Container Port Industry Research Articles

Hub port choice and shipping connectivity in Southeast Asia during COVID-19 pandemic: implications for post-pandemic competition landscape

ABSTRACT The COVID-19 pandemic has had a major impact on the container shipping and port industry in terms of its reach and scale. The research analyzes the impact of COVID-19 on hub port choice and shipping connectivity using the case of major container ports in Southeast Asia. This study enriches the definition of connectivity and proposes a new research approach that differentiates the order of port-call for mainline services. The research approach is applied to the case of major container ports in Southeast Asia for the Asia-Europe trade route. The study further analyzes hubbing strategies of major shipping lines and alliances with the application of data mining on global satellite ship data. Findings indicate shipping connectivity to have grown in Singapore particularly at the expense of Port Klang during the COVID-19 pandemic as evidenced by changes in the shipping networks of The Alliance and Ocean Alliance. The research offers important policy and managerial implications concerning the post-COVID competition landscape covering the aspects of joint venture terminals, shipping alliance networks, and container port development.

Understanding the impact of demand shocks on the container port industry

The Covid-19 pandemic has severely impacted the world economy, generating an unprecedented shock that pushed carriers to adapt to the collapse of demand. Most of the related adaptation actions (e.g., blank sailings) appear as temporary initiatives being insufficient to reach a long run equilibrium. Moreover, while carriers managed to adjust their own supplied capacity to the ongoing crisis, the port sector has been greatly impacted by the fall in transport demand, not being able to counteract the demand shortages as effectively as the carriers. Against this backdrop, the paper introduces a model for assessing the effects of demand shocks (e.g., due to the pandemic) on the integration strategies of carriers. We focus on the possible initiatives that demand shocks may trigger on the horizontal and vertical integration among the actors of the shipping industry. In doing so, the present study provides useful insights for better understanding potential future market modifications and their impact on social welfare. Using non-cooperative games, profit-maximising strategies, in case of such integrations, are compared in order to study how carriers and terminal operators might react to demand shocks in the medium and long run.

CLUSTERING TURKISH CONTAINER PORTS BASED ON PHYSICAL ATTRIBUTES AND EFFICIENCY SCORES

Due to the significant impact of port performance on overall performance of global supply chains, enhancing the efficiency of terminal operations is an important task for ports to achieve a competitive edge. By acknowledging the role that efficiency plays in port competition, there are many research in the literature revealing the relative efficiencies of ports that are under investigation and providing managerial implications for the ones that are relatively inefficient. However, in many cases, the results obtained from the efficiency analysis can be misleading on its own as the ports may have different natures in terms of their size, cargo flow potentials or the environment that they are embedded in. Therefore, focusing on Turkish container ports, our study aims to classify the ports by taking both their physical attributes and efficiency scores into consideration. In order to determine the efficiency scores our study applies data envelopment analysis and the classification of the terminals is carried out by the application of cluster analysis. Results of the clustering lead to better assessment of benchmarking options for the ports and provide a general overview of the characteristics of Turkish container port industry.

The factors affecting the sea transportation in the new globalization era

Purpose- to identify the variables that define the new globalization model from the point of view of the container shipping and port industry and to rank these variables by their importance. Methodology- A research process involving both qualitative (semi-structured interview) and quantitative method (Fuzzy AHP) has used to collect and analyse data. Findings- According to the findings, there are 9 basic variables that will affect maritime transport and the port in the future. Conclusion- the most influential variables of the new globalization model that will affect the maritime transport in the future will be cybersecurity threat, Industry 4.0 technologies and climate change.

A research on the factors of the new globalization model influencing the maritime transport

After the global financial crisis in 2008, world economy and trade have taken place in a radical change. Especially after 2012, global economic development is far from the rapid growth rates recorded in the 90s and 2000s. This term is called "New Globalization Era" and this era emphasizes the real-time economy. The aim of this study is to identify the variables that define the new globalization model from the point of view of the container shipping and port industry and to rank these variables by their importance. According to the results, it is expected that the most influential variables of the new globalization model that will affect the maritime transport in the future will be cybersecurity threat, Industry 4.0 technologies and climate change.

