ports and terminals - oliver wyman
TRANSCRIPT
Transportation
PORTS AND TERMINALS
Oliver Wyman provides a full range of management and economic consulting services to the
international port and maritime terminal industry. Oliver Wyman’s port specialists possess
management expertise combined with practical transportation and port knowledge. This
dual focus provides the industry with the comprehensive capabilities it needs to successfully
address the challenges it faces. Oliver Wyman’s port-related clients include national and local
governing agencies, port authorities, stevedores and terminal operators, steamship lines,
railroads, and trucking companies.
Oliver Wyman has been involved in expansion,
modernization, and restructuring/privatization
projects for ports and terminals worldwide.
Oliver Wyman has extensive experience in
market, customer, and competitive analysis
for the maritime industry, often as an input to
strategic and capital investment planning, and
maintains financial and operating models used in
planning and evaluating port capital investment
projects. These models can be used to analyze
investments, evaluate the effect of introducing
alternative equipment technologies on financial
performance, or to develop pricing strategies.
Oliver Wyman has particular expertise in evaluating
the financial and economic feasibility of proposed
maritime development projects, such as container
terminals and intermodal yards. The studies
typically involve an assessment of market demand,
identification of key customer groups or companies,
definition of key success criteria (for example, cost
and service orientation), conceptualization of a
physical development plan, and a financial analysis.
For a US state department of transportation,
Oliver Wyman conducted a governance study of the
state’s major port. Oliver Wyman first assessed the port’s
current performance and strategy and its competitive/
market challenges. Oliver Wyman then reviewed
governance and operational structures being used at
ports worldwide, including public ports, independent
port authorities, and landlord ports, and developed
a white paper on critical parameters and criteria for
changing port governance structures. Based on this
research, Oliver Wyman developed recommendations
for changes to the port’s governance and to improve
organizational effectiveness. Oliver Wyman presented its
findings to a special committee of the state’s legislature.
Oliver Wyman has supported the Panama Canal
Authority on the development of the Third Lane
Locks (TLL) project to expand the Panama Canal.
Oliver Wyman initially developed a business case,
which included a 25-year investment-grade forecast
of Canal transit revenues and traffic forecasts,
including tonnage forecasts by route for 28
commodity groups. Oliver Wyman next evaluated
the economic impacts of increased Canal transit
prices on the economies of eight countries (who
are major users of the Canal). Finally, Oliver Wyman
analyzed and made recommendations on the
organizational structure and processes that would
best ensure successful execution of the TLL project.
For Transport Canada, Oliver Wyman undertook
an analysis of the future freight flows through major
North American ports to/from the US and Canadian
Midwest. Oliver Wyman conducted an online survey
and interviews with shipping lines agents and shippers/
receivers, assisted in the development of a 20-year
traffic forecast, and analyzed the factors influencing
individual port competitiveness and market share,
such as port/inland congestion and accessibility
for post-Panamax vessels. Based on these analyses,
Oliver Wyman made recommendations with regard
to potential infrastructure investments for Canada to
increase its attractiveness for international freight flows.
For the Government of Mexico, Oliver Wyman
conducted forecasting and assisted in the development
of concession structures to design, build and operate
what is envisioned to become one of the largest ports
on the west coast of North America, together with a
new 200 mile rail link to the US rail network. As part
of the project, Oliver Wyman worked with potential
bidders and the government to gain their perspectives
on concession criteria Oliver Wyman also worked with
technical experts in both port and rail construction and
operations to develop concessionaire requirements and
insights into funding and investment requirements.
For a national transportation company that has
primary ownership and responsibility for the country’s
rail, port, and pipeline operations, Oliver Wyman
developed a best-practice report on international
regulatory structures governing state-owned
enterprises (SOE’s), including mechanisms for
involving private sector participation in operations
and infrastructure investment. The project
involved extensive research into SOE regulation
and transport-sector regulation worldwide, with a
particular emphasis on developing economies.
Copyright © 2014 Oliver Wyman 2
For the Halifax Port Corporation, Oliver Wyman
prepared a strategic master plan to guide the
port corporation’s management over 10 years.
