Diagnosis of Malmö Port Competitiveness and Market
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World Maritime University The Maritime Commons: Digital Repository of the World Maritime University World Maritime University Dissertations Dissertations 1999 Diagnosis of Malmö port competitiveness and market opportunities in the light of the Öresund fixed link and the joint venture with Copenhagen port Khalid Bichou World Maritime University Follow this and additional works at: http://commons.wmu.se/all_dissertations Part of the Economics Commons Recommended Citation Bichou, Khalid, "Diagnosis of Malmö port competitiveness and market opportunities in the light of the Öresund fixed link and the joint venture with Copenhagen port" (1999). World Maritime University Dissertations. 332. http://commons.wmu.se/all_dissertations/332 This Dissertation is brought to you courtesy of Maritime Commons. Open Access items may be downloaded for non-commercial, fair use academic purposes. No items may be hosted on another server or web site without express written permission from the World Maritime University. For more information, please contact [email protected]. WORLD MARITIME UNIVERSITY Malmö, Sweden DIAGNOSIS OF MALMÖ PORT COMPETITIVENESS AND MARKET OPPORTUNITIES -In the Light of the Öresund Fixed Link and the Joint Venture with Copenhagen Port- By KHALID BICHOU Morocco A dissertation submitted to the World Maritime University in partial fulfilment of the requirement for the award of the degree of MASTER OF SCIENCE in PORT MANAGEMENT 1999 ©Copyright Khalid Bichou, 1999 Declaration I certify that all the material in this dissertation that is only my own work has been identified, and that no material is included for which a degree has previously been conferred on me. The contents of this dissertation reflect my own personal views, and are not necessarily endorsed by the university. …………………………………….. (Signature) ……………………………………. (Date) Supervised by: Name: Jan Horck Office: Lecturer World Maritime University Assessor: Name: Shuo Ma Office: Course Professor Institution/organisation: World Maritime University Co-assessor: Name: Jan-Erik Olsson Office: Marketing Manager Institution/organisation: Port of Malmö (Malmö Hamn AB) ACKNOWLEDGEMENTS The completion and compilation of this study would not have been possible without the real help and assistance of number of people and organisations to whom I would like to address my indebted acknowledgements: First and Foremost, to my mother who was always the person encouraging and inspiring me in my life, To my organisation, the Ministry of Ocean Fisheries and Merchant Marine of Morocco, for helping me to integrate higher and special maritime studies at the World Maritime University, To the German organisation "Carl Duisberg Gesellschaft" (CDG), which financed my studies at WMU, To WMU itself as an international academic centre for maritime education and research, as accepting my modest person to be one of its students, To Captain Horck for accepting to supervise such a modest work. His advice and wise guidance have been for great help to the completion of this dissertation, To Professor Ma and Professor Francou, respectively course professor and assistant professor at WMU, for their advice and assistance, For the staff and management of the port of Malmö, namely Mrs. Olsson, J, Pettersson, L, and Karlsson, K. Particularly, Mr. Olsson has always been for great assistance and guidance to the issue of the dissertation, To the staff of the port of Copenhagen for providing precious information related to the topic of the dissertation, To the ports of Helsingborg, Trelleborg, and Elsinore for information assistance and help, To all my Swedish and Danish friends who helped me to plunge in the real Scandinavian society. Their insight and contribution into the dissertation is for great importance, To everyone, who contributed directly or indirectly to the completion of this study, To the Great God for helping me in all my life stages, and being always guiding me and lightening my life and spirit. ABSTRACT Title of Dissertation: DIAGNOSIS OF MALMÖ PORT COMPETITIVENESS AND MARKET OPPORTUNITIES -In the Light of the Öresund Fixed Link and the Joint Venture with Copenhagen Port- Degree: MSc The research paper proposes a diagnosis of both Malmö port's internal and external environments, by identifying the interactions between those two aspects in shaping port's operations, performances, and strategies. Special emphasis points out the port's competition aspects in the light of evolving market changes and mutations. This supposes an appropriate and positive use of the diagnosis approach, and a broad conception and analysis of market condition and changes. With that respect, the study addresses three broad areas of reflection and analyses: A diagnosis