The Art of the Deal
When it comes to port negotiations, what turns ‘maybe’ into ‘yes’? Sometimes, a seemingly insignificant driver can bring a deal to the tipping point. For ports, a single agreement can represent hundreds of thousands of dollars: So what makes the difference between deal or no deal?
* By Sarah B. Hood *
What makes a person decide to sign a contract? Sometimes, a seemingly insignificant driver can bring a deal to the tipping point. For ports, a single agreement can represent hundreds of thousands of dollars: So what makes the difference between deal or no deal?
Fundamentally, it comes down to fulfilling essential needs. “Shippers need reliable service and affordable costs from their supply chains, and they’re looking across the entire supply chain when they make decisions,” said Tong Zhu, Northwest Seaport Alliance chief commercial officer and chief strategy officer for the Port of Tacoma. “Anything that impacts their ability to move freight efficiently, respond to changes in demand or manage costs is open for consideration.”
These basics can never be overlooked. “It’s really important that shippers have reliable ocean services and efficient port operations, as well as efficient last mile distribution,” said Paul Anderson, president and CEO of Port Tampa Bay. “It can take really strategic investments and vision to create the difference in those small things; for example, we spent years working to get a dedicated truck lane to the port from the I-4.”
Beth Frisher is the manager of business development and international marketing for the Port of Oakland, a landlord port for marine terminal operators EverPort and Stevedoring Services of America (SSA), which operates one domestic and one international port. “In addition, we have several month-to-month or multi-year space assignments, typically involved in supply-chain or maritime supporting services,” Frishe said.
However, the port’s business development team is “very intensively involved in reaching those supply-chain decision-makers – ocean carriers and BCOs – because they decide what their network deployments are going to look like,” she said. “Cargo velocity is critical to these carriers.”
Oakland International Container Terminal, operated by SSA, is the country’s second biggest, and the port also benefits from rail service through two Class I rail systems that serve central and eastern North America. “One of our largest segments of cargo that exports is the fresh protein that comes out of the Midwest,” Frisher said. Oakland’s new CoolPort, financed through a $90 million private investment from Lineage, will enable the port to better support its refrigerated customers.
A further $52 million investment from CenterPoint Properties is developing 180 acres inside the port maritime footprint for logistics facilities, to include a 460,000-square-foot cargo facility that will enable on-site transfer of cargo between standard 40- or 45-foot shipping containers and 53-foot truck or rail containers. “When we engage our cargo owners, these are the things they’re telling us are really critical,” said Frisher.