Due Diligence (2x click)

Commercial Due Diligence

Introduction: Basic Factors to Consider

Market Analysis

Container Trade
- Assess current and future container volumes
- Assess regional trade factors
- Investigate shipping routes
Competition
- Identify competing terminals (hub, spoke, gateway)
- Assess capacities (current and future expansion projects)
- Assess pricing (fixed tariffs / rebates / discounts / open negotiation)
- Assess service differentiators
Customers
- Understand relationship between terminal and shipping lines (length of contracts in place / negotiating power ?)
- Understand relationship between terminal, importers and exporters
Regulatory Environment / Concession Obligations
- Understand Local and National Government Policies
- Understand Customs’ Practices
- Understand Port Authority Regulations
- Duration of concession / open to renewal ? / exclusivity clauses / termination risks

Finance Considerations

Revenue Streams
- Terminal Handling Charges
- Storage Fees (full / empty containers)
- Value Added Services (e.g. stuffing / unstuffing / container cleaning and repairs)
- Understand every line item of tariff
Cost Structure
- Understand true fixed costs
- Understand true variable costs (correlation with volume throughput)
- Labour costs (flexible working or fixed)
- Port Fees
- Equipment Maintenance
- Energy (electricity). Off the grid ? Independent power sources ? Risks ? Generators ?
Profitability
- EBIT
- EBITDA
- ROI
- Cash Flows

Operational Due Diligence

Introduction: Basic Factors to Consider

Health, Safety, Environment and Security

Infrastructure

Berth and Yard Capacities
- Quay length
- Yard hectares
- Dwell time
- Ratio: Gateway / Transhipment
- Ratios: Import / Export, Full / Empty, 40’/20′
- Equipment type (e.g. RTG (width / height) / Straddle Carrier / Reach Stacker / Empty Handler)
Gate Capacity
- Number of in-gates
- Number of out-gates
- OOG capabilities
Traffic Flow
- Signage
- Lane markings
- External trucks / Internal trucks / Cars
Depths (approach channel / turning basin / alongside)
- Dredging responsibilities ? (Terminal Operator / Port Authority ?)
- Tidal ranges
Bollard pull
Power source (e.g. off grid / own substation / own power source (generators)
Civil Engineering:
- Age of Terminal: Condition of surface in the yard
- Age of Quay Wall: Condition of the structure / piles
- Understand past repairs to quay wall and / or yard

Equipment

IT and Automation

Productivities

Berth Productivity (main liner / short sea / feeders)
Gross Crane Productivity: Individual cranes (understand definitions (e.g. delays taken into account ?)
Weather conditions (affecting productivity): e.g. wind / heat
Congestion areas in yard /outside terminal ?
Efficiency of planning (ship and yard)

Human Resources

HR Policies
- Pay Structures
- Shift Patterns
- Training
- Disciplinary Procedures
Relationship with Unions
Understanding of Local Labour Law

Integration with Supply Chain

Environment