Masterclass Port Authorities in International Perspective

STC-Group
Netherlands Maritime University

Port authority internationalisation
October 17, 2013
STC-Group,
Lloydstraat 300 Rotterdam

Master Class
Knowledge platform for young port professionals

Platform for knowledge exchange between education, business
community and association of young port professionals

Port Internationalisation
Time
17:00 hrs

Speaker

Subject
Reception

17:20 hrs

Maurice Jansen
Senior Manager Innovation,
Research & Development
Peter de Langen
Visiting Professor Netherlands
Maritime University and
Owner Port & Logistics
Advisory

Opening

17:30 hrs

18:15 hrs
18:30 –
19:15 hrs
19:30 hrs

“Beyond the landlord model”, an
overview of port authority
strategies

Break
Marc Evertse
Port of Rotterdam
International

Collaboration and participation
abroad: a case study
Drink in Café Verhip!

Netherlands Maritime University
Master Shipping and Transport

Curriculum of the Master
Shipping and Transport

Welcome

Domain:
Maritime
management

Domain:
Logistics

Domain:
Finance and
economics

Domain:
Shipping
management

Domain:
Law and Policies

Courses:
AMS; CMS; HRM/
HRD

Courses:
SCM; COM; HIN,
ILO

Courses: ECO I;
ECO II; FCM-I;
FCM-II; FCM-III

Courses:
SBC; FLM; SBP, ISM

Courses:
LAW; POL; OCM;
SEC

Teaching cases in maritime and port related issues
Port Case
Shipping Case

Student counseling /Research and management skills

Thesis

Outline Port authority case
Market
analysis
Macro
analysis on
industrial,
supply
chain,
shipping and
port
development
s in a
country

Supply chain
analysis and
port competition
Analysis of
main
commodities
Throughput
drivers
Trends and
developments
Port
competition
Productmarket mix
Future outlook

Stake
holder
analysis

Analysis of the
stakeholders
of a certain
area/port
Role and
influence of
the
stakeholders
Position of PA
Institutional
framework

Vision &
Masterplan
Draw a
masterplan
based on:
Market
analysis
Stakeholder
analysis
Competitive
analysis

Business
plan
Analysis of
different
input
elements:
Income,
cargo flows,
tariffs
Port
management
model

Final
report
Compilation
of final
report
Handover to
PoRINT
Presentation
to Port of
Rotterdam

Master Shipping and Transport applies a case driven approach towards
actual port and shipping management topics

What’s happening internationally?

Theses regarding today’s topic

What is a good investment?
What is the added value of oversea’s
participations?
Who’s interested?

Speakers

Peter de Langen

Marc Evertse

Prof.dr. Peter de Langen is senior advisor to Port of
Rotterdam, and is involved in various strategic renewal
projects. He holds a part-time position as professor Cargo
Transport & Logistics, at Technical University Eindhoven.
Publications on port selection, port policy, and international
transport & logistics chains in various scientific journals,
provides guest lectures at various universities abroad and
participates as speaker/ session chairman, in (industry)
conferences.
30 years of experience in several, mostly port related
projects abroad. Project Manager in large scale port
projects focusing on setting up new, long-term participations
with (greenfield) ports worldwide. In addition Project
manager for extensive port consultancy projects; recently in
the preparation of masterplans and strategic port reform
recommendations for the Brazilian port sector and as an
advisor to the Indian Government in the preparation of
business plans for the 12 major ports.
Based in Rotterdam, working experience in 60+ countries.

Peter de Langen
Dr. Peter de Langen
Visiting Professor
Netherlands Maritime University and
Owner Port & Logistics Advisory

Contents
• The port development playing field
• Conceptually: deterritorialisation of port
authorities
• Rotterdam credentials
• Driving markets

The port development playing field
•

•

•

Shipping lines
– Containers: top 3 about 45% market share.
New development: P3
– Other commodities: quite/somewhat
concentrated markets (Cars, liquid bulk, dry
bulk, LNG).
Terminals
– Containers, ‘big four’ have > 50%
marketshare
– Tank storage: highly concentrated.
– Other commodities: often increasing
concentration, often direct involvement of
globally operating end users (ThyssenKrupp,
Shell, Vale)
Port industries
– Energy, refining, chemical industry:
increasingly globally operating
– Logistics: increasing globalisation,
forwarders as well as logistics real estate
investors

Deterritorialisation of port authorities
• In NW Europe: centuries old Hanseatic
tradition
• Elsewhere: deeply locally rooted. Example:
PANYNJ.
• Public orientation; often focused on local
public benefits (employment, value added)
but do these really matter?
• Methaphor: school square.

