Maritime liner shipping and the stevedoring industry: market structure and competition strategies

Globalization, liberalization, competition and spatial interaction are significant factors affecting the transformation of manufacturing industries worldwide. In the transportation and logistics industry, however, cooperation is becoming even more critical than competition in determining firms' efficiency. Cooperation has always characterized the liner sector in which strategic alliances, mergers and acquisitions have generated twin effects: notable increases in ship size and falls in freight rates. Meanwhile, the stevedoring industry is undergoing privatization-driven consolidation and the emergence of global pure terminal operators. This article focuses on vertical integration between global carriers and terminal operators. We address the following key current issues:

• dedicated terminals as a strategy for cutting costs and controlling integrated transport chains;
• the struggle for supply chain control, involving global carriers versus global terminal operators, driven by financial power and technical and managerial capability.

We close analysing one of the core problems of the market, namely the evolving role of the dedicated terminals. For the pure stevedores they represent an opportunity to secure a cargo, while in the hands of the liners they enable cost stability and the possibility to put pressure on pure terminal operators.     

The market for second-hand ships: Further results on efficiency using cointegration analysis

This paper examines the dynamic behaviour of second-hand prices of tankers and dry-cargo vessels over various time periods, with a view to determining whether or not the markets for such assets are efficient. It extends and re-analyses the results of an earlier study by Hale and Vanags, published in this journal in 1992. Using a more modern method of testing for cointegration, it is shown that both the tanker and dry cargo markets appear to be cointegrated, a fact which would suggest that these markets are inefficient. It is suggested that the existence of cointegration does not necessarily imply market inefficiency, if the factors that create the common trends are themselves stochastic in nature. With this in mind, it is argued that the evidence put forward in this paper is still consistent with market efficiency in the long run.     

Uncertain demand,modal competition and optimal price-capacity adjustments in air transportation

A new microeconomic model for the operation of an airline facing modal competition with uncertain total demand is developed to analyze optimal price capacity combinations. The novelty is the treatment of the capacity restriction, which is not viewed as affecting negatively individual preferences (e.g. probability of a full flight), but does influence aggregate utility. A mode choice model is used to represent unrestricted individual preferences assuming full availability (phone call demand); air capacity is treated as a variable that acts on the actual choice set. Restricted choices and total demand stochasticity are integrated in welfare calculations (users' benefits and profits). Numerical examples are given and results are analyzed in terms of load factors fare levels, and sensitivity to the stochasticity of requests.This research was partially funded by FONDECYT, Chile, Direction Génerale de l'Aviation Civile, France, the Andes Foundation and the Fulbright Commission.     

An Exploration of the Relationship between Timing and Duration of Maintenance Activities

The timing and duration of an activity episode are two important temporal aspects of activity-travel behavior. Understanding the causal relationship between these two variables would be useful in the development of activity-based travel demand modeling systems. This paper investigates the relationship between these two variables by considering two different causal structures – one structure in which time-of-day choice is determined first and influences duration and a second structure in which activity duration is determined first and affects time-of-day choice. These two structures are estimated within a discrete-continuous simultaneous equations framework employing a full-information maximum likelihood methodology that allows error covariance. The estimation is performed separately for commuter and non-commuter samples drawn from a 1996 household travel survey data set from the Tampa Bay area in Florida. The results of the model estimation effort show that the causal structure in which activity duration precedes or affects activity timing (time of day choice) performs better for the non-commuter sample. For the commuter sample, the findings were less conclusive with both causal structures offering equally good statistical measures of fit. In addition, for the commuter sample, all error correlations were found to be zero. These two findings suggest that time of day choice and activity episode duration are only loosely related for the commuter sample, possibly due to the relatively non-discretionary and inflexible work activity and travel.     

Optimal synthesis of function generation in steering linkages

This paper presents an approach to optimize planar mechanisms for function generation synthesis. It is applied to the design of different steering linkages used in road vehicles where the Ackermann condition is formulated as the objective function. Four different mechanisms are kinematically defined and synthesized in terms of the proposed method. Limitations of the size of the elements are also considered by means of inequality constraints. Solutions are presented as the difference between desired behaviour, established by Ackermann, and actual generated performance. The results show that the accuracy achieved by the proposed procedure is satisfactory for working conditions in this type of linkages.     

Industrial water dependency: The BCDC experience

The Bay Conservation and Development Commission (BCDC), has designated a number of shoreline sites around San Francisco Bay for exclusive use of water‐related industry. This is intended both to reduce future needs for Bay fill, and to reserve those waterfront sites needed for long‐term industrial growth. The Commission currently defines water‐related industries as those “requiring”; a shoreline site for water transportation. The Commission is now considering the use of an economic criterion for identifying water dependency. This involves comparisons of the uniquely water‐related benefits and costs to the firm to locate on the shoreline, as opposed to its location at an inland site. By limiting use of deepwater sites to those industries that are significantly water‐dependent under this criterion, long‐term economic efficiency is served, and the need for future Bay fill for industrial growth is reduced. The data and analysis required to implement an economic water‐dependency criterion do not appear to be a barrier to use of such a test in the regulatory process. Whereas water dependency is an important concern to BCDC, other factors, including environmental constraints, must also be weighed when evaluating industrial projects.     

A Sociological Approach to Maritime Studies: A Statement and Example

This paper is an attempt to illustrate the stance of the Soviet Union in the law of the sea debate in the light of Soviet ocean activities. The paper has two sections. First, it examines the range of Soviet ocean activities. The considerable extent of Soviet ocean use underscores the importance which the Soviet Union places on the law of the sea debate and its consequent active participation in the process of international negotiation. Second, the paper considers the published record of the Soviet Union in the United Nations seabed debate. In seven years of debate the United Nations General Assembly and the Ad Hoc and permanent Seabed Commities and sub-Commities have generated a considerable body of documantation reflecting the public policy of over one hundred States concerning the law of the sea. Soviet expressions of opinion alone cover more than five hundred pages of documentation. Specific Soviet positions can be considered within two ganeral preferences: the protection of traditional freedoms of the high seas and opposition to ocean control by either coastal States or by an independent international ocean authority. The paper shows how these preferences and the specific Soviet negotiating positions defend and promote the maritime interests of the Soviet Union.     

Shipper's councils: role and responsibility—a western view

This paper first presents arguments for having public sector port authorities. They can deal, flexibly and permanently, with property rights within their own areas. They can plan and regulate port areas comprehensively. They can provide ‘public goods’. They can deal, in various ways, with externalities. They can promote efficiency, whether their own (if they operate as a comprehensive port) or that of the private sector (if they are largely landlords). For example, if their policy is to rely on the private sector to produce efficiency through competition then they can see to it that there actually is competition and not any kind of cartel or monopoly. Examples are cited where this last function has not been performed. The exception for single-user ports is noted.

Against them are the general disadvantages of public authorities (or bureaucracies)—though examples are cited where port authorities had very small staffs. The common instances of ‘market failure’ may thus be contrasted with those of ‘government failure’. Finally, a pragmatic approach is advocated, tailored to the needs and resources of the country in question. The increasing effect of the economies of scale in port technology, and its limitation on competition, is, however, noted and to be discussed in the next paper.