Corporatisation and Performance: A Literature Review and an Analysis of the Performance Effects of the Corporatisation of Port of Rotterdam Authority

Abstract

The ongoing process of port reform has led to an increasing number of publicly owned but corporatised port authorities (PAs). The performance effects of corporatisation have been analysed, for example, for the airports industry, often showing positive effects. This paper reviews the literature on port reform and the relationship between port governance structures and performance. It also presents a first case study on the effects of corporatisation of PAs, namely for the Port of Rotterdam Authority, a publicly owned but corporatised port development company. In 2004, this organisation was transformed from a municipal department to an independently operating company. The performance indicators to evaluate the effect of this corporatisation include market share, turnover, operating costs, profits, and investments. These indicators are evaluated for two periods, one prior to the corporatisation (1997–2003) and the other afterwards (2005–11). The comparison of these two periods shows that corporatisation has led to significant improvements of all performance indicators. The findings derived from this case study are relevant for the ongoing discussion on port governance models.     

Competition Between New Port Governance Models on the Iberian Peninsula

The aim of this article is to analyze the interaction between port devolution processes in Portugal and Spain in their common geographical environment, the Iberian Peninsula. Firstly a review is done of the different port devolution processes in the world which specifically analyses the transition of numerous public and centralized ports to the landlord model. Among the conclusions that we can highlight with respect to the Iberian port systems are the need for a reflection process before any change is made to the port governance model, and greater cooperation between the two countries to avoid any possible future port tariff price wars. The over-investment process that the Spanish port devolution process, especially, has generated must also be mentioned, for highlighting once again the almost inexhaustible ability of ports to eat up public funds for investment that precludes profitability.     

Charting a New Paradigm of Container Hub Port Development Policy: The Asian Doctrine

This paper proposes the conceptual model of the Asian (Port) Doctrine to explain the successful development of top ranking container ports in Asia during the past four decades. This paper draws a new paradigm for the role of government as a third governance approach in addition to Anglo-Saxon and European doctrines by describing how Asian countries have developed container hub ports by investing in infrastructure as social overhead capital to support export-led growth. We survey characteristics and outcomes in major Asian container port developments and one European port in terms of a port development policy. The findings are presented in a comparative overview of government investment in functional elements of port, maritime infrastructure and landside connections to container ports. This paper confirms that the existing two doctrines—Anglo-Saxon and European doctrines—are not sufficient to explain the Asian success in major container port developments. The proposed framework contends that a newly proposed Asian Doctrine can accomplish this with the help of cross-subsidization, strategic and administered port pricing mechanism.     

Port choice in container market: a literature review

As a result of the intense changes occurring in port environment over the last decades, new models of competitiveness have been developed, where port authorities try to increase their attractiveness. In this context, one of the most debated issues in this area of research is still the role played by port authorities in defining port competitiveness. The aim of this paper is to provide a review of port choice literature enabling to identify the main port choice’s criteria in order to define the role played by Port Authorities and to point out future lines of research that should be undertaken to fully incorporate current ports’ environment and performance. The results show that although some studies point out the importance of geographical factors in port choice, a larger number of studies defend the increasing role played by port authorities in determining the competitiveness through investing in port infrastructure, improving port efficiency or hinterland accessibility. Despite the existing models contributing on this topic, there are still some gaps in terms of measuring the port performance, including port strategies and studying the port choice for specific industries.     

The Greening of Ports: A Comparison of Port Management Tools Used by Leading Ports in Asia and Europe

Abstract

From the policy and management perspective, this study aims to investigate the port management tools that port/public authorities have at their disposal and then to analyse to what extent the tools are used to enforce or encourage green port development at functional activities of port operations and development. We conduct an exploratory and comparative review based on two axes: on the one hand, the range of tools available to port authorities (pricing, monitoring and measuring, market access control and environmental standard regulation) and on the other hand, the functional activities in ports (shipping traffic, cargo handling and storage operations, intermodal connection, industrial activities, and port expansion). The situations in the leading ports in Asia and Europe, namely Singapore, Shanghai, Antwerp and Rotterdam are studied and compared, whereby the policies' effectiveness is discussed accordingly. Findings show that the ports are particularly mature in exercising environmental standard regulations which reveals that the enforcement approach is more prevalent. The most focused functional activity is shipping traffic which reflects that the ports are driven by the International Maritime Organisation. The respective port authorities in Antwerp and Rotterdam have a higher level of influence on devising green port policy in comparison to the two Asian ports.     