Air emission inventory of container ports’ cargo handling equipment with activity-based “bottom-up” method

With the rapid development of China’s container port industry, the emissions of air pollutants in port areas have been increasing. Cargo handling equipment as a non-road mobile source of emissions has become a focus of public attention. This article adopted a full activity-based “bottom-up” method to establish the inventory of emissions by cargo handling equipment at a container port. Drawing on the OFFROAD model, we conducted investigation and analysis of cargo handling equipment holdings, activity levels, and equipment-related parameters and modified the emission factors. The Nanjing Longtan Container Port was taken as a case study. Results show that in 2014, emissions by cargo handling equipment of the Nanjing Longtan Container Port were as follows: PM10 4.25 t, PM2.5 3.91 t, NOx 82.98 t, SOx 1.06 t, CO 23.84 t, and HC 16.39 t, all lower than results from an earlier research based on 2013 fuel consumption data. Cargo handling equipment produced more PM and HC emissions than any other emission source at the port. The method and main conclusions of this article provide support for future work on energy conservation and emission reduction in port areas.

Comparing the productivity of Norwegian and some Nordic and UK container ports An application of Malmquist Productivity Index

This article measures productivity changes during 2009-2014 of the six largest Norwegian container ports against 14 similar small- and medium-sized ports in the Nordic countries and the UK. The approach used is the data envelopment analysis (DEA)-based Malmquist productivity change index (MPI), which carries out a decomposition isolating the technical progress of the efficiency improvement. The major findings are: 1) the sampled Norwegian ports seem to perform better than their international counterparts in terms of efficiency scores; 2) when productivity growth over time is considered, the Norwegian ports appear to be overperformers but a statistical test proves that they are not; 3) overall, total productivity increased by approximately 0.6% per year for all ports considered and this progress is explained more by technological improvements and less by efficiency change, which declined during the period studied. This study provides Norwegian decision makers with new information regarding the performance of Norway's container port industry.

Dealing with uncertainty and volatility in the port industry network: social and instrumental antecedents of “clique” survival

The recent proliferation of inter-firm collaborative linkages within the container port industry is progressively shaping a complex architecture of voluntary ties among terminal operators, i.e. an inter-organizational network. Within the overall industry network, some stable groups of densely interconnected firms emerge suggesting the existence of “cliques” where firms repeatedly cooperate with each other and develop strong and durable ties. The growing pressure exerted by economic uncertainty and market volatility on clique stability stimulates a fruitful academic debate on clique survival and its determinants. The present contribution investigates social and instrumental antecedents of clique survival, focusing on equity joint ventures engaged by terminal operators in a 10-year time frame (2002–2011). For this purpose, this study introduces a longitudinal network analysis of inter-firm relationships. Research hypotheses are tested performing binomial logistic regression analysis. In line with network theory assumptions, the outcomes corroborate the explanatory role of a number of social (i.e., cultural similarity and organizational mismatch) and instrumental (i.e., the presence of core firms within the clique and clique equality) antecedents in the survival of cliques. The results, indeed, bring valuable implications for both academics and practitioners.

Traffic consolidation in East Asian container ports: A network flow analysis

The proliferation of hub-and-spoke operations in maritime container transportation has resulted in the widespread consolidation of traffic flows. Utilising liner shipping network configurations, this paper assesses the impact of freight traffic consolidation in the container port industry by exploring the spatial pattern of traffic flow movements and identifying the variety of roles that container ports play within this context. On the basis of the network concept, the spatial inequality of freight traffic consolidation is determined by the density and direction of all meaningful connections (i.e. significant flows) identified by applying Multiple Linkage Analysis (MLA) to an initial traffic flow matrix.The effectiveness of the chosen methodology is tested empirically using a sample comprising the 18 major container ports in East Asia, together with another 21 important container ports located on the East–West trading route. Based on this sample network, the spatial structure of traffic flow consolidation reveals the nature and structure of hub-and-spoke operations within a port system, the relative hub-dependence of ports, the variety of roles which individual ports play within the overall structure of inter-port interactions and the hierarchical configuration of the port industry structure. The paper concludes that MLA offers new insights into the distributional inequality of traffic flows, the spatial and economic interactions between ports and the extent to which hinterlands overlap. Furthermore, the analysis clearly shows that inter-port relationships can no longer be evaluated as isolated phenomena; any change in a specific port’s competitiveness will directly impact upon the structure of the whole maritime transportation system. Port authorities and terminal operators will need, therefore, to carefully analyse and disentangle specific inter-port relationships in order to provide the most appropriate basis for their decision making.

