.
The collection of information should be based on sources presently available. Normally ports have access to all import/export manifest data, identifying all important information on a shipment. Statistics data should be provided to the decision making levels of the port management on a regular basis in order to ensure timely planning for better economic gains.
Market share data can be based on performance figures by the other national ports. The market share thus reached however would provide a limited evidence as inland shipments carried through foreign ports would not be covered. In terms of transshipment trade for the region, it may require a separate databank to ascertain potential market share and aggressive marketing strategy to attract this growing trend of business.
This requires a number of incentive oriented steps to induce new customers using the port as transshipment hub. World seaborne trade developed slightly faster than the world gross product during most of the seventies. During the eighties considerable structural changes took place, necessitating a reorientation when preparing seaborne trade forecasts.
These forecasts appeared to indicate favourable trade developments, which badly influenced ports and shipowners, investment decisions. This is especially true for investment in large sized tankers. While seaborne trade in dry cargo commodities developed more in line with the forecast volumes, the liquid trade did not meet to the forecasted range.
This variation is mostly attributed to greater coal shipments in response to shifts in the pattern of energy sources. Coal trade more than doubled within the decade of 1910-2000.
Forecasts released in the early eighties which promised a growth in general cargo trade were considerable off course due to worse than expected economic performance and the structural changes within the general cargo sector leading to lowering production of manufactured goods.
Container traffic has grown at a rate faster than forecast. It is notable that some former projections on container trade even proved to be underestimations in respect to the subsequent developments. Container turnover figures are obtained from the data maintained by the ports.
This poses some kind of problem since ports maintain Turnover statistics in terms of TEUs handled by the port which would include empties as well as transshipment containers. Hence it will only reflect container turnover of a port and not the container trade. It is obviously not possible to equate port container turnover growth figures with container trade growth figures, but nevertheless this is often done.
The trend of container shipping in favour of bigger ships which at fewer ports stimulates feeder operation. In Europe more than one third of container traffic between European ports is deep-sea feeder traffic. Feeder operation outside Europe, especially in South East Asia, are also expanding more rapidly than total container trade.
Global container through put is estimated at 400 mill TEUs and would be 557 mill TEUs by 2010. The container volumes of middle East and South Asian 10 top ports have grown by 18.4% when compared to 14.8% for the world's top ten.
Dry bulk shipments have touched 3000 mill tons mark globally. Hong Kong in Asia has handled 21 mill TEUs whilst liquid cargo crude oil growth has been 0.8% but natural gas has registered growth of 12.3%.
Unfortunately neither of our ports are equipped to do market analysis and forecasting, there is no such department in both Pakistani Ports. Pakistani ports are thriving on captive cargo based on sustained economic growth of GDP 7%.
There is no concept to attract transshipment cargo whereas Colombo in our region handles 30% captive and 70% transshipment cargo, so is Singapore, Hong Kong and Dubai etc, thriving on transshipment business. Our port organisation needs structural changes and must embark upon marketing and induce new owners and collect data to develop ports, rather rejoicing only on captive cargo or building surplus capacity.
The corporisation of ports with restructuring the organisation by inducing qualified port management graduates, can compete in this century with new emerging ports. Gone are the days of non professionals who survive on mere lobbying and blazoning with the support of media.
How long we can sustain knowledge on the basis of father to son. Only relevant and skilled people can be best managers to give the bottom line. I strongly recommend that government must look into modern concepts of port management and surely we can learn from experience of Colombo, Dubai.
(The writer is Ex. Additional Secretary and Director General Ports and Shipping, Ex. Chairman Gwadar Port, Member Board Port Qasim Authority, Governor World Maritime University Malmao (Sweden) Member IMO Secretary General's Panel of Experts, London.)