of the internal environment of Malmö port through an overview of technical, legal, organisational, financial, commercial, and marketing aspects of the port organisation. A diagnosis of port's external environment in the light of current market condition and future changes. Beyond the SWOT analysis, the study invokes market segmentation and port market share, and looks upon port responses to the predicted market and traffic changes. A reflection on the port's joint venture with the port of Copenhagen, both as a strategic response to market changes under the future Öresund link, and a new tool in ports' co-operation and partnership. TABLE OF CONTENTS Declaration ii Acknowledgements iii Abstract iv Table of Contents v List of Tables ix List of Figures x Annexes xii List of Abbreviations xiii Introduction 1 1. Overview of Malmö Port: A Diagnosis Approach 4 1.1 Technical Description of Malmö Port 6 1.1.1 Bulk Harbour 6 1.1.2 Oil Harbour 6 1.1.3 Free Port 6 1.1.4 Ferry/Passenger 6 1.2 Legal and Organisational Aspects 7 1.2.1 Legal Aspects 7 1.2.1.1 Legal aspects of Swedish Ports 8 1.2.1.2 Legal situation of Malmö port 8 1.2.2 Organisational Aspects 9 1.2.2.1 Organisation of Ports and Organisational Model in Sweden 10 1.2.2.2 Organisational Diagnosis of Malmö Port 12 1.3 Financial Diagnosis of Port Operations 14 1.3.1 The Capital structure 14 1.3.2 The Solvency & Liquidity 15 1.3.3 The Profitability 16 1.4 Port Competitors: Drawing the Map of the Port Market 18 1.4.1 Competition Rules in the Port Market 19 1.4.1.1 Competition Rules in the EU 19 1.4.1.2 Competition Rules in Sweden 20 1.4.2 Map of the Port Market 20 1.4.2.1 Port's Size, Type, and Impacts on the Economy 21 1.4.2.2 Structure of the Port's Sector 22 1.4.3 Identifying Port Competitors 23 1.4.3.1 Inter-port competitors 23 1.4.3.2 Competitors within the logistic and transport sector 25 1.5 Productivity and Performances Indicators of Malmö Port 25 1.5.1 Physical Performance Indicators 25 1.5.2 Quality Performance Indicators 26 Conclusion of Chapter 1 27 2. Diagnosis of Port's Environment and Market Changes 28 2.1 Analysis of Port Strengths and Weaknesses 30 2.1.1 Review of Port’s Strengths and Weaknesses 30 2.1.2 Port’s Comparison vis-à-vis Current Competitors 31 2.1.2.1 Status and Mission Statement 31 2.1.2.2 Comparison of Elements of Strengths & Weaknesses 32 2.2 Market Segmentation and Identification of Port Market Share 36 2.2.1 Segmentation of the Port’s Market 36 2.2.1.1 Activity Segmentation 36 2.2.1.2 Customer’s Segmentation 37 2.2.2 Current market Share 38 2.2.2.1 Port Share within the Port Sector 38 2.2.2.2 Port Contribution in the Transport Sector 40 2.3 Port’s External Environment and Market Changes 43 2.3.1 Market Overview and Scanning 43 2.3.1.1 The Öresund Level 43 2.3.1.2 The national Levels 45 2.3.1.3 The Baltic Sea Level 48 2.3.2 Market Outlook and Port Traffic Forecasting 50 2.3.2.1 Market Outlook and Future Perspectives 50 2.3.2.2 Mutation of the Transport Sector and Spatial Model Perspectives 52 2.3.3 Assessment of External Threats and Opportunities 54 2.4 Port Response to New Market Changes 55 2.4.1 Horizontal Integration in the Transport and Logistics Sector 56 2.4.2 Long-term Vision with New Investment & Market Reposition 56 2.4.3 Joint-Venture Co-operation with the Port of Copenhagen 58 Conclusion of Chapter 2 58 3. The Future Öresund Link and the Port's Response to New Market Changes 59 3.1 Analysis of Market Changes Under the Future Öresund Link 60 3.1.1 The Bridge and Expected Traffic Changes 61 3.1.1.1 The Toll Fee Framework 61 3.1.1.2 The Traffic Forecasts across the Öresund's Link 62 3.2.1 The Bridge Impact on Malmö Port's Traffic: A Case Study of the Ferry Market 64 3.2.1.1 Impact on the Ferry/Passenger Market 64 3.2.1.2 Impact on the Ferry Operators 65 3.2 The Joint Venture with Copenhagen Port: New Concept in Port Co- operation and Market Competition 66 3.2.1 Overview of Joint Ventures Principles and Practices 66 3.2.1.1 The Concept of Joint Venture 67 3.2.1.2 Forms of Joint Venture 68 3.2.1.3 Joint Ventures in the Maritime Sector 69 3.2.2 Features of Copenhagen & Malmö Ports' Joint Venture 71 3.2.2.1 Legal Aspects 72 3.2.2.2 Organisational Aspects 73 3.2.2.3. Financial Aspects 74 3.2.24 Commercial Aspects 75 3.3 Copenhagen Malmö Port (CMP): Common Policy and Market Strategy Under a New Organisational Structure 76 3.3.1 CMP Vision and Market Strategy 76 3.3.2 The Joint Venture's Risk Element 77 Conclusion of Chapter 3 77 General Summary and Conclusion 78 Bibliography 81 Annexes LIST OF TABLES Table1: General Characteristics of Different Terminals at Malmö Port 7 Table 2: Pilot Fees at Malmö Port 7 Table 3: Tug Charges at Malmö Port 7 Table 4: Financial Key Figures During the Period 96-97 of Malmö Port 15 Table 5: Balance Sheet for 96-97 of the Port of Malmö 16 Table 6: