Port Strategy Showcases Port of Nansha as New Entrant

Making Connections: Overseas offices are more than just a public relations outlet for a port.

Never mind social media, personal contact is still valued and valuable in the world of shipping and, as anyone in business knows, it’s always important to remind your customers that you exist.

Many international ports operate satellite offices in other countries and one of the busiest in this regard is the Port of Hamburg, which has representative offices in Shanghai, Hong Kong, Mumbai, St Petersburg, Warsaw, Prague, Budapest and Vienna, as well as those strategically located in Germany.

Of course increasing the port’s profile is important but, as Axel Mattern, chief executive of Port of Hamburg Marketing, emphasizes: “It is definitely not all about parties and big receptions in expensive hotels. It is about talking to the importers and exporters, identifying who is making the decisions about logistics and shipping, and being very precise and to the point. Our staff are constantly on the road, meeting the decision makers. We want to know what sort of issues shippers might have, and what kind of questions. We might be providing information about customs clearance or advising how to optimze their rail traffic.

“Our offices are in the core markets where cargo is coming from, and in major destination markets, the consumer markets in Europe. We try to be on top of all the questions and we like to know our customers.”

In the ongoing round of mergers and consolidations, it isn’t easy to keep up with the major container lines but, he says: “The main focus for us is on the shippers and particularly on our hinterland, because that is our main advantage. Of course the shipping lines are of interest for the terminal operators, because they are their clients; but for the port itself, we have to consider strategic solutions for the future and invest in infrastructure. We have to connect the port as efficiently as possible to its possible markets. We sincerely believe this is the key to our success, and our continuous work in the market is worth a lot for us.”

Hamburg is always considering plans for more overseas markets, he says, but the costs must always be balanced with the return. “Obviously we have a limited amount of money to spend and we would rather have an office which is working properly than just being somewhere. At present, we are discussing opening a representative office in the US and this is a good example; you could have at least three offices there, East Coast, West Coast and Gulf, because the markets are so different. And at the end of the day, you have to identify who is making the decisions and where they are. In the US and also in South America, we have learned that often logistics decisions are being made somewhere else.”

New entrant

A port that has only recently started out on the road towards international representation is Nansha, part of the Guangzhou Port Group. In January, the group announced that after the successful launch of its US office a year before, it was extending its network into Europe with the launch of Guangzhou Port (Europe) BV – based in The Hague and headed up by chief executive Johannes Nanninga.

“We’ve been fast growing since the opening of the Port of Nansha, which benefited clients particularly in the West Pearl River Delta,” said the group’s vice president, Song Xiaoming. The port already handles more than 11m teu a year, largely based on a high level of intra-Asia trade.

“However, the port’s East-West trade is still highly underdeveloped,” says Mr Nanninga. “One of the port’s biggest volumes is Asia-Africa trade while Nansha still has quite modest shares in Europe and US trades.”

The opportunities for a government-owned Chinese port to have constant contact with its target markets outside China are limited, he says. “That is why Guangzhou Port Group decided to act innovatively and invest in overseas offices. Our primary objective is to increase awareness of the Port of Nansha. The office in the US has been so successful that it resulted in a 60% growth year-on-year in US volumes.”

What are his priorities? “You have to communicate and work with everybody in the industry. You have to go to the big shippers and, of course, the international forwarders are very important in Europe.”

Encouraging potential customers to use a port means breaking down some barriers, he points out. “Ask a shipping line why they don’t use the port more and they say – we go to where the cargo is. But go to the big shippers and they say – we go to the ports where the ships are. So you have to work on both sides to increase the profile of the port and get them to start using it.

“In international trade, if things are set in their particular way, you have to cross a barrier. The customers have to get to know new processes and new services such as customs. We have really actively tried to lower those barriers.”

Value proposition

First and foremost, he says, Nansha has a ‘clear value proposition’. He sees himself as a coordinator, including between people in Asia and Europe who can be part of the same company, and making them aware of the potential cost savings.

Nansha has a clear focus, based on the manufacturing base in its hinterland which is dominated by electronics, home appliances and white goods. “It is very logical that I should get in contact with the companies retailing those products or those whose brands are being manufactured there,” says Mr Nanninga.

“But as a port you have to think along the lines of the different actors – shippers, forwarders, shipping lines. They all have different interests and different ways of looking at things and it helps if you know the industry quite well. I lived for nine years in Greater China, and I have worked in the industry for a long time.”

On the East-West trades, many of the decisions on cargo routes are not made in China but in Europe or North America, he says – and while many shippers have been ‘set in their ways’ for a long time, many are increasingly open to new possibilities.

Guangzhou Ports Group has a network of offices in China and this is expanding – “you need more and more connections with the hinterland, especially as a lot of manufacturing and distribution moves deeper into China,” says Mr Nanninga. Following the US and Europe offices, the group is now looking to open offices in some key Asian hubs, and a representative office in the Middle East is also a possibility.

WEIGHING COSTS AGAINST REACH OF OVERSEAS OFFICES

The Port of Koper has three representative offices, in Vienna, Budapest and Bratislava. The Budapest office also covers the Romanian market, while the Bratislava office also covers the Czech Republic and Poland, Sebastjan Sik, head of PR at the Port of Koper, explains.

The main functions of these offices are to raise awareness of the port, meet customers, find new customers and explain the benefits of using Koper, he says. “We are a business-to-business business and even if the business is becoming more and more impersonalised and digitalised, our customers feel much more appreciated knowing that they have a contact person nearby offering them full support and attention.”

Koper does not have immediate plans for further offices, he says: “Any decision would be based on economic analysis and business potentials offered by that market.”

Of course, running representative offices, with associated rent and travel costs, is not cheap, points out Port of Hamburg Marketing’s Axel Mattern. “But it is worth doing it. It is part of a marketing concept that the city and port of Hamburg has to be present.”

Each of the Hamburg representative offices has a minimum of two full-time people and they are constantly on the road talking to shippers, clients, local organisations and associations, forwarding agencies and forwarders. The office in Dortmund is very well connected to IKEA, clearly a massive shipper. But, says Mr Mattern: “There are also a huge number of companies in central Europe that are smaller companies but very sophisticated and very export and import-orientated. You have to talk to them as well – even if it is only a couple of containers, they need our attention and support too.”

Article courtesy of www.portstrategy.com