THE IMPORTANCE OF PORT COMPETITIVENESS FOR THIS NEW DECADE

 By Andrea Garcia and Alejandro Campo

THE IMPORTANCE OF PORT COMPETITIVENESS FOR THIS NEW DECADE

Ports have become a vital role in the international transport system, converting into a gateway for foreign trade which facilitates a smooth export and import. In such a globalized world, the connectivity between the different ports allows companies to access a greater number of markets, in less time and above all in a more efficient way. 

What is the mission of a port?

A port is a tool at the service of society and companies. Its mission is to contribute to the economic and social development of its area of influence by improving its competitiveness.

To contribute that economic and social development it takes:

✔ Good accessibility.

✔ In the shortest time possible (scale)

✔ Reliability / punctuality. 

✔ With the most security in service.

✔ In the most competitive and efficient way.

✔ Sustainability. 

Spain represents the number 11 in the ranking of the 125 most important countries in the world for international maritime transport, being third in Europe in terms of container shipping. 

The Port of Valencia, one of the largest basins in the Mediterranean, offers international transport companies the possibility of importing and exporting goods with countries located in Southern Europe and North Africa.

The Port Authority of Valencia (APV) is responsible for running and managing three state-owned ports: Valencia, Sagunto, and Gandía, which are located along an 80km stretch of the Mediterranean coast in Eastern Spain. This strong combination makes it Spain’s leading Mediterranean port in terms of commercial traffic, basically containerised cargo, particularly because of its dynamic area of influence and an extensive network connecting it to major ports around the world.

Did you know…?

Valenciaport is the leader in container traffic, the leading Spanish and Mediterranean port, with an annual throughput of nearly 4.5 million TEU of container traffic and 66 million tonnes of cargo. 

Other data to take into account in the competitiveness of ports is the time of call. In the case of Valenciaport, the times per phase of a container ship are as follows:

Its privileged location makes it the best and most efficient option at the service of the maritime trade, with connections to more than 1,000 ports around the world. Also, the Port is the largest container port in the country, with a storage area adding up to 300 acres and a quay length of 12 km. 

Also, its area of influencia is connected to all major cities and industrial areas by high-capacity highways. The rail connection with Madrid region in central Spain, making it the ideal natural port for Madrid, and an essential platform for the entire Iberian Peninsula. Actually, the Port is working to improve their rail connections with other areas in the hinterland.

According to the United Nations Conference on Trade and Development (UNCTAD), the Port of Valencia  has reaffirmed its position as the best connected port in Spain and fourth best in Europe in Q3 (third quarter: 1 July – 30 September). 

Currently, the Port Authority of Valencia is preparing a new Strategic Plan until 2030. Furthermore, this plan considers the development such as the promotion of the railway,  the modal integration and with the Trans-European Transport Networks or the promotion of logistics areas. 

Axis of the APV Strategic Plan for 2030:

• New Business Opportunities and Technology Development
• Energy transition, Decarbonization and Combat Climate Change
• Digital transformation

• Innovation
• Port-City Relationship

In 2019, the Port of Valencia moved over 4,2 million TEU-containers, a global volume of goods exceeding 55 million tons and it annually handles over 7,500 vessels. The port is also a major employer, with over 15,000 employees, and generates over half of the country’s Gross Domestic Product (GDP).

Goods: 

The types of goods movements at the Port of Valencia include: the furniture and timber industries, textiles, footwear, agriculture and foodstuffs (grain and fodder, wine and beverages, tinned food, fruit, etc.), fuel products (diesel fuel, petrol , coal, etc.), chemical and motor vehicles (Ford, Fiat, Land Rover, Jaguar, etc.), the construction industry (cement and clinker, ceramic tiles, marble, etc.), machinery, etc.

Main customers of Valenciaport:

                     

         

MSC, MAERSK, CMA-CGM, HAPAG–LLOYD, HAMBURG SÜD, HANJIN, UASC, COSCO, EMES, EVERGREEN, BOLUDA CORPORACIÓN MARÍTIMA, NYK, HOEGH, GRIMALDI, ACCIONA and BALEARIA.

 

Countries 

Between January and October of this year, the most active areas in containers managed from Valenciaport were the United Kingdom, Canada, Saudi Arabia, India, the United States and China. These countries lead the commercial relations with Valenciaport.

SUBSIDIARY COMPANIES:

VALENCIAPORTZAL

A company founded in 1994 to promote and develop the Logistic Activities Zones (ZAL) of Valencia. Following a collaboration agreement signed in 2001, it is the commercial  branch of Valenciaport.​

Shares: 98,40%

                        

Europhar

An association whose aims are the protection of natural environments, the safety of persons and

activities, training and increasing environmental awareness amongst port personnel and society

in general.