An Application of the Hierarchical Fuzzy Process to Container Port Competition: Policy and Strategic Implications

This paper aims to empirically identify the competitiveness of container ports in Asia by examining factors influencing the perceived competitive edge of each port using the Hierarchical Fuzzy Process, a method embracing human knowledge and/or judgement into a mathematical framework. This analysis is unique in that the ‘human-perceived’ competitiveness on Asian container ports is examined under the quantifiable framework. The findings reveal that Singapore is the most competitive port among the sampled ports. Moreover, the methodology employed here shows the potential to be applicable to other transport and logistics related service industries.     

A decision support system for port selection

Abstract

A number of studies have been carried out on the factors determining port choice, derived from the perspectives of shippers, carriers or both. Recently, some studies using multi-criteria analysis, more specifically Saaty's analytical hierarchy process (AHP), have been undertaken to address port competitiveness and port selection by shipping lines. Based on a review of the literature on port selection, this article proposes a decision support system (DSS) for port selection using AHP methodology. The proposed DSS is web-based and thus it can be accessed by more decision makers and data collection can be carried out faster. Moreover, AHP addresses the issue of how to structure a complex decision problem, identify its criteria, measure the interaction among them and finally synthesise all the information to arrive at priorities, which depict preferences. AHP is able to assist port managers in obtaining a detailed understanding of the criteria and address the port selection problem utilising multi-criteria analysis. This article presents the architecture and the port selection procedure of the web-based DSS, and then illustrates three different cases. It shows how technology advancement can bring positive effects of strategic planning to shipping firms.     

Strategic beliefs of port authorities

Over the last decade, insights from the strategic management discipline have increasingly been applied to ports. A review of literature shows that in the analysis of port authority strategy, mainly outside-in approaches are applied. This paper adds to the emerging understanding of the port authority’s strategy by applying a cognitive perspective. Specifically, the strategic cognition of firms’ executives is one of the explanatory variables behind firms’ strategic decisions. Furthermore, cognitions are influenced by the organisational contexts in which port authority executives have worked. As a result, managerial “mental maps’ may vary across industry contexts and over time. This research investigates the strategic cognition of a global set of port authority executives through a survey-based instrument. The results show that, to a large extent, PAs resemble “regular” for-profit companies, but that they possess some specific beliefs that distinguish them from “regular” companies.     

Identifying Governance Relationships Between Intermodal Terminals and Logistics Platforms

Abstract

Governance theory examines different ways of managing resources and relationships in order to achieve a desired outcome. This paper applies governance theory to intermodal terminals and logistics platforms, extending previous work on ownership to include different operational models. An inductive methodology is used to derive a typology of governance relationships from an analysis of the transport and logistics literature. The classification developed in this paper explores different kinds of integration that can help support growth of intermodal transport services. The understanding of transport governance is extended via three key relationships: first, between the logistics platform and the site tenants (therefore, encouraging consolidation and efficiencies that can boost rail services at the site); second, between the terminal operator and rail service provision (which can aid service planning and train loading factors); and third, between the inland site (either terminal, logistics platform or both) and port(s), (thus enabling better planning and efficiency of port rail shuttles).     

Classifying Ports for Efficiency Benchmarking: A Review and a Frontier-based Clustering Approach

Abstract

Port efficiency and port clustering are two aspects that have received different degrees of attention in the existing literature. While the actual estimation of port efficiency has been extensively studied, the existing literature has paid little attention to developing robust methodologies for port classification. In this paper, we review the literature on classification methods for port efficiency, and present an approach that combines stochastic frontier analysis, clustering and self-organized maps (SOM). Cluster methodologies that build on the estimated cost function parameters could group ports into performance metrics’ categories. This helps when setting improvement targets for ports as a function of their specific cluster. The methodology is applied to a database of Spanish port authorities. The dendrogram features three clusters and five outlier Spanish Port Authorities. SOM are employed to track the temporal evolution of Spanish Port Authorities that are of special interest for some reasons (i.e. outliers). Results show that use of a combination of cost frontier and cluster methods to define robust port typology and SOMs, jointly or in isolation, offers useful information to the decision-makers.     

