Global Port Research Articles

Operational productivity and financial performance of pure transhipment hubs versus gateway terminals: An empirical investigation on Italian container ports

The sea–sea transhipment of containers between vessels has become a key part of the container handling activities in the global maritime shipping network constituting 25.8% of the worldwide container port throughput in 2017 (Drewry Shipping Consultants, 2018). Since the 1990s, the global port system has seen the development of pure transhipment hubs close to interoceanic passages (Straits of Malacca, Suez Canal, Panama Canal, etc.) and port sites at other strategic maritime locations. Some regional markets, such as the Mediterranean Sea, seem to offer the right conditions for the emergence of pure transhipment hubs characterized by a transhipment incidence, i.e., the share of sea-sea transhipped containers in the terminal's total container traffic, of >65% (Notteboom et al., 2019).Although prior academic papers have stressed main issues related to pure transhipment hubs' competitive and operational performance, no contributions have investigated their link with economic and financial performance. This paper aims at analysing the main drivers that are expected to shape transhipment hubs' profitability and to compare their financial performance with gateway terminals (focused on import/export cargo only) and terminals handling a mix of gateway and transhipment flows. A database is developed consisting of the operational, economic and financial data of main Italian container terminals for the period 2009–2020. An OLS statistical model is tested for investigating the relationships between economic-financial performance and technical-operational performance of pure transhipment hubs compared to gateway and mixed terminals.The findings reveal that, for the same operational performance, terminals predominantly focused on transhipment activities tend to reach significantly lower levels of profitability compared to gateway and mixed terminals. It is also demonstrated that these terminals have a lower ability to create a positive cash flow and income compared to gateway and mixed terminals. The research outcomes provide useful insights for both port managers and policy makers involved in the development and management of pure transhipment hubs.

Multi-hazard risk to global port infrastructure and resulting trade and logistics losses

Despite their economic importance, the risk that ports face from multiple natural hazards has not yet been monetised on a global scale. Here, we perform an asset-level risk analysis of global port infrastructure from multiple hazards, quantifying the risk to physical asset damages and logistics services (i.e. port-specific risk) and maritime trade flows at-risk (i.e. trade risk). We find that 86% majority of ports are exposed to more than three hazards. Globally, port-specific risk totals 7.5 USD bn per year, with 32% of the risk attributed to tropical cyclone impacts. In addition, 63.1 USD bn of trade is at-risk every year, with trade risk as a fraction of total trade being particularly high in Small Island Developing States. Our result underline that port resilience is determined by various critical factors, such as engineering standards, operational thresholds, recovery duration, that vary widely across ports, requiring tailored solutions to improve port resilience.

Development of GPCN Model to Assess Domestic and International Competition Patterns of Coastal Container Ports in China

The importance of a port’s strategic position has long been recognized, during which process inter-port competition is becoming increasingly fierce. This paper aims to assess the domestic and international competition patterns of 43 coastal container ports in China. A global port competition network model (GPCN) is developed based on the global liner shipping network (GLSN) model and the multiple linkage analysis (MLA) method. In the GPCN model, three competition indicators (competition degree, competition intensity, and competitive pressure) are proposed to quantitatively describe the competitive patterns of Chinese container ports. This study has found that ports tend to compete with other ports that have similar competition degrees, and competition among large ports may be more intense. Additionally, a port’s traffic volume is correlated well with its competitiveness; the larger Chinese ports, such as Shanghai, Shenzhen, Ningbo-Zhoushan, and Hong Kong, have put much more competitive pressure on their smaller competitors than they are subjected to, and Singapore and Busan ports are found as the main competitive threats to the development of Chinese coastal container ports. The methodology developed in this study can provide a good strategic decision-making and guidance tool to quantitatively assess the competition situations of other countries’ coastal container ports.