Pathways of deterritorialisation
• UK: privatisation. Humber estuary: fifth
port complex of UK, no active port
development approach. ABP manages
portfolio of ports & segments, investments
where revenue is largest (cruise, housing).
• Mergers between ports in proximity.
– Best case: CMP (see next slides)
– Worst case: Zeeland seaports

• Corporatisation. Case Rotterdam.

CMP: shareholders

16
22-10-2013

Merger Copenhagen and Malmö is an example
of deterritorialised port authorities

CMP: organisational structure
(around 2008)

CMP is organised per business segment, rather than geographical area

Post merger performance CMP

18

Financial performance has significantly improved
despite stagnating throughput volumes

Rotterdam credentials
• World Economic Forum indicator ‘quality of port
infrastructure’: consistent ranking among top 3 worldwide,
currently nr 1.
• Widely regarded as global benchmark.
• Post corporatisation performance (see next slide).
• Performance Oman
– Consistent improvement WEF indicator from 70th to 85th percentile.
– Private investments around 15 billion US $ (PoR nett revenue <25 million
– my rough estimate).

– Volume growth from 6 to 43 million ton in 7 years.
– Around 30% of FDI in Oman is in Sohar’s port complex.

Has performance PoR improved since
corporatisation?
Port of Rotterdam Authority
Variable

Units

1997

2003

2005

2011

Total revenue

M€

453

457

486

588

Port dues

M€

246

228

253

291

Land rents

M€

153

197

203

267

Employees

N

1165

1304

1268

1220

Turnover per employee

M€

0,389

0,350

0,383

0,482

Operating costs

M€

210

238

245

226

EBITDA

M€

242

219

241

362

Net profit

M€

62

64

81

195

Profit per employee

M€

0,053

0,049

0,064

0,160

Investments

M€

167

127

149

494

NB: 2004 excluded because of huge reservation (would make effects larger)
NB2: corrected for inflation
NB3: economic growth in 2005‐2011 was lower than in 1997‐2003

Results: PoR did significantly improve
performance!
Table 2: Overview of test results

Variable

Test
Improve statistic

Market Share

up

Mean
Mean Rank

Turnover

up

Mean
Mean Rank

Turnover per Employee up

Mean
Mean Rank

Operating Costs

down

Mean
Mean Rank

EBITDA

up

Mean
Mean Rank

Net Profit

up

Mean
Mean Rank

Profit per Employee

up

Mean
Mean Rank

Investments

up

Mean
Mean Rank

Real growth percentage
Period
Period
Period (2) (1)
(2)
(1)
-1,33
0,76
2,10
5,43
9,57
4,14
0,21
2,50
2,29
6,14
8,86
2,71
-1,77
3,67
5,43
5,00
10,00
5,00
3,63
-2,81
-6,45
10,00
5,00
-5,00
-2,53
11,77
14,30
4,57
10,43
5,86
5,45
23,03
17,58
6,43
8,57
2,14
3,47
24,52
21,05
6,00
9,00
3,00
-3,00
25,48
28,48
6,00
9,00
3,00

Significant

Corrected for GDP growth
Period
Period
Period (2) (1)
(2)
(1)

Significant

++
++
+
no
++
++
++
++
++
++
+
no
+
+
+
+

-3,21

-1,36

5,71

9,29

-5,19

-0,19

4,57

10,43

0,21

-6,67

9,86

5,14

-5,95

7,91

4,29

10,71

2,03

19,17

6,29

8,71

0,04

20,66

6,00

9,00

-6,42

21,63

6,00

9,00

++ (or +) indicates a significant improvement of the second period at the 5% (or 10%) level.

1,85

+

3,57

+

5,00

++

5,86

++

-6,88

++

-4,71

++

13,87

++

6,43

++

17,14

+

2,43

no

20,62

+

3,00

+

28,04

+

3,00

+

Internationalisation of port
authorities; models

Source: Dooms, Van der Lugt and De Langen (2013)

Market driven vs driving markets
• There is no ‘market’ for port development.
• Initiatives are in most cases public, increasing
numbers of private initiatives.
• These private initiatives: mostly by terminal
operators.
• ‘Landlord model’ exception rather than the
rule.
What does it take to drive markets:
long term view, commitment, trust building.

Marc Evertse
Marc Evertse
Project Manager PoRINT
Port of Rotterdam

Port of Rotterdam International
Masterclass for Netherlands Maritime University
and Jong Havenvereniging
STC, 17th of October 2013

Marc Evertse, Project Manager, Port of Rotterdam International
© Copyright - Port of Rotterdam - 2012

1

Table of Contents
1.

