Understanding Port Choice Determinants and Port Hinterlands: Findings from an Empirical Analysis of Spain

Abstract

In the present work, the determinants of port choice regarding container cargoes from specific hinterland regions are analyzed, based on an empirical study of Spain. Previous work has been extended by including novel explanatory variables for the market shares of ports in hinterland locations. Discrete choice theory is the methodological approach used here. More specifically, a nested logit model is proposed. As potential explanatory variables, the model includes maritime connectivity to specific overseas regions and intermodal connectivity of the port to specific hinterland locations. The empirical analysis is based on detailed Spanish customs data. The analysis shows that all variables hypothesized to influence the market share of a port in a specific hinterland region (i.e., road distance to the hinterland region, maritime distance, maritime connectivity of the port, and intermodal connectivity of the port) indeed influence significantly its market share, with the signs as expected. The findings add to the understanding of port competitiveness in specific regions with three conclusions: First, port hinterlands are relational, in the sense that they depend on the overseas origin or destination of the cargo; Second, the analysis suggests that ports that predominantly handle transhipment cargoes may have a “transhipment orientation,” which is an impediment for reaching hinterland markets; Third, intermodal connectivity is a determinant of the market share of a port in a certain hinterland region.