The Caribbean basin: adjusting to global trends in containerization

Positioned strategically between major east–west and north–south trading routes, the Caribbean basin has become a locus of new service configurations in container shipping. Over the last decade global shipping lines have been restructuring their service networks in the region in order to integrate local services with the newly rationalized intercontinental connections. By comparing service network structures in 1994 and 2002 at three levels of organization—local, regional and global—we are able to show that although Caribbean ports are well connected to the global system, and while the total number of services has declined between the two years, those mounted by members of global alliances have increased. Moreover, services of the global carriers at the local and regional levels are on the increase. As much as the alliances are reshaping Caribbean networks, the smaller carriers are still playing a role, but at a reduced spatial scale. Parallel with the modifications to network configurations are the changes in the port system. Essentially, traffic of the most important ports in the north and western part of the basin has grown at slower rates than the ports in the south and east. These traffic changes are only partly related to network changes. It is the growth of transshipments that is driving the most important developments in port traffic and bringing to the forefront the development of hub ports. The most important are: Colon, Panama (southwest), Freeport, Bahamas (north), Port of Spain, Trinidad and Tobago (southeast), Kingston, Jamaica and Rio Haina, Dominican Republic (middle), and Cartagena, Colombia and Puerto Cabello, Venezuela (south).     

Spatial pattern of the global shipping network and its hub-and-spoke system

Port system is a research focus of transport geography, and most studies believe carriers are important factors in the development and concentration of the port system. Since the 1990s, carriers have played an important role in organizing the global shipping network and reorganizing the port system. But there isn’t a perfect method to evaluate carriers’ influence and the roles of each port in the maritime shipping networks. In this paper, we use the monthly schedule table of international carriers to describe and model the spatial pattern of the global shipping network and identify its hub-and-spoke system. The result shows that a hierarchical structure exists in the global shipping network. The North Hemisphere, especially the East Asia and the Southeast Asia, is a dominant region of the worldwide shipping network. East Asia, Southeast Asia, Northeast Europe, and East coast of the USA are the concentration regions of worldwide shipping lines. The ports of Hong Kong, Singapore, Shenzhen, Shanghai, and Kaohsiung etc have advanced capacity for maritime shipping and high potentials for being hub ports in the global shipping network. Today, the worldwide shipping network is transforming from the multi-port calling system to 44 regional hub-and-spoke systems. Meanwhile, the sub-networks with hub ports of Antwerp, Singapore, and Hong Kong have become the most important ones and dominate the whole global shipping network.     

Dynamics of change in the port system of the western Mediterranean

The ports of Mediterranean basin have experienced significant growth in container traffic over the last decade. In the western Mediterranean two distinct types of port have emerged: the established ports of the northern part of the basin which serve a gateway function and a set of new ports in the south which act as transhipment hubs. In this paper we explore the dynamics of change and reveal how growth is driven by shifts in individual trades. While the hub ports are integrated into Asian pendulum services, the gateway ports are experiencing growth because of new direct services to Asia and North America. We suggest that the distinctions between the transhipment hubs and the gateway ports are becoming blurred, especially because the gateway ports are also assuming greater transhipment roles. We also explore whether this new dynamism in the Mediterranean ports is reversing the long-standing hinterland domination of the ports of the northern range. We demonstrate that the gateway ports of the western Mediterranean continue to serve local and regional markets, with very limited penetration north of the Alps and Pyrenees. This is due in part to difficulties with rail services but also because of the continued efficiency of the northern range ports and their hinterland connections. We suggest that in the short run, at least, little change is likely.     

Market structures and competitive strategies: the carrier-stevedore arm-wrestling in northern European ports

Over the last few years, liner and stevedoring markets have been facing new challenges. The progressive concentration on the demand side (carriers) and the emergence of global alliances in the mid-1990s have triggered a similar process of consolidation on the supply side (stevedores). In turn, more recently, the strategic choices of pure terminal operators have led to the progressive involvement of carriers in port operations, both from a financial and a managerial point of view. This paper aims at analysing the current contest in northern Europe between customers and suppliers of port services. Substantial concentration in the stevedoring market and the emergence of dedicated facilities in that area, make this arm-wrestling stronger and stronger.

At present, the liner market is following a number of strategic directions including the pursuit of economies of scale (larger vessels) and the supply of services using faster vessels (deployment of 'fewer' assets) in order to offer either new services or additional loops (scope). By exploring the strategic behaviours of the top carriers ('bigger' or 'more effective'), the paper attempts to outline the future evolution of the two industries in a 2015 vision, highlighting in particular scenarios for north European ports. Global alliances are weakening and a new era of M&As is probably approaching: how will the bargaining power change between port users and port customers? Which competitive paradigm will dominate?     

