Water covers around 71 of the surface of our planet. Already this simple fact gives us an understanding that maritime shipping plays a very important role in transportation in the world. The history of shipping and port development accounts for several thousand years and it is no doubt that this kind of transportation is much older than air and railway.
At the same time maritime shipping cannot be the magical cure for all transport aspects simply due to the fact that it is geographically limited and many places in the world are out of its reach. The logical solution of this transportation problem was the establishment of certain facilities which were situated on the seashore or in the estuary of rivers and which could serve as connection points between the sea and mainland. These facilities are ports.
What is the basic meaning of a port? A port in its traditional meaning can be defined as "a geographical area where ships are brought alongside land to load and discharge cargo - usually a sheltered deep water areas such as a bay or river mouth" (Mangan et al, 2008).
However, there is no single opinion among scientists what a port exactly is nowadays. It is emphasized that the role of port cannot be limited with the traditional one anymore, and there is a lot of reasons for that - persistent technological and economic development in the world, more and more complex global supply chains and logistics systems, rapidly changing market environment, the rise of new players in the market and so on. Ports and their authorities face new problems and challenges, and the appropriate response to them cannot be given if the port stays within the framework of its traditional role.
So, in my research paper I would like to describe and examine the role of seaports in transportation and global supply chains. There are two keys aspects. First of all, I would like to pay attention to the current role of ports and situation in the port industry. Second key aspect is future perspectives of the port system, trends and factors that have an impact on its development as well as challenges faced by ports.
In particular, I have decided to examine the port system in Europe. In my opinion, it is unique and interesting due to several reasons. First, maritime shipping is of high importance in Europe in comparison with other continents. Second, European port system has a long history of existence, is well-developed and at the same very heterogeneous - there is a lot of different types of ports in Europe. Third, Europe itself is very heterogeneous, and a lot of different political, social and economic factors - both national and supranational - have an impact on the development of ports.
My paper is mainly based on studies that were earlier conducted in this field as well as statistical and empirical data provided by researchers and different institutions (ESPO, European Parliament, ports authorities etc.).
Main part
What is the port?
Before turning our attention to the current role of seaports in Europe, it is necessary to give a theoretical background to this topic. So, this part is mainly an overview of studies and research in this field in the available literature.
First of all, the answer must be given to the following question - what is a port? At first glance, it seems to be easy, although there is no single opinion about that in the literature. The most basic concept of the ports is that "it is the intersection of different modes of transport" (Long, 2004). It is basically correct although it does not give us a clear understanding of functions which are executed by ports. In my opinion, very clear concept that shows the real structure of port is that "ports have been defined as areas made up of infra and superstructures capable of receiving ships and other modes of transport, handling their cargo from ship to shore and vice-versa and capable of providing logistics services that create value-added. Ports are, therefore, four-modal nodes where ocean ships, short-sea/river ships, road and rail modes converge and where are complementarity between waterborne and land modes must exist" (Paixao and Marlow, 2003). This description gives us a clear understanding what ports are actually nowadays.
So, main functions of port include provision of superstructure and infrastructure for ship operations, loading and unloading, temporary storage and intra-port operations (Panayides and Song, 2008). Through efficient execution of such kind of operations ports stimulated the economic development of the hinterland (Liu, 2012). So, the main economic function of a port is called to be ""to benefit those whose trade passes through them, i.e. through providing increments to consumers and producers surpluses" (Suykens and van de Voorde, 1997).
There are several features that are typical of ports and are needed to be mentioned. First, a port is usually not the area of responsibility of the shipper, consignee or consigner and there are other parties handling the cargo. Second, as it was already mentioned, a port is the place where different types of transportation - trucks, barges and railway - come together, and the goal of a port is usually to make the interaction between these different modes as smooth as possible. Third, a port is an intersection of several routes, and there are different directions in which the cargo can go. So, that means that there us the risk of misrouting (Long, 2004).
However, nowadays ports are not examined from the traditional point of view anymore. They are considered to be not "an independent and natural area for the transfer of physical goods, but also a systematic element of a multimodal logistical supply chain" (Liu, 2012). This approach emerged in 1990s and now it is the dominating in the research of port industry (Paixao and Marlow, 2003).
It means that ports are able to support supply chains by providing different services and activities. The result is the win-win situation - supply chains get more efficient and effective, while ports become more profitable. So, the role of ports in supply chains cannot be underestimated (Mangan et al, 2008).
Why did ports become a vital component in deciding the efficiency of logistics nowadays? There are several reasons for that.
First of all, around 90 percent of the world cargo transportation and international trade are executed by ships and, as a result, goes through ports because of larger volumes and relatively lowers costs in comparison with other transportation modes (Feng et al, 2012; Liu, 2012). These features were in their turn caused by technological and economic development in the shipping industry (due to the emergence of containerization too) and the rise of maritime logistics (Liu, 2012). Second, ports are of great importance for the competitiveness of the country due to their position in the supply chain of international trade. Because of that, national governments and other public institutions pay a lot of attention to ports. Third important aspect is the environmental one. Ships as water transport consume relatively less fuel than other transport modes such as rail and road and due to increasing environmental pressure the demand for shipping is increasing as well. In addition to that, ports function "as economic catalysts on revenue and employment" (Feng et al, 2012).
It is also widely recognized that "ports are now operating in a new environment - which is globalized, corporatized, and privatized and is exceptionally competitive; it is also a logistics-restructured environment"(Olivier and Slack, 2006).
