Strategic Management in the Maritime Sector

A Case Study of Poland and Germany

Michael Roe

• Publisher: Routledge
• Year: 2019
• Print ISBN: 9781138345898
• eBook ISBN: 9780429794568
• Topic: Business
• Subtopic: Business General
• Index: Business

First published in 1999, this volume explores port strategic management in Poland and Germany. It is part of the Plymouth Studies in Contemporary Shipping series represents a unique collection of papers and edited texts from the leading maritime institute in Western Europe at the University of Plymouth. It covers all aspects of the industry from operations through to the logistical framework that supports the sector. Designed both for practising academics and the shipping and ports industry itself, the series, combining the output for some of the leading academic commentators in the world from the UK, Korea, Germany and Poland, is an original and novel contribution to the maritime debate.

1.   Introduction

Michael Roe

Institute of Marine Studies
University of Plymouth

This is the third in the series of books produced from the combined research interests of the leading research groups with a specialist interest in shipping and ports in the Baltic Sea region. For the first time this volume includes two papers from the Institut fur Verkehr und Logistik at the University of Rostock in Germany, representing the premier centre for teaching and research in the new Germany and the only survivor in this sector from the former German Democratic Republic times. The two collaborators on the previous three volumes from the Institute of Marine Studies, at the University of Plymouth in the United Kingdom and the Institute of Maritime Studies and Seaborne Trade at the University of Gdańsk in Poland have long established links with the University in Rostock dating back to the 1980s and beyond and well into the era before transformation and reunification. Thus in this volume we have papers from the leading East European research centre (in Gdańsk), the leading German Baltic Sea research centre (in Rostock) and the leading research centre in Western Europe for East and Central European maritime studies (in Plymouth).

Current collaborative interests include research projects spanning work between all three establishments funded from a variety of sources including the British Council, the European Union (Phare) programme, the Polish and UK shipping industry, the Polish government and the universities themselves. This set of papers represents a selection of the work carried out in the last year up to April 1998, with a particular orientation towards the issues that stem from strategic management in the maritime sector - an issue that did not even exist up to the time of transformation in Poland and reunification in Germany.

The papers are divided into three sections. The first set represent the work of the University of Gdańsk under the leadership of Professor Janusz Zurek who has long directed the work of the Institute in Sopot and has been prominent in developing the University’s international collaboration and reputation. It begins with the paper by Aleksandra Wrona who has also played a vital administrative role in bringing this text to a conclusion. Her paper looks at the application of computer simulation tools to port management including a series of case studies from around the world and then applying the techniques to a practical example. The SLAM II application model is applied and its advantages (and difficulties) are outlined and discussed.

Wrona’s paper is followed by a paper by Hanna Figwer which begins the process of looking at the application of marketing tools to Polish seaports where before 1989, the issue of marketing was entirely ignored. This paper begins by examining the role and importance of marketing generally in the seaports sector and then discusses in some detail the characteristics of a general approach to the process. It concludes with an application of a strategy to the Polish situation and discussion of some lessons for the immediate future.

The paper by Miotke-Dziégiel provides an original analysis of the activities of two significant ancillary companies in the maritime sector - that of Polfracht and the Gdynia Maritime Agency - and the attempts being made by each to increase their marketing activity particularly focusing upon their strategic marketing initiatives and the organisational impacts. Meanwhile the paper by Zurek takes developments in the ship operating companies in Poland, and in the state owned companies of PŻM, PŻB and Polish Ocean Lines in particular and examines the changes taking place in organisational structure and the effects of a strategic management approach upon their activities.

Misztal presents a detailed analysis of the development of marketing practices in Polish seaports in the context of the specific nature of service marketing and goes on to examine the effect of these developments in the ports of Gdynia, Gdańsk and Szczecin. He concludes with a discussion of strategy.

Adam Salomon presents a full review of the present state and planned development of the Port of Gdynia which includes a general background to the port’s activities and ownership and then a discussion of the planned investments over the coming years. The final Polish paper comes from the joint authorship of Krzysztof Dobrowolski and Stanisław Szwankowski who take a look at the legal and institutional developments in Polish seaports. In particular they examine the effects of the new Ports Act upon the ownership structures of both the major and minor ports within Poland.

The paper by Michael Roe represents the major contribution to the text from Plymouth and provides an extensive discussion of the relationships between international transport investment and the development of the economy using transformation and the Polish maritime sector as an example. The wider issues of how the old system worked and the changes that have taken place in recent years are used as the framework for discussion in addition to an analysis of the impact of European Union issues on the maritime sector.

The third and final section of the book is provided by the University of Rostock with two papers. The first is by Karl-Heinz Breitzmann and analyses in some detail the privatisation of ports on the Baltic Coast in the Former German Democratic Republic with particular reference to the ownership issues that have emerged and the need to transform their markets. The ports of Rostock, Wismar, Stralsund, Sassnitz and Mukran provide the case study material. Meanwhile the final paper is an extended discussion by Falk von Seek, also of the University of Rostock and looks at the substantial impacts of the developments in the Baltic Region upon the shipping sectors with particular emphasis upon the industries in the Former East Germany, Poland, Russia and parts of the Baltic States. This extensive article provides an in depth analysis of recent events in the region and unrivalled coverage of the significant issues that abound.

2. The application of computer simulation tools to port management

Aleksandra Wrona

Institute of Maritime Transport and Seaborne Trade
University of Gdańsk

Definition of efficient port management

A series of Polish maritime transport transformation developments are having the effect of changing existing management concepts which have proved to be inefficient and have failed to meet the requirements of a rapidly evolving market economy. Professional knowledge of modern management techniques is probably the primary element that provides for economic success within an enterprise and as a result its social and economic environment. However both the professional experience and managerial skills have to be supported and extended by modern tools which have been designed to support decision processes. These issues particularly concern developments in maritime ports where a large number of operations of a various nature are carried out, many partners from different business backgrounds are involved, and the interests of the region and whole country are in question.