Impact of quarantine policies on port network performance and robustness during pandemics: a simulation-based analysis

ABSTRACT To contain the spread of the virus at ports, many countries have implemented quarantine policies for vessels from abroad during COVID-19. In response, vessels chose to skip the port to save time or undergo a 14-day quarantine to ensure critical supplies, both of which significantly affected the performance of the port network. However, due to the combined effect of many factors, data analysis techniques can hardly identify the impact of quarantine policies on the outcomes. Therefore, to enable both networkwide performance assessment and detailed evaluation for individual vessels and ports under such an unprecedented policy, a microscopic simulation model for the global port network (GPN) is desired. The proposed simulation method is based on real-world vessel movement data from Automatic Identification Systems (AIS) combined with a port database. It is found that the effect of the quarantine policy on a particular port consists of two parts, i.e. the direct impact caused by vessels’ port skipping and the indirect impact caused by network interaction, which is further determined by the location of, and the policy implemented by the port. Furthermore, the ability of the global port network to maintain its performance under different levels of pandemic situations and different rates for vessels to skip the ports requiring quarantine is investigated. Interestingly, in most cases, a moderate port skipping rate (mostly between 20% and 50%) could help improve network performance. The results and presented simulation method can assist policymakers in coping with COVID-19 and potential global catastrophes.

Managing risk of non‐indigenous species establishment associated with ballast water discharges from ships with bypassed or inoperable ballast water management systems

Abstract Ballast water is recognized as a leading pathway for the introduction of aquatic non‐indigenous species which have caused substantial ecological damage globally. Following international regulations, most international ships will install a ballast water management system (BWMS) by 2024 to limit the concentration of aquatic organisms in ballast water discharges; however, these new technologies may not operate as expected at global ports having variable water quality or may periodically malfunction. Using simulations informed by empirical data, we investigated the risk of non‐indigenous species establishment associated with BWMS inoperability and evaluated potential mitigation strategies. Scenarios considered included bypassed or inoperable BWMS achieving no reduction in organisms, and partially functioning BWMS with discharged organism concentrations exceeding permissible limits. These scenarios were contrasted to outcomes with fully functioning BWMS and to voyages where ballast water exchange (BWE) was used to mitigate risk. Partially functioning BWMSs were nonetheless beneficial, reducing organism concentrations in ballast and thus establishment risk. When a BWMS is bypassed or partially functioning, BWE is a useful emergency mitigation measure, reducing establishment risks more than partial BMWS. However, the greatest risk reduction was achieved when partial BWMS and BWE were combined. Voyage‐specific characteristics such as concentration of organisms at uptake and destination port salinity can affect the optimal management strategy for voyages when the BWMS does not achieve compliant discharges. Synthesis and applications. The risk of aquatic invasions and their associated ecological damages can be substantially reduced by using a ballast water management system (BWMS) and/or ballast water exchange (BWE). When a BWMS is inoperable, appropriate mitigation measures should be decided on a trip‐by‐trip basis considering voyage route and reason for BWMS inoperability (when known). BWE is a useful strategy for reducing invasion risk, except when uptake concentrations are very low. Combining BWE and partial BWMS always reduced risk compared with BWE alone, but did not greatly reduce risk when uptake concentrations were high.

The Impact of the Crude Oil Price on Tankers’ Port-Call Features: Mining the Information in Automatic Identification System

Ship navigation technical data contains a lot of information. In this paper, we explore a relationship between the crude oil price and tankers’ port-call features by mining the information recorded in Automatic Identification System (AIS), which extends the application field of ship navigation technical data and aims to help oil shipping enterprises and port enterprises to arrange operation plans in advance. We generate a monthly panel data over the period from 2010 to 2020 of major global ports located in main crude oil exporting countries from AIS data. By using the panel fixed-effect model and binary logit model, our empirical results innovatively present the tanker’s monthly port-call features are influenced by crude oil price fluctuation through four dimensions, that is the tankers’ port-call numbers, the average docking time, total gross tonnage of the docking tankers and the number of different docking tankers. With these variables, we attempt to analyze the relationship between crude oil price fluctuation on tankers’ port-call features. The results of the study are helpful to comprehensively understand the impact mechanism of the crude oil price on the tankers’ port-call features.

The Maritime Silk Road: Concerns for U.S. National Security

This article examines how China’s twenty-first century Maritime Silk Road impacts U.S. national security. While the literature frequently discusses the Belt and Road Initiative, the Maritime Silk Road and its impact on U.S. national security is notably lacking. This article examines the specific impacts on the U.S. Department of Defense and other government departments and agencies. The main findings reveal that the Maritime Silk Road is a U.S. national security concern because it degrades operational security, alters military force projection, and bypasses ethical procurement norms. The author articulates the importance of U.S. action in response to China’s global port influence, as well as recommends ways to counter each threat China imposes on the United States through the Maritime Silk Road.