There is a number of heterogeneous actors in the micro as well as macro environment of the port who are interested in the successful functioning of the port but whose goals could be conflicting in the end. According to Feng et al (2012), macro level logistics systems consist of shippers, traders and consignees; public and private service providers; regional and national institutions, polices and rules; and finally transport and communication infrastructures. Correspondingly, there are also four main components on the port level: consignors and consignees; port service providers; institutional framework such as port development policies and regulations; and port transport and communication infrastructure.
So, all these challenges faced by ports nowadays and the necessity to solve them resulted in the emergence of the port logistics concept and ports themselves are considered to be logistic systems. Under such a mechanism, the port operation process should be integrated into the multimodal supply chain based on efficient physical cargo flows and common strategic goals, as well as innovative organizational relationships (Liu, 2012).
The following figure shows how a port can examined as the logistics system.
Figure 1.
Source: Paixao and Marlow, 2003
According to this concept, ports consist of two kinds of flows - the physical and the information flows. Physical flows include the port entry, stevedoring, transit, storage and linkage systems (Liu, 2012; Paixao and Marlow, 2003). Information flows, in their turn, relates to the "transfer of all relevant operational information concerning the bureaucratic procedures related to ship (and other modes too) and cargo"(Paixao and Marlow, 2003).
One of special features is that ports, unlike manufacturing industries, are bi-directional logistic systems - it means that both physical and information flows inside ports are going in both directions. In addition to that, the information flow must always be ahead of the physical one in order to keep all necessary actors informed and so that all these actors could react in the right time and in the right proportion As a result, port operations become very complex and require the high level of coordination (Paixao and Marlow, 2003).
Moreover, ports within the system can provide additional value-added services. These do not only include basic logistical functions, for example, cargo loading, warehousing, and so on, but also include those which can facilitate integration; for example, quality control, repackaging, assembly, re-export and so on. In short, a port logistics system plays an intermediary role of connecting the whole logistical process (Liu, 2012).
So, based on this theoretical background it is possible to make a conclusion that "modern ports are highly sophisticated corporations offering a wide array of services to many customers and operating on many dimensions" (Long, 2004).
So, at this point I would like to stop this theoretical overview and turn attention to the practical example - European port system. First, I will describe its current role in general and what is the situation inside the European port industry. Second, I will analyze factors which influence the development of this industry on the European as well as on the world level and bring challenges and trends that will be characteristic of the European port industry in the closed future.
European port system
Current role and position
This part of my paper is devoted to the European port system, its description and analysis. First of all, there is an overview of European ports based on the statistical and empirical data. Second, current trends in the port industry are examined as well as factors and driving forces that determined the situation in this industry nowadays.
It is widely recognized that seaports play a very important role in Europe. The fundamental reason for that is the geography, because Europe has a long coastline "reaching from the Baltic all the way to the Mediterranean and Black Sea" (Notteboom, 2010).
The European port system is very heterogeneous. There is a lot of different types of ports presented - established large ports like Rotterdam and Hamburg, medium-sized ports like Algericas, Bremen and Genoa as well as smaller ports like Tallinn and Ventspils. Each port has its unique characteristics in terms of types of commodities transported and stored, location features, hinterland markets served and connections with other facilities and ports (ITMMA, 2009).
There is an enormous diversity among European ports in almost every aspect: " in terms of size (local, national, international); in terms of geographical location (estuary or coastal port, natural or artificial); in terms of management (local/municipal, Latin tradition, port-trust); in terms of operations (comprehensive organization, tool ports, landlord ports); in terms of type of labor (piece work or basic wage, pool labour or regular labor)" (Suykens and van de Voorde, 1998).
"This unique blend of different port types and sizes combined with a vast economic hinterland shapes port hierarchy and competition in the region" (Notteboom, 2010).
There are different approaches for analysis and comparison of European ports - for example, on the individual level when particular ports are compared to each other or grouping ports according to their geographical location or economic proximity and analyzing them in that way.
The most fundamental differentiation of ports is according to sea areas where they are located. There are distinguished usually four European sea areas: the Baltic Sea, North Sea, the Atlantic and the Mediterranean. There are all together 471 ports in 4 sea areas each of which has a total cargo handling of more than 1 million tons annually as well as smaller ports. According to their share in total cargo handling in Europe, these sea areas can be put in the following sequence - the highest share has North Sea, followed by the Mediterranean, the Atlantic and the Baltic Sea (Grossmann et al, 2007). The importance of the North Sea area can be partly explained by the fact that "the hinterland of the North Range of European seaports, extending from Le Havre to Hamburg, are very densely populated in comparison to the EU average"(Grossmann et al, 2007).
In the Figure 1 you can see the map of Europe where these four main sea areas together with the biggest ports in these areas are shown.
C:\Users\Voldemaron\Desktop\Studies\Bachelor Work 2\map with ports 2004.png
Figure 1. The ten largest ports in each of the European shipping areas, 2004
Source: Grossmann et al, 2007
Another possible way of analysis and comparison of ports is on the individual level.
It also worth of mentioning that the European port system is not homogeneous in terms of type of cargo it handles. There are five main markets: container cargo, dry bulk, liquid bulk, conventional cargo and ro/ro each of which has its own submarkets as well (ITMMA, 2009). It is hardly possible in this work to