Port e-Transformation,customer satisfaction and competitiveness

ABSTRACT

e-Transformation in container ports means port organization-wide innovative transformation encompassing internal and external value chains based on information and communication technology. There is a considerable theoretical literature on the impact of e-Transformation on business performance, but there is very little empirical study on its effectiveness in ports. The objective of this paper is to empirically investigate how e-Transformation in container port management can influence customer satisfaction and port competitiveness. The findings reveal that e-Transformation in container ports can affect customer satisfaction and port competitiveness through e-Workplace, customer relationship management and security, implying that container ports should make every effort to focus on e-transformation in these critical areas. Due to limited empirical studies in this area, the findings have provided an empirical support for the importance of e-Transformation in container terminal management and shed more light on how e-Transformation can affect customer satisfaction and port competitiveness.     

Smaller ports’ evolution towards catalysing sustainable hinterland development

ABSTRACT

From simple organizations as gateways for goods and passengers, ports have evolved and transformed into complex organizational systems with multiple functions. Besides providing cargo, logistics, and other kinds of services to its customers, modern ports engage in the development of their hinterlands. Sustainability, evolving from environmental actions over the years, has become the core of many modern ports’ approach towards hinterland development and port competitiveness. While the literature is concerned with and presents examples of large ports implementing sustainability initiatives, the literature is scarce on smaller ports. This article addresses this gap by exploring qualitatively the case of the Port of Aalborg, a medium-sized port in Denmark, and its evolution towards using sustainability for port and hinterland development. The research focuses on the actions behind environmental development at the port. Its evolution is mapped and explored using the analytical framework developed based on the (larger) ports’ development and their roles. The findings from the Port of Aalborg case exemplify how smaller ports can evolve to drive the sustainable development of their hinterlands and contribute to a better understanding of this kind of port.     

Comparative analysis of port competency requirements in Vietnam and Korea

ABSTRACT

Much research has been conducted recently on the changing role of ports in the context of international logistics and supply chain management focusing on issues such as port efficiency and competitiveness. However, little research has been found on the critical aspect that contributes to making a port efficient and effective, especially, in the new era: the port human capital. As seaports play a critical role in the supply chain, it is thus important that the port personnel possess necessary competencies to contribute to port efficiency and turn the port into an effective supply chain partner. In this paper, this research issue is explored through a conceptual model of competencies and validated empirically by a survey with port executives in Vietnam and Korea. As a result, important managerial insights are drawn to the design and implementation of human resource development policy for ports.     

Impact of politics,economic events and port policies on the evolution of maritime traffic in Chinese ports

The Chinese government has been exploring various paths to find a direction that better suits China’s national conditions during the past 60 years. Meanwhile, a series of political and economic events and policy transformations have had different effects on the port industry. This article attempts to ascertain how these events and port policies have influenced Chinese port traffic through an empirical study on data covering 1952–2009. The findings suggest that foreign trade has been the prime driver of the throughput of Chinese ports. The increase in the ports’ throughput has enabled an increase in domestic demand and the urgent need for further port investment. Chinese port throughput has been subject to multiple shocks. The Great Leap Forward¹ is found to have had the largest, but only a short-term impact. China’s accession to the World Trade Organization, however, led to a longer and exclusive effect on ports, with little observed effect on the other variables. The reform of port governance is shown to have had a more lasting positive effect on port throughput than physical investment. However, these latter effects are minor, the economic and political factors remain the primary driving factors of port throughput.     

Managing port-related supply chain disruptions (PSCDs): a management model and empirical evidence

ABSTRACT

In the contemporary port business environment, port resilience is of paramount importance for supply chain continuity. A result of the increased integration of ports into supply chains is ports’ potential to supply chain disruptions. This paper introduces a PSCD management model that incorporates the application of risk management, business continuity management, and quality management theories with the purpose of increasing port resilience such that supply chain continuity is enhanced. To validate this model, primary data were collected from samples of port operators and port authorities and analyzed using structural equation modeling with AMOS 22.0. The results indicate that managing PSCD using the management model contributes positively to the identification of internal and external opportunities and through that to port’s resilience of internal operations. This, in turn, positively influences port’s financial health and market reputation. The management model has several managerial and academic implications as it offers meaningful insights on policy development as well as theory building.     

