Next generation mega container ports: implications of traffic composition on sea space demand

ABSTRACT

Demand for sea space brought about by increasing container-shipping traffic has important implications on how this space is managed and used. This is particularly important given the long-term nature, high-asset specificity, high- opportunity cost of investment, and significant economic impact of container port activity on a locality. The challenge is especially pressing for ports, which are facing constraints in seaside capacity where container traffic also has to co-exist with the needs of other types of ship traffic. This challenge is likely be multiplied for next generation container ports, which are expected to handle even larger traffic volumes. These ports are also likely to face competing sea space demands from other economic and social activities especially when they are concurrently major confluences of trade, logistics, and urban populations. This is the first research to investigate in detail the impact and importance of investigating sea space requirements from the perspective of cargo traffic composition and ship capacity. Results show that transshipment containers can generate much higher demand for sea space due to the higher volume of shipping capacity that accompanies such traffic. Sustainability issues and managerial and policy implications pertaining to the development of next generation container ports are provided.     

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.     

Examining stakeholder participation and conflicts associated with large scale infrastructure projects: the case of Tema port expansion project,Ghana

ABSTRACT

Balancing economic activities with socio-environmental considerations has become a global standard for the construction of large scale infrastructure projects, including ports. In this discourse, stakeholder participation and environmental and social impact assessment (ESIA) have been stressed as important tools that can help port managers to co-create values, avoid conflicts and promote inclusive growth. Drawing on qualitative research tools and stakeholder theory, this paper explores whether and to what extent local stakeholders’ inclusion has substantial influence on addressing their socio-cultural concerns and interest. This is illustrated with a case study of an ongoing port expansion project at Ghana’s largest port of Tema. The findings suggest that although the port authority conducted an ESIA and engaged local stakeholders as part of the planning process, this did not translate into preventing the loss of valuable cultural resources of the local communities. The port authority did not place ‘value’ on cultural resources of the local communities that cannot be expressed in monetary terms. Further, lack of good faith engagement with local stakeholders led to conflicts in some cases that triggered a court action and delays. The paper concludes that stakeholder participation if not applied well, can become a ‘post-political’ tool.     

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.     

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.     

The impact of ship size on ports’ nautical costs

ABSTRACT

Much is known about transport costs at sea and costs made at terminals in ports. About costs, made by ports to provide nautical facilities (incl. infrastructure) and services, not much research is done yet. This paper estimates the impact of increasing ship sizes on costs made by the Port Authority of Amsterdam when providing nautical facilities and services by using hedonic pricing techniques. We have rather unique data on ship’s sizes and harbour dues paid per ship for over 25 years for ships that visited the Port of Amsterdam. Harbour dues paid are used as a proxy for the costs of nautical facilities and services. We have found nearly constant returns to scale, when volume is used as a measure of a ships’ size. An increase in average ship size with 1,000 tonnes deadweight will result in approximately €2 million additional yearly costs (an increase of the average ship size of six percent results in an increase of nautical costs with nearly the same percentage). Our results can be used by Port Authorities and port operators (in case of landlord ports) to estimate costs to be made for providing nautical facilities and services in the near future.     

Containerization and the decline of the upstream urban port in Europe

This paper examines the impact of containerization on upstream urban ports in Europe, briefly discusses the changing socio-economic role of such ports,and considers whether the few remaining upstream urban ports currently still attracting large containerships can continue to do so in the long-term. Citing the trend towards larger containerships, the analysis concludes by offering the view that continued investment in container-handling infrastructure within traditional upstream urban ports may be a flawed policy. Such ports are becoming outmoded (for the largest containerships), superseded by more appropriate custom-built infrastructure at coastal locations.     

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.     

A simulation model for gate operations in multi-purpose cargo terminals

ABSTRACT

A multi-purpose cargo terminal in a seaport contains necessary infrastructure to handle different types of cargo, such as container, dry bulk, general bulk, and Ro-Ro. Since such terminals generally have dedicated areas and equipment for different types of cargo, berth, and yard operations for each type of cargo can be considered separate. On the other hand, trucks that carry all types of cargo use the same gate structure to enter and leave the terminal. Therefore, a method to superimpose the traffic that is caused by different types of cargo is needed for the planning of gate investments and operations. Consequently, this paper has developed a simulation model for a multi-purpose terminal to estimate the gate traffic and determine the necessary gate infrastructure, so that it can be used as a decision support tool for terminal planners and operational managers.     

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.     