Assessing urban sidewalk networks based on three constructs: a synthesis of pedestrian level of service literature

ABSTRACT

Pedestrian Level of Service (PLOS) models are widely used to assess walking facilities. These models have been in existence since the 1970s, wherein the process broadly consists of three steps, i.e. attribute selection, model calibration, and classification of model results into service-level categories, based on Measures of Effectiveness (MOEs). This paper reviews existing sidewalk PLOS studies based on their association with the three constructs of flow characteristics, built environment and users’ perception, which in combination represents the entire walking environment spectrum, as has been indicated by existing researchers. Forty-seven PLOS studies, along with eight review papers, written by authors from the Americas, Europe, Asia and Australia, between the years of 1971 and 2019, are analysed in this review. The review finds that although 49% of the studies employed both qualitative and quantitative data for their respective methodologies, but none of them use all the three broad constructs in a combined fashion. Also, in selecting the attributes to be used for developing the PLOS, these studies have only referred to previous literature available at that point in time, and not employed any consistent and robust method in selecting context-specific attributes. When it came to the preferred analysis technique, 60% of the studies favoured the use of the regression technique while calibrating their model, whereas 22% used a points-based marking scheme. Finally, 89% of the studies manually classifies the PLOS model results to respective service levels (i.e. letter grades), as opposed to utilising a classification algorithm. In addition, this review could identify only one paper that describes a PLOS based on pedestrian route directness, which is a measure of pedestrian network connectivity. In view of these findings, the review paper suggests the need of a robust methodology in selection of attributes and the use of innovative modelling techniques, both of which could allow the utilisation of all three constructs. Also, such advanced modelling techniques could bypass the need for categorising service levels manually. Finally, the study advocates the use of network connectivity measures in developing sidewalk PLOS, as it is an important part of the built environment.     

Assessment of hub status among Asian ports from a network perspective

This paper proposes a novel network-based hub port assessment (NHPA) model through explicit formulations of connectivity and cooperation indices. Such a model is useful for port operators and policy makers to evaluate the relative influences of various quality characteristics from which carriers base their port choices on and identify port partners. Key insights can be obtained for port authorities to improve their port infrastructures and operations to achieve a competitive and sustainable hub port status. Three comprehensive case studies are conducted to assess the current standings and potentials of major Asian ports within networks of major carriers.     

Characteristics of European inland ports: A statistical analysis of inland waterway port development in Dutch municipalities

Most scientific attention in port studies centers on deep-sea ports, in particular container ports. In our paper, in contrast, we focus our attention on the characteristics of inland waterway ports in a European context. This is an overlooked part in the scientific literature on inland port development, which is up to now mainly concerned with US-based understandings of inland ports. We try to broaden the application of the inland port concept by explaining the development of inland ports in terms of inland waterway bounded cargo throughput. Based on a large-scale quantitative dataset of inland port development in Dutch municipalities we perform various statistical analyses to arrive at a more detailed understanding of the question: What are the characteristics of European inland waterway ports and what transport and economic factors influence cargo throughput on the municipal level? The results in particular highlight the importance of the presence of a container terminal, the diversity in types of goods which are being handled by the inland port and the accessibility of the inland port relative to the regional motorway network as important factors in explaining the size and growth of inland ports. Interestingly, the popular claim in policy of ‘investments in inland port development leading to employment growth’ cannot be confirmed.     

Health externalities of ship air pollution at port – Piraeus port case study

This paper is employing the well-known methodology of impact pathway approach to assess the external costs in human health from ship air pollution at port areas. The passenger port of Piraeus, Greece is the scenery of the study. Piraeus port is in the vicinity of the greater Athens metropolitan area where almost half of the country’s population lives. Hence, this port is the central hub of the Greek coastal passenger ship system which connects the islands of the Aegean Sea with land and is characterized by heavy ship traffic. The case study presented in this paper assesses the annual external cost in human health from air emissions produced by all passenger ships and cruise ships calling the port of Piraeus. Health cost from ships at port has been estimated at both local (Athens metropolitan area) and regional level (entire territory of Greece). Results show that higher costs occur at the local level. The dominant pollutants creating this cost are particulate matter (PM_2.5, and PM₁₀). Overall, the results indicate that the health impact of Piraeus’s passenger port emissions is not negligible; however the cost of PM₁₀ is considerably lower than the corresponded cost deriving from the land based industries of the Athens regional area for which comparison has been available.     

