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
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
Why Clustering?
Cluster groups help create a more
comprehensive and focused
strategy for integrated port
and logistics activities
The Quality Chain
Successful clustering
Port operations run
like clockwork
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)
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
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
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
A Cluster Champion
GIL’s International Best-in-Class Port Cluster
Valenciaport
Represented by the Port Authority of Valencia, Spain
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
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
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
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
•
•
•
•
•
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
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
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
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
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
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
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
Top 20 ports + Valencia (teu) 1970-2008
Singapore
35000000
Shanghai
Singapore
30000000
Shanghai
Axis Title
25000000
Hong Kong
Shenzhen
Hong Kong
Busan
Shenzhen
Dubai
20000000
Ningbo
Guangzhou
15000000
Busan
Dubai
Rotterdam
Qingdao
10000000
Hamburg
Kaohsiung
5000000
Antwerp
0
Tianjin
1970
1980
1990
2000
2008
Source: Own, Data fromCI-online
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
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, …
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
Valenciaport timeline
Thousands of TEU's
4,000
PORT
EXTENSION
WORKS
FIRST
PUBLIC CT
TENDER
3,500
SEAL OF
GUARANTEE
IPEC
TRAINING
CENTER
3,000
2,500
CSR POLICY
SECOND
CITY/PORT
AGREEMENT
FIRST
CITY/PORT
EDI
MADRIDVALENCIA
FREEWAY
AMERICA’S
CUP
VALENCIAPORT
FOUNDATION
SIC
ECOPORT
AGREEMENT
2,000
1982
1,500
1986
1990
1978
1985
PORT
AUTONOMY
SAGUNTO &
GANDIA
JOINT PAV
1991
1994
1998
1997
2001
2000
2004
2002
2005
2007
2009
2006
2008
1,000
500
MSC
DEDICATED
TERMINAL
COSLADA
DRY PORT
NEW PUBLIC
CONTAINER
TERMINAL
VALENCIAPORT
PCS.NET
STRATEGIC
PLAN 2015
F1
0
78
82
86
90
91
94
97
98
02
04
07
08
09
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
Introducing PCGC
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
PCGC Goals
1. Share-learn-benchmark (SLB) best practice globally
2. Examine trends and future of port cluster
3. Enhance the diffusion of the excellence philosophy
in port cluster
4. Connect people who know with those who need to
know
5. Generate and synthesize knowledge
6. Develop networking opportunities
7. Obtain new ideas from various port
cluster types and various countries
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
PCGC Vision
By 2011, the Global Institute of Logistics will
have published a comprehensive guide to
best 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
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
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
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
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
Learn from us
Available case studies
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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
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
The big picture
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
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
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
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
“Standards are written
by interested parties,
GIL only holds the pen”