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1 year ago

Ramesh Shivakumaran: Valuable Principles on Port Management

More Valuable Principles on Port Management

We continue with our review of the essential principles involved in managing ports and trade transport with a discussion of some vital considerations investors, consultants and managers must seriously face:

1. Understanding the different types of ports and access to ports (natural, man-made, river, estuary) and the diversity of specialist port operations

The type and purpose of the port facilities will determine one's level of financial exposure and managerial approach. Ports dedicated to dry bulk will have a different configuration to those designed for liquid cargoes. Some countries might prevent the use of certain natural waterways for transporting such products as crude oil or natural gas. Hence, if inland sources of such products are only available by land, it will mean providing for port facilities that will cater only to land transportation. Conversely, using only barges to ferry products will entail another set of support facilities.

2. Appreciating the use of Free Port/Free Trade Zones as an economics tool

Countries have gained the benefits of opening up Free Ports and Free Trade Zones to allow foreign investors to establish operations in regions where labor and raw materials are cheap and readily available. This has allowed port operators to take advantage of such ports and zones while enjoying the tax relief afforded them as well as their manufacturing partners. Commonly, these zones, however, have a short or limited life expectancy as many companies that use up their tax-holiday contract period move to other regions or eventually pay required customs, thus, losing their advantage over their competitors. A long-term view of entering into such an arrangement is needed to assure that port facilities will have a long duration of operation and continuing profitability.

Ever since Gulftainer Company Limited started its port facilities in Sharjah, UAE, in 1976, with Ramesh Shivakumaran, Group Director Business Services - it has grown into a well-oiled and strong company that can deliver services according to the specifications of its clients. With 8 terminals now in Saudi Arabia, it prides itself of its accomplishments which it has achieved through applying these and other primary principles in port management.