Port Management and Strategy West Coast of India

Question: Describe about the Port Management and Strategy for West Coast of India. Answer: Strategic Planning and Background Information Mumbai Port Trust lies in the middle of the West Coast of India. It is established on the natural subterranean water harbor of Mumbai, Maharashtra (mumbaiport.gov.in 2016). The harbor is spread over 400 kilometers. The harbor is protected by Konkan in its east and by Island City in its west. Mumbai port is administered by an autonomous corporation namely Mumbai Port Trust (mumbaiport.gov.in 2016). The port is completely owned by Indian Government. The port is mainly utilized for bulk of cargos and most of the container traffic is intended for Nava Sheva port. Elements and Process in Strategic Planning Serial Number Elements Process 1 Mission Facilitate effective and sustainable flow of commerce through world leading port operation and infrastructure. 2 Guiding Principle Pursue excellence in world trade and invest in those activities, which advance the position of port as world leader. It conducts best practice in seaport management and international commerce. Developing asset and land for enhancing long-term value and ensuring equitable return port investment. Empower excellence in port operation through improving infrastructure facilities. 3 Value Proposition The port is connected to every key market in all through the world by expansive network. The port offers extensive sailing options and 26 terminal choices to the shippers. Off-dock container yard facility at the seaport facilitates the organizations to transport their good without issues. The port is intended to minimize gap between the seaport and hinterland. Road, inland waterway, pipeline and rail networks have developed for maintaining smooth commodity flow. Deep Water in the harbor provides facilities of ample sheltering of shipping throughout the year. 4 Areas of Focus On-Site Warehousing The port will focus on developing on one-site warehousing in the port areas. It will establish hub in the seaport areas, where the customers will be able to store their commodity goods to be transported in the next day (Desai and Choudhury 2016). Moreover, the port authority will be willing to frame port centric model. The IT experts will customize the stock data for integrating with customers towards control over cargo deliveries and logistics. Changing Sourcing Pattern Government of India should invest more towards improving the operational and infrastructural parts of the port. The port should employee skilled and experienced employees and IT developers for improving technological department (Dandekar and Mahajan 2013). National Prosperity The port will provide gateway of trade and exert a pull on the infrastructure like shipping agency, freight forward, stevedores and banks (Mandal and Harkantra 2013). Improving the equipments The port should highly focus on improvement of their equipments needed for loading and unloading the commodity goods (Strupp 2016). Moreover, the mode of direction with the port areas should be enhanced. Table 1: Element and Process of Strategic Planning (Source: Kale and Joshi 2013) SWOT Analysis Factors Explanation Strength Mumbai port is considered as one of the most preferred ports for trading due to its competitive pricing, location, proximity of industry and secure operation. 3.3 meters high water neap tide is adequate for meeting requirements huge numbers of passenger ships, cargo vessels and deep drafted tankers (Pawar 2013). The port has land areas of 235 ha (Approx). The port has Ro-Ro Terminal and it multilevel car packaging capacity of 5000cars. The port is capable to handle ultra large container ships, which can carry over 15000 TEUs (Gujar et al. 2014). Weakness Congested approach of the roads may cause delay in commodity transportation. The land availability of Mumbai port is restricted. Sub-optimal utilization of railway connectivity reduces the effectiveness of commodity transportation (Noiseux 2016). Traffic evacuation is not allowed in daytime at Mumbai. Increasing rate of ageing workforce has minimized the operational efficiency of the port. Lack of skilled employees, who are technically efficient and contribute in IT infrastructure improvement of the port Exposure to saline environment and dust leads to high maintenance expense. Opportunity The port serves the regions like Pondicherry, Tamil Nadu, South Andhra Pradesh and others. It has been emerged as hubs on the west coast of India. Major cargos, which are handled in the port, are automobile exports, containers, Iron Ore, fertilizers, coals and general cargo items. It assists in effective transportation of exports and imports. Increasing size of ships is effective for huge commodity transportation. 