Evolving competition between Hong Kong and Shenzhen ports

Shenzhen Port (SZP), once a negligible local port, has risen dramatically to a world-leading container port and an “equal” player with Hong Kong Port (HKP). Will this market share reallocation continue, or will equilibrium be eventually realized for HKP to prosper continuously? We examine the relationship between these two ports to answer this question. We propose a new transformation method to describe the growth of container cargo transport demand, define the quantitative measures of the competition relationship and port competitiveness, and present a rigorous analytical framework with econometric tests and models to understand the true relationship between HKP and SZP. Direct empirical tests suggest that SZP complements HKP; however, the two ports exhibit strong competition when the effect of demand growth is excluded. Considering transshipment separately, we find that the impact of SZP on HKP is negative in transshipment but complementary in direct shipment. We may conclude that HKP does not affect SZP, whereas SZP has competitive power over HKP. These results are consistent with the findings of some previous theoretical studies.     

Competition model of cruise home ports based on the cruise supply chain – based on China cruise market

This paper addresses issues of cruise home port competition based on the cruise supply chain. A pricing model of the cruise market is developed considering the competitive cooperation behaviors of the participants in the cruise supply chain. Furthermore, a model of cruise home port competition is developed to investigate the impacts of subsidy participants in the cruise supply chain on cruise home ports. The results indicate that subsidy policies change the market equilibrium, promote the upstream and downstream integration of cruise supply chain, and enhance cruise home port competitiveness. Subsidies to cruise line increase the payoffs of cruise supply chain and ports’ profit. Subsidies to travel agency decrease passenger costs and improve all ports’ profits. For the long-term development of cruise home port, the consequents can be used as policy suggestions.     

Dynamics of liner shipping service scheduling and their impact on container port competition

Container ports provide the primary interface where physical exchange between buyers and sellers of containerised shipping capacity can be consolidated and realised. Consequently, ports that are able to complement and add value to the objectives of shipping lines and shippers will become focal points for containerised cargo flows. To evaluate container port competition, the authors propose a practical and direct approach based on revealed preferences of shipping lines with respect to container shipping service dynamics. The container shipping networks are generated as carriers formulate their service schedules to capitalise on opportunities that are presented by evolving container trade patterns along trade routes and relative changes in the competitive profile of the ports of call. Empirical results showed that this approach offers a deeper understanding on the workings and evolution of competitive dynamics between ports, which may not be obvious from observations of port performance at the aggregated level. Benefits of the approach also include raising awareness that policy makers should be aware of the need to understand the nature, extensity and intensity of competitive relationships between ports as they craft and implement policies to correct for the actual or perceived market failures in the industry.     

基于合作对策的江苏沿江港口合作竞争研究

江苏沿江港口群功能定位混乱、恶性竞争严重,不利于其整体竞争力的提高和"组合港"的发展,为此有必要形成良性竞争的合作模式。利用合作对策理论,建立了沿江港口在航线开辟上的合作模型。研究发现,沿江港口间的合作是有实质意义的,但各个港口在联盟中的地位是不同的,必须建立一定的利益分配原则来维持联盟的稳定性。研究结果表明:基于合作对策的沿江港口合作竞争模型有效地揭示各港的动态竞争行为,为研究港口合作竞争提供了一条新的途径。     

浅谈新时期港口竞争形势及港口企业的发展对策

从港口竞争的区域和竞争的内容及形式上分析了港口竞争的变化,阐述了由此带来的港口企业发展战略的变化。并从加强与邻港合作、提高中转货物比例、发展物流产业和建立全球网络等4方面论述了上海港发展战略的现状及方向。     

Pricing strategies for port competition and cooperation

This paper analyzes the effects of integration between two neighbor ports with a third port sharing the same overlapping hinterland. The merger (integrated port) can select either the price discrimination or uniform pricing strategy after integration. Our study reveals that port integration is always beneficial to the merger and the third port, but results in the reduction of consumer surplus and social welfare, regardless of the type of pricing strategy implemented. Further analysis shows that when the inland transportation cost to the ports is relatively low or sufficiently high, a better option is for the merger to adopt the price discrimination strategy. When port pollution is considered and has a relatively large impact, the integration of the two ports improves green social welfare for the region. This finding provides strong support for the ongoing port integration in China. In terms of pricing strategy, the uniform pricing strategy generates higher green social welfare when both inland transportation cost and pollution are relatively low, or both are significantly high. Otherwise, the price discrimination strategy generates the best result for the region.     

