A dynamic model for marginal cost pricing of port infrastructures

ABSTRACT

A dynamic model for marginal cost pricing of port infrastructures links costs to system performance by combining a power-law function with time-dependent queueing analysis. Additionally, the model incorporates the marginal cost of capacity, including the effects of economies of scale. This allows the calculation of the marginal cost price under a dynamic framework. The model accounts for nonlinear behaviour of port demand, which is sensitive to price and service levels. The effects over time of cost and service levels on the port’s operational performance are quantified. The proposed model allows determining the optimal timing for capacity investment. The model is a starting point for the application of marginal cost pricing to ports. However, for practical application of such pricing method it is necessary to apply a system’s approach, as productivity and costs must be assessed at the terminal’s component level. This should allow the derivation of a marginal cost function at the terminal’s component level.     

Black Boxes - Pathetic progress but some success now in sight

Little has been written about the ship demolition market, an essential element in the supply/demand balance for shipping. Either technical or economic obsolescence may be the cause for scrapping a ship, where the latter is strongly influenced not only by anticipated freight market levels, but the rate at which more efficient ships are being introduced. The scrap value of a ship is a function both of the realizable value of the materials within the ship and cost of demolition. Both are strongly influenced by the cost structures prevailing in the likely country of demolition. The paper explores not only the fundamentals of the ship demolition market, but the trends from the 1960s to the present. The shipbreaking market has moved in that time from being West European-centred to Asian-centred, concentrating for some years in Taiwan, but now shifting to the Indian subcontinent.     

The economics of double-hulled tankers

A cost-benefit analysis is conducted on the double-hull requirements for oil tankers in United States' waters contained in the U.S. Oil Pollution Act of 1990. The benefits of reduced spillage are compared with the increased construction and operations costs of double-hulled vessels. In the most probable scanario, the expected benefits are only 20% of the expected costs. Double-hulls do not even show a positive net present value with the most favorable assumptions. Even if double-hulls prevent all of the spillage that occurs due to collisions and groundings, and that the damage per gallon spilled is as extensive as in the ‘Exxon Valdez’ incident, the benefits are under half of the costs.     

On the use of mathematical programming in the evaluation of transport policies

This paper focuses on the evaluation processes by which decisions regarding transportation alternatives can be assisted. A multidimensional approach usually called multiple criteria decision making is required to represent the complexity of transportation policy and systems.

The multiple criteria decision making techniques can be divided into two groups. The first is based on a ranking scheme approach and the second on a mathematical programming approach.

A multiple objective mathematical programming procedure known as Goal Programming is presented. The authors examined the use of that procedure in real transportation problems.

The results suggest that multiple objective mathematical programming techniques in general do not appear to be appropriate in transportation policy analysis involving mutually exclusive alternatives. Their use can be limited to special cases in the private sector.     

Review of computer software for traffic engineers

The mid‐1970s saw the initiation of several lengthy research and development programmes in the United Kingdom which culminated in a range of software for the traffic engineer. The early 1980s brought cheap, powerful microcomputers, thereby enabling the facilities offered by the software to be exploited to the full. This article describes the range of programs now available and in common usage for the design and appraisal of traffic management schemes in the United Kingdom, and suggests a few of the areas where some research and development effort is still needed.     

Examining the influence of firm performance on business risk-taking and the mediation effect of scale of operations in the container terminal industry

Container shipping and its related service sectors help accelerate globalization of the world economy. This industry has been experiencing rapid growth, prompting container terminal operators to increase their handling capacity in response. Providing container terminal services requires substantial capital investment in physical assets such as cargo handling facilities and information systems. On the other hand, operating container terminals is a long-term investment that typically spans several business cycles. Hence prudent asset management using appropriate tools is critical for container terminal operators to sustain their businesses. Generally, due to risk-adverseness, investors are unwilling to take more risk in their investment unless they can reap a higher return. Contrary to this argument, this study finds no direct influence of better firm performance as a proxy of higher return on business risk-taking by container terminal operators. Instead, scale of operations is positively associated with business risk-taking, suggesting that container terminal operators with a larger scale of operations are willing to take more business risk.     

Impacts of biodiesel blending on freight emissions in the Midwestern United States

We use a combination of petroleum–diesel models, datasets and tools along with biodiesel-specific corrections to create a roadway-level emissions inventory capable of evaluating spatial, temporal and scale aspects of fuel distribution options for the Midwestern US. Specifically, we compare the emissions of a year-round “low-blend” biodiesel implementation scenario, already under consideration in a variety of states, with a more strategic summer-only, interstate-only “high-blend” scenario. Our results indicate that spatial and seasonal distribution decisions do affect the overall emissions impacts of any biodiesel deployment, even those at low-blend levels. However, we also finds that changes in emissions due to biodiesel are considerably smaller than those anticipated from improvements to engine and control technologies.     

A Training Framework for Understanding Conflict in the Coastal Zone

The coastal zone is attractive for human settlement because it tends to be resource rich, providing a good location to generate incomes and livelihoods. Equally, however, it is a complex and powerful natural environment, which means that the coastal zone often becomes a focus of conflict with multiple users competing for limited space and resources. Understanding the causes of, and determining solutions to, the ensuing problems requires inputs from a range of analyses across sectors and disciplines. However, different disciplinary and sectoral approaches frequently use different investigative methods, language, and means of presenting results. This article presents a framework that has been developed in collaboration with Indian institutions over the past three years in an effort to address some of these fundamental problems of analysis and translation into policy action. Key components addressed by the framework are strengthening the capacity to practice, knowing how to proceed and how to find out what needs to be known using experience-based problem solving.     

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.