An analysis of the overcapacity problem under the decentralized management system of container ports in Japan

This article is concerned with an analytical summary of how the Japanese container ports have been taking place overcapacity problem in a systematic way. It focuses on institutional aspects of the overcapacity problem from the viewpoint of accounting cost and opportunity cost. The first issue arises due to the port authority's accounting system and insufficient disclosures of financial statements of port business to the port users and taxpayers. The second issue is inherently related to resource allocation between the state government and local governments through the budget system and income distribution programmes. Since a proper allocation of economic resources in the port sector as a whole will depend on investment decisions being taken within a coherent framework for ensuring that costs are passed on to port users, these issues are closely related to each other in reality. Although the budget system is completely controlled by the state government, the local governments have authoritative power over port planning, financing, and management, which is assured by the Ports and Harbours Law. The overcapacity problem appears to be an inevitable result.     

A game theory analysis of port specialization—implications to the Chinese port industry

The fast growth of the Chinese economy and its international seaborne trade has escalated the demand for high-quality and efficient port services. “Decentralization” of the port management regime has given local government greater freedom in port development and operational decision-making. However, major port capacity expansion in coastal areas, coupled with the slowing down of both the economy and trade growth over recent years, has led to overcapacity and excessive competition. Although both port specialization and government regulations are called for to address these issues, few studies have investigated the formation mechanism and economic implications of port specialization. This paper uses alternative duopoly games, namely a Stackelberg game and a simultaneous game, to model port competition, where ports provide differentiated services in the sectors of containerized cargo and dry-bulk cargo. Our analytical results reveal that inter-port competition can lead to port specialization in the following three ways. A port can specialize in a type of cargo (1) for which there is relatively high demand, (2) where it has established capacity first, or (3) for services which require prohibitively high capacity costs. Also, it is seen that overcapacity is likely if strategic port decisions are made simultaneously instead of sequentially. These results suggest that if there is a clear market leader, policy intervention may not be necessary. However, if no port has clear market power, then government coordination and intervention may be needed in order to prevent overcapacity and to encourage specialization.     

Integrated Coastal Management in Philippine Local Governance: Evolution and Benefits

In 1991 the Philippine government shifted many coastal management responsibilities to local governments and fostered increased local participation in the management of coastal resources. In their delivery of integrated coastal management (ICM) as a basic service, many local governments have achieved increasing public awareness of coastal resource management (CRM) issues. Continuing challenges are financial sustainability, inadequate capacities, weak law enforcement, and lack of integrated and collaborative efforts. To address these challenges, a CRM certification system was developed to improve strategies and promote incentives for local governments to support ICM. This system is being applied by an increasing number of local governments to guide the development and implementation of ICM in their jurisdiction. The CRM benchmarks required for a local government to achieve the first level of certification are: budget allocated, CRM related organizations formed and active, CRM plan developed and adopted, shoreline management initiated and two or more best practices implemented. Implementation is providing tangible benefits to communities through enhanced fisheries production associated with MPAs, revenues from user fees and enhanced community pride through learning exchanges and involvement in decisions, among others.     

Port reform in Australia: issues in the ownership debate

Australia port reform initiatives have taken on a variety of forms — from out-right sale and transfer of ownership, to the sale of particular assets of infrastructure or services, or to long-term lease arrangements; or in some cases state governments, unable to relinquish control, have opted for corporatization or commercialization strategies. Reform is driven by the belief that ownership impacts on efficiency and efficiency is perceived to suffer if governments either retain ownership or direct control. As a result a major aim of reform is to either remove or distance governments from day to day port operations. The sale of ports removes government control outright and privatized ports are subject to identical regulatory constraints as any company in the private sector. But corporatization strategies are such that government ownership is retained and ports have been transformed into statutory state owned corporations. Effectiveness of this strategy requires legislation to be such that port corporations are free to operate like their private sector counterparts. To date this has not occurred and some serious impediments are emerging which are embedded in legislation and which, rather than reduce, have indeed, increased government control.     