Minimum Efficient Scale (MES) and preferred scale of container terminals

The decision on the scale of a port terminal affects the terminal’s managerial, operational and competitive position in all the phases of its life. It also affects competition structures in the port in which the terminal is operating, and has a potential impact on other terminals. Port authorities and terminal operators need to know the scale of the terminal when engaging in concession agreements. In economic theory the scale of a plant/firm is typically defined in relation to the Minimum Efficient Scale (MES), the long-run output where the internal economies of scale are fully exploited. However, there are a number of theoretical and empirical indications that in ports the scale of a terminal is commonly guided by a combination of the MES and other determining factors. The “preferred” scale is the result of a complex interaction between the MES, the port governance framework and objectives, the market size and structure, technological change and operational considerations, physical and geographical limitations, and the business patterns of shipping lines. This study analyses the factors resulting in a preferred container terminal scale that in most of the times is different from the MES. The analysis of the technical, market-related and governance-related factors is supported by theoretical and empirical insights that illustrate the presence of a range of actual ”preferred” scales of terminal concessions that usually are different, below or above, MES.     

Co-operation and competition in international container transport: strategies for ports

This paper focuses on the response of port authorities to the changing market environment in which they operate. It documents the changes taking place in the relationships between port authorities and terminal management companies and considers the strategic issues faced by these groups and other port interests. In particular, it investigates the potential conflicts of interest for a port authority in matters related to the level of competition amongst terminals within a port and the amount of competition amongst ports.     

Co-operation and competition in international container transport: strategies for ports

This paper focuses on the response of port authorities to the changing market environment in which they operate. It documents the changes taking place in the relationships between port authorities and terminal management companies and considers the strategic issues faced by these groups and other port interests. In particular, it investigates the potential conflicts of interest for a port authority in matters related to the level of competition amongst terminals within a port and the amount of competition amongst ports.     

A game-theoretic analysis of competition among container port hubs: the case of Busan and Shanghai 1

Countries throughout the world, and especially within Asia, are investing heavily in container port infrastructure in the hopes of capturing a larger share of global shipping activity for their economies. Many existing ports are emphasizing developing the capacity to serve as a hub port, building deepwater berths with large terminals to facilitate transfer of containers from feeder ships to mother ships for intercontinental transport. We develop a game-theoretic best response framework for understanding how competitor ports will respond to development at a focus port, and whether the focus port will be able to capture or defend market share by building additional capacity. We apply this model to investment and competition currently occurring between the ports of Busan and Shanghai.     

(Law for the Promotion of Competition and Consumer Protection) was passed in early 1995. The impact this law will eventually have, however, is uncertain because rules for its implementation have not yet been established.

Governments in their port reform efforts have experimented with liberalization and commercialization to improve port operations. Because of their failure to meet expectations or because of changing competitive environments, these options have generally been discarded in favour of privatization. In mature large-volume port systems, privatization was a relatively obvious solution, because interport or interterminal competition would be achieved to the extent that the monopolistic tendencies characteristic of their predecessor organizations would cease to exist. In countries with a limited number of ports having relatively small cargo volumes, however, the case is quite different. These countries would have to pursue strategies that would still induce competition in spite of their limited cargo volumes if they hoped to achieve the same privatization benefits and market disciplines enjoyed in other countries. This article examines the port reform approaches used in three distinct competitive settings;the experiences in these countries offer some guidance on how to assure that ports will feel competitive pressures even under conditions of limited cargo volumes.     

The implications of increased competition among ports for port policy and management

The increased competition faced by ports is more focused than previously on the performance of logistics systems of which the individual terminals in ports are critical hubs. The changes in competitive conditions raise issues about appropriate public port policies and strategies of port managements. This paper argucs that the port industry should (and is) moving in the direction of more harmonized policies based on economic principles. Port policies based on cost recovery from users of port facilities and services need to be adopted as the international standard. The competitive environment favours considerable local autonomy. Port management, in addition to possible direct responsibility for terminal management, needs to focus on activities with economies of scale or scope. Such activities, which span the requirements of terminals and may even warrant inter-port cooperation, enhance the services available for many port users.     