7% growth rate in GDP, foreign exchange rate, stable inflation and increasing international trade lead to increasing income from the port (Chu, Fwa and Nishijima 2013). Threat Increasing competition among the domestic ports is becoming a challenge to ports. The port is facing tough competition from Jawaharlal Nehru Port, Vishakhapatnam Port and Kakinada Port (Jategaonkar and Yadav 2014). Internal clashes among the countries and sea regulation polices highly influence the port in terms of legislations issues. There is high chance for reduced government funding. Increasing awareness of people regarding the environmental issues minimizes the effectiveness of the port. Substitute transportation system like air cargos is minimizing demand of port (Patil, Nanaware and Jadhav 2013). Table 2: SWOT Analysis of Mumbai Port (Source: De Oliveira and Cariou 2015) Recommendation Strategies for Internal Issues Strategies for External Issues The port should take the permission of Government towards increasing the land availability (Jiang et al. 2012). It will help in accommodating more number of cargos and ships for loading and unloading the commodities. As traffic evacuation in Mumbai is not allowed at daytime, Mumbai port should transport most of the commodity goods at night. The port authority should hire new and talented employees for the port operational activities. Apart from that, the port authority should also recruit more number of technically expert employees for improving the equipments of the ports system (Zhang, Huang and Zhao 2013). In order to minimize the maintenance expense resulted from environmental issues, the port should highly focus on creating environmentally sustainable port system. The port should highly concentrate on optimal utilization of railway connectivity towards increasing the effectiveness of commodity transportation (Lee and Cheong 2013). The port needs additional environment and pollution management towards shaping environmentally sustainable port system. In order to beat the challenge from other domestic ports, Mumbai port should incorporate some unique and competitive facilities over those ports. While internal clashes among the countries become the challenge to the port in terms of routes, the port should avoid those countries and try to enhance other smooth routes (Ishii et al. 2013). While there is high chance that Government would reduce their funding, the port authority should ensure that the port would actually contribute in the economy of India. The port authority should convince the Government that they are doing projects by keeping national interest (Monios and Wilmsmeier 2012). In order to face the environment policies of the country, the port should incorporate green transportation system by minimizing carbon emission. The port authority should revise the price structure of the port transportation and minimize the price for effectively competing with the air cargos. Table 3: Recommendation Strategies for Internal and External Issues (Source: Zhang, Huang and Zhao 2013) Marketing Plan Marketing Objectives Incorporating port centric model for enhancing the competitiveness of the port Enhancing the effectiveness of infrastructural, regulatory and operational activities of the port Enhancing the effectiveness of on-site warehousing and other logistic value added services for container goods Developing berth from 10-12 at Indira dock as conventional cargo Developing cruise terminal nearby Gateway of India The port authority would be concentrated on personal selling and direct business trip In order to increase customer database, the port authority would focus on international shipping exhibition Communicational Goals and Target Providing information to current customers and attracting new customers Providing information and remind the local community regarding the contribution from the seaport Sharing information and consulting with the employees Publicity and public communication through marketing communication and gaining support from them Increase customer base and enhancing the ports revenue through huge trading Providing information to the community for getting support from them Setting Target Groups International Businesspersons: These groups of persons deal with other companies in foreign country and remain engaged with exchanging commodity goods through port transportation. Manufacturing Industry: Manufacturing industry involved in international trade is likely to transport commodity goods through port system. Therefore, these are the target group of Mumbai port. Mining Industry: One of the most effective target groups for Mumbai port is mining industry. This industry is most likely to transport huge amount of coals to foreign country. Define Message Avail the integrated seaport service for commercial flow of commodity goods through handling, storing and delivery of cargos. Get the integrated service at minimum price with best quality. Selecting Tools/Medias for Promotion Professional Magazines Commercial Newspaper Reference books for different industry Radio Adverting Television Advertising Digital Media Advertising Direct Mailing International shipping Exhibition 2: Port Sustainability Shore Power Mumbai port should take the initiative of shore power for reducing the environment pollution occurring from port operation. In this strategy, the port will decrease the marine diesel air emission through restricting the container ships to shut down their engines while near port (Pawar 2013). It will also be applicable in berth while loading and unloading commodity goods. In this way, the rate of carbon emission in the marine will be minimized. It has been found that Port of Vancouver in British Columbia uses this strategy for protecting the environment from port operation (Denktas-Sakar and Karatas-Cetin 2012). Renewable Source of Energy Mumbai Port should be highly concentrated on installing renewable source of energy for operating their machines. The installation of wind energy, solar energy will definitely minimize the emission of carbon generated from diesel used in the machines. With the utilization of renewable sources, the port will also save huge resources of the country and thereby, improving the economical condition of the country (Chu, Fwa and Nishijima 2013). The port can also use biodiesel for reducing air pollutants. This strategy is widely used by Port of