Influence of local government on port investment: implications of China’s decentralized port governance system

ABSTRACT

The pursuit of better performance by the local government can influence the investment decision-making related to port expansion. This paper compares the ceilings at which the port enterprise and the local government would stop making investments. To achieve this, the benefits to the port enterprise and the local government are measured over a given time period. An empirical study investigating how a port would respond if a rival port uses a type of capacity investment strategy is conducted for two major ports in Liaoning. The time at which the local government and the port enterprise would stop making investments and the final equilibrium are developed using the data from 2010. From the empirical results, it was found that investment in port capacity contributes greatly to the local government’s performance. Meanwhile, different investment ceilings are discovered for the port enterprise and the local government. This research is meaningful for discussing the institutional relationship between the local government and the port enterprise in China’s current decentralized port governance system.

This paper is a revised and expanded version of a paper entitled ‘Port expansion mechanism in the context of political achievement of local government: a special phenomenon in China’ presented at International Association of Maritime Economists 2012 Taipei Conference during 5th September –8th September.     

Federal ports policy

In contrast to the centralized port-planning framework that is utilized in some industrialized countries, the US relies on a complex and fragmented framework in which responsibility for the planning, development and operation of landside maritime infrastructure rests with State and local governments. It has been argued that the separation of the federal government from port policy was rooted in the port preference clause of the Constitution. This paper is an effort to determine whether the current decentralized port policy in fact stems from the Constitution and, to that end, reviews how over the years the US Supreme Court has construed the port preference clause in the Constitution. It was found that there is no evidence to support the assertion that the port preference clause has restricted the development of Federal port policy. Moreover, the decentralized and fragmented decision-making process that is evident today does not imply the absence of federal impact. Rather, it reflects federal involvement through multiple agencies and regulatory processes and is a conscious effort, consistent with other areas of transport infrastructure development, to retain local decision-making for infrastructure investments. It is concluded by raising the issue whether current federal involvement in ports (that is, existing federal port policy), through dredging, landside transportation improvements or subsidized capital, among other things, needs to be reappraised before a new round of capital intensive investment begins.     

Development of port service network in OBOR via capacity sharing: an idea from Zhejiang province in China

The ‘Silk Road Economic Belt and the 21st-Century Maritime Silk Road’ (One Belt One Road, OBOR) strategy initiated by the Chinese government has a significant impact on the business and logistics modes which involves Asia, Europe, Africa, and their adjacent seas. Many countries and ports are developing new strategies that are suitable for this economic environment. Compared with many ports in the world, the ports in Zhejiang province of China have a novel property. In addition to Ningbo-Zhoushan port, there are several other sea ports and river ports in that province. In this paper, we propose a concept of port service network that consists of a huge hub and multiple ports. Ports of small and medium sizes can share their capacities of different types of port service with the hub when the service capacities are integrated into the network. We develop a mixed integer nonlinear programming model to determine the optimal decisions in such a network with constraints on the budget to conduct integration. An optimization algorithm incorporated with a genetic algorithm is developed to solve large size problems. We provide managerial insights on the policies of government, including expanding port capacity, reducing fixed integration cost, and providing better financial condition.     

Spatial aspects of shoreline management in Puget sound reconsidered

Abstract

Shoreline management in the state of Washington attempts to provide opportunities for both urban and rural interests to express themselves. Local governments have wide latitude in determining the spatial patterns which they deem desirable. The state provides general guidelines to insure that local governments adhere to the policy of the act. On shores designated as shores of state‐wide significance the state has reserved the right to protect state interests over local interests. Since the Washington State Shoreline Management Act generally covers only 200 ft inland from the ordinary high tide line, and each local government develops its own management program, it is doubtful that nodal or spread development on a regional level in Puget Sound can be meaningfully addressed under its provisions. There may, however, be evidence of nucleation or spread patterns at the local level.     

