Kevin Cullinane

ECONOMIES OF SCALE IN LARGE CONTAINERSHIPS: OPTIMAL SIZE AND GEOGRAPHICAL IMPLICATIONS.

Abstract In recent years, liner shipping has experienced an explosion in containership size. This is explained by the economies of scale in utilising such ships. This paper presents a model which quantifies the economies of scale in operating large containerships. A sensitivity analysis is conducted to test the effect of various input scenarios and the results analysed to determine optimal containership size with respect to different operational scenarios. Inferences are then drawn concerning the optimal deployment of the existing fleet of large containerships, likely future trends in containership size and deployment and the impact these trends will have upon container operations, logistical systems and ports.

Identifying influential attributes in freight route/mode choice decisions: a content analysis

The adoption of Stated Preference (SP) techniques in freight route/mode choice studies requires the identification of the major modal attributes which influence these decisions. While there is a need to limit the number of attributes and attribute levels in order that the number of combinations (decision alternatives) presented to respondents is at a manageable level, it is also important that these variables are accurately identified and specified. In the majority of empirical studies, methods employed for performing this task have tended to revolve around either focus groups, interviews, unscientific syntheses of previous studies or even merely the feel or hypotheses of the researchers. This paper explains and presents the application of a content analysis methodology to the (mostly Western) freight route/mode choice literature, thereby providing a formal approach to the identification and justification of the attributes that are to be utilised within (Stated Preference) SP experiments. The implications for attribute selection in empirical studies are discussed, with particular reference to the Eastern European context.

A stochastic frontier model of the productive efficiency of Korean container terminals

A central objective of port privatization and/or deregulation policies is stimulating greater efficiency by engendering a more competitive market and commercial approach to management. Korea provides a prime example of a nation that is implementing such policies. Also, its ports play a pivotal role in world shipping, particularly in the ever-burgeoning container market. The success of these policies in increasing the productive efficiency of Korean container terminals is assessed. The UK container terminal sector provides a useful benchmark for comparison since privatization and deregulation have formed an integral part of UK port reforms for nearly 20 years and the effect on efficiency, having had time to mature, will be much easier to gauge. The stochastic frontier model is justified as the chosen methodology for estimating productive efficiency levels and is applied to cross-sectional data under a variety of distributional assumptions. A panel data model is also estimated. Results are consistent and suggest (1) The degree of private sector involvement in sample container terminals is positively related to productive efficiency and (2) Improved productive efficiency has followed the implementation of privatization and deregulation policies within the Korean sector. Even though not categorical, these conclusions are important because the market for container throughput is internationally competitive and if policies which promote competition between Korean container terminals lead to greater productive efficiency, this will inevitably make the sector as a whole more competitive internationally.

The efficiency of European container ports: A cross-sectional data envelopment analysis

This paper focuses on measuring the efficiency of container terminals in Europe using the data envelopment analysis (DEA) approach. Container terminals in Europe play an important role in the region’s economic development and, as the result of their geographic concentration, face fierce competition compared with the rest of the world. Despite this, studies of the efficiency of container terminals in the region are minimal. As a basis for further research, this paper serves to supplement existing studies by deriving estimates of relative efficiency for a sample comprising 69 of Europe’s container terminals with annual throughput of over 10,000 TEUs. The scale properties of container terminal production are also considered as part of the study, as is the relationship of efficiency to geographical influence.

PORT PRIVATIZATION POLICY AND PRACTICE.

In recent years a significant number of countries have implemented policies aimed at reforming their port industry. In the belief that it will improve efficiency and reduce the heavy financial burden placed upon governments that attempt to support such a capital-intensive industry, privatization has often formed an important strand of such policies. A key claim in favour of privatization is that the transfer of ownership from public to private hands will ultimately lead to an improvement in economic efficiency and, hence, financial and operational performance. This paper investigates the theoretical underpinnings and practical validity of this claim and concludes that privatization is only a partial cure for what ails the worlds ports and that, if implemented in isolation, it simply cannot deliver the much-needed panacea for the industrys woes.

