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Port strategy - Essay Example

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The global economy and business have expanded dynamically since 20th century. The business related to port had increased at a rate of 8% from 2000 to 2006. In the developing countries, the business had increased by almost 30% and fuelled by the high cost of gasoline and other primary goods. …
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Port strategy
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Download file to see previous pages In the year 2005, UNESCAP and TTD (The Transport and Tourism Division) comprised of almost 600 ports, globally. In the year 2002, GTO operated approximately 55% of total global port terminals (Rossignol, 2007). Source: (Rossignol, 2007). Since 2002, the larger port operator companies comprise of the larger market share and are increasing at reasonable rate. In the year 2005, the GTO’s share in port had increased to 58%. The capacity of goods in ports had risen by 11.3% which was calculated as 399 million TEU from 2004–2005. The high market share of GTO indicates the importance of port services globally. In 2006, it was found that GTO terminals possessed 81% of the largest cranes with more than 22 rows (Rossignol, 2007). Source: (Rossignol, 2007). The above table shows the major port operator companies throughout the world in the year 2005. Strategies of Major Port Operators The port operators had experienced tough dynamic business environment. This increased the need of merger and acquisition of small terminal and establishment of new terminal system. As a consequence, many port operators had implemented horizontal and vertical assimilation strategies. The motive for merger and acquisition strategies is to expand the business, market share, and economies–of–scale and attain the leading position. In the year 2009, HPH (Hutchison Port Holdings) was the market leader for port shipment and PSA (Port of Singapore Authority) was in the second position with regard to total hectare. This highlights the aggressive growth related strategy for obtaining terminal. The acquisition takes place in the lower market that possesses strong growth...
In past, many port operators had restructured their port and begun to relocate operations and proprietorship to the private sector. The critical part in restructuring is that the government must make sure that the ports are managed effectively. It has been seen that private corporations have stronger encouragement to control resources competently than public organisations. The reason is that private companies are greatly exposed in the competition and there is less vulnerability of political intrusion. The restructuring had helped PSA and HHLA to gain insight about how to achieve more competitive and efficient ports. It directly benefits the employees and the neighbouring countries. Port restructuring provides convincing means to increase both political and monetary autonomies. There are three motives behind restructuring of ABP ports. The first motive is the limited competition and higher cost of port services. The second motive is to remain competitive with other European ports that had swiftly adjusted according to market condition and adopted advanced technology such as containerisation. The final motive is that under the control of government the port’s access was restricted i.e. it was unable to diversify into other profitable businesses. The restructuring helped to remove these limitations of ABP. ...Download file to see next pages Read More
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