Do mergers and alliances influence European shipping and port competition?

In Europe, ports are confronted with a closer integration in the maritime and shipping industries. The co-operation agreements can take several forms such as alliances and mergers among shipping lines, conferences, involvement of shipping companies in terminal management, and extending interests in inland transport of shipping companies. In this paper we give a brief overview of these different types of agreement and we examine the consequences of this evolution of the market structures in which ports and shipping companies have to operate. More specifically, attention goes to the competitive position of the port in this new environment. It is clear that the role of the port and the port authorities has to be redefined to guarantee that it remains a fully fledged player in this fast evolving integrated market.     

Port strategic planning: Canadian port reform

Recent port reform established major commercial ports as Canadian Port Authorities (CPAs) as federal non-profit, business corporations. Canadian port reform was aimed at allowing CPAs to compete effectively. Canada's major ports operate in an increasingly competitive business environment. To gain advantage over their competition, Canadian ports must develop business strategies dealing with their organizational cultures, institutional structures, operations, and facility provision. Developing appropriate strategies involves creating a strategic plan that considers external and internal port environments. This paper outlines the evolution of strategic planning and its applicability to Canadian ports. The initial literature review is followed by a brief review of Canadian port reform and an analysis of external and internal port environments. This analysis determines the resources available to exploit external opportunities and defend against threats, and considers the internal strengths and weaknesses of Canadian ports. A list of strategic issues facing Canadian ports and how the Canada Marine Act affected them is derived from the analysis.     

我国港口竞争态势分析

港口经济作为经济发展的一种地域形态,近年来获得了巨大的发展,但也带来港口之间竞争的日益激烈。从港口经济发展带来的港口竞争入手,分析了现代港口竞争的主要内容以及港口争夺腹地货源的竞争;并针对港口竞争新焦点,就发展国际多式联运连接港口腹地的空间纽带进行了阐述。     

Competition in ship handling: a study of market turbulence in North European harbour towage

This paper addresses the issues of an increasingly competitive towage industry in Northern European ports. Enhanced competitiveness reflects the trends in the global mobility of capital, labour, enterprise and management within the context of deregulated port markets. Up until the early 1990s, the long term trend in major North European ports had been towards market concentration. Many small towage firms have been taken-over, bought out or merged. Alternatively, a pattern of consortia has emerged with co-operation and market sharing seen as preferable to ruinous competition. A contrasting trend has occurred in the 1990s, with new entrants into hitherto stable markets. In a number of ports—Antwerp, Rotterdam, Bremerhaven, Hamburg, Southampton, Thamesport, Bristol Channel—new fleets have brought competitive challenge to the incumbent towage fleets. The process of enhanced competitiveness raises questions of safety, reliability, investment and professionalism. The movement towards an openly competitive shipping industry has been in evidence from the 1960s onwards. The momentum of a dynamic shipping industry, with its competitiveness sharpened by the use of global supply factors, has intensified from that period. The movement in European tonnage towards flags of convenience and global labour supplies began in the tanker and bulk carrier markets; more recently this has spread to deep sea liner, short sea and even cabotage trade shipping. The towage industry is the last North European shipping sector to make this transition, following the trends towards port deregulation in the 1990s. From this perspective, this paper considers the impact on the towage market of global mobility and deregulation in North European towage markets—the impact of increased competition on the traditional operators and the likely effect on operational towage standards.     

Competition in ship handling: a study of market turbulence in North European harbour towage