In the current competitive environment, carriers, shippers, inland and seaport terminal operators and other participants within intermodal transport, need to understand each other’s operations far more than they did in the past. This requires the use of tools capable of accommodating the entire intricacies of port operations in sufficient detail.¹ It is for this reason that the computer simulation of economic and technological processes needs to be considered in full.

A seaport as a system represented by a model

There are many definitions of systems as a concept. Generally speaking it is accepted that a system is an organised group of entities - including for example people, equipment, methods, principles and/or parts - which come together to work as a unit. A simulation model characterises a system by mathematically describing the responses that can result from the interactions of the system’s entities. The system state is the collection of variables, either stochastic (which can change randomly) or deterministic (not influenced by probability), which contain all the information necessary to describe a system at any point in time.²

The port system is an organised unit within which elements such as loading equipment or infrastructure, are subjected to a main goal - in this case normally servicing transportation means and cargoes. The port system can be the port as a whole, a specialised loading and storage terminal, a berth, a loading site, etc.

A maritime port provides us with a typical example of a queuing analytical model. It is a complex system because it is characterised by many variable processes with complex relationships and its external environment changes and evolves very quickly, subjected to world trade trends and many other external forces. The main features of the port system can be identified as follows:

• – dynamic,
• – non-linear,
• – changeable,
• – stochastic,
• – discrete,
• – very complex.³

The port system is dynamic because its operations are affected by frequent qualitative and quantitative changes in characteristics of equipment, their organisation and the technologies employed. Operations depend upon the current and anticipated demand for services created by the port’s economic environment.

The maritime port is also a non-linear system. This means that functions describing its operations, e.g. time in storage, are not a linear function of a limited number of variables but tend to be highly complex and non-linear, and as a consequence, very difficult to formulate.

The port system also can be described as changeable, i.e. the efficiency it displays over a longer time scale tends to be variable. For example a gradual increase in loading capabilities will result in changes in services output. Seasonal fluctuations, in particular in the demand for the servicing of particular goods, can influence the system’s stability resulting in congestion at some time during the functioning of the port.

Another feature of the port system is its stochastic property. A port operates in risky conditions. Most of its operations are of random character and they follow common theoretical or empirical distribution patterns.

Any changes in the functioning of the port system tend to occur gradually - they are of discrete character.

Application of modelling and computer simulation in port management - some practical examples

Here we present some examples of the use of modelling and computer simulation in the process of port management.

Firstly we can take an example from Israel - which includes the preparation and implementation of a simulation project for a cost prognosis of the Ashdod port operations

A process of preparation and building a port simulator constitutes a very interesting question in itself. One could ask why look for new solutions when there is an abundance of existing port simulators of many different profiles, which vary both in complexity and flexibility? In practice, finding and adjusting an instrument and completing a very comprehensive analysis turns out to be difficult. Simulation software designed to solve one particular maritime problem might not meet the requirements set by another experiment goal. On the other hand employing a tool which provides flexibility normally means using procedures that have to be standardised to some extent. Adopting a general-purpose simulator suggests accepting a compromise for a number of levels of detail.

There are three main ports in Israel: two on the Mediterranean leading to Southern Europe and the Atlantic Ocean, and one on the Red Sea leading to the Indian Ocean. They are managed individually whilst port policy is directed by a national Ports Authority, which is overseen by the Ministry of Transportation. The need to estimate the timing and amount of investment necessary to provide for the national port system and to ensure it works efficiently as a whole encouraged the government to turn to the Wydra Institute of Shipping and Aviation Research. The aim of this project was to combine the experience from various scientific disciplines (i.e. marine sciences, economics, labour productivity and mathematical modelling), and to recommend an optimal investment volume and schedule.

The researchers first considered using extrapolation methods and conventional port design methodologies. However the complexity of modern marine terminals, the dynamics of port and shipping technologies and the enormous costs involved required more sophisticated and flexible planning tools - involving computer modelling and simulation. Having reviewed a variety of existing port simulators (i.e. CASM, DYNATRACK, G2, PORTLOG/YARDLOG, PORTSIM, and those designed by Gogol, Hansen, Hoong et al., Lawrence and Ward), the team decided to design a new and unique suite of software. The comprehensive approach of the study required the construction of a unique simulation model that would relate to multiple functions and components of a single port and would even consider co-ordination between two neighbouring ports. It was soon realised that the available products could not meet these specific requirements. For example issues relating to the impact of labour were commonly neglected. Also some of the above simulators were old and did not reflect recent technological changes.

The next step the Wydra Institute team faced concerned the choice of hardware and software. A resource matrix was constructed. It combined three crucial resources: the human component, available equipment and computer languages. Finally it was decided to develop the product on PC, run it on a SUN computer and to use the C language because it was compatible with both computers.

When the hardware and software was decided upon, the input and output designs were discussed. The goal was to provide for simplicity, ease of use a...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Acknowledgements
• Preface
• 1. Introduction
• 2. The application of computer simulation tools to port management
• 3. Marketing orientation in Polish seaports
• 4. Servicing maritime transportation firms - a marketing management perspective
• 5. Refining management systems in Polish maritime development
• 6. Marketing management in seaports
• 7. The present state and development opportunities in Gdynia Port
• 8. New legal regulations for seaport management in Poland. Institutional aspects of Polish seaport management compared with ports of the European Union
• 9. Eastern European development and the role of international transport - a case study of Poland
• 10. Privatisation of ports - the case of Eastern Germany
• 11. Managing transition – privatisation and restructuring of former Socialist shipping companies in the Baltic Sea region