Who we are

2.

Vision

3.

Objectives & Approach

4.

Track Record & Current Projects

5.

Paths to Partnerships


2

1. Who we are
1.

A port development company
•
Develop land/infrastructure to attract cargoes
•
Business case driven approach to development
•
Asset management
•
Strategic stakeholder management

2.

A publicly owned business driven company
•
Financially self-sustaining – no subsidies
•
Pays out dividends to shareholders
•
Profitable but not profit maximizing

3.

Corporatized non-political organization
•
Public shareholders but autonomous
•
Professional management – no political appointees

4.

Landlord model
•
PoR leases 4,000 ha. of land to private companies
•
Aiming to attract EUR 10 billion in private investments (20112015)
•
Annual investments in land/infrastructure (> EUR 200 million)

5.

Authority as harbor master
•
Formal authority as harbor master
•
Harbor master is responsible for safety and security

5

1. Throughput and revenue growth have improved after corporatization
Pre-Corporatization

Post-Corporatization
Growth (CAGR)

Growth (CAGR)
Throughput:
1.67%
Total Revenue: 0.20%
Net Profit:
3.72%

Throughput:
3.07%
Total Revenue: 3.23%
Net Profit:
15.86%

* Corrected for inflation

6

Main criteria for our shareholders
What we do must be good for Rotterdam (and the Netherlands):

• Give Rotterdam clients the opportunity to enter a new market under the
‘umbrella’ of Port of Rotterdam, and/or:
• Generate cargo flows to the Port of Rotterdam, and/or:
• Attract foreign companies to set up business in Rotterdam.


7

2. Port of Rotterdam International (PoRInt) is a key component of the
PORs corporate strategy


8

2. Sample Partnership Structure

Partner(s)

PoR

What do we look for in a partnership

PoR option to
participate in
Asset Mgmt. Co.

structure?

 Owns port land
 Gives long-term lease to
Port Mgmt. Co.
 May be needed where
public land is involved

16 oktober 2013

Long-term
Concession

Port
Management Co.

Stable, reliable, long-term partner


Asset Management
Co.



Substantial shareholding to ensure
appropriate mandate to
develop/manage the port

 Basic infrastructure
investment
 Leases out land to clients
 Port planning, development
& management
 Stakeholder management
 Nautical control/safety


9

2. Why is PoR an attractive partner in port development?

• Experience: > 75 years of World class port planning

• Commercial Opportunity: a global network of contacts with with key
players in transport, logistics, energy, chemical industry, and mining.

• Credibility: Track record in port development at home and abroad (the
only one!)

• Reliability: Port of Rotterdam brand creates trust with all relevant
stakeholders (commercial, financial, institutional)

• Vision: for PoR development means long-term partnership
• Landlord Operating Principle: is key to attracting leading terminal
operators


10

2. What is the benefit of partnering with PoR?

Know-how
Transfer





Boardroom Consultancy: short-term port management/development advisory
Port Management Services Agreement: long-term know-how transfer via PoR experts
Port Management Program: yearly training program for port managers offered at PoR
(customized programs also available for global strategic partners)

Partner with long-term outlook and commitment
Direct: equity investments via port partnership JVs
Indirect: via investments made by companies in PoR’s commercial network (i.e. terminal
operators)



Investment





PoR has a strong brand name among terminal operators, shipping lines, and other
maritime companies.
Brand name attracts clients and therefore new business

Brand Name



11

The Quality of port infrastructure in the
Netherlands is world-class…
In the Global Competitiveness
Report, a leading study of the
competitive strength of
various countries conducted
by the World Economic
Forum, the Netherlands
ranks 1 worldwide

Global Competitiveness Report (2012 - 2013)
© Copyright - Port of Rotterdam

12

3. The market for port development – what projects do we look for?

Terminal
Operator

Single User
Port/Terminal

Greenfield

Industrial Port Complex

?

Brownfield

Port Landlord

Brownfield projects are only considered if:
•

There’s room for expansion inside or next to
existing port

•
•

Is of strategic interests to existing clients

•

Port offers business development opportunities

Offers opportunity to create new partnerships
13

4. Track Record: 72 locations in 33 countries analyzed between 2009 and
2012

Countries
Visited/Analyzed

Past/Current
Port Locations

16 oktober 2013


14

Track Record: Current Key Projects are result of careful selection

CONSTANTZA
CEYHAN

TEDA NANGANG

SOHAR
BARRANQUILLA
JOHOR

Focus Areas
PORTO CENTRAL

Main Projects

NACALA

Key Prospects

16 oktober 2013

© Copyright - Port of Rotterdam

15

4. Track Record: PoRInt has advised governments and port authorities
around the world contributing to better port development/governance
Consultancy