Port competition between Shanghai and Ningbo

The objective of this paper is to analyse the relative competitiveness of the neighbouring container ports of Shanghai and Ningbo in China and to develop a view of the likely future outcome of the competition between them. After assessing the demand for their services within what is hypothesized as a shared hinterland, current supply and future expansion plans are detailed and considered within the two ports’ wider development strategies. The relative competitiveness of the two ports is then evaluated on the basis of price and quality of service, as embodied within the concept of generalized cost as incurred by customers. A critical political dimension is a necessary element of this analysis. It is concluded that continued economic development in the hinterland, central government policies on regional development and Chinas accession to the World Trade Organization (WTO) will all contribute to growing demand for port services. However, Ningbo will continue to gain greater market share as the result of advantages in its natural endowments (particularly depth of water), price (especially in terms of recovering the cost of capacity expansions) and quality of service improvements that are predicted to emerge as the result of currently planned enhancements to inland transport infrastructure and logistical systems.

CONTAINER TERMINAL DEVELOPMENT IN MAINLAND CHINA AND ITS IMPACT ON THE COMPETITIVENESS OF THE PORT OF HONG KONG.

In recent years, Chinas container ports have experienced a significant expansion in throughput and capacity. This paper provides a review of the sector and analyses the recent development of container ports and terminals within Mainland China. It then focuses in more depth on the competition between the ports of Shenzhen and Hong Kong. In particular, the port of Shenzhen is analysed in the context of Robinsons criteria for hub port development to try to discern whether it will become the dominant regional hub. The discussion concludes that despite Shenzhens current competitive advantages, Hong Kong will, in all probability, retain its dominant role.

The efficiency analysis of container port production using DEA panel data approaches

Applications of Data Envelopment Analysis (DEA) to container port production have been largely restricted to standard DEA models using cross-sectional data. The efficiency results derived may be biased; for instance, as the result of random effects or a recent investment in future production. In overcoming this problem, panel data on container port production may be more suitable for medium- to long-term efficiency analysis. This paper evaluates available DEA panel data approaches by applying them to a sample of 25 leading container ports. Empirical results validate the necessity of utilizing panel data and reveal that considerable waste exists in container port production. It also provides a basis for assessing the competitiveness of container ports, for benchmarking best practice and identifying specific sources or causes of inefficiency.

CAR DEPENDENCE IN A PUBLIC TRANSPORT DOMINATED CITY: EVIDENCE FROM HONG KONG

Abstract Reducing car traffic to improve transport sustainability has become a major goal of transport policy. This is also the case in Hong Kong where car ownership and use is, by international standards, very low. The objectives here are first to determine why people own cars in Hong Kong, second to explore how dependent car owners are on their cars and third to identify the policy implications. Based on a survey of 401 car owners, the finding is that despite the existence of excellent public transport, once a car has been acquired, people become dependent on it for virtually all journey purposes. To achieve greater sustainability, therefore, car ownership and use must be controlled.

The Contribution of the Dry Port Concept to the Extension of Port Life Cycles

Despite the temporary respite afforded by worldwide recession, limitations on port capacity still plague the container handling industry. At the same time, competitive pressures continue to mount on container ports. In recent years, the dry port concept has increasingly been applied, not only as a vehicle for overcoming capacity problems, but also as a deliberate attempt at expanding or reinforcing the hinterlands of container ports. The objective of this paper is to apply the Product Life Cycle to ports and to relate dry port development to the prolongation of the growth and/or maturity phases of a Port’s Life Cycle. In doing so, the dry port concept is explained by reference to both the literature and industry examples. The Product Life Cycle is then related specifically to container port development, and the prospect of dry ports exerting a positive impact on the Product Life Cycle of container ports is evaluated. The paper concludes by identifying the circumstances which are likely to characterize a successful implementation of the dry port concept, such that the desired effect of prolonging a port’s growth and/or maturity phases is achieved.