Oliver Wyman’s role included developing detailed
analyses of long-term trends in the international
container shipping, North American port, and
intermodal industries; a competitive analysis of
container handling and intermodal costs at major
Atlantic Coast container ports, and preparation of
action plans for implementing specific strategies.
For the Port of Montreal, Oliver Wyman assisted
in developing a 20-year strategic plan, with a focus
on infrastructure requirements (and supporting
financial structures) to meet long-term capacity
needs. Oliver Wyman developed forecasts for key
sectors served by the port, a new growth strategy
focused on increasing the port’s market share
and scenarios for different levels of infrastructure
investment to increase capacity and truck and rail
access. Additionally, strategies for financing were
needed, infrastructure improvements were developed,
and new organizational processes were created.
Oliver Wyman was engaged by DP World, a global
container port development and operating company,
to support the integrations of CSX World Terminals
and P&O. The scope of Oliver Wyman’s work included
functionally integrating 11 critical business areas,
developing the organizational model by working
closely with the Board and senior management team,
and identifying and assessing potential cost saving
opportunities. Specific outcomes of the project
included: definition of the global organization structure
and governance model for the organization; Board
and CEO reporting roles/responsibilities, authority
limits, and management team working processes;
regional and head office roles/responsibilities and
detailed scope of activities by department; and full
department manuals and corporate policies.
For a major operator of barges on the US inland
waterway system, Oliver Wyman assessed the
feasibility of developing an innovative system that
would discharge ISO ocean shipping containers
directly from deep sea linehaul vessels to barges
and then move those containers to inland points in
competition with traditional routings by rail and truck.
For one of the largest coal exporting terminals in
the United States, Oliver Wyman helped design and
structure a value- and cost-based pricing system for coal,
phosphates, and other major commodities. The analysis
considered the discrete costs of service and provided a
much more functional basis for pricing and cost recovery.
For a major multi-modal terminal with ship-barge-
rail operations for multiple cargoes, Oliver Wyman
completed a feasibility analysis to review the viability
of the project from market, operations, and equipment
perspectives. This included a review of dock and
cargo handling capacities and an examination of
man-power and maintenance requirements.
For a consortium of mining companies planning
to increase their export volumes, Oliver Wyman
first benchmarked their transport provider’s plan to
increase rail and bulk port terminal capacity, which
was premised on capital contributions from the
companies. Oliver Wyman then developed alternative
ownership and control structures that could be
used by the companies to assess their investment
and participation options, with a goal of lowering
the cost of capacity expansion while delivering
improved operational and financial performance for
the transport provider. Oliver Wyman subsequently
facilitated the negotiations between the industry
and the transport provider on asset requirements,
alternative suppliers of rollingstock, opportunities
to improve financial returns by phasing investment
decision points and commitments, and involvement
of third-party operators and financial institutions.
Copyright © 2014 Oliver Wyman 3
Oliver Wyman is a global leader in management consulting. With offices in over 50 cities across 25 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management and organization transformation. The firm’s 3,400 professionals help clients optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh& McLennan Companies [NYSE: MMC], a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 53,000 employees worldwide and annual revenue exceeding $12 BN, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in risk and reinsurance intermediary services; and Mercer, a global leader in human resource consulting and related services. For more information, visit www.oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman.
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Copyright © 2014 Oliver Wyman
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The information and opinions in this report were prepared by Oliver Wyman. This report is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accountants, tax, legal or financial advisors. Oliver Wyman has made every effort to use reliable, up-to-date and comprehensive information and analysis, but all information is provided without warranty of any kind, express or implied. Oliver Wyman disclaims any responsibility to update the information or conclusions in this report. Oliver Wyman accepts no liability for any loss arising from any action taken or refrained from as a result of information contained in this report or any reports or sources of information referred to herein, or for any consequential, special or similar damages even if advised of the possibility of such damages. The report is not an offer to buy or sell securities or a solicitation of an offer to buy or sell securities. This report may not be sold without the written consent of Oliver Wyman.