Complexity is a feature of any expanding network and for operations management, which has previously thrived on close, personal contact between cruise lines and ports, this complexity could easily lead to a deterioration of key relationships and have a negative impact on business performance.

Ensuring that this deterioration does not occur requires operations managers to look at new ways to do their jobs, adapting to the changes in the market and fostering relationships with ports around a new set of parameters. Roberto Ferrarini, marine operations director for Costa Cruise Lines, has seen many of these changes first hand, and has recognised the need to manage relationships with ports differently.

“I have been in my job for ten years, and in that time there have been many changes,” he says. “As ships get bigger and the number of ports we use increases we cannot follow every port directly by visiting it as I did before. So, the job has changed.”

When he took charge of marine operations for Costa, Ferrarini had around 100 ports to manage, and was able to visit them, inspect them and interact personally with the agencies responsible for the delivery of service to the Costa fleet. Now those ships call at some 215 ports, so the same kind of personal relationship is not always possible.

Relationships with port agents are crucial because marine operations executives such as Ferrarini are more reliant on their inputs, assessments and recommendations. Costa is delegating more responsibility to port agents for evaluations of ports and their services, but there has been a shift in how cruise lines and port agents interact.

“Things have changed,” says Ferrarini. “It is important that port agents have been specified for cruises, and are not dealing with, say, ferries or cargo. Then we can get good feedback from them and they get to know the cruise business. So we need them to be trained. Ten years ago, port agents were training cruise lines on how to deal with ports. Now, we are training them to deal with cruise operators.”

QUALITY IS KEY Sorry, there are no polls available at the moment.

Cruise lines are in search of quality services from the ports they visit. This not only means the presence of adequate facilities to berth the ship, but also the delivery of value-added services to passengers to make embarkation a pleasant experience that ties in with the standards of a cruise’s other elements.

In some markets, Costa believes that there is a gap to make up in the level of quality that is delivered by ports. Through operating in Europe, the cruise line has experienced first hand the great variance in quality of service at its many ports.

“Ports are starting to act to secure the valuable business available in the cruise market.”
Costa has long been a vocal partner in the dialogue with ports, making suggestions as to how they can better serve the cruise industry. Now, these suggestions are being heeded more often. Ports are starting to act to secure the valuable business available in the cruise market. “We must work more on planning, coordination and delegating more responsibility to port agents and on-board crew in port evaluation,” says Ferrarini.

“Because we’re always busy with reporting and relationship management, we need to plan our activities from afar. The challenge is to maintain standards when not on site.” If anything, the importance of quality services at ports is growing because the cruise market is highly competitive. Simple embarkation is no longer enough. Cruise lines want ports to focus more closely on passengers’ experience of embarkation and the effect that has on their overall impression of the destination and the cruise. After all, if there is any fall in quality, the cruise line will be blamed by its customers.

“The focus on quality is the concept we are trying to transfer to ports, which need to be more than simply large enough and accessible enough to accommodate the ship,” says Ferrarini. “They also need to be clean, customer-friendly and professional in terms of their staff and their services. Some ports need to increase their size and add new structures, but what they must understand is the need for quality in their services.”

BUSINESS BENEFITS

Competition is not only growing in the cruise market, but also among ports. More ports are trying to bring in lucrative cruise business, and their potential customers are making it clear that elements such as security and embarkation facilities are basic requirements and should be taken for granted. What can make the difference for a port is the quality of the services it offers to cruiseships and their passengers.

Costa and other cruise lines want ports to recognise and embrace their contribution to passengers’ enjoyment of their cruises, and then by working with cruise operators they can significantly enhance their chances of being chosen for an itinerary. “Ports know what to do,” notes Ferrarini. “They know what we require and they are more keen now to follow our indications.”

There are some ports, including some of the fastest growing in the Mediterranean, that still have poor facilities and services, but benefit sufficiently from their location in generating more business. There are also instances where ports have invested in facilities and services, yet they have not seen the quick return they might have expected.

Location is still a key determinant for the selection of a port by a cruise line, but as the market becomes more competitive, especially in Europe, other factors will carry more weight in such decisions. “We are a European player, and every day we get ports requesting the development of cruise business,” says Ferrarini. “Ports want to develop in line with our indications on software, hardware and services. Competition between them is much greater.”

He also admits that there have been occasions where Costa has declined to use ports because of the poor quality of their facilities and services, and for being too expensive. For ports, the goal is to achieve the right blend of cost, investment, services and facilities. For cruise lines, it is to maintain relationships with the right ports in the right locations and offer consistent quality.

DEVELOPING RELATIONSHIPS

To impart an understanding of their needs to ports and their employees, and to cement relationships with key destinations in the more complex and stretched business environment, cruise lines have been looking at ways to share responsibilities with their partners. Costa has explored a variety of methods, including direct investment in the development and ownership of ports.

“Ports in Europe in particular are becoming steadily more congested, and there are fears that this will increasingly disrupt or impair the quality of cruises.”

Such an arrangement ties ports in to the interests of a cruise line at a different level to the norm. The benefits can be seen in Costa’s relationship with the Port of Savona, Italy, in which it invested, and which now serves as an example of what the operator is looking for from a port that caters for cruiseships.

“That kind of investment starts a relationship,” says Ferrarini. “Savona has a real focus on quality of service, and that is the value add. You add value when you provide a nice environment for passengers, and here we have seen a dramatic change. Slowly, ports are understanding what we need, and when they look at Savona they see something real, something that works.”

Direct investment of this sort is not always desirable or possible, but Ferrarini sees many ways in which ports and cruise lines can be brought closer together. “Direct investment is one way to cooperate, but there are many levels before that, such as agreements on priority rights for a cruise line,” he says. “From that basis you can talk about improvements, as the connection between the port and the line is set up.”

The importance of close ties is also likely to grow as ports and their customers face new challenges, which will change the market even more. Here, the issue of congestion is likely to feature strongly. Ports in Europe in particular are becoming steadily more congested, and there are fears that this will increasingly disrupt or impair the quality of cruises. “Congestion in Europe is difficultto overcome,” says Ferrarini. “Many of the ports are historic and in the middle of the town, so development faces some problems.”

This is partly why cruise lines are keen to open up new destinations, and why there are more opportunities for emerging ports to bring in cruise business. Congestion will fuel competition between ports in the years to come. Costa prides itself on its track record of opening up new destinations, and will need to rely on this skill heavily in the future.

Ferrarini also believes that there are ways for existing ports to improve their scheduling to combat congestion and provide more reliable services to cruise customers. He notes that many ports do not have clear rules on berthing and as a result do not achieve optimum management of their schedules, citing examples of cruise lines having made reservations a year ahead, only to find out a few weeks before arrival that there are problems.

“If you know the rules, you can plan correctly,” he says, pointing to ports in the Caribbean as role models, as many have clear berthing rules, which enable cruise lines to make reliable bookings up to two years ahead.

Nevertheless, whatever ports do to improve congestion and efficiency, Ferrarini believes that for now quality of embarkation services is the most important factor for ports. “There are big arguments about congestion,” he says. “It is a real problem, particularly in the Mediterranean, but more frequently we find ourselves talking about the quality of service. Passengers are on vacation, so they need to feel welcomed.”

As the mindsets of ports and cruise lines adapt to the changing market, their interdependence will find a balance where their increasingly complex relationships will be nurtured in new ways. While this change happens, cruise operators like Costa must ensure that the passenger remains central to the development strategies of ports.