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.     

Factors Influencing the Participation of Local Governmental Officials in the National Estuary Program

Participation by local governmental officials is not given the same attention in the literature as that of citizens, publics, technical experts, or stakeholders. Yet, local governments are often a keystone to successfully implementing and enforcing coastal management policies. Qualitative analysis of open-ended interviews with local government officials from three national estuary program applications in New England revealed factors related to nine themes that shaped decisions to participate or not. Three categories of factors help to clarify the different types of influence agencies have over local government officials' decisions about whether or not to participate: factors associated with the character of individuals, with the context, and with the process. This taxonomy helps to clarify the kinds of opportunities available to project leadership to influence local government officials toward participating in regional coastal management processes. An important finding is that project staff should listen and learn about the concerns of local government officials and then create a process that accommodates and overcomes barriers to their participation.     

Regional governance of port development in China: a case study of Shanghai International Shipping Center

When China enters the World Trade Organisation (WTO) and becomes more involved in the global economy, her major seaports will be pivotal places where the international shipping and terminal operators interact, conflict and co-operate with the local and the central governments. To demonstrate and understand these interactions, this article analyzes the case of the Yangtze River Delta (YRD), where the competition, co-operation and governance of Shanghai and Ningbo, the two largest ports on Chinese mainland, concern all stakeholders from the central and local governments of China to the container terminal operators and shipping lines overseas.

This paper first develops a conceptual framework for analyzing port development in a regional context. The article then introduces the case of the Shanghai International Shipping Center with a focus on the efforts of the Shanghai Government to establish a regional hub port, which also involves two nearby provinces. This case study reveals the course of the decision-making processes and the power networks currently governing the port development in the YRD. Two domains of port governance are discussed: the role of port authorities in port internal governance, and the crucial influences of local and central governments on the port external governance. It provides evidence that the power of shipping lines and international terminal operators are not as prevalent as in many ports in western countries. It is suggested that the lack of good regional port governance in the region is due to structural problems in administration.     

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.     

The potential role of public–private partnerships in the upgrade of port infrastructure: normative and positive considerations

There is a broad consensus on the need for the major expansion of many ports. Traditionally, ports and related facilities have involved significant levels of direct or indirect government ownership or some degree of government financing. Most governments, however, are reluctant to either borrow money to fund the needed additional capital infrastructure or to fund it directly. Public–private partnerships (P3s) are thus an attractive potential option. But are they the answer? This article examines the normative rationales for P3s and presents a positive theory perspective that focuses on the conflicting goals of public and private partners. It argues that the major government impetus for P3s is likely to be for physical port infrastructure with moderate levels of market failure, such as small to medium sized ports, and not for intangible port activities. Furthermore, small to medium sized port P3s are likely to be successful in terms of having relatively low transaction costs and lower total social costs than alternative provision mechanisms. Nonetheless, even in this situation, the different goals of public and private partners may give rise to conflict. Drawing on the global empirical evidence on P3s, this article proposes some institutional design features that will help to ensure P3 success.     

基于风险分担的政府投资项目代建合同总价控制

政府投资项目实施代建制是传统自建模式的制度创新,其投资控制的责任通过市场化手段转移给代建人承担并通过合同机制实现了投资控制的硬约束。代建合同中对于代建人投资包干总价的确定与调整方式的约定成为影响投资控制成效的关键问题。针对代建项目采用设计概算作为投资包干总价的确定依据的不足和产生的超概问题,引入风险分担机制,剖析投资控制目标确定的风险分担原则,应由政府委托人与代建人分别承担相应的投资变化的风险和投资控制责任。代建合同投资包干总价的固定总价部分,由代建人承担全部投资变化的风险;可调价格部分由政府委托人承担的投资风险发生后,需要调整投资包干总价;讨论了总价合同中风险分担条款的设定及风险发生后的调价方法。     