Shares: 33,33%

Infoport

Information services company foundedin 1998 by the Valencia Port Community serving as the driving force in electronic  information exchange related to logistics through Valenciaport ports, facilitatingthe use of new information technologies.

Shares: 24.98%

COVID-19

Due to the health crisis caused by COVID-19, the operation at the Port of Valencia have been vitally important in dealing with the crisis as they have helped ensure that essential goods such as food or medical supplies, as well as raw materials and manufactured goods, reached their intended destinations, maintaining the health and economic activity. 

Also, The Port Authority of Valencia (APV) developed a contingency plan to keep operating the port. For their workers, applied a protocol with health and safety measures, such as the use of personal protective equipment, the way to interact with other workers, or the disinfection of work areas.

KNOW THE ADVANTAGES OF THE PORT OF VALENCIA

The port of Valencia provides a technological platform offering to their customers services to streamline and facilitate the operating process of companies of the port of community.

Through this platform Valenciaport provides logistics agents with a new instrument for them to offer their customers a better service, helping them thereby to become more competitive whilst allowing them to capture and increase cargo loyalty thanks to improvements in the following areas:

• Efficiency: automated operations by adopting error-free paperless processes.

• Connectivity: connecting port agents dealing with critical business processes.
• Integration: integration of sea-port-land operations between ports, ocean carriers and their shipping agents, freight forwarders and other operators.
• Modernisation: modernising logistics management by connecting agents’ systems and using the most advanced information systems.

Today, the Port Authority of Valencia has a series of tools intended to increase the competitiveness of port community companies. Among these are electronic invoicing, portmobile services and the technological platform ValenciaportPCS.

 

In the port and transport sector, efficient management of information technologies is a key factor for competitiveness, given the vast amount of information that is produced and exchanged. For this reason, major European ports have developed various systems that considerably enhance information management.

COMMERCIAL TERMINALS

The port of Valencia has two commercial terminals, among them are: APM Terminals Valencia and CSP Iberian Valencia Terminal.

VALENCIA CONTAINERISED FREIGHT INDEX

Ocean freight is the main ocean cost. This cost comes from the transport of a container from the port of origin to the one of destination and basically depends on the shipping companies contracted and the routes chosen.

On the one hand we have the dynamics related to international trade flows, which affect the cost of ocean freight. It is for this reason that export freights from the European, American or Asian continent are usually cheaper than import freights from Eastern countries, for example. And on the other, the dynamics of market competitiveness, which affect shipping companies. These lead to periodic upward trends in the cost of ocean freight on specific routes.

Occasionally it produces the General Rate Increase (GRI), which consists of the agreement between shipping companies of a freight price. This happens exceptionally when ocean freight costs are very low.

Due to all these problems, the VCFI (Valencia Containerized Freight Index) is created, an index that represents the evolution of the rates of the container export market by maritime transport from the port of Valencia, on a monthly basis. We could say that it intends to serve as a guide for the evolution of export freight from the APV (Valencia Port Authority), serving as a European reference for certain maritime routes originating in the Mediterranean. Therefore, we could consider this system very similar to the Shanghai Containerized Freight Index (SCFI).

The VCFI provides highly relevant information to determine port competitiveness with regard to ocean freight. In fact, this information was until very recently considered confidential, and is now used to help better decision-making by port users. On the one hand, shippers benefit since they will have a reference that will set the market trend, and on the other for operators, as it is a benchmarking instrument for the evolution of freight rates in the market.

The positive effects of this system are a more transparent market with more information at the time of making important decisions, translating this into a more efficient market.

PORT CONNECTIVITY INDEX

According to the literature carried out by Francesco Parola, Marcello Risitano, Marco Ferretti and Eva Panetti (2017), the internal connectivity of the port territory stands out as one of the most determining factors of port competitiveness.

In recent years, the growth of international trade, offshoring and fragmentation of production have led to an increase in the relevance of global value chains. This has a great impact on transport chains. 

In such a globalized world and with the different stages of production becoming internationalized, the connectivity between the different ports of a given area or country can be transcendental, and can make great differences. And that good connectivity allows companies to access a greater number of markets, in less time and above all in a more efficient way. In fact, ports are increasingly aware of the importance of this factor, and for this reason they increasingly give greater importance to the design of a port policy that reinforces their connectivity through the adaptation of their infrastructures and services to the needs of the market, in order to attract the maximum number of shipping companies and shipping lines.

With this objective, the Valenciaport Foundation and the Port Authority have prepared the Port Connectivity Index (ICP). This Index measures the connectivity of Short Distance Maritime Transport (TMCD) traffic for goods from Spanish ports. This index arises from the index prepared by the United Nations Conference on Trade and Development (UNCTAD), called the Liner Shipping Connectivity Index (LSCI). This is where the methodology to measure the connectivity of the Spanish ports of the ICP is based.