The clustering strategy for stacks allocation in automated container terminals

ABSTRACT The heavy congestion at the global ports and the impact of the pandemic spread make the automated container terminal competitive. With the operations of more and more automated container terminals, the optimization of yard space allocation becomes one of the most urgent issues for improving the handling efficiency for the automated container terminal. To figure out the optimal clustering strategy to allocate the containers in the automated container terminal, this study investigates the stacks allocation with different scenarios. A novel stack-based allocation model is built to balance both the transportation distance and the allocation dispersion among blocks. Based on the model we built, we talked about the impact of efficiency of automated rail-mounted gantry crane and the berthing time for each vessel on the stacks allocation. The results show that the stack-based allocation with multi-batches in the same bay is suitable for the automated container terminal, while both the efficiency of the automated rail-mounted gantry crane and the berthing time will directly affect the total transportation distance for allocating the containers. The research is very inspiring for the terminal manager to choose the suitable clustering strategy and improve the yard space management for the automated container terminal.

The influence of COVID-19 epidemic on BDI volatility: An evidence from GARCH-MIDAS model

In this study, we use the sample data from Jan 22, 2020 to Jan 21, 2022 to investigate the impacts of added infection number on the volatility of BDI. Under this structure, the control variables (freight rate, Brent crude oil price, container idle rate, port congestion level, global port calls) are added to test whether the information contained in the added infection number is covered. In the GARCH-MIDAS model, we divide the volatility of BDI into the long-term and short-term components, then employ in the least squares regression to empirically test the influences of added infection number on the volatility. From the analysis, we find the added infection numbers effectively impact the BDI volatility. In addition, whether the freight rate, Brent crude oil price, container idle rate, port congestion level, global port calls and other variables are considered alone or at the same time, further the added infection number still significantly influences the volatility of BDI. By studying the ability of the confirmed number to explain the volatility of BDI, a new insight is provided for the trend prediction of BDI that the shipping industry can take the epidemic development of various countries as a reference to achieve the purpose of cost or risk control.

Quantifying the impact of pandemic lockdown policies on global port calls.

The recent experience of lockdowns during COVID-19 highlights the prolonged impact a pandemic could have on ports and the shipping industry. This paper uses port call data derived from the Automatic Identification System (AIS) reports from the world’s 30 largest container ports to quantify both the immediate and longer-term impact of national COVID-19 lockdown policies on global shipping flows. The analysis uses the Difference-in-Difference (DID) and combined regression discontinuity design (RDD)-DID models to represent the effects of lockdown policies. The combination of RDD and DID models is particularly effective because it can mitigate time trends in the data, e.g., the Chinese New Year effect on Chinese ports. This study further examines the potential shock propagation effects, namely, how lockdown policy in one country (i.e., China) can affect the number of port calls in other countries. We categorize ports in other countries into a high-connectivity (with Chinese ports) group and a low-connectivity group, using a proposed connectivity index with China derived from individual vessel trajectories obtained from the AIS data. The results provide a clearly measurable picture of the kinds of trade shocks and consequent pattern changes in port calls over time caused by responses to lockdown policies of varying levels of stringency. We further document the existence of significant shock propagation effects. As the risk of pandemics rises in the twenty-first century, these results can be used by policy makers to assess the potential impact of different levels of lockdown policy on the maritime industry and trade flows more broadly. Maritime players can also use findings such as these to manage their capacity during lockdowns more effectively and to respond more flexibly to changing demand in seaborne transportation.

Impact of local port disruption on global container trade: An example of stressing testing Chinese ports using a D-vine copula-based quantile regression

In the shipping market, ports are increasingly interconnected in the global container network. A port disruption in one place can lead to a chain effect on subsequent ports. Nowadays, China's container port throughput accounts for around 30% of the global port throughput, manifesting its essential role in the global container trade system. Therefore, any disruption in Chinese ports could have a cascading effect on the world container trade. This study explores the potential impact on the container main trading lanes given a stress scenario for a number of Chinese ports. We are particularly interested in the degree of risk spillover to the different trading lanes. The stress scenario used in this study is a severe drop in the container throughput in major Chinese ports. This drop will be reflected in quantiles of the respective throughput distributions that are close to zero. D-vine copula-based quantile regression is used to measure the throughput impact of stressed Chinese ports as covariates on other response container trading routes. Copula is a powerful tool to measure the tail dependence structure between throughputs of major Chinese ports and major container trading routes. Results show that port disruptions in China severely impact the major container trading routes. The Asia to Sub Saharan Africa route is extremely vulnerable to downside risk given any port disruption event in China. We have also compared the results with the historical trade and port call data. The results provide significant implications for container shipping risk management.