U.S. ports: evolution and structure

U.S. ports are facing competitive pressures similar to those being felt by ports elsewhere around the world. Despite the public enterprise nature of U.S. port authorities, they tend to function as 'business-like' organizations. This enterprise-like approach stems from their evolution from being primarily private railroad ports in the 19th century to public competitive port authorities in the 20th century. This paper provides an overview of the evolution of U.S. ports and the ongoing effect of earlier legislation, the varied resulting institutional structures, and current national and regional level issues. Although there is no national ports plan or strategy in the U.S.A. (the Constitution limits federal actions in the ports field) the federal government is involved in providing dredging services through the Army Corps of Engineers, navigation aids via the Coast Guard and other minor port-related services. U.S. ports typically come under the jurisdiction of state or local governments. Increasing competition coupled with other port issues (growing financial constraints, difficulties in obtaining dredging permits, environmental concerns and restricted landside access) is forcing some U.S. ports to enter into strategic alliances with others at a regional level.     

Pricing policy and operational controls in container terminals

Following a general discussion on port pricing policies and structures the author explores the argument that price in itself provides an inadequate focus of needs and preferences of port users, especially users of container terminals, and suggests a system of input pricing related to the sale of terminal capability on a time basis.     

The Coastal Barrier Resources Act: Has It Discouraged Coastal Development?

Despite an effort by Congress to design a market-based public policy to limit development on certain coastal barriers and protect the federal treasury from paying for recovery from expensive natural disasters, growth continued on these shifting sands. In enacting the Coastal Barrier Resources Act, federal policymakers may have overlooked the key role of state and local governments, as well as the role of local developers, landowners, and realtors in shaping development on coastal barriers. By itself, the act will not prevent development. In fact, it appears that development in areas designated under the act will occur if (1) development pressure is strong enough to overcome the disincentives posed by the act, and (2) state and local governments facilitate development. For example, a local government may substitute its own subsidies for those withdrawn by the federal government. Nothing in the act prevents this from occurring. This article examines the key forces affecting development in areas designated under the Coastal Barrier Resources Act (CBRA) and seeks to explain why development has occurred in some designated areas, despite the withdrawal of federal subsidies. Using case studies of selected coastal barriers designated by the act, as well as surveys of state coastal managers and key informants, the research shows that the Coastal Barrier Resources Act, by itself, will not prevent development from occurring in the designated coastal areas.     

基于项目生命周期的造船成本核算管理系统的研究与开发

从项目所需各种资源的消耗和占用数量入手,对造船成本核算系统的目标需求进行了研究分析,在与实现财务、物资、工时等系统数据共享集成的基础上,实现了对工资、辅助生产、制造费用、专用费用等的归集、分摊、转账等功能,并对系统的体系架构、分摊要素设置、数据流程和核算业务处理逻辑时序进行了论述。     

推进水运工程设计企业项目成本核算

阐述水运工程设计企业成本核算工作中存在的问题和推进项目成本核算的必要性,提出改进项目成本核算的思路及工作中应注意的问题。     

Seaports and the structural implications of the economic crisis

The 2008 credit crunch and the subsequent economic crisis ended a period that lasted over two decades wherein international seaports around the globe experienced double-digit volume increases. This chapter provides an analysis of the structural effects that the crisis has on seaports, focusing mostly on developments in Europe. It does so via an examination of (a) the crisis implication for each of the four major types of transport flows that account for the vast majority of port throughput worldwide; (b) the prospects for future capacity organisation and development, given the realignment of the involvement strategies that the various stakeholders (i.e., governments, port authorities, service providers, users, investors) endorse in reaction to the financial tsunami; and (c) the adjustment opportunities, that the trade downturn unintentionally provides, allowing for correction of existing misallocations in the sector via the deployment of relevant adjustment strategies by the related actors. Recapping the identified structural consequences, the final section concludes on the changing role and responsibilities of port authorities and the ‘new issues’ that will require further investigation in the post-financial tsunami era.