FULLY ADVANCED AND AVANT-GARDE TECHNOLOGICAL MEANS ARE ALREADY AVAILABLE

Maritime transport is one of the most used today. It is estimated that 80% of operations are carried out through shipping companies and the number is expected to quadruple by 2050. And it is for this reason that digitization and the use of new technologies are essential for the future.

The main advantages of this entire process are the automation of procedures and obtaining greater profitability. In this way, the increase in operations at a lower price will be decisive.

One of the main pioneers and references in these concepts is the Port of Valencia, where fully advanced and avant-garde technological means are already available. At the moment the Port Community of Valenciaport is currently one of the most advanced in the use of information technology. Each movement of a TEU requires multiple communications amongst members of our Port Community, creating a highly complex information network. This initiative for innovation is undoubtedly essential to achieve a clear competitive advantage over other ports.

FORELAND

An example of this is its tool called "Foreland" that can be used to visualize and analyze the traffic of goods in the ports of Valencia, Gandía and Sagunto.

All the information of interest is organized according to the ports of origin or destination of the goods, countries, geographic areas and goods moved by tariff codes or chapters and can be acquired in any of the available metrics: tons, TEUs and number of containers. In order to access this tool, which is specifically an application, a prior registration must be made.

Another very useful system is the telematic invoices, clients of Valenciaport. Its purpose is basically to make billing processes easier.

TECHNOLOGICAL PLATFORM VALENCIAPORTPCS.NET

Other tools to highlight is the valenciaportpc.net technological platform. This platform focused entirely on the Internet, is created meeting high availability requirements, offering SOA services to users to facilitate interconnection.

In addition, with its integration with the GT and INTTRA Nexus platforms, it provides users with a connection point with the world's leading shipping companies for sending and receiving documentation related to the maritime transport of goods.

The user has the possibility of carrying out information, commercial and operational transactions associated with the transport of goods, which means having easy access to integrated logistics information, accelerating the contracting of logistics services and achieving greater efficiency.

Another service that is very useful to highlight is the SICYP service (Web Information Service for Clients and Suppliers), created for clients and suppliers. Its purpose is to simplify billing processes. The clients and suppliers of the Port of Valencia will have the possibility of reviewing at any time the information related to their accounting movements, such as invoices, credits, guarantees, payments or finances, among others.

LOGISTICS SERVICES

Today's ports are part of the production, transport and distribution logistics chains, so their activities are clearly influenced by this logistics chain. The capacity of ports to diversify their tasks is quite high, so that the offer of a good variety of services is key to attracting customers and their subsequent loyalty.

Port logistics locations create added value in different ways, such as packaging, labeling, bundling and ungrouping of loads or palletizing.

Given the importance of this type of strategy, the Port of Valencia for years has promoted the development of logistics areas through the Valenciaport ZAL. Valenciaport ZAL is a state company of the Valencia Port Authority, and its function is based on the Logistics and Intermodal development related to the Ports of the Valencia Port Authority and those works that favor the commercialization of the Logistics Activities Zones of the Intermodal centers and the Valencia Port Authority, located specifically in Valencia and Sagunto. The Port of Gandía does not currently have these services.

The logistics area of ​​the Port of Valencia has 307,977m2 used solely for logistics, strategically located next to the port and the main means of transport, resulting in an area of ​​great interest for companies engaged in related logistics with maritime traffic and for those that plan to establish a strategic distribution center with international projection.

Regarding the logistics area belonging to the Port of Sagunto, it consists of 279,380 m2, also focused on export and import maritime traffic, with the main objective of adapting to the needs of freight forwarders, importers and exporters logistics operators.

WARRANTY MARK

Finally, as a seal of distinction and that highlights the Port of Valencia above the rest, it is important to mention the Guarantee Mark, an innovative quality certificate and of great prestige worldwide, this being the basis of the commitment offered by Valenciaport and the companies that have activities in this (Port Authority, Freight Forwarders, Consignees, Stevedores, Carriers, Official Services, among others), to their clients.

In this way, a high quality in commercial transactions is guaranteed.

These guarantees are established by the Quality Councils, which are represented by all the groups that operate in Valenciaport.

The quality guarantee it offers is based on:

• Ship berthing as scheduled (Valencia and Sagunto)
• Ship provisioning without delay (Valencia and Sagunto)
• Security of the merchandise to customer destination (Valencia)
• Delivery of the container at the agreed time (Valencia)
• Loading the container on the agreed ship (Valencia)
• Streamlining bill of lading (Valencia and Sagunto)
• Result Download / Outturn Report 2 days after the end of operations (Sagunto)
• Inspection time at the I.F.C.S.M. less than 45 minutes (Valencia)

And this is just a proof of the high port competitiveness existing today, and of how it is increasingly important to use new technology, digitization and have the most innovative organization for transport and logistics.