The impact of competition on container port (in)efficiency

There are many studies on container port efficiency and that seek to understand what factors, such as technical and scale efficiency, private versus public terminal management or macro-economic factors, play on the efficiency score of a given port. There are fewer studies that focus on the role played by the inter-port competitive environment. This role remains difficult to assess. In fact, on the one hand, a port subject to high inter-port competition may record higher efficiency scores due to the pressure from the competitive environment. On the other hand, a port subject to high competition may be forced to over-invest and could therefore records a lower efficiency score. This article investigates this issue and examines how the degree of competition measured at different levels (local, regional and global level) impacts the efficiency score of a given container port. To do so, we implement a truncated regression with a parametric bootstrapping model. The model applied to information gathered for 200 container ports in 2007 and 2010 leads to the following conclusions: port efficiency decreases with competition intensity when measured in a range of 400–800 km (regional level); and the effect from competition is not significant when competition is measured at a local (less than 300 km) or at a global (more than 800 km) level. Estimates also show a tendency for ports who invested from 2007 to 2010 to experience a general decrease in efficiency scores, an element which could be explained by the time lag between the investment and the subsequent potential increase in container throughput.     

Competition dynamics between container ports in East Asia

This paper unveils the competitive dynamics between the major container ports in East Asia by analyzing their extent and intensity. Time series data, with the longest series dating back to 1970 ending 2001, on container throughput for the ports of Hong Kong, Kaohsiung, Keelung, Kobe, Nagoya, Osaka, Pusan, Taichung, Tokyo and Yokohama are computed. Cointegration tests are employed to determine the existence of long run relationship between various port pairs. Error correction models are constructed to determine short run inter-port dynamics. The results reveal that Hong Kong and Pusan are beneficiaries from inter-port competition in the region for the past three decades. The study suggests that inter-port competition in the region would intensify in the future as the centre of gravity of cargo volume shifts to mainland China. Moreover, concentration of services by shipping lines at the primary load centers might lead to intense competition between the primary load centers and ports located in close proximity that share their hinterlands.     

Efficiency evaluation and PM emission reallocation of China ports based on improved DEA models

The emission of particulate matter (PM) and other atmospheric pollutants in port operations and shipping have caused a huge negative impact on the environment. Consequently, how to evaluate the environmental efficiency of ports and put forward corresponding countermeasures on this basis is becoming a more important issue than ever before from the perspectives of the government, academia, and society. We construct three data envelopment analysis (DEA) models to evaluate the environmental efficiency of ports under the circumstances of environmental control, non-environmental control and PM emission through inter-ports cooperation. The innovation of the DEA models constructed in this paper lies in: (1) Setting environmental control parameters to uniformly manipulate the situations of environmental control and non-environmental control, etc.; (2) Allowing non-equal proportional change of input index, expected output and non-expected output index; (3) Setting preference coefficients for ports to admit favorable decisions; (4) Providing a distance formula of expected output for PM emission reallocation. Further, data from 11 major ports in China are collected to compare the expected output under different PM emission standards assuming the situation of environmental control and non-environmental control, port cooperation, and non-cooperative sewage discharge. The empirical results show that: (1) Ports in the eastern China (Shanghai, Ningbo, and Nanjing) have higher port efficiency; (2) Port cooperation can improve the overall expected output but it will lose its edge with the improvement of PM emission standards. (3) Ports follow the same trend of output loss regardless of favorable decisions. In the end, the author makes a summary, puts forward relevant policy suggestions and makes the recommendation for future research.     

Post-entry container port capacity expansion

Port capacity development is a critical strategy for the growth of a new port, as well as for the development of existing ones, when both new and existing ports serve the same hinterland but have different competitive conditions. To study this strategy, we develop a two-stage duopoly model that comprises the pricing and capacity decisions of two heterogeneous players serving an increasing market. We identify the necessary condition for a port to increase its profit through capacity expansion, and characterize the condition when preemptive pricing by the dominant player is neither credible nor effective in preventing the smaller player from gaining market share. We also find the pure-strategy Nash equilibrium in the capacity expansion game for two ports that have different price sensitivities, as well as different operation and capacity investment costs. We apply the model results to the container port competition between Hong Kong and Shenzhen after Shenzhen port started its container operation in 1991. Our analysis explains the transition of market power from monopoly to duopoly, the fast development of Shenzhen Port, and the possible market structure changes with the continuing increase in demand.     