Rotterdam in Europe. This port authority has decided to install wide energy with capacity 300 MW by 2020 (Strupp 2016). Removing Plastic Soup Mumbai port should participate in removing plastic soup in the port areas in conjunction with other parties. The port authority should involve in removing the floating plastic waste from the docks and ports. In this way, they will be able to build up clean sustainable port towards contributing to the quality life of marine residents. It has been found that Shanghai port in China has used this strategy for keeping environmental interest (Shiau and Chuang 2015). Reducing Idling Time The port authority can reduce the rate of pollution and harmful carbon emission by through reducing the idling time of the truck, bus and other equipment around the port. Through this strategy, the port can save gallons of fuel per day and reduce harmful pollution. It has been found that Busan Port in South Korea uses this strategy for keeping the port areas pollution free (Lee and Cheong 2013). 3: Logistic and Supply Chain (Visakhapatnam Port and Chennai Port) Even though India is a developing country, still Chennai Port is found to be rapidly gaining reputation among the manufacturers in the country (Mandal, Roychowdhury and Biswas 2016). On the other hand, Visakhapatnam Port is rapidly growing because of coal handling berth facilities in India (De Oliveira and Cariou 2015). Therefore, these two ports are under extreme competition in India, which will be further evaluated in the following sections. Discussion of Ports Key Factors Chennai Ports Key Factors Factors Explanation Location and Geography It is the only flat coastal plain port Since situated at thermal equator, there is very less variation of seasonal temperature, which is quite favorable for logistics Moderate risk of earthquake indicates least risk of cargo damage (Jiang et al. 2012) Traffic growth Reputed port for handling coal (8 million tonnes) and iron ore (12 million tonnes) Fastest annual growth for container volume Capacity to handle 3,000,000 TEUs and it is the third mega terminal container (Ishii et al. 2013) Port Layout and Infrastructure Facility for handling general cargo, food grains, granite steel and cars Bharathi Dock handles 100,000 DWT oil tankers Berths are having five marine loading arms associated with pipelines that convey white oil, crude oil and furnace oil (Monios and Wilmsmeier 2012) Terminals Two container terminals operated by Singapore's PSA International Pte Ltd and DP World Pvt. Ltd resulting to a capacity to handle 2.8 million containers (standard) each year Fastest growing container terminal in India having CAGR 20% Flawless communication with Korea, China, Vietnam, Thailand, Europe and Mediterranean (Patil, Nanaware and Jadhav 2013) Table 4: Chennai Port Key Factors (Source: Created by Author) Visakhapatnam Ports Key Factors Factors Explanation Modernization and expansion program Though the investment of 130000 million, port is increasing its capacity to 130 million tones 37 percent of traffic has been reduced by Gangavaram Port, thereby increasing logistics Rashtriya Ispat Nigam Limited (RINL) shifted its base to new port for flawless still transport (Chu, Fwa and Nishijima 2013) Coal handling berth Modernized berth for handling coal with larger chunk Berth is capable to handle capsize vessels, resulting to reduce air pollution Capable of handling vessels with 12.5 meter draft and excellent harbor entrance channel (Jiang et al. 2012) Satellite Port In the recent years, in order to reduce traffic, satellite port will be installed at Bheemunipatnam (Ishii et al. 2013) Table 5: Visakhapatnam Port Key Factors (Source: Created by Author) After evaluating the key factors of both the ports, it can be said that Chennai port is far more developed and advanced. Logistics functions at Chennai port will be easier than Visakhapatnam Port. Choosing between two ports While choosing between the two ports, shippers must consider Chennai port due to the factors such as terminals, traffic, direct connectivity and complimentary mainline feeder services. While considering shippers, it can be identified that Ashapura Group of Companies is the major exporter of iron ore from India (Lee and Cheong 2013). Since trade of coal and iron ore generates the maximum return out of all the other goods, these shippers will be most attracted to Chennai port over Visakhapatnam port (Monios and Wilmsmeier 2012). In India, trade relationship with neighboring countries has increased a lot where direct connectivity with Thailand, China and Korea is the most crucial (De Oliveira and Cariou 2015). Chennai Port is the most suitable here as the shippers from top exporters such as Rungta Mines, MMTC, Bagadiya Brothers and Kalinga Allied Industries can communicate with all other 50+ ports (Zhang, Huang and Zhao 2013). This will eventually increase the amount of exports. Moreover according to Lee and Cheong (2013), the traffic feasibility at Chennai Port is quite favorable due to incorporation of 4 post-Panamax quay cranes, 7 rail-mounted quay crane (RMQC), 120 reefer plugs and seven weekly feeder services. From the above, it can be said that connectivity of Chennai port is flawless and it is far better than Visakhapatnam port. It can also be said that Visakhapatnam port is growing its mechanical handling facilities but its size is quite less than the other. Visakhapatnam port has able to reduce its traffic but needs to increase its capacity so that tones of chunks can be transported at a time. 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