This paper addresses the issues of an increasingly competitive towage industry in Northern European ports. Enhanced competitiveness reflects the trends in the global mobility of capital, labour, enterprise and management within the context of deregulated port markets. Up until the early 1990s, the long term trend in major North European ports had been towards market concentration. Many small towage firms have been taken-over, bought out or merged. Alternatively, a pattern of consortia has emerged with co-operation and market sharing seen as preferable to ruinous competition. A contrasting trend has occurred in the 1990s, with new entrants into hitherto stable markets. In a number of ports Antwerp, Rotterdam, Bremerhaven, Hamburg, Southampton, Thamesport, Bristol Channel new fleets have brought competitive challenge to the incumbent towage fleets. The process of enhanced competitiveness raises questions of safety, reliability, investment and professionalism. The movement towards an openly competitive shipping industry has been in evidence from the 1960s onwards. The momentum of a dynamic shipping industry, with its competitiveness sharpened by the use of global supply factors, has intensified from that period. The movement in European tonnage towards flags of convenience and global labour supplies began in the tanker and bulk carrier markets; more recently this has spread to deep sea liner, short sea and even cabotage trade shipping. The towage industry is the last North European shipping sector to make this transition, following the trends towards port deregulation in the 1990s. From this perspective, this paper considers the impact on the towage market of global mobility and deregulation in North European towage markets the impact of increased competition on the traditional operators and the likely effect on operational towage standards.     

Activities,resources and inter-organizational relationships: key factors in port competitiveness

In the last decade, the port economics literature has given great emphasis to the Supply Chain Management approach as the new paradigm for the definition of port competitiveness. SCM supports the development of partnerships between the actors of the supply chain and considers the integration of activities and resources along business processes as source of competitive advantage. Nevertheless, the application of SCM approach to the port is particularly compiex given the traditional hostile relationships between port actors. In the effort to overcome such complexity, some authors have considered ports as Logistics Service Providers and interpreted their role within supply chains through the integrative practices undertaken by Global Players–mainly Shipping Companies and Terminal Operators–in the supply of integrated logistics services. Even tough these actors are crucial for the port competitiveness, they determine a passive role of port in the new competitive scenario. The definition of a potential and pro-active role of port in the supply chains is the objective of this paper that presents, through a literature review on SCM and port competitiveness, a new framework for port competitiveness. According to this framework, that is based on the value constellation concept value is generated by joint effort of port actors in the satisfaction of clients' needs, through the exploitation of different I mterdependencies (serial, pooled and reciprocal) between supply chains. In this context, Port Authority has a I fundamental role in identifying those resources–the so called critical assets–that encourage the development of inter-organisational relationships between port actors in the value generation process.     

Evaluating determinants of attractiveness and their cause-effect relationships for container ports in Taiwan: users’ perspectives

The attractiveness of ports is usually a pre-requisite and necessary condition for ports to achieve competitiveness, as well as the springboard to explore the competitive advantages of ports. To determine whether a port is competitive, it is necessary to explore whether it boasts certain factors that make the port attractive to users. The main purpose of this article is to apply the Analytic Hierarchy Process (AHP) method and the Decision Making Trial and Evaluation Laboratory (DEMATEL) technique to evaluate key determinants of attractiveness and their cause/effect relationships for container ports in Taiwan. The empirical results showed that: (1) Top six determinates of attractiveness for container ports are ‘ample cargo sources,’ ‘favorable port charges,’ ‘dense ship network and routes,’ ‘low transshipment costs,’ ‘efficient wharf operations,’ and ‘adequate wharfs and back-line land,’ respectively. (2) Among the above six determinants of attractiveness, ‘ample cargo sources’ is the cause determinant. Three determinants of port attractiveness, ‘favorable port charges,’ ‘dense ship network and routes,’ ‘low transshipment costs,’ which are the effect determinants. They are affected by the determinants of attractiveness of ‘ample cargo sources’. In addition, this study discusses the above findings and expects to provide the study results to Taiwan’s port authorities for reference.     

Integrated ports clusters and competitive advantage in an extended resource pool for the Antwerp Seaport

In the context of increased scale of carriers and vessel sizes, stakeholder opposition to port expansion, and heavy regulation, ports prepare their strategic response. A port’s competitive strength strongly depends on its capability of developing or retaining competitive advantages. Ports consider options such as strategic partnerships, or any form of collaboration, which could help them to create more or alternative combinations of unique resources as sources of competitive advantage. Taking an extended resource base perspective, the competitive advantages of the Antwerp port cluster are analyzed, using both linear regression and factor analysis, for its integrated hinterland network area, on data of 59 port experts. The results of our analysis show that the port’s hinterland extension did not (yet) result in new sources of competitive advantages. This leads us to the reflection that we cannot assume integrated port clusters always lead to projected positive strategic outcomes.