Marine fuel hedging under the sulfur cap regulations

This paper examines the hedging potential of crude oil financial derivatives in the marine industry and concentrates on the dependence between marine fuels and crude oil futures. We argue that marine fuel consumers and producers can reduce uncertainty regarding their portfolios under environmental regulations aimed at air pollution reduction. Our results show that uncertainty can be reduced up to 72%. In addition, we find that complex dynamic hedging strategies do not provide significant benefits compared to the static method, and asymmetries in dependence structures are not driving the results. We also identify Gasoil and Brent Crude futures as the universal hedging instruments to manage uncertainty across the global ports.

Integrated berth and yard space allocation under uncertainty

Improving container ports’ operational efficiency to reduce the delays at ports concerns global port operators significantly. Optimizing the tactical level allocation of quay side and yard side resources to vessel calls is a typical lever to mitigate the delays in operations. Another lever is by strategical level planning that re-adjust the preferred visiting time windows of vessel calls. It aims to absorb the delays at the scheduling stage rather than in the operations stage. This paper integrates the planning and operations at container ports to jointly optimize strategical level planning and tactical level berth and yard space allocation under uncertain vessel arrival times and uncertain numbers of loading/unloading containers. The problem is formulated as a two-stage stochastic integer programming model. To solve it, we develop an original decomposition algorithm that passes columns of second-stage problems to the first-stage problem to approximate the second-stage decision making. Numerical experiments are conducted to validate the effectiveness and efficiency of our proposed algorithm. Some managerial implications for port operators are also obtained.

Optimizing Berth-quay Crane Allocation considering Economic Factors Using Chaotic Quantum SSA

ABSTRACT With the regular development of the global epidemic, the global port shipping supply is tight. The problem of port congestion, soaring freight rates, and hard-to-find container space has emerged. This paper proposes a new joint berth-quay crane allocation model, namely E-B&QC, by taking the minimum of the time in the port of the ship, the cost of extra transportation distance for collector trucks in the land area of the port, and the cost of extra waiting time for ships. Then, the deficiencies of the sparrow search algorithm (SSA) are considered in solving the E-B&QC model, and the SSA is improved based on the three-dimensional Cat chaos mapping and quantum computing theory. Chaotic Quantum Sparrow Search Algorithm (CQSSA) is proposed, population individual coding rules are formulated, also E-B&QC model solving algorithm is established. Finally, a new berth-crane allocation optimization method, namely, E-B&QC-CQSSA, is proposed. Subsequently, the feasibility and superiority of the proposed allocation model and solution algorithm are tested according to the actual data of a small river port in the south and a medium-sized river port in the north. Simulation examples show that the E-B&QC model can develop different high-quality solutions for container ports under different working conditions, and the more complex the actual situation of the port, the more significant the optimization effect. The proposed CQSSA for E-B&QC model can obtain a better solution.

System-based barriers for seaports in contributing to Sustainable Development Goals

PurposeThe main purpose of this paper is to identify the reasons for the stagnant behaviour of seaports contributing towards Sustainable Development Goals (SDGs).Design/methodology/approachGlobal seaport sustainability practices that correspond with SDGs were identified through an extensive literature review. In total, five focus interviews were carried out with port managers in Sri Lanka to identify the existing knowledge about seaport sustainability, and the reasons for disparities between the global standards and country-level port sustainability practices. Data collected from a questionnaire survey of 55 seaport terminal managers in Sri Lanka were analysed using exploratory factor analysis (EFA) and thematic analysis.FindingsDeficient collaborative policies, structural and managerial constraints, market constraints and the absence of a well-established SDG-driven global port framework were identified as significant barriers for seaports to contribute towards SDGs.Social implicationsIdentifying barriers in implementing sustainable practices in ports help the responsible authorities tackle them. Hence, seaports in return and the wider society benefit from the spillover effects of port operations aligning to SDGs.Originality/valueThis paper provides port organizations insights on the barriers needing to be addressed in their operational and management systems to best incorporate practices aligning to SDGs in seaports.

