Ramesh Shivakumaran Company Review: Valuable Principles on Port Management


More Valuable Principles on Port Management


We continue with our review of the essential principles involved in managing ports and trade transport with a discussion of some vital considerations investors, consultants and managers must seriously face: 


1. Understanding the different types of ports and access to ports (natural, man-made, river, estuary) and the diversity of specialist port operations 


The type and purpose of the port facilities will determine one's level of financial exposure and managerial approach. Ports dedicated to dry bulk will have a different configuration to those designed for liquid cargoes. Some countries might prevent the use of certain natural waterways for transporting such products as crude oil or natural gas.  


2. Understanding the highlighted role of ports in a through-transport context – hub ports, feeder/transshipment ports, intermodal interfaces 


Specialist port facilities consist of facilities that support the overall port system through auxiliary services, for instance, hub ports that serve as intermediary access-points to other major facilities or provide linkages for other parts of the entire system. These intermodal ports allow movement of products and goods through various modes of transport (land-to- water interface, water-to-land interface or air-to-land interface, etc.) until the final delivery or transfer of goods to their port of destination is accomplished.


3. Being aware of the role of national and regional local government institutions in port design, management and operations 


Recognizing the primary role of national and regional government agencies play in the construction and operations of part facilities will give a company the advantage of acquiring a thorough understanding of one's corresponding role and duties.


4. Understanding the different forms of the ownership structure of ports and of port services; that is, public or private, landlord only, full or part-service provider, including terminal facilities within ports  


Various conditions will determine and even complicate the form of ownership of port facilities and the kind of services that will be provided. Leasing the land upon which the port is located will be the best option compared to owning it. Some country will not allow full ownership and will require a local partner to own majority of the land as well as the improvements (usually 60%).


5. Appreciating the use of Free Port/Free Trade Zones as an economics tool 


Countries have gained the benefits of opening up Free Ports and Free Trade Zones to allow foreign investors to establish operations in regions where labor and raw materials are cheap and readily available. This has allowed port operators to take advantage of such ports and zones while enjoying the tax relief afforded them as well as their manufacturing partners.