As a port administrator, what would you do to best save costs associated with running an effective port operation?
How well the port manages its costs is not only a factor of enhanced efficiency within operations but also on the rate at which it is positively responding to emerging market dynamics (Alderton, 2008, p.180). Much of the cost-saving decisions will function better at localized settings depending on the assessment of the situation at hand. For instance, port response to taxation regimes and concessions by the state (Alderton, 2008, p.180). Idleness and jamming of the port area may symbolize inefficiency as emphasized in the case of the Panama Canal (Ierapetritou et al., 2009, ¶1).
The relationship established between the Dockers’ wages and cargo-handling costs is about whether the port is capital or labor-intensive. This has led to the introduction of containerization in the cargo handling process at the port to cater for a positive correlation between Dockers’ wages and cargo-handling costs in a bid to delink and contain costs that are on the higher side. The move to containerization was more pronounced in countries that were experiencing relatively higher Stevedoring costs (Alderton, 2008, p.172). The port harmonizes labor intensity with capital investments within its operations. This has to do with cutting the labor intensity within cargo handling operations in the port. This brings down costs, especially in handling bulk cargo. For example, case reports by the International Benchmarking of Container stevedoring of ports in Australia and USA’s Philadelphia (Alderton, 2008, p.177).
The systems governing the modalities of pricing port services have implications for minimizing port costs. The comparison between state and regional authorities influenced pricing. This determines the flexibility of ports in altering their pricing. The price controls by the state systems will influence the existence of competitive pricing of services between ports (Alderton, 2008, p.178). State involvement may not only offset competition within but also between states. This was the case as the British National Ports Council reported in 1969 resenting the disparity arising on competition balance existing between them and their neighbors. The central issues were on the kind of financial support offered to ports by the mainstream state government (Alderton, 2008, p.179).
There is a need to continuously mainstream environment-friendly codes in the planning processes of the port. This has become a contemporary requirement in proving efficiency in production processes. This is assessed in terms of the processes that minimize waste natural resources as well as pollution into the atmosphere. Environmental activism has led to abandoning the adoption of new plans because of failing to meet all environmental requirements. Probably this was the case reported by Lloyd’s List in September 2002 of the building a new port terminal for handling containers at Dibden Bay (Alderton, 2008, p. 172). This hampered their port development plans. Panama Canal recognizes environmental care in the policy frameworks as an efficiency aspect at the port (Ierapetritou et al., 2009 ¶1).
Increasing accessibility of the port especially to the inland is influencing port earning. Ports are the interfaces between the inland and maritime services. Costs attached to infrastructure maintenance of the inland have factored financial inputs from ports. Increased inland accessibility has positive implications on port development. The UK recognizes the correlation between the cost of operations at the port and inland infrastructure maintenance and development. Ports are involved in the maintenance of rail and road infrastructure in the UK (Alderton, 2008, p.172). Arguably, accessibility enhances the capacity of operations among inland transporters in the quantity and timely aspects thereby boosting the income rates of the port.
References
Alderton P. (2008). Port Management and Operations, 3rd ed. UK: Informa.
Ierapetritou, M.G., Theofanis, S., Boile, M.,Saharidis, G.K. & Golias, M.M. (2009). The Berth Allocation Problem: Optimizing Vessel Arrival Time. Web.