Vertical integration and its implications to port expansion

ABSTRACT

Over the years many shipping lines have established terminal operation companies, with some set up as independent firms. However, port authorities and local governments have not always welcomed external investment and control with open arms. The economic implications and each stakeholder’s best strategies remain unclear. This study develops an analytical model in order to study the effects of vertical integration, with a focus on shipping lines’ investment in ports’ capacity. Modelling results suggest that vertical integration between terminal operator and a shipping line leads to higher port capacity, port charge, market output and consumer surplus. It also reduces delay costs. All these results suggest that vertical integration can be an important source of synergy for the maritime industry. Although vertical integration increases the participating carrier’s output at the expenses of non-integrating rival shipping firms, our numerical analysis suggests that the overall social welfare is likely to increase. Preliminary empirical tests confirm that vertically integrated ports handle more traffic volumes and are associated with better infrastructure and equipment. Therefore, port authorities and government regulators should carefully review the market competition status as well as port expansion plans.     

A game-theoretical approach for modeling competitions in a maritime supply chain

ABSTRACT

To accommodate the structural changes in logistics, competitions along a maritime supply chain are more intensive than before. This paper adopts a two-stage noncooperative game-theoretical approach to model the horizontal and vertical interactions among liners and ports. In the first stage, Bertrand game is applied to model the interactions between two liners. When the shipping line decides which port to call, a multinomial Logit model is applied. In the second stage, Bertrand game is applied to model the competitions between two ports. Nash equilibrium is derived by solving the Bertrand games. A numerical example is provided as a case study.     

Which terminals should expand investment: a perspective of internal non-cooperative competition in a port?

ABSTRACT

With the increasing container cargo throughput and the arising of port congestion, container ports start to choose the investment expansion strategy to increase the port efficiency and then to figure out the problem of port congestion. To analyze this strategy, we formulate a non-cooperative game model for a two-terminals-one-port system, and derive the optimal equilibrium outcomes of the investment expansion strategy and investment constant strategy. In the game, we find that when the investment parameter of expansion strategy and impact of handling efficiency on demand changes, both pure-strategy Nash equilibrium and mixed-strategy Nash equilibrium exist, and two terminals are more likely to choose the investment expansion strategy in most cases. Numerical simulation is applied to explore the equilibrium strategy under different circumstance.     

Corporatization: a legislative framework for port inefficiencies

It is now some five years since the restructure of Australian ports and their transformation into corporatized entities. This strategy was adopted in an endeavour to improve efficiency by distancing government from day to day operations—the element that was perceived by many to be the cause of sub-optimal performance. While there is widespread agreement that port performance has improved significantly, dissatisfaction persists with the continued political intervention which is considered to be the reason for ongoing sub-optimal performance and ports' commercial potential from being realized. This paper investigates some of these issues but argues that political intervention per se should not be the focus of research and what is widely perceived to be the cause of the problem. Rather, that political intervention is an effect of something more endemic, of a legislative framework which may not be appropriate for the operations of a commercially focused port. It is argued that the focus should therefore be on the cause, a legislative framework, rather than the outworkings, or the effects of that framework.     

A three-dimensional risk management model of port logistics for hazardous goods

ABSTRACT

Ports are the distribution centers of hazardous goods in the global transportation system. Once hazardous goods accidents occur in ports, they may cause catastrophic losses to humans and the environment. This research investigates the port logistics risks of hazardous goods and provides an overview of port logistics regarding hazardous goods risks. With this investigation, we conducted a detailed analysis of the underlying causes of the port logistics accidents related to hazardous goods. To manage these risks, this article proposes a three-dimensional risk management model that includes human, governance and goods and provides a risk level identification framework for port hazardous goods logistics. Applying the three-dimensional risk management model, we use the Tianjin port explosion as a case study. Finally, we provide several potential preventative measures to prevent such accidents. The findings of this article contribute to the implementation and monitoring of port strategies that will allow for more sustainable and secure development.     