Unveiling co-operative networks and ‘hidden families’ in the container port industry

Over the last few years, the progressive scarcity of land for greenfield projects in ports and the enormous financial resources required to realize new terminal facilities have induced international terminal operators (ITOs) to enter in various types of agreements. In particular, ITOs have growingly resorted to equity joint-ventures (EJVs) to develop new infrastructures and share project risks.This manuscript introduces a multi-layer conceptual framework and investigates the extent of EJVs through a network analysis of inter-firm communities across various nations. The study has been performed on a data set that includes all port facilities operated in 2010 by ITOs. Indeed, 427 terminal facilities and 250 container port operators, that is 40 ITOs and 210 local firms, have been examined. Results show the different co-operative attitudes of ITOs and demonstrate that firms co-operate in a selective way, disclosing emerging patterns and hidden networks of relationships.

Entry mode choices in international markets: examining the antecedents of service firms' strategies

The intensification of markets globalisation and the diffusion of internationalisation strategies across various businesses, led the academic literature to challenge the notion of entry modes in international ventures. Nevertheless, with specific regard to soft-service industries, only a few authors investigated the entry-mode behaviour of firms for testing the applicability of traditional theories. Therefore, this paper investigates the antecedents of firms' entry choice on a quantitative basis, focusing on the wholly owned subsidiary/joint venture dilemma. The empirical analysis is conducted on 416 overseas market entries in the container port industry. The manuscript proposes and tests an eclectic model for evaluating the determinants of foreign entry in soft-service industries, including internal, external and cross-cultural factors.

80 million-twenty-foot-equivalent-unit container port? Sustainability issues in port and coastal development

The container port industry has experienced phenomenal growth over the past decades since the era of containerisation. The continuous population growth, urbanisation and industrialisation will continue to propel seaborne commodity trades which are largely handled via ports. Given that the four busiest container ports of Shanghai, Singapore, Hong Kong and Shenzhen handle significantly high throughputs, this research aims to examine their likely growth paths, sustainability issues in port and coastal development and related policy implications. The paper uses a longitudinal approach to analyse growth patterns that are exhibited by the selected ports in 1990–2010. The results of which will be used to derive scenarios for throughput growth and additional quay length required up to 2025. Container ports could expect to face immense pressure for their traffic-handling systems given that container throughput is projected to increase by several times within the next 15 years. The research contributes to both policy and research by addressing the need for a balanced approach in sustainability for port and coastal development. Increasing capacity does not mean that ports must resort to new terminal/berth construction extensively. If the decision is made to accommodate this growth in throughput, innovative solutions and flexibility in capacity expansion will also be required to accommodate the addition to traffic given the scale involved so as to alleviate pressures on spatial demand and the environment.

Network effects in the East Asia container ports industry

This paper proposes an integrated set of 4Cs indices, namely, centrality index, competition index, congestion index and concentration index to examine network effects in the East Asia container port industry. Empirical analysis confirms that larger ports enjoy greater direct network effects related to economies of scale, whereas, smaller ports leverage on indirect network effects to widen their scopes of influence to attract vessel calls. Ports tend to engage in more competitive interactions with their counterparts within the same region, even though cooperative relationships among ports across regions are beneficial. In the light of the empirical results, the paper proceeds to explain some important managerial and policy implications.

The hierarchical configuration of the container port industry: an application of multiple linkage analysis

This paper aims to provide a hierarchical configuration of the container port industry. It attempts to do so by determining a port hierarchy and then, utilising this, deriving the nature of the spatial interactions between sample ports in East Asia. The former is determined by assessing the relative importance of a port within the given network, and the latter is mainly based on the significance of network flow movements. Rather than focusing purely on the economic or topological meaning or significance of the available shipping capacity, this paper aims to determine port hierarchy by addressing the spatial profile of network flow data as a supplementary indicator. An approach based on graph theory—Multiple Linkage Analysis—is described and applied to examining the profile of capacity flow on each linkage within a sample network consisting of 39 major container ports on the main east–west routes. The value on a linkage is defined in terms of the available shipping capacity between pairs of ports within a given unit time. As the output from this analysis, all significant connections are separated out from the initial flow matrix. The position of a particular port within the network port hierarchy relies upon the number of significant flows connected to the port and the origins/destinations of those flows. The results reveal a strong correlation between the importance of a port as indicated by its position in the hierarchy and the number of significant connections into or out of it. A further clustering analysis, based on the above distinction, is performed for the hierarchical mapping of the container port industry in a selected area and to provide a better understanding of inter-port competition.