Strategic alliances in the container shipping industry: a global perspective

This paper examines developments in container shipping in light of the formation of strategic alliances by many of the leading companies. It focuses on three features: the transformation of services, the evolution of the fleet, and the adjustments made to the ports of call. These elements are analysed on a global basis for 3 years: 1989, 1994 and 1999. Some of the changes wrought by the alliances are identified, including the spread and intensification of services, and the deployment of the largest vessels on alliance routes. While the individual companies that have come together in alliances are serving many more ports than before, it is also demonstrated that the total number of ports served by the industry has remained constant. The results are interpreted in the context of globalization that is tending to impose greater standardization on the container shipping industry.     

Strategic alliances in the container shipping industry: a global perspective

This paper examines developments in container shipping in light of the formation of strategic alliances by many of the leading companies. It focuses on three features: the transformation of services, the evolution of the fleet, and the adjustments made to the ports of call. These elements are analysed on a global basis for 3 years: 1989, 1994 and 1999. Some of the changes wrought by the alliances are identified, including the spread and intensification of services, and the deployment of the largest vessels on alliance routes. While the individual companies that have come together in alliances are serving many more ports than before, it is also demonstrated that the total number of ports served by the industry has remained constant. The results are interpreted in the context of globalization that is tending to impose greater standardization on the container shipping industry.     

Market structures and competitive strategies: the carrier–stevedore arm-wrestling in northern European ports

Over the last few years, liner and stevedoring markets have been facing new challenges. The progressive concentration on the demand side (carriers) and the emergence of global alliances in the mid-1990s have triggered a similar process of consolidation on the supply side (stevedores). In turn, more recently, the strategic choices of pure terminal operators have led to the progressive involvement of carriers in port operations, both from a financial and a managerial point of view. This paper aims at analysing the current contest in northern Europe between customers and suppliers of port services. Substantial concentration in the stevedoring market and the emergence of dedicated facilities in that area, make this arm-wrestling stronger and stronger.

At present, the liner market is following a number of strategic directions including the pursuit of economies of scale (larger vessels) and the supply of services using faster vessels (deployment of ‘fewer’ assets) in order to offer either new services or additional loops (scope). By exploring the strategic behaviours of the top carriers (‘bigger’ or ‘more effective’), the paper attempts to outline the future evolution of the two industries in a 2015 vision, highlighting in particular scenarios for north European ports. Global alliances are weakening and a new era of M&As is probably approaching: how will the bargaining power change between port users and port customers? Which competitive paradigm will dominate?     

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.     

Asian hub/feeder nets: the dynamics of restructuring

The emergence of hub/feeder networks in the Singapore-Japan corridor through the 1970s and 1980s reflected not only the rapid growth of containerized cargo in regional Southeast and East Asia but also the exceptional importance of Far East/transPacific and Far East/Europe mainline shipping services in structuring these networks. This paper argues that the mid-1990s is a defining moment in the restructuring of these networks; that the period represents, in fact, a convergence of a number of different though related trends impacting on the regional shipping market. More particularly, continuing high growth rates of containerized cargo have not only spawned new ports but have also increased the proportion of ports handling threshold volumes of containers for which mainline calls, rather than handling thfeeder operations, are justified. Further, the quite dramatic retionalization of already large container shipping lines into mergers and alliances bestows a new level of market power that is able to underwrite major changes in shipping schedules, port rotations and feeder linkages. This paper speculates that these developments are generating, and will continue to generate new, hierarchically organized port/shipping networks in which high order networks will include high efficiency/high cost operations; and lower order networks will include a mix of hub and direct-call ports that will focus on different market segments.     

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.     

Analysis of the development potential of bulk shipping network on the Yangtze River

In the past decades, a multilayer transshipment network of bulk shipping has been formed along the Yangtze River so as to support the fast development of Chinese iron and steel industry. Yet with the decrease of iron ore trade in China since 2014, the bulk port system on Yangtze River probably will be subject to change in the future. Under this background, this paper aims to analyze the development potential of Yangtze River bulk ports system with a focus on iron ore transshipment. To realize this objective, we firstly sort out the main transshipment patterns of bulk shipping, and optimize the bulk-shipping network with an optimization model. Several scenarios are then proposed and examined in the model by changing corresponding parameters. Cooperation among ports as one scenario is analyzed by applying core theory in cooperative game. Based on the changes of transshipment plans observed under the various scenarios, we finally ascertain the different development potentials of the system, and provide suggestions to the port operators and local maritime authorities.     

Port system evolution – the emergence of second-tier hubs

Some evidence has emerged of second-tier hubs inserting themselves between hubs and feeder ports, producing a new hierarchy of port networks. This article aims to establish the dynamics of this process based on illustrative cases in Asia, South America, and Europe. Findings reveal spatial factors to include a cluster of small ports with minimal sailing distance within a given range, suitable channel and berth depth, and ideally high capacity inland links. From the economic perspective, demand-side factors include a local captive market and aggregated demand to be captured from other ports, while supply-side factors include diseconomies of scale at traditional hubs, an increase in direct services, an increase in large feeder vessels calling from first-tier hubs which are then transhipped to smaller feeders for serving local ports, and an increase in overland servicing of local smaller ports. From a strategic perspective, vertical and horizontal integration in the shipping sector has produced extensive network economies, whereby shipping lines look to create group-specific port hierarchies, enhanced in the presence of aggressive management strategies and supportive policies. This finding suggests that proactive port stakeholders can in certain circumstances seize the opportunity to capture this role within their port range.     