Towards improved port capacity investment decisions under uncertainty: a real options approach

ABSTRACT

Port activity plays an important role in facilitating international trade. Sufficient capacity is indispensable for a port to attract flows to a region and retain them. The capacity decision is the result of a trade-off between investment and waiting costs. Traditional methods to value expansion projects do not deal adequately with managerial flexibility in the face of uncertainty from different sources in the complex port environment. In this paper, real options (RO) models are identified as an alternative method to making project valuations and investment decisions, as they attribute the correct value to managerial flexibility under uncertainty. In order to be able to build and use such RO models for port capacity investment decisions, the sources and implications of uncertainty in the port and the different RO model specifications need to be understood. To this end, both the literature about uncertainty in the port context and the literature about real options models are reviewed in order to provide researchers who want to build their own decision-making models, with the necessary knowledge of both fields. The review makes clear that the complex interactions in and competition between the logistics chains and their actors coming together in ports have significant impacts on port capacity. Uncertainty is also caused by uncertain international trade flows and changes in legislation following new technologies and environmental impacts. An analysis of the components of some general RO models shows how the options of flexible output, investment size and timing are valued by RO models in a setting with demand uncertainty. Moreover, the review presents researchers with insights in how to deal with cooperative and competitive interactions in the chain, time to build, cyclical markets and legislation changes. It also shows how to value the expansion and the phased investment options. The new insights resulting from this review are subsequently combined in a framework that serves as a guideline to build RO models for port capacity investments. Finally, an exemplifying application of the framework is used to build an actual port capacity investment decision model.     

Quasi-landlord port financing in China: Features,practice and a contract theory analysis

Since the 1970s and 80s, landlord port has been the dominant port financing model in western large and medium-sized container ports. In China, many prospective port projects have also explored a landlord port financing model. However, some evidence suggests that landlord port financing in China is a variant of the international mainstream landlord port financing model. Based on an explanation of their unique features and practices, this paper analyzes the Chinese quasi-landlord port financing model from a contract theory perspective, in which it can be viewed as a double-level principal–agent relationship and two-layer profit distribution contract with three participants: the state-owned assets administration department, the port investment company and the operators. Furthermore, the results show that in the Chinese quasi-landlord port financing model, whether in the case of both joint venture and port land lease (fixed rent), or in the case of both joint venture and port land transfer, the optimal incentive scheme is the same as in the international landlord port financing model with profit sharing rent or mixed rent.     

Tour-based mode choice modelling as the core of an activity-based travel demand modelling framework: a review of state-of-the-art

ABSTRACT

The paper presents a critical review of the methodological approaches used in tour-based mode choice models within the activity-based modelling frameworks. Various components of the activity-based models, such as activity type choice, activity location choice, and activity duration have already matured significantly. However, the mode choice component is often simplified in many ways. Both trip-based and tour-based approaches are used in many cases. However, the tour-based approach is considered to be the most relevant to the activity-based modelling framework. This paper presents a synthesis of the strengths and weaknesses of existing tour-based mode choice models. The previous studies on tour-based mode choice models are grouped into seven categories, ranging from simplified main tour mode to complex dynamic discrete choice models. Besides, challenges with data-hungry models, simulation-based models and static models are discussed elaborately. In conclusion, it proposes a few methodological suggestions for researchers and practitioners for finding an appropriate mode choice modelling framework for activity-based models. In addition, the paper also provides a guideline on how to incorporate automated vehicles and Mobility-as-a-Service within the framework of tour-based mode choice models.     

Giving a direction to port regionalisation

As theoretical approaches to port development have advanced over the years, the role of the inland terminal has attracted increasing focus, particularly under the framework of port regionalisation. This paper will explore port regionalisation in different contexts through a greater focus on the drivers and direction of a number of inland terminal development strategies.The paper will build on previous work by combining inland terminal taxonomies and the theory of directional development with traditional port development models. Regionalisation strategies will be compared and contrasted through examples derived from field work undertaken in Europe and the USA. The results contribute towards a disaggregation of the process of port regionalisation, revealing different levels of integration and cooperation observed in different location splitting models. In this way, different strategies will be elucidated, enabling further exploration and more nuanced understanding of the institutional aspects of spatial development.     

An Analysis of the Dynamics of Ownership,Capacity Investments and Pricing Structure of Ports

With more than 80% of the world's cargoes being transported by sea, effective port management is critical to the well-being of the global economy. This study models the effects of port ownership and governance on capacity investment and pricing structure, and these changes' implications on port service level and social welfare. The study argues that capacity investment and pricing are significantly influenced by a port's ownership form, and the different levels of government involved. Inter-port competition leads to increased capacity investments by private investors and local authorities, which can be either higher or lower than social optimal level. Therefore, it is important for policymakers to consider the effects of institutional and competition factors in port reform initiatives.