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Port Cluster Governance

Port Cluster Governance. Time to Talk Once outside of the port gates, there is little communication between supply chain stakeholders (GIL research ) BUT performance of the port is inextricably linked with hinterland development and overall service levels. The Root of the Problem

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Port Cluster Governance

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  1. Port Cluster Governance

  2. Time to Talk Once outside of the port gates, there is little communication between supply chain stakeholders (GIL research ) BUT performance of the port is inextricably linked with hinterland development and overall service levels

  3. The Root of the Problem • The industry needs to ... • ... better understand service levels • ... foster relationships between the • players in the supply chain • ... and benchmark and build up key performance indicators

  4. Why Clustering? Cluster groups help create a more comprehensiveand focused strategy for integrated port and logistics activities

  5. The Quality Chain

  6. Successful clustering Port operations run like clockwork

  7. Why Governance? “The port must define its strategic vision and practice good governance through the imposition of a system of rules and responsibilities in line with the strategic targets of the port and its vision for the future” (Mary Brooks)

  8. The Port Cluster Status Quo • Clusters exist at many global ports but at varying levels of maturity • Some clusters that are deemed ‘mature’ are not transferable as they are autocratic in nature • The level of maturity has in the past been concordant with competitive inter-port and inter-supply chain pressures

  9. Three Steps to Cluster Success • Find the champion to lead a culture of collaboration • Develop an efficient port cluster under that champion’s leadership • Improve cluster cohesion and governance and ultimately quality service levels at ports

  10. The Search for Best-in-Class The Institute’s criteria for “best-in-class” designates that the cluster demonstrates the spirit of collaboration, strikes the right note between public and private partnership, and has developed a model that is transferable

  11. A Cluster Champion GIL’s International Best-in-Class Port Cluster Valenciaport Represented by the Port Authority of Valencia, Spain

  12. A Cluster Champion Valenciaport • A port cluster at an exceptional level of maturity • Proven transferability with international adoption of its quality guarantee, the Marca de Garantía • Stakeholders truly engaged in the collaborative process

  13. About Valencia • Eastern Mediterranean Sea coast of Spain • Valencia region encompasses 23,500 km2 • Third largest city in Spain by population (1.7m in 2008) • Extensive industrial hinterland

  14. About Valenciaport • Largest on the Mediterranean Western coast • Ranked first in Spain in terms of container traffic (3.6m teu in 2008) • Distributes goods within 2,000 km radius • Main exports are vehicles, agricultural and ceramic products, footwear and machines

  15. Why Valenciaport? • Cohesive and inclusive nature • Quality Guarantee on service levels • Culture of integration and co-operation • Strong links between the port and its city • Comprehensive IT portal linking all port stakeholders • Clear leadership • Integrated supply chain

  16. Key Valenciaport assets Strategic Plan and Vision • Established the 2002-2015 Strategic Plan in consultation with the port community, institutions, and economic and social agents from the Valencia region • Cemented the foundations for cluster development and governance at Valenciaport

  17. Key Valenciaport assets Fundación Valenciaport • Valenciaport’s research, training and cooperation centre of excellence • Active in numerous projects in well over twenty countries • Critical to the success of Valenciaport’s understanding of the significance of clustering to successful supply chain relationship management

  18. Key Valenciaport assets Community and Culture • Developed a culture of stakeholder inclusion from 1982-1997 • Considered the other side of the logistics chain, outside of the natural port environs • Instilled a culture of cohesion from the top down in the port

  19. Key Valenciaport assets Marca de Garantía • Quality guarantee launched in 1998 to provide compensation for anything less than promised • Encourages best practice, instigates an auditing procedure, and enforces compensation if a system fails • Concept sold to international ports outside of Spain

  20. Key Valenciaport assets Integrated IT Solutions • Bespoke Port Community System integrating port authority, customs, cargo owners and carriers • Open ‘infostructure’ enables a secure and efficient flow of information • Has improved the quality of port activity and maximized resources

  21. Key Valenciaport assets • Signed first port/city agreement in 1986 • Strong relationship with local and regional government • Viewed as a partner in supply chain decisions • Far-reaching intermodal connections

  22. Key Valenciaport assets Sporting Activities • Held the 32nd America’s Cup in 2007 • Landed the Formula 1 Grand Prix hosting contract in 2006 “[I am] fascinated by the port and the surrounding area... Valencia is the world’s best kept secret” Bernie Ecclestone, CEO Formula 1 Management

  23. Top 20 ports + Valencia (teu) 1970-2008 Source: Own, Data fromCI-online

  24. 1970-1985: Proactive not reactive • Facing new markets with old port structures and agents • Fast growth of markets and shipping industry • Who are the competitors and how can we compete? • Who is the client and what do they want? • Changing legal framework of Spain

  25. Quality perceived by the client • Client’s point of view: sees the Port as a one-stop shop • Should we Pull, Push, or just wait? • Start with Port Community, then GOVERNANCE and pursue with strong LEADERSHIP • Knocking on doors, attending events, networking, …