Network economies in liner shipping: the role of home markets

This paper deals with the measurement of the network complexity of some selected shipping groups, also identifying the contribution of co-operative agreements among carriers. The empirical investigation is focused on: (i) the analysis of the distribution of the carrying capacity per range; and (ii) the comparison of that capacity with the throughput handled in the port facilities of the group. These variables are interpreted in the light of the impact that alliances have on the geographical wideness of the services supplied by each partner. This factor also allows to depict how the cultural and political origin of shipping lines affects the decision of joining an alliance and the outcomes deriving from such co-operation.     

Network economies in liner shipping: the role of home markets

This paper deals with the measurement of the network complexity of some selected shipping groups, also identifying the contribution of co-operative agreements among carriers. The empirical investigation is focused on: (i) the analysis of the distribution of the carrying capacity per range; and (ii) the comparison of that capacity with the throughput handled in the port facilities of the group. These variables are interpreted in the light of the impact that alliances have on the geographical wideness of the services supplied by each partner. This factor also allows to depict how the cultural and political origin of shipping lines affects the decision of joining an alliance and the outcomes deriving from such co-operation.     

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.     

The competitiveness of short sea shipping in multimodal logistics supply chains: service attributes

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.     

Strategic alliances in container liner shipping

The economic crisis in the years between 2008 and 2010 has demonstrated the necessity for substantial adjustments on behalf of container lines. Capacities were shifted quickly to emerging and less affected markets allowing a faster recovery of globally organized companies. This paper illustrates the dynamics in the container shipping market. Alongside the main characteristics of the Top 20 ocean shipping companies, liner services are described. These services are classified by geographic coverage and vessel deployment. In addition, this paper provides a better understanding of the collaboration among service providers. Starting from a general framework of co-operative liner services, in-depth analyses of the global alliances in liner shipping are obtained. These formations - Grand Alliance, New World Alliance and CKYH Alliance - are compared with alternative forms of collaboration in the liner shipping industry. The analysis of alliance announcements which are related to operational and strategic changes indicates that the “global alliances” cannot be regarded as closed corporate-like entities. In effect, service agreements are not only negotiated with the focal members of the specific alliance. Instead, every service is arranged individually and under specific conditions. By understanding the dynamics within alliances, we are able to develop an assessment relating to the stability of collaborations. Ultimately, these insights direct us to several paths for future research.     

Port co-opetition in concept and practice

The port industry has undergone a rationalization process over the last decade. An increasing proportion of port management and operations is being taken over by global port operating groups. Many port operators who previously ran only their local business now extend their business scope to the regional or global scale; today's port operators can be regarded as multinational corporations. In the era of global economy, a port no longer enjoys a natural monopoly, as was the case in the past. To cope with this changing business environment, a certain form of competition and co-operation among ports is necessary so as to provide services that fit into shipping lines' strategies. It is suggested that ports have to concentrate on new ways for co-operation in an effort to establish a countervailing power. This paper proposes a new strategic option known as co-opetition , the combination of competition and co-operation, for the port industry, and explains a case of co-opetition between the container ports in Hong Kong and South China. The results of this research will provide a useful insight into the port industry, which is currently required to carry out its business in an ever-changing business environment.     

全球典型中转港发展格局、特征及趋势研究

全球海运的发展催生出以转运货物形式服务于周边区域和远洋运输的中转港,它们在全球贸易及运输体系中占据重要地位,形成了明显的特征格局。在中转港形成因素及分类研究的基础上,总结全球范围中转港发展格局和发展特征,探讨不同区域中转港的发展趋势。结果表明,当前全球航运格局重心在亚太地区,国际中转港主要分布在远东-西欧-北美主航线,而扼守关键区位则容易催生出中转大港。同时,未来各区域的中转港发展将随着经济全球化与国际贸易的深入发展而变动,并受船舶大型化、服务软环境等显著影响。     

Port co-opetition in concept and practice

The port industry has undergone a rationalization process over the last decade. An increasing proportion of port management and operations is being taken over by global port operating groups. Many port operators who previously ran only their local business now extend their business scope to the regional or global scale; today's port operators can be regarded as multinational corporations. In the era of global economy, a port no longer enjoys a natural monopoly, as was the case in the past. To cope with this changing business environment, a certain form of competition and co-operation among ports is necessary so as to provide services that fit into shipping lines' strategies. It is suggested that ports have to concentrate on new ways for co-operation in an effort to establish a countervailing power. This paper proposes a new strategic option known as co-opetition, the combination of competition and co-operation, for the port industry, and explains a case of co-opetition between the container ports in Hong Kong and South China. The results of this research will provide a useful insight into the port industry, which is currently required to carry out its business in an ever-changing business environment.