ITF Round Tables

International Transport Forum

2074-336X (online)
2074-3378 (print)
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ITF Roundtable Reports present the proceedings of ITF roundtable meetings, dedicated to specific topics notably on economic and regulatory aspects of transport policies in ITF member countries. Roundtable Reports contain the reviewed versions of the discussion papers presented by international experts at the meeting and a summary of discussions with the main findings of the meeting.

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Port Competition and Hinterland Connections

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19 June 2009
9789282102251 (PDF) ;9789282102244(print)

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This Round Table publication discusses the policy and regulatory challenges posed by the rapidly changing port environment. The sector has changed tremendously in recent decades with technological and organisational innovation and a powerful expansion of trade. Although ports serve hinterlands that now run deep into continents, competition among ports is increasingly intense and their bargaining power in the supply chain has consequently weakened. Greater port throughput is meeting with increasing resistance from local communities because of pollution and congestion. In addition, local regulation is warranted but made difficult by the distribution of bargaining power among stakeholders. Higher-level authorities could develop more effective policies.
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  • Summary of discussions
    Maritime freight transport has experienced strong growth and profound change over recent decades. Freight volumes and container traffic in particular have grown with the intensification of global trade and the geographical dispersion of production. The industrial organization of the sector has evolved rapidly. These changes have rendered the ports business environment more challenging. Many agents along the supply chain have engaged in horizontal and vertical integration of activities. This has lead to more efficiency in the movement of cargo, but has reduced the number of players, with an attendant risk of abuse of market power. The market power of the ports vis-à-vis shippers and shipping companies has become correspondingly weaker.
  • The relationship between seaports and the intermodal hinterland in light of global supply chains
    The seaport-hinterland interaction plays an increasingly important role in shaping supply chain solutions of shippers and logistics service providers. Scarcity concerns, combined with concerns over the reliability of transport solutions, have led seaports and hinterland corridors to take up a more active role in supply chains. This contribution looks at port developments and logistics dynamics in Europe and proposes some steps towards a further integration between seaports and the hinterland. The key point put forward in this paper is that the competitive battle among ports will increasingly be fought ashore. Hinterland connections are thus a key area for competition and coordination among actors.
  • Responding to increasing port-related freight volumes
    Rapid growth in international trade over the last two decades has generated both benefits and costs. Costs have become increasingly visible in metropolitan areas – growing congestion, air pollution – and local communities are demanding solutions. Congestion and air pollution associated with increased international trade have become so severe in the Los Angeles region that port-related trade is facing increased regulation by both state and local agencies. Historically US ports have been remarkably autonomous. Their role as economic development engines is well-recognized by local leaders. Thus recent regulatory efforts represent a significant change in public policy.
  • Assuring hinterland access
    We argue that port authorities (PAs) should contribute actively to better hinterland access. We discuss different types of PA involvement as well as some reasons for such involvement. The analysis applies to landlord PAs with public goals. Landlord PAs take the initiative for the expansion and redevelopment of port infrastructure. Traditionally PAs have acted as landlords, but they are increasingly operating outside the landlord model.
  • The impact of hinterland access
    This paper examines the interaction between hinterland access conditions and port competition. Competition between ports is treated as competition between alternate intermodal transportation chains, while the hinterland access conditions are represented by both the corridor facilities and the inland roads. We find that when ports compete in quantities, an increase in corridor capacity by a region will increase its port’s output, reduce the rival port’s output, and increase its port’s profit. On the other hand, an increase in inland road capacity by a region may or may not increase its port’s output and profit, owing to various opposing effects. Essentially, while more road capacity reduces local congestion delays and moderates the negative impact of the port’s output expansion, it induces greater local commuter traffic and may moderate the effect by which a rise in cargo traffic reduces local commuter traffic, both of which reduces the port’s output and profit. Similarly, inland road pricing by a region may or may not increase its port’s output and profit. Finally, case examples for selected ports and regions are discussed.
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