By Peter de Langen
This year’s Danish Port Days were held in Esbjerg, with the theme of ‘port transformations’ guiding a conference that included sessions where academics and industry leaders discussed management research issues worth exploring
One of those issues came straight from a tour of the port: over the last few years Esbjerg has developed into the leading Danish offshore wind port, hosting a large number of companies involved in construction, assembly, and transport of components of offshore windmills, as well as related services. Offshore wind now accounts for about 30% of the total revenues of the port company. This offshore business has forced the port company to fundamentally adapt the way it operates to put flexibility centre stage.
This flexibility is reflected in its port operations where there are no fixed cranes for the offshore operations; all cranes are mobile. In addition, the surface of the quay consists of gravel, with no drainage or concrete, and there are no fixed fences to separate plots.
Flexibility is also reflected in the contractual relations with offshore companies. These contractual relations are developed quickly, are tailor-made for specific clients (that is to say, there is no competitive bidding process for selecting clients), and the contract duration is short, in some cases as short as the duration of one specific project of a client. In addition, the lease fees are flexible as they fluctuate with activity levels.
While none of this may be beyond what one would expect from a commercially-operating landlord port developer – and indeed may sound rather straightforward – for a port company involved, the transformation may be quite significant.
This transformation will require a shift in the development approach, where engineers will need to become comfortable with uneven gravel surfaces with puddles of water, commercial managers with short term contracts, financial managers with large revenue variations, and so on.
The broader question is whether this represents a one-off case where flexibility matters, or whether this a telling example of a larger shift towards more flexibility in port development? The dominant feeling of the workshop participants was the latter, with the consensus reached that further research promises to provide more insights about this important issue.
First published @PortStrategy.
