Lecture 5: Port Competition and Competitiveness Flashcards
What does competitiveness reflect?
Capability and ability. It is a comprehensive measure of an entity’s ability to succeed in the marketplace while ensuring sustainable economic growth and improved living standards for its population.
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What does competition imply?
Reflects the action and result. Struggle but does not exclude cooperation given the opportunities and threats
What is intra-port competition?
Competition between service providers within a port facility
Examples include cargo companies, ship chandlers, and bunkering operators.
What is inter-port competition?
Competition among port service providers located in different ports
This can occur in different regions and countries.
What drives port competition?
- Globalization and Trade Growth
- Infrastructure and Capacity
- Differentiation of Services
- Shipping Industry Consolidation
- Environmental Regulations
Who are the three decision makers in port selection?
- Shipping companies/Carriers
- Shippers
- Freight forwarders/third-party logistics (3PL) service providers
What factors contribute from the perspective of shipping companies? (List 3 )
- Cargo-generating potential
- Port charges
- Level of efficiency
- Nautical access
- Berth allocation policy
- Strategic fit with logistics network strategies
What factors do shippers consider in port selection?
- Port capability of cargo handling
- Port location
- Port connectivity
- Port charges and costs
- Port efficiency
- Port service quality
- Schedule and service reliability
- Port sustainability and environmental practices
- Risk of congestion
- Viable alternative routings
What additional factor do freight forwarders/3PL consider in port selection?
Information and communication
This factor is similar to those considered by shippers, with an emphasis on information flow.
What is the role of port networking?
Crucial for competitive advantage
It requires port interaction and coordination.
What does achieving a sustainable competitive advantage require?
Balancing competition and cooperation within the network
This balance is essential for long-term success.
What is port integration?
Combining operational efficiency, economies of scale, improved connectivity, innovation, and environmental sustainability
What is vertical integration in the context of ports?
A port expands control over the supply chain to improve efficiency and reduce costs.
Examples include owning terminals, ships, or logistics.
Who are the major players in port vertical integration?
- Terminal operators
- Shipping lines
- Inland logistics companies
- Digital platforms
What is horizontal integration in the context of ports?
A port expands by merging or partnering with other ports to increase market share and operational capacity.
What are the features of Port clusters and its key benefits (List 2)
- Geographical Proximity–> Reduces transport costs, increases synergy
- Complementary roles–> Specialisation & Market Diversity
- Strong Hinterland Connectivity–> Expands market reach, enhances efficiency
- Economies of Scale –> Reduce costs, handle mega ships
- Sustainability Focus –> Meets regulations, attract green shippers
What are the main factors differentiating port integration and collaboration?
- Structure: Integrated Ports operate as a single entity with shared management and governance; Collaboration: Seperate governance structures but work together on specific projects/ initiatives.
- Scope: Broad & permanent, encompassinf infrastructure, operations, governance & strategy
- Autonomy: Port loses some or all of their autonomy
- Legal Framework: requires formal legal agreements for mergers and acquisitions, often subject to regulatory approval.
- Investment: Requires significant investments in shared infrastructure, technology or management systems.