Indian Port Association: Business plans for the 12 major ports
Brazilian Ministry of Ports: PNLP Project – Port Reform study for
the whole Brazilian port sector
Port of New York and New Jersey , USA

Partnerships & Agreements











Qatar Petroleum , Qatar
Port of Constantza , Romania
Espirito Santo State , Brazil
Suape , Brazil
Tianjin Economic Development Area , China
Senegal (CSR project)
Rosmorport , Russia
Vinalines , Vietnam
Port of Taranto , Italy
Saldanha Bay , South Africa

16

4. Sohar: Rotterdam’s 1st port development partnership

2000-2002




2000: PoR advises Omani gov. on
development and management of
Sohar
2002: PoR and Omani gov.
establish a 50:50 JV

2003-2007





2004: first vessel arrives
2006: refinery and container
terminal begin operations
2007: Concession area expanded
from 2,000 ha to 6,400 ha – Sohar
Free Zone established

2008-Present








USD 14 billion in investments
generated since 2004 (30% of
inbound FDI in Oman)
1,500 ha. leased out
Expansion of liquid and container
terminals
60% (CAGR) throughput volume
growth since 2007
Paying dividends since 2009
17

4. Sohar: a diversified industrial port complex built through
partnerships with world class Rotterdam clients
Tank Storage

Dry Bulk
“After Vale’s successful
inauguration of its new iron
ore transport hub in
Oman…other dry bulk
shippers are now flocking to
the Port of Sohar”

- Lloyd’s List Mar. 2012

Containers

Breakbulk

“Hong-Kong based global
operator Hutchinson Port
Holdings signed an
agreement with Sohar port
authority to expand its joint
venture”

- Lloyd’s List Jan. 2013

16 oktober 2013


18

Nangang

16 oktober 2013


19

4. Porto Central: Greenfield port development project in
Brazil
•

1,500 ha greenfield being developed into a deep water port and industrial complex

•

Centrally located to the offshore, mining and agri-bulk production sites

•

Expected cargo throughput of up to 200 million tons

•

Project is being developed with local partner – TPK Logistica

16 oktober 2013


20

4. Porto Central: scheduled start of operations in 2016

Unique Selling Points
1. Location: centrally located to offshore oil
fields and major economic centers in
undeveloped rural area
2. Management: professional private sector
management
3. Concept: varied economic activities
clustered to generate synergies
4. Accessibility: 24/7 port with deep draught
(23m.) and multimodal hinterland access
5. Port Infrastructure: state of the art
infrastructure and low environmental impact

16 oktober 2013


21

5. Paths to Partnership: 2 track partnership process

Fast Track:



Port Analysis/boardroom consultancy identifies
strengths, weaknesses, opportunities, and threats
of prospective partner port.



Business case is drafted and if positive JV
establishment processes begin

Slow Track:



After port analysis PoR and prospective partner
port sign a Port Management Services Agreement
(“PMSA”)

 Through PMSA PoR transfers know-how allowing
partners to assess attractiveness of a JV



Go/No Go Decision Point
Initial Track

If partners wish to continue, a business case is
drafted and JV establishment processes begin

Fast Track
Slow Track

22

5. Partnership process can result in different types of partnerships

Partnership Types
Different paths, different partnerships

Private Port JV

 Fully private port development co.
 Owns, develops, and manages port land

Port JV w/
Concession

 Land owned by government
 Port development co. receives long-term
concession to develop and manage the port

Know-how Transfer

16 oktober 2013

Examples

 Via boardroom consultancy or port
management services agreement (“PMSA”)
 technical, managerial, market expertise
 Business development assistance


23

Thank you for your Attention
Questions?


24

Master class organiser

Maurice Jansen

Maurice was the first head of Netherlands Maritime
University of Applied Sciences (STC-NMU) and responsible
for the Master Shipping and Transport program at STCGroup's main campus in Rotterdam as well as at STC-Korea.
Currently at STC-Group’s Innovation and R&D department
he’s working as a researcher and thesis supervisor to Master
students in the field of port strategy, port governance and
supply chain management. Previously he was a supply chain
solutions engineer and consultant at UTi Worldwide and
KPMG Consulting.
More information:
Maurice Jansen MSc,
m.jansen@stc-r.nl / T. +31 10 4486000

How to stay in contact?

@STCGroupNL

www.stc-nmu.eu
Netherlands
Maritime University

Email: info@stc-nmu.eu

full speed ahead… with your career!

Masterclass Port Authorities in International Perspective

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