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BOOSTING OUR FUTURE

We are known worldwide for providing world-class maritime services in ports across 40 countries. Currently, our competitors are able to offer more competitive rates due to their lower cost base. This means that we need to restore a balance between supply and demand to make our operations financially sustainable.

To help us address this, we have initiated ‘Port boost’. The purpose of the initiative is to ensure that our activities and services continue to meet our customers’ requirements, that we run a sustainable and profitable business, and that we secure jobs and development possibilities for our employees.

NO CHERRY -PICKING

When scanning the towage market, it becomes evident that some of our competitors have a more flexible approach to doing business. They may cherry-pick the most profitable jobs during peak hours and then leave SVITZER to serve the customers off-peak hours, often at the standard tariff. Other competitors enjoy a lower cost to serve per tug job and our research suggests that this is due to lower crew costs. Hence, while SVITZER pays for crews around the clock, our competitors only pay for crew called in for specific jobs. This means that a number of our ports are actually underperforming. As we have built our business on delivering safe and reliable services to our customers, we will not follow the route of cherrypicking. Instead we will keep focusing on providing value-added service, which meet our customers’ requirements and help them deliver within their line of business. “In order to do so, we have to obtain a better understanding of the terms and conditions of our operations to restore a profitable balance between supply and demand. Our customers are willing to pay a fair price for the safety net we provide across our operations. However, we have to ensure that we remain competitive – otherwise our competitors will be the ones attracting our customers and eventually take over our operations,” explains Steffen Risager, Head of Business Transformation.

THE AIM IS SOUND OPERATIONS

We need to understand why some of our operations in Australia and Europe are underperforming in order to take actions that will result in the required turnaround of our business. So far we have looked at more than ten harbour operations with the sole aim of ensuring cost-competitiveness and continued leveraging of our service offerings to contract customers at the right prices. “This is about making visible to customers and stakeholders that we are in the We are known worldwide for providing world-class maritime services in ports across 40 countries. Currently, our competitors are able to offer more competitive rates due to their lower cost base. This means that we need to restore a balance between supply and demand to make our operations financially sustainable. business as a full-service provider for the long haul as long as there is a reasonable business case supporting each operation,” Steffen explains and ads: “We have already started this dialogue with crews and customers, and backing our arguments with facts has had a profound effect.”

A BETTER BASE FOR NEGOTIATIONS

The ‘Port boost’ initiative started off in the state of Victoria in Australia – with great success. “By analysing the port traffic, peak periods, customers and the competition, we have created a database that allows us to make more informed decisions,” explains Robert Chignell, State Manager for South Australia and Victoria. “The ‘Port boost’ initiative will mean different things to different ports, but common to all is that solid data enables our crews to engage in levelheaded and constructive discussions about what we need to do to service our customers and organise our rosters accordingly,” Robert concludes.

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