Traffic consolidation in East Asian container ports: A network flow analysis

The proliferation of hub-and-spoke operations in maritime container transportation has resulted in the widespread consolidation of traffic flows. Utilising liner shipping network configurations, this paper assesses the impact of freight traffic consolidation in the container port industry by exploring the spatial pattern of traffic flow movements and identifying the variety of roles that container ports play within this context. On the basis of the network concept, the spatial inequality of freight traffic consolidation is determined by the density and direction of all meaningful connections (i.e. significant flows) identified by applying Multiple Linkage Analysis (MLA) to an initial traffic flow matrix.The effectiveness of the chosen methodology is tested empirically using a sample comprising the 18 major container ports in East Asia, together with another 21 important container ports located on the East–West trading route. Based on this sample network, the spatial structure of traffic flow consolidation reveals the nature and structure of hub-and-spoke operations within a port system, the relative hub-dependence of ports, the variety of roles which individual ports play within the overall structure of inter-port interactions and the hierarchical configuration of the port industry structure. The paper concludes that MLA offers new insights into the distributional inequality of traffic flows, the spatial and economic interactions between ports and the extent to which hinterlands overlap. Furthermore, the analysis clearly shows that inter-port relationships can no longer be evaluated as isolated phenomena; any change in a specific port’s competitiveness will directly impact upon the structure of the whole maritime transportation system. Port authorities and terminal operators will need, therefore, to carefully analyse and disentangle specific inter-port relationships in order to provide the most appropriate basis for their decision making.     

International emission regulation in sea transport: Economic feasibility and impact

Emissions from shipping due to the burning of the sulphur content of marine fuels conduce to air pollution in the form of sulphur dioxide and particulate matter. Various international organisations and institutions impose environmental standards on their member states to limit the emission of greenhouse gases. This paper examines both the potential effects of the emerging international maritime emission regulations on the competition between seaports and the potential underlying economic motivations fostering the discussion of introducing Emission Control Areas. It focuses on deepsea shipping. Another novelty is that the environmental issues are addressed from a policy, an economic and a legislative viewpoint. For the policy-related part, it is found that the political theory of public choice suggests that not the green lobby but rather the petrochemical lobby is the major driving factor behind the very strict emission caps. A potential port shift from Northern Europe to Mediterranean ports seems unlikely due to logistics disadvantages and service problems in Southern European ports. Finally, no convincing proof was found that the main liner companies would be unprepared for this legislation and should be persuaded to change their routes in favour of Mediterranean ports solely on account of the various emission regulations. The legal analysis, however, showed that the current enforcement regime of MARPOL Annex VI should be improved in order to rule out the possibility of a low degree of compliance and to protect the competiveness of complying ships.     

Integrated analysis of GHGs and public health damage mitigation for developing urban road transportation strategies

This study attempts to present an urban road transportation strategy focusing on the mitigation of both GHGs emission and public health damage, taking Xiamen City as a case study. We developed a Public Health and GHGs Emission model to estimate the impacts of direct energy-consumption-related GHGs emissions and public health damage in Xiamen’s road transportation strategies from 2008 to 2025, considering the environmental benefits and economic costs. Two scenarios were designed to describe future transportation strategies for Xiamen City, and mitigation potentials for both GHGs emission and public health costs were estimated from 2008 to 2025 under a series of options. The results show that enacting controls on private vehicles would be most effective to GHGs mitigation, while enacting controls on government and rental vehicles would contribute the most to NO₂ and PM2.5 reductions. Compared with the Business as Usual scenario, the Integrated scenario would achieve about a 68% energy consumption reduction and save 0.23 billion yuan (95% CI: 0.16, 0.32) in health costs in 2025. It is clear that integrated and advisable strategies need to mitigate the adverse impacts of urban road vehicles on GHGs emissions and public health and economic costs, particularly in regions of rapid urbanization.     

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.     

Foreign participation and competition: A way to improve the container port efficiency in China?

This paper investigates how the involvement of foreign and local ownerships, intra- and inter-port competition and hinterland affect the container terminal efficiency in China and its neighboring countries. The operational efficiency of sample container terminals is estimated by data envelopment analysis, which is followed by regression analysis to examine factors affecting container terminal efficiency. We find that having some Chinese ownership may make a container terminal more efficient, while a container terminal is less efficient with Chinese as the major shareholder. It is also found that intra- and inter-port competition may enhance container terminal efficiency. Finally, the efficiency growth of terminals is examined, and implications for the regional economic disparity in China are discussed.     

When it comes to container port efficiency,are all developing regions equal?

