Synergies is a leading advisor in the port sector, working collaboratively with many ports both big and small, city based and regional, bulk and non-bulk, private and government owned, across Australia to refine their pricing strategy to meet their broader objectives. This pricing intelligence is a vital input to ensure that a port is well positioned to meet the challenges of future demand as well as build on the opportunities to secure long term sustainable growth.
Ports are a critical gateway in Australia’s freight supply chain network. Pricing practices are increasingly in the spotlight as port users demand attractive prices and high service standards while port managers must balance competing priorities of meeting customer needs as well as maintaining efficient service provision and maximising port value. In the wake of several port privatisations in recent years, the level of public and regulatory scrutiny surrounding port fees and charges at some of Australia’s largest ports has intensified.
Greater market intelligence on a port’s pricing practices can be a valuable tool for a port when it reviews its pricing strategy to ensure its infrastructure is well positioned to respond to the challenge of meeting future demand and balancing stakeholder interests.
Synergies has worked with many ports around Australia to assist them develop a pricing strategy that responds to changing customer needs as well as grow the long term value of the port.
As part of assisting our port clients, we are often tasked with preparing the following analyses:
A ‘current situation analysis’, which may include elements such as:
an examination of revenues, costs and current returns that a port is achieving overall, as well as on different segments of its business
the competitive environment in relation to alternate supply chains for its key trades, and the resulting competitive risks associated with potential pricing strategies.
Synergies regularly conducts price benchmarking on behalf of port clients to identify benchmark trades, prices and suitable comparator ports. Such exercises can offer a port valuable insights into its relative price competitiveness.
Supply chain costing analysis
We have extensive experience in examining and costing supply chain scenarios. This can provide useful information about the significance of port charges in the supply chain, as well as the comparative cost of using the next best alternative port.
Regulatory risk assessment
A significant issue for many ports is understanding the extent and nature of any regulatory risk. We examine the potential mechanisms through which regulation may be applied to the port, and assess the risk that such regulation may be imposed. We also use standard regulatory approaches to assess the pricing ‘headroom’ available to a port before regulation (if it were imposed) would be expected to constrain prices. We then work with ports to develop strategies to mitigate any perceived regulatory risk
Having regard to the pricing opportunities and constraints, Synergies will identify pricing strategies to assist a port to preserve its overall competitiveness and maximise port value.
Pricing strategy reports deliver the following benefits to our clients:
deeper understanding for port managers on the impact of current pricing practices for key trades (and relative to other ports);
greater understanding of commercial constraints on port charges, including factors impacting customer perception of value, in order to gain insights on the consequences of price changes;
better understanding of the impact of regulatory risks and potential regulatory constraints on price changes, and of the available strategies to mitigate regulatory risk;
This information allows port managers to make more informed decisions about their pricing strategies, in order to preserve overall competitiveness while maximising port value.