Logistics and Maritime Clusters: Theory and Practice Presentation by Fisher Associates 2nd Intermodal Asia 2004 1

Structure • About clusters • Cluster strategy and development • Case studies

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About Clusters 1 • The cluster framework helps us to understand how to make our industries more competitive • The theory has developed over the last ten years as a tool for better describing economic activity in service or knowledge-based regional economies • For example: – Dubai as a region in the UAE – England’s Northwest as a region in the UK

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About Clusters 2 • The essence of a cluster is that the value of the whole exceeds the sum of its parts • There is a critical mass – in one place – of unusual competitive success in a particular field • A cluster is a geographic concentration of interconnected companies, specialised suppliers, service providers, firms in related industries and associated institutions that compete but also co-operate

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About Clusters 3 • To grow, clusters must innovate, improve productivity, improve access to employees and suppliers and information, exploit complementarities, give birth to new businesses, and engage locally. Improving the competitiveness of the cluster needs a cluster level, collective response, and new modalities for public private partnership (paraphrase of Professor Porter)

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About Clusters 4 • The framework works well with logistics and maritime because it fits the industry • It helps to describe its connectivity • It enables us to appreciate that all parts of it are important to all other parts • We can look at the building blocks of total competitiveness

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Cluster Strategy Research Engagement Strategy and Plans

Implementation Performance Monitoring

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Cluster Building Blocks Upgrading and Innovative Institutions

Related and Supporting Industries

Core of Cluster

Markets

Support and Infrastructure

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Dubai Maritime

Upgrading & Innovative Institutions University

Related & Supporting Industries Trading

Tourism

Hydrocar bons Air freight Distribution

Further Education

Core of Cluster Port Services Shipping (freight) Ferries

Cruise

Employer Initiatives

Specialist Providers

Markets Gulf Shipyards

Africa ISC

Marine Leisure Port Industry

Industrial Consumer Freezone

Support and Infrastructure Government

Company Associations

Roads

Communications

Energy

Water

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Cluster Analysis • Now we know what the cluster looks like: – Where is it strong? – Where is it weak? – Where lie the best opportunities for improved competitiveness? – What initiatives will achieve this?

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Cluster Initiatives • Marketing: putting forward the total capability of the cluster • Networking: putting businesses in touch with each other • Information and Communication Technology: connectivity; extranet; value added systems • Education, Training and Skills: vocational training programmes; maritime institutes • Innovation: airport in a port 11

Some Examples • Dubai implicitly uses cluster development principles: e.g. strong emphasis on links between Free Zone, Port and Customs • Some other examples for discussion: – – – –

Ports and logistics: Mersey Maritime Maritime services: London Holistic logistics: Singapore Emergent strategies: Sri Lanka

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Mersey Maritime • •

Mersey Maritime comprises the port conurbation that includes the Port of Liverpool in England’s Northwest Its vision is to maintain and grow the Mersey Maritime cluster of businesses into a world class benchmark centre of excellence: – Grow tonnage, turnover, profitability and employment – Galvanise companies into forward looking entity with highly skilled, motivated and customer focused staff – Communicate Mersey Maritime as modern growth business – Develop the Mersey Maritime Institute - world class training facilities – Build up the region as a centre of excellence for logistics – Make Mersey Maritime the most successful of its kind in the UK

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Shipping

Marketing Promotion Networking Communications

Agency / Forwarding

Education, Training, Skills

Professional Services

Further Education Higher Education

Business Development Value Added Logistics Coastal shipping Others?

Mersey Maritime

Ports

Haulage

ICT / E-community Web site Virtual Community Total Logistics

Infrastructure Road Rail Marine Distribution

Distribution

Marine Engineering Others

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Maritime London • Long-established cluster, pre-eminent in many aspects of maritime services • Cluster factors hold it together, but cost pressures counteract these • Cluster analysis being used to identify how partners can work together to ensure London remains pre-eminent

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Ship Owners Ship Managers

Shipping

Liner Agency Services

Shipper or Charterer

Ship Brokers

Industry Associations

Regulators Classification Societies IMO Country Reps

National

Baltic Exchange Flag State

International

Maritime Services Cluster Intermediate Services

Lloyds

in London UK Government

Lloyd's Brokers

Support Services Media & Publishers

Maritime Education

Research & Consultants

Marine Insurers

Legal Advisers

Technical Consultants & Surveyors

Bankers & Accountants

Manning Agencies ICT Services

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Singapore Logistics and Transport

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Singapore Logistics and Transport •

Integration of four industry sectors – Aviation, Maritime, Land Transport and Logistics/Supply Chain Management (SCM) – Aviation: critical mass of world-class players; excellent air connectivity; one-stop aerospace repair and overhaul services and related services; component and system manufacturing – Shipping: Crossroads of international shipping routes and a maritime hub; a leading player in the global shipbuilding and repair markets; home to key oil & gas infrastructure and equipment companies – Land Transport: Several regional headquarters for automotive companies, plus development and manufacturing operations for high-value components; efforts in R&D and testbedding include emerging transport technologies such as intelligent transport systems – Logistics and SCM: Configures solutions for the global supply chain of manufacturing and services industries. Works with third-party logistics players (3PL), air cargo airlines, marine logistics integrators, etc 18

Sri Lanka Logistics Cluster • Proposal for Sri Lanka to play a role in the development of global logistics • Sri Lanka’s location determines that there is a large potential market • The national and regional trade policy environment strongly supports clustering potential

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Sri Lanka Logistics Cluster • Lessons identified for Sri Lanka – Lesson 1: The port, the airport, distriparks / free zones, links between these, and the skills of people in the industry, are all linked together in the logistics cluster – Lesson 2: Development of a logistics cluster can be achieved only through persistently chasing the vision and overcoming barriers. The vision must be sustained at the very top – Lesson 3: An organisation and some key people must champion the development of the Logistics Cluster

• Naturally all successful zones are operated effectively and benefit from world class marketing • Will government chase the vision? Attendez et vois 20

and finally … • Thanks for listening • For more information on cluster and maritime strategy including downloads: www.fisherassoc.co.uk

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