Connectivity analysis of the global shipping network by eigenvalue decomposition

ABSTRACT

Maritime shipping necessitates flexible and cost-effective port access worldwide through the global shipping network. This paper presents an efficient method to identify major port communities, and analyses the network connectivity of the global shipping network based on community structure. The global shipping network is represented by a signless Laplacian matrix which can be decomposed to generate its eigenvectors and corresponding eigenvalues. The largest gaps between the eigenvalues were then used to determine the optimal number of communities within the network. The eigenvalue decomposition method offers the advantage of detecting port communities without relying on a priori assumption about the number of communities and the size of each community. By applying this method to a dataset collected from seven world leading liner shipping companies, we found that the ports are clustered into three communities in the global container shipping network, which is consistent with the major container trade routes. The sparse linkages between port communities indicate where access is relatively poor.     

Impacts of the Belt and Road Initiative in the Indian subcontinent under future port development scenarios

ABSTRACT

The aim of this paper is twofold: the first is to assess the extent to which current port development initiatives contribute to securing the status of the Port of Colombo as a regional transshipment (T/S) hub to serve the Indian subcontinent; and the second is to generate plausible future development scenarios for the maritime industry in the context of the Belt and Road Initiative (BRI). A scenario analysis method is applied to examine the past trends and to build future development scenarios. The results showed that major Indian ports have experienced a significant growth in cargo volumes and vessel traffic. South and East Indian coastal ports continue to use the Port of Colombo as a T/S port in tandem with the corridors connected to the Indian Ocean. Scenario analysis highlights the growing importance of BRI-centric land-based economic corridors, which would generate a large amount of cargos from hinterlands up to China. This would be further fueled through the Great Mekong region-driven industrialization, which would add to the west-bound maritime cargo volume. The paper concludes that the increased capital influx from China would more likely to result in a substantial development of the present port and road/rail infrastructure in Sri Lanka.     

Green port project scheduling with comprehensive efficiency consideration

ABSTRACT

Ports are an important driving force for world economic growth, but they consume considerable energy. The marine sector has proposed the development of green ports to achieve low-carbon sustainable development. This paper presents a green project scheduling model of port construction to optimize comprehensive economic and environmental efficiency. Various realistic constraints are considered, including investment scale, energy savings, emissions reduction, and project priority. Comprehensive efficiency involves cost reduction, energy savings, emissions reduction, and other efficiency goals. The problem is formulated as an integer program and is solved using CPLEX in a general algebraic modeling system (GAMS). We use a representative port in China as a case port in solving its green project scheduling. The results show that the port can save 6,527 tons of standard coal, reduce 40,875 tons of CO₂, and save 49 million yuan per year in the five-year implementation period. The payback in investing in these green projects is less than six years. From an economic and environmental perspective, the comprehensive efficiency achieved is significant.     

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.     

Transshipment hub port selection for shipping carriers in a dual hub-port system

ABSTRACT

This paper investigates the factors affecting transshipment (T/S) hub port selection by a feeder port and helps shipping carriers make a decision about T/S hub port selection in a dual hub-port system. By employing established evaluation factors, a case study is conducted to weigh the priority of factors and to select an alternative T/S hub port, such as between the Shanghai and Ningbo ports from the Nanjing feeder port in the Yangtze River delta (YRD). A combined multi-criteria decision-making (MCDM) framework utilizing the analytic hierarchy process (AHP) and the consistent fuzzy preference relations (CFPR) method is employed to both reduce the number of pairwise comparisons by AHP and to obtain experts’ knowledge in the decision-making process. The result indicates that the cost, availability of hub port’s space allocation, and the connectivity between feeder port and hub port are crucial factors for T/S hub port selection by shipping carriers. In the case study, Shanghai is selected as the T/S hub port from the Nanjing feeder port. Nevertheless, Ningbo port has the advantage of cost, and if the relationship with feeder port can be improved, Ningbo port would be preferred over Shanghai as a T/S hub port for shipping carriers in a dual hub-port system.     

