Transport & Logistics Maximizing Opportunities* at your port of call A practical guide to support essential business decisions in the port and shipping industry *connectedthinking PwC Industry knowledge is one of our most powerful differentiators* Maximizing opportunities at your port of call 2 Contents Introduction – Opportunities call for adequate strategic responses How PricewaterhouseCoopers can help Our integrated Transport and Logistics network Our practical and logical approach Market opportunities Capital investment opportunities Restructuring and privatization opportunities Performance improvement opportunities Networking opportunities Identifying new opportunities Our credentials Key contacts Political ENTRY BARRIERS Economic • supra-national legislation • physical constraints (land • growth Asia • environmental legislation availability, deep-sea access, …) • new EU member states • incentives & support • dedicated terminals • security • overcapacity SUPPLIERS INDUSTRY RIVALRY CUSTOMERS • energy costs • internal – external competition • alliances • low cost financing • captive – non-captive markets • increasing bargaining power • tendering • strategic alliances • growing vessel size • outsourcing • PPP • forward integration • service level agreements • globalization • clustering Social SUBSTITUTES Technology • sustainability - • rail transport • port community systems environmental restrictions • barge transport • track & trace – RFID • safety • pipelines • employment Some industry specific opportunity drivers structured in the Porter five forces model complemented by the PEST framework. Maximizing opportunities at your port of call 4 Introduction Opportunities in the port and shipping industry call for adequate strategic responses Our clients operate in a global business environment and are confronted with many new opportunities. They are challenged to define the according strategic responses to turn their overall strategic vision into reality. Every day directors and senior managers of the many ports in the world have to take decisions about the various aspects of their business. Many decisions which solve the problem are concerned with today’s business or with the immediate future. However, long-term value can only be created when strategic opportunities are effectively captured by formulating the appropriate strategic response. Some of these opportunities may present themselves while other opportunities need to be identified. The port and shipping industry is changing at a high pace with many challenges ahead. As new opportunities emerge, critical business decisions earmarked by high levels of uncertainty must be taken. These decisions are part of the implementation of an overall strategy and can be considered as commitments to the future. In view of numerous opportunities, our experts assisted Port infolink, a provider of web-based port community information services, with the structuring of their prices. 78% of CEO’s say they are pro-active focussing on external opportunities, In prospect of economic growth, our experts assisted a Russian compared with 48% industrial investment group with the feasibility analysis of the who are looking to development of a multi-functional* cargo port at the Baltic sea. reduce costs PricewaterhouseCoopers’ 9th Annual CEO Survey, January 2006 Maximizing opportunities at your port of call 5 “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” Sir Winston Churchill (1874 - 1965) How PricewaterhouseCoopers can help We have a dedicated team of What differentiates us specialists located in Antwerp, Belgium providing objective PricewaterhouseCoopers has an unparalleled network of expertise across 125 countries. In addition, our approach to advice and assistance with the support essential business decisions in the port and formulation of industry specific shipping industry has four key points of difference: solutions. The team includes Thought leadership consultants with high relevant We help you objectively assess the various opportunities in your reach. Our approach is based on in-depth industry experience in boardroom knowledge and helps you to be realistic about specific consulting to port authorities industry changes. Our expertise is an integrated part of the PwC collaborative network of Transport & Logistics and operators around the consultants with various publications in the fields of world. shipping & ports, rail & infrastructure, logistics & post, airlines & airports. Before you take your final decision, it pays to get advice from experts with a proven track Our integrated network of industry specialists record, who can help you on the ground with No other firm is able to draw such a pool of connected relevant and practical advice and local “savvy”. expert resource. The combination of objective assessment Even if you have made up your mind, expert by our central industry expert team, combined with local advice can help you to identify new alternative knowledge, first-hand experience and linkage with solutions, address specific problems and functional PwC specialists (financial, M&A, tax, HR, risk uncertainties, and gain the confidence to management, performance improvement, etc.) allow to formulate and implement the matching strategic address most efficiently the various aspects of the business response. decision in all area’s where needed. For this purpose, PwC adopted the idea of *connectedthinking. This is a unique differentiator that expresses the way we join together in sharing knowledge so that we can find the best solutions for our clients. Our industry expertise Our knowledge of the waterborne transport sector is what sets us apart from the pack. Our consultants have more than 10 years of expertise in delivering ideas and solutions around the world which are recognized as a genuine source of added value in the sector. Our practical and logical approach PricewaterhouseCoopers uses its expertise to develop a pragmatic approach which is tailored to support each type of complex business decision. We provide guidance in the decision process by structuring, assessing, and prioritizing the alternative strategic responses turning your strategy into reality. *connectedthinking Maximizing opportunities at your port of call 7 Our integrated transport and logistics network At PricewaterhouseCoopers we connect our network and Ports & Shipping our strong industry expertise with your priority issues, to help you extract the maximum value from your opportunities. These specialists work closely with our unparalleled network with more than 800 offices spread around the world. Our local offices bring the most up to date local “savvy” about markets, regulations, relationships and how to get things done. Together, this expertise will bring the best and most efficient advice to you. No other firm can bring this breadth and depth of resource and with our approach, we are in a unique position to provide you with end-to-end service – from initial opportunity identification to in-depth assessment and implementation – to help you succeed in your business ventures. Complete Consultancy Package The vast network of worldwide PricewaterhouseCoopers offices allows us to call upon additional expertise where needed. Backed by high quality professionalism, we can offer a complete consultancy package to provide our clients with the expert advice they expect from a leading international adviser. Strategy & Valuation Maximizing opportunities at your port of call 8 Rail & Infrastructure Logistics & Post Airlines & Airports M&A Tax & Legal Finance & Treasury * Maximizing opportunities at your port of call 9 “If you could predict the future, there would be few problems in managing a port business.” Maximizing opportunities at your port of call 10 Our practical and logical approach It is our aim to construct realistic solutions that don’t require rocket science. Business decisions aiming to maximize opportunities, as we have seen, are in fact a set of interrelated decisions, each one following from another and the fundamental purpose of the strategy itself is to ensure as far as possible that the aims and objectives are achieved. Different types of opportunities will emerge each requiring the formulation of the appropriate strategic response. Strategic Response Aims and Opportunity Objectives Essential Business Decisions Markets Capital Investments Restructuring Performance Networking Identifying Our experts have the required industry expertise and can offer practical tools to guide you through the decision process and define together with you the adequate strategic response. Maximizing opportunities at your port of call 11 Competitive position of the Port of Rotterdam for international mobile investment projects Our experts conducted the competitive analysis evaluating the attractiveness of the port against alternative locations in the HLH-range from the point of view of a potential investor. Seven industry sectors were under scope : container handling, other handling facilities, distribution, empty depots, chemicals, recycling, and heavy industry. For each sector the most important competing locations in North-Western Europe were identified and the availability and the quality of matching sites in these locations was assessed. For several sub sectors, representative project definitions were compiled based on real investment projects outlining the specific critical and important location selection factors. A qualitative analysis was carried out