In this paper we carry out a container port performance analysis of the developing world between 2000 and 2010, using both parametric and nonparametric approaches. From a unique dataset – our sample covers 70 developing countries, 203 ports, and 1750 data points–, we examine the evolution and drivers of productivity and efficiency changes across developing regions. We show that productivity growth rates between 2000 and 2010 vary significantly and that this heterogeneity is explained by pure efficiency changes rather than scale efficiency of technological changes. Therefore, we carry out a detailed efficiency analysis to determine the drivers of port efficiency. Time series results show an upward trend for port efficiency in developing regions, as it increased from 51 percent in 2000 to 61 percent in 2010. Our analysis indicates that private sector participation, the reduction of corruption in the public sector, improvements in liner connectivity and the existence of multimodal links increase the level of port efficiency in developing regions.     

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.     

The effect of institutional factors on public–private partnership success in ports

Port public–private partnerships (PPPs) are considered to be an important emerging mechanism for port development and improvement in port performance especially for developing countries. This paper empirically investigates the effect of institutional factors in the success of port’s PPPs; the latter defined as the attractiveness of the PPP project for private bidders and the market competitiveness of the facility. The empirical investigation of a large sample of ports finds that ‘regulatory quality’, ‘market openness’, ‘ease to start a business’ and ‘enforcing contracts’ are important institutional determinants of port PPP success and may ultimately contribute to port development and economic growth. The results are consistent with and add to the theoretical literature whereas practical implications for port authorities, managers and investors are discussed.     

Evaluating the competitiveness of container ports in Korea and China

Changes in world trade and the shipping environment have created ever-increasing competition between ports in North-east Asia, especially Korea and China. Following intensive state investment in port developments through large-scale projects, Chinese ports now threaten to oust Busan in Korea as the regional hub. To identify and evaluate the competitiveness of major ports in the region, this paper identifies the components influencing their competitiveness and presents a structure for evaluating them. Based on the literature related to port selection and competition, a regional survey of shipping companies and owners employed factor analysis to reveal that port service, hinterland condition, availability, convenience, logistics cost, regional centre and connectivity are the determining factors in these regions.     

A stochastic frontier model of the efficiency of major container terminals in Asia: assessing the influence of administrative and ownership structures

This paper applies a `port function matrix' to analyse the administrative and ownership structures of major container ports in Asia. The relative efficiency of these ports is then assessed using the cross-sectional and panel data versions of the `stochastic frontier model'. The estimated efficiency measures are broadly similar for the two versions of the model tested. From the results of the analysis, it is concluded that the size of a port or terminal is closely correlated with its efficiency and that some support exists for the claim that the transformation of ownership from public to private sector improves economic efficiency. While this provides some justification for the many programmes in Asian ports which aim to attract private capital into both existing and new facilities, it is also concluded that the level of market deregulation is an important intervening variable which may also exert a positive influence.     

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.     

Carbon dioxide emissions from port container distribution: Spatial characteristics and driving factors

Port carbon dioxide (CO₂) emissions in China have become an ever-increasing public concern due to their significant impacts on human health and the environment. However, existing studies focus mainly on CO₂ emissions from vessels calling at the ports and cargo handling within the ports, paying little attention to the inland distribution networks. To fill this gap, this paper proposes an easily implemented method for calculating CO₂ emissions from port container distribution (PCD) and investigates their spatial characteristics and driving factors. By analyzing 30 container ports in China, the main findings are as follows. First, road transportation is the major contributor of CO₂ emissions from PCD due to the lack of rail and inland water transportation. Second, PCD carbon emissions exhibit significant local spatial clustering. That is, ports with similar geographical locations tend to present a similar pattern of PCD carbon emissions. Third, as suggested by the spatial Durbin model, PCD carbon emissions are negatively determined by local gross domestic product, number of port berths, but are positively determined by local tertiary industry value and highway freight volume, and waterway freight volume in both local and neighboring ports. These results provide empirical insights into cross-port collaboration in reducing PCD carbon emissions.     

Ship emissions and their externalities in cruise ports

This paper presents an estimation and analysis of ship exhaust emissions and their externalities in the popular cruise destinations of Dubrovnik (Croatia) and Kotor (Montenegro) along the eastern coast of the Adriatic Sea. To this extent, the recent record (2012–2014) of cruise ships calling at these ports is used to model and estimate the ship exhaust emission inventories and externalities within the associated bays and ports.The results indicate that cruise ship traffic produces continuously increasing air pollution in both ports over recent years. More importantly, however, the analysis of the ship operating characteristics reveals that for any given ship traffic involving specific vessels using marine fuel of a given quality, the presence of other factors (e.g. berth availability, berth accessibility etc) can also influence the ship emission levels. This is particularly evident in the case of the port of Kotor where berth space insufficiency dictates the need for ship anchorage thus leading to increased air pollution and costs of associated damage.The application and results of the aforementioned ship activity-based methodology to the ports of Dubrovnik and Kotor improves our understanding of ship emissions in cruise bays and ports, and contributes toward the implementation of port policies for the effective control of air quality in such environmentally sensitive locations.     