Legal and practical consequences of not complying with ISM code

Almost a decade since port corporatization was introduced in Australia it is becoming clear that initial objectives are not being realized. This paper explores some of the legal and legislative causes, the effect on port operation and investigates what necessary conditions are required to deliver an effective corporatized port business. The paper argues that effective corporatization is a product of effective legislation—one which, while emulating private sector business practices—can deliver a business model that is innovative, entrepreneurial, commercially oriented and free from self-serving political constraints.

The legislation and corporatized artifacts in Australian mainland ports have failed, in general, to deliver this. Arguably, the legislation has, in fact, created a model with inherent flaws and serious contradictions. The legislation enacted is such that while it has set in place a model that articulates commercial objectives, the model created is in fact one in which political objectives may override commercial ones; where strategy may be determined by a bureaucratic elite without the requisite skills and insights, and the resultant strategy appears ad hoc; and a corporate culture that frequently has failed to transcend that of the statutory authority and public utility model. This paper will test these assertions against the developments in the port of Melbourne.     

Influential factors in the design of port infrastructure tariffs

ABSTRACT

The main aim of this article is to examine the factors influential to the practical process of port infrastructure tariff design. The analysis is based on the survey data of 67 seaports representing the Australasian, East Asian, European, North American and South American regions. Exploratory factor analysis (EFA) was first carried out to identify the factors influential to the selection of the infrastructure tariff design model. Subsequently, confirmatory factor analysis (CFA) was used to confirm the relationship between the variables. The findings showed that demand, knowledge about pricing theories, the dynamics of port and shipping sectors (including competition and ship size), pricing objectives and port cost consideration are influential factors in infrastructure tariff design. Most ports use a mix of pricing approaches including price discrimination, cost-based pricing and market-based pricing. Ports are aware of the basic pricing approaches but have limited knowledge of their application. Based on the results of analysis, policy implications for port management in designing port infrastructure tariffs, limitations and recommendations for future research are discussed.     

Productivity change in Nigerian seaports after reform: a Malmquist productivity index decomposition approach

ABSTRACT

During the 1990s, Nigerian seaports were considered inefficient, unsafe due to massive cargo theft (wharf rat phenomenon) and one of the most expensive port systems in the world. This resulted in long turnaround times for ships and increased container dwell times. As a result, port operations were transferred to the private sector through concession contracts. This paper employs a Malmquist productivity index (MPI) technique to benchmark pre-and post-reform total factor productivity growth of the six major Nigeria seaports (Apapa, Calabar, Onne, Port Harcourt, TinCan Island and Warri) for the period 2000–2011 which represents six years before (2000–2005) and six years after (2006–2011) the reform. The results indicate progress in technical efficiency of the ports after reform but deterioration in technological progress. Overall productivity growth was higher in the pre-concession period compared to the post-concession period. The source of pre-concession period productivity growth was technological progress while the change in productivity of the post-concession period is generated by an increase in scale efficiency. This suggests that concessionaires have not brought in the much anticipated investment in modern technology to drive port efficiency. The ports of Calabar and Apapa experienced the highest productivity growth while lowest result was Onne.     

Panama Canal expansion and its impact on East and Gulf coast ports of U.S.A.

ABSTRACT

This paper focuses on the Panama Canal expansion and its impact on American port infrastructure for the attention of academic researchers in maritime transportation and supply chain management (SCM). First, it provides a comprehensive background based on a review of pertinent practitioner as well as academic publications. This is followed by a summarization of the impact of this expansion on the infrastructure of the major East and Gulf Coast (EGC) ports, since these stand to be the most affected. Then it presents a categorization scheme for these EGC ports that capture their likelihood of attracting the expected increase in cargo traffic engendered by the expansion; this is preliminarily supported by the latest data on growth in container traffic. The policy implications of this categorization are then discussed and the paper ends by identifying key SCM research problems exposed by the above.     

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.