Piling up: Cargo Paperwork in a Global Port

Piling up: Cargo Paperwork in a Global Port

Pier Competitor: China's Power Position in Global Ports

Abstract China is a leader in the global transportation industry, with an especially significant position in ocean ports. A mapping of every ocean port outside of China reveals that Chinese firms own or operate terminal assets in ninety-six ports in fifty-three countries. An original dataset of Chinese firms' overseas port holdings documents the geographic distribution, ownership, and operational characteristics of these ports. What are the international security implications of China's global port expansion? An investigation of Chinese firms' ties to the Party-state reveals multiple mechanisms by which the Chinese leadership may direct the use of commercial port assets for strategic purposes. International port terminals that Chinese firms own and operate already provide dual-use capabilities to the People's Liberation Army during peacetime, establishing logistics and intelligence networks that materially enable China to project power into critical regions worldwide. But this form of networked state power is limited in wartime because it depends on commercial facilities in non-allied states. By providing evidence that overseas bases are not the sole index of global power projection capabilities, findings advance research on the identification and measurement of sources of national power. China's leveraging of PRC firms' transnational commercial port network constitutes an underappreciated but consequential form of state power projection.

Financial professionals and the formation of proprietarian ideology

Financial professionals and the formation of proprietarian ideology

Seaport's investment under disaster information asymmetry between public and private operators

This paper analytically examines a seaport's capacity and adaptation investments when faced with disaster risk. A landlord port is studied, which is consisted of an upstream public port authority and a downstream terminal operator (public or private). Compared to public sectors (i.e., the public port authority and public terminal operator), the private terminal operator possesses more accurate disaster information that is obtained from its richer experience from global port operations and more resources/willingness to acquire such information. With the private terminal operator, the public port authority can be updated with more accurate disaster information. A two-stage game is solved, with the public port authority making capacity and adaptation investments at the first stage, and the terminal operator setting port charge/output to shippers at the second stage. Our analytical results suggest that the more accurate disaster information offered by the private terminal operation can help port authority rationalize its investments (both capacity and adaptation), benefiting the social welfare. But the private terminal operator is also intended to abuse the monopoly market power by raising service charge. Especially when the market size is high, such negative effect of market power abuse dominates and the benefits of more accurate disaster information, harming the social welfare and shipper surplus. The accurate disaster information of private terminal operator is more valuable when its revealed disaster risk is lower than public sector's perception. This would encourage port's capacity and adaptation investments to approach the socially optimal level. However, such more accurate information is less valuable if it suggests a high disaster risk, or when the adaptation investment cost is high. In this case, the public port authority is still reluctant to raise adaptation investment with such more accurate information. To summarize, when faced with disaster information asymmetry, the port authority should consider privatizing terminal operations either when the market size is small, or when the adaptation investment cost is low.

Environmental sustainability maturity system: An integrated system scale to assist maritime port managers in addressing environmental sustainability goals

The environmental management structure adopted by port managers with management systems such as ISO 14,001 or EMAS certification provides the basic foundation of environmental sustainability. However, to manage the complexity and the specific characteristics of marine transport activities, port managers must utilize additional sustainability tools to build upon the port's basic management systems structure. This study demonstrates through a case study of Tanger Mediterranean Port Authority, Morocco, and the port of Aalborg, Denmark, two types of maritime ports, that the use of an environmental sustainability maturity system provides the needed integration tool to address specific sustainability issues based on port operational similarities. The identification of sustainability indicators by port managers in monitoring and assessment of environmental management systems for this study was first presented by the authors at an international conference in February 2021.The following study measures the previous identified indicators to demonstrate that as port operations expand to handle increased global trade, the use of an environmental sustainability maturity system guide will assist global port managers in identifying, assessing, prioritizing, and meeting environmental sustainable development goals. The results of this study demonstrate the importance of port managers using an environmental sustainability maturity system guide as a key operational tool in meeting environmental sustainability objectives, which includes port stakeholder input and assessing port operations that impact climate change. These results also provide a basis for continued research on how to optimize port operations to stay competitive in a growing global economy using environmental sustainability practices.