The private and social cost efficiency of port hinterland container distribution through a regional logistics system

Increasingly, the debate on freight transport and logistics involves the challenge of sustainable development. Key objectives of sustainable or “green” freight logistics systems are the mitigation of negative environmental and human health effects of distribution operations and the realization of a major modal shift in transport preferences, while at the same time achieving internal generalized cost efficiency and quality of services. Pursuing these goals requires the introduction of a range of measures. These measures call for private and public actors to take up various initiatives and adopt policies. Usually, it is more effective to combine different actions into an integrated package of measures than to introduce single instruments in isolation.This article explores the nexus between sustainability and port hinterland container logistics. In particular, the methodology and results of an empirical analysis based on applications of a network programming tool called the “interport model” are presented and discussed. The model enables an examination of all possible effects on inland container flows and their associated internal and external costs due to public and private initiatives in the field of port hinterland container logistics. The empirical analysis aims to evaluate the impact of a set of simultaneous policy options and operational measures on the competitiveness and sustainability of hinterland multimodal distribution of import and export containers handled at the seaports of the Campania region located in Southern Italy. The loading units can transit through the dry port facilities (the so called “interports”) located in the same region and/or through extra regional railway terminals, before reaching their ultimate inland destinations or the seaports. The integrated package of measures simulated by means of the model includes: (i) infrastructure policy, (ii) improvements of rail services, (iii) regulatory changes in terms of customs authorizations and procedures, (iv) removal of technical and legal barriers to fair and non-discriminatory competition in the market of rail traction between regional seaports and interports, (v) new business models integrating container logistics operations between seaports and interports, and (vi) social marginal cost charging of transport operations. Once this package of instruments is introduced, higher private and social cost efficiency of port hinterland container distribution through the investigated regional logistics system can be achieved. For instance, it has been estimated an annual saving of the order of about 12,660 tonnes of CO₂ equivalent emissions from transport corresponding to an external cost reduction of 0.27 million euros from the observed real life situation, whereas the estimated saving in terms of air pollution (CO, NO_x, PM, SO₂, VOC) from transport is approximately 220 tonnes per year corresponding to an external benefit of 1.31 million euros.The most immediate priority appears to be the customs and intermodal logistics integration of seaports and interports by means of full implementation of the “extended gateway” concept as a way to increase the rail share of modal split and improve the overall cost efficiency of the system. In addition, the simultaneous introduction of a social marginal cost charging policy can contribute to make the regional interports a viable solution to expand the hinterland reach of the regional seaport cluster.     

Active or passive? Sustainable manufacturing in the direct-channel green supply chain: A perspective of two types of green product designs

This paper considers a supply chain in which a manufacturer produces and sells two types of green products in its direct channel under government interventions aiming to improve social welfare. There is a Stackelberg game between the two stakeholders. Our research derives the closed form solutions to the optimal tax, green degree and price for the products, and obtains the strategies for government and manufacturer under different environmental policies. By considering six scenarios, our models obtain the best choice from the comparison between the two cases in which the manufacturer determines its product green degree actively or accepts the green standard set by the government passively. Then, we conduct some sensitivity analyses and explore the scenario in which there is competition between green products and non-green products. The results of this research indicate that the government setting the product green standard and providing the manufacturer with a subsidy is significant.     

Have Emission Control Areas (ECAs) harmed port efficiency in Europe?

Ports in the European Union and North America have enforced environmental regulations on controlling SO_x and NOx emissions from ships in their coastal areas known as Emission Control Areas (ECAs). This study uses two-stage approaches to examine whether ECA regulations impact the efficiency of ports operating in such areas. First, port efficiencies are estimated using non-radial slacks-based measure (SBM) Data Envelopment Analysis (DEA) models. The efficiency scores estimated by the SBM DEA models are then regressed on explanatory variables, including the ECA factor, and macroeconomic indicators using bootstrapped truncated regression (BTR) models. Panel data is collected on countries in EU ECAs and non-ECAs regarding such input variables as capital and labor, with cargo as an output variable. The results indicate that ECA regulations can harm port efficiency, reflecting concerns of policy-makers and industrial managers: the average efficiency loss from an ECA designation amounts to 0.058–0.066 on a scale of 0–1, accounting for a 15–18% loss from ECA ports’ average efficiency scores.