  26. Evolution of the Port Community • Evolution of the Business and stakeholders • Defining the leadership role • Different countries and ports = different legal rules • Meeting the cluster challenge: integrating commerce, society and the environment • Being a referee • In the end it comes down to PEOPLE, CULTURE and LEADERSHIP

  27. Valenciaport timeline PORT EXTENSION WORKS SEAL OF GUARANTEE FIRST PUBLIC CT TENDER CSR POLICY IPEC TRAINING CENTER SECOND CITY/PORT AGREEMENT AMERICA’S CUP MADRID-VALENCIA FREEWAY SIC VALENCIAPORT FOUNDATION FIRST CITY/PORT AGREEMENT EDI ECOPORT 1982 1986 1990 1991 1994 1998 2001 2005 2007 2009 1997 2004 1978 1985 2000 2002 2006 2008 MSC DEDICATED TERMINAL SAGUNTO & GANDIA JOINT PAV NEW PUBLIC CONTAINER TERMINAL COSLADA DRY PORT PORT AUTONOMY VALENCIAPORT PCS.NET F1 STRATEGIC PLAN 2015

  28. Forward Thinking GIL has partnered with Fundación Valenciaport (FV) for the second phase of its post cluster governance research Through a two-year cooperation, the Institute and FV will formalize the findings of the port cluster study and produce a best practice Port Cluster Governance guide in 2011

  29. Introducing PCGC

  30. Port Cluster Governance Committee • New formal GIL working group • Chaired by Rafael Aznar, Valenciaport Chairman • Will determine maturity models for port clustering • Will examine governance criteria at global ports

  31. PCGC Goals • Share-learn-benchmark (SLB) best practice globally • Examine trends and future of port cluster • Enhance the diffusion of the excellence philosophy in port cluster • Connect people who know with those who need to know • Generate and synthesize knowledge • Develop networking opportunities • Obtain new ideas from various port cluster types and various countries

  32. PCGC Mission • The Global Institute of Logistics’ Port Clustering and Governance Committee aims to build a transferable model based on “Best in Class” benchmarking that when implemented will allow global port controllers to successfully bring together all port cluster stakeholders to • raise quality levels • maximize profit and • movement of container cargo

  33. PCGC Vision By 2011, the Global Institute of Logistics will have published a comprehensive guide tobest practice Port Cluster Governance based on share/learn/benchmark research at ten international ports with varying levels of cluster maturity. This guide will be a practical guide to optimizing efficiency at global public/private ports through benchmarking and effective use of clustering, with the container as the common denominator

  34. PCGC Research Programme • Share-learn-benchmark (SLB) workshops at international ports • Develop a Port Clustering Maturity Model • Produce a Best practice Port Cluster Governance Text Book

  35. Introducing SLBs • Series of 10 share-learn-benchmark (SLB) workshops over the next two years of the program in both developed and emerging port clusters • Locations will vary geographically and by business model - import only, export only, mixed, and transhipment

  36. Share with us • Host ports will be encouraged to give examples of best practice cluster and governance techniques • Information shared at each SLB will be analysed and included in the Best Practice Port Cluster Governance Guide

  37. Learn from us • Host ports can choose from 11 available case studies developed from the experiences of the Best-in-Class port cluster Valenciaport • Invited industry experts will also advice and guidance on best practice port clustering

  38. Learn from us • Available case studies • Making use of Academia • The importance of a Masterplan • Putting Information Technology (IT) to work • Optimising Relationship Management • Developing Infrastructure • Attracting Sporting Events • Driving Corporate Social Responsibility (CSR) • Cultivating City/Port relations • Investing in Quality • Caring for the Environment • Developing Logistics Zones

  39. Foundations Academia Masterplan Collaborations Information technology Relationship management Developing infrastructure Corporate social responsibility Managing property City/port relations Sporting events Innovations Quality Environment Logistics zones

  40. The big picture

  41. Benchmarking • A key role of the SLB workshops will be to allow ports to benchmark themselves against the Best-in-Class • Each SLB will also generate new benchmarks to be considered

  42. An Invitation to Participate • PCGC Member • Working Group, chaired by Rafael Aznar • Driving force of the Port Cluster Governance research program • Sets structure of research and performs research primarily through SLBs • Made up of GIL, FV, VPA, invited industry experts and a representative from each SLB

  43. An Invitation to Participate • Advisory Board Member • Panel of experts available for advice and consultation on specific matters arising as part of research or through SLBs • Acts as sounding board for PCGC hypotheses and findings • Made up of invited academics, institutions and organisations

  44. The End Goals • Best practice Port Cluster Governance guide • Port Cluster Maturity Model • Series of seminars explaining Port Cluster Governance benchmarking • Post graduate course on Port Cluster Governance

  45. “Standards are written by interested parties, GIL only holds the pen”

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