A Study on Productivity Factors of Chinese Container Terminals

The container port industry has been variously studied by many researchers, because the contemporary container transportation and container port industries play a pivotal role in globalization of the world economy. For container terminals, the productivity, affected by many factors, is an important target in measuring container terminal performance. Under this background, finding the critical factors affecting the productivity is necessary. Regression analysis can be used to identify which independent variables are related to the dependent variable, and explore the relationships of them. The aim of paper is to evaluate the factors affecting the productivity of Chinese major terminals by using a regression statistical analysis modeling approach, which is to establish the variable preprocessing model (VPM) and regression analysis model (RAM), by means of collecting the major Chinese container terminals data in the year of 2008.

Benchmark optimization and attribute identification for improvement of container terminals

The aim of this paper is to optimize the benchmarks and prioritize the variables of decision-making units (DMUs) in data envelopment analysis (DEA) model. In DEA, there is no scope to differentiate and identify threats for efficient DMUs from the inefficient set. Although benchmarks in DEA allow for identification of targets for improvement, it does not prioritize targets or prescribe level-wise improvement path for inefficient units. This paper presents a decision tree based DEA model to enhance the capability and flexibility of classical DEA. The approach is illustrated through its application to container port industry. The method proceeds by construction of multiple efficient frontiers to identify threats for efficient/inefficient DMUs, provide level-wise reference set for inefficient terminals and diagnose the factors that differentiate the performance of inefficient DMUs. It is followed by identification of significant attributes crucial for improvement in different performance levels. The application of this approach will enable decision makers to identify threats and opportunities facing their business and to improve inefficient units relative to their maximum capacity. In addition, it will help them to make intelligent investment on target factors that can improve their firms’ productivity.

Global maritime transport and logistics: Recent developments and implications for Asian container ports

Globalisation and transport revolution, logistics integration and the consequent expansion of port area and hinterland in the maritime industry have redefined the functional role of ports in global logistics and supply chains and have generated a new pattern of freight distribution. The rapidly increasing world trade in the last decade has brought about a new round of port (especially, container port) development and caused the restructuring of the world port network as well as more intensive inter-and intra-port competition. This phenomenon again requires a new approach towards port development and related planning. This paper aims at, in a holistic way, providing an overview of the recent developments in maritime transport and logistics in the global scale and discussing strategic implications for the container port industry in the Asian context.

A Review of Theories on the Factors for Excess Competition in the Container Port Industry and Its Policy Implications

A Review of Theories on the Factors for Excess Competition in the Container Port Industry and Its Policy Implications

Port infrastructure efficiency: the Europe-Mediterranean case

The objective of this research is to estimate the infrastructure efficiency of individual ports, to investigate factors that influence efficiency and to shed light on infrastructure investment strategies. Thirty-two container ports in Europe-Mediterranean area have been assessed using stochastic frontier analysis. The result indicates the exogenous (environmental) factors, trading volume, which has a strong impact on port efficiency. Moreover, the infrastructure efficiency is improving over time, but the annual percentage change in output is slower than the technological change. This phenomenon is suggested due to over capacity, one of the most featured characteristics in container port industry. Different investment strategies to utilise and control over capacity in port management practice have been explored and suggested.

Internationalisation and Consolidation of the Container Port Industry: Assessment of Channel Structure and Relationships

The international consolidation of the container port industry is a relatively recent, yet radical trend in international shipping and logistics. Global strategies of vertical and horizontal integration evolving around port ownership and operations are undertaken by a variety of market players, both within and outside the international shipping and logistics markets. However, while much of the available literature on the subject has focused on the bases and various motives behind the change, little work has addressed the impacts on channel structure and relationships, including such aspects as control, power and conflict. By channel, we refer to an organised network of institutions that form the combined physical and non-physical path taken by goods and services as they move from original supplier to final consumer. However, in the context of this paper, the scope of the distribution channel is reduced to active members of the international shipping and logistics industry, that is, shippers, ocean carriers, ports, agents and intermediaries. This paper investigates the extent of channel power, conflict, role, performance and strategic concentration of shipping lines as international container terminal operators. A structural equations model is used to assess the impacts of global factors and consolidation on the container port industry, and test whether the direction of change would result in an increasing or decreasing risk of commoditisation and footloose mobility.