Widening the Panama Canal and U.S. ports: historical and economic impact analyses

ABSTRACT

The economic history of the U.S. illustrates how the role of many cities has been changed by being seaports or located on navigable rivers or lakes. Based on the widening of the Panama Canal in 2016, the West Coast ports that include the west coast seaports of California, Oregon, and Washington were expected to become less important, while the freight shares of the East Coast and Gulf ports would increase. By how much it has been not easy to measure or predict so far, but this study attempted to define some of the key parameters in the measurement. As well as several relevant background topics, both the demand- and supply-side versions of the National Interstate Economic Model, have been applied for the measurement of economic impacts. U.S. port authorities and policy makers at the local and national levels who respond and develop plans for coping with the new realities of the Panama Canal are able to understand the extent to which changes in shippers’ and land-mode transporters’ behaviors would undermine the logistics and the costs of their activities. Therefore, this study is important for a diverse spectrum of port development strategies in the U.S. to respond to the Canal expansion.     

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.     

Manoeuvring and hotelling external costs: enough for alternative energy sources?

Local air pollution is the most relevant externality of maritime transport, and its effects are more acute in urban areas as a result of manoeuvring, hotelling and load/unload activities at ports. This article is intended to assess ships’ local air pollution impact in generally densely populated harbour areas to decide whether alternative power supply measures are feasible. First, an optimized infrastructure investment model is developed to ease implementation and maximize the efficiency of alternative power supply projects. Once target harbours and traffic (ship types) within a national port network have been chosen, a vessel traffic analysis (ship type, tonnage, manoeuvring, and hotelling times) is carried out to quantify and evaluate annual polluting emissions (PM_2,5, SO₂, NOx, and VOCs) and their externalities. Finally, the assessment model is applied and results of the Spanish port network case study are discussed. The results obtained are significant and bring the possibility of further controlling the ship’s environmental performance at berth.     

Environmental zoning restrictions on port activities and development

With the port industry facing increased cargo volumes, the need for expansion of landside facilities is eminent. The ports face a dilemma which can cause considerable damage to their futures. This threat comes in the form of environmental policy. Since the early 1970's, Europe has been involved in an 'environmental crusade' which seeks to protect habitats and species of wildlife. The creation of 'environmental zones' to protect these areas, are spreading rapidly along the coastlines and waterways where ports are situated and in need of development to handle increased cargo volumes. This paper is aimed at developing an understanding of the potential impact of environmental zoning on the future of ports, as well as presenting the facts and legislation supporting this environmental crusade.     

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.     

The political economy of ports in the United States and Great Britain

Abstract

This is an exploration of the political economy of ports in the United States and Great Britain. A number of technical, economic, and political issues concerning ports are examined. Particular attention is paid to the institutional evolution of ports from private to public ownership, and its consequences for port efficiency. The paper concludes with a set of recommendations designed to reverse the trend toward port nationalization in both countries.     

The evolution of containerization in East Asia

This paper examines the development and growth of container traffic in the Asia-Pacific region. It is hypothesised that containerization is losing its national character as the geography of container transport changes port hierarchies where only a few ports have become locationally favorable. The organizatioon of the paper is straightforward. First, the development and growth of container traffic in the Asia-Pacific region is examined in order to provide understanding of changes associated with containerization. Second, the role of selected Asian-Pacific ports as key economic players is reviewed, and container development in each port is analysed so as to measure the differences explaining the position of Asian-Pacific ports in the maritime system. Third, the degree of concentration and competition that exist among the container ports of the region is analysed with a view to evaluate what rate of expansion can be expected in the foreseeable future that will shape the network of the container market in the region. The paper concludes on a possible research agenda.     

Environmental assessment in the Prc: Third phase of the Qinhuangdao coal port

Abstract

The use of environmental impact assessment (EIA) is relatively recent in the People's Republic of China (PRC). China is committed to a reversal of the environmental degradation resulting from its industrialization and the central government has initiated a requirement for environmental planning and assessment for large development projects. Today large scale harbor developments are subject to the requirements of the National Environmental Protection Law (1979) and the Marine Environmental Law (1982). Because the third phase expansion of the coal port of Qinhuangdao would increase the ports’ capacity to handle coal by 30 to 50 million tons, an EIA was required.

Since 1981, the Environment and Policy Institute of the East‐West Center (EWC), Honolulu, has had a program of research focusing on the environmental impacts of coal transportation. On the basis of workshops in China that centered on the problems associated with planning coal transportation projects, the Ministry of Communications of the PRC invited the EWC to participate in the environmental assessment for the third phase coal port expansion at Qinhuangdao. A 10‐member team with specialities in environmental assessment and port environmental problems from five countries representing the EWC worked with a 25‐member team from four different agencies of the PRC Ministry of Communications.

This article describes the environmental regulations in the PRC that affect this harbor expansion, discusses the process by which the EWC assisted the PRC in the preparation of the environmental assessment and evaluates the assessment product against PRC regulations and U.S. standards. The most important contribution of the EWC was the provision of guidelines adapted from the EIA experience in several countries which will assist the PRC in the environmental evaluation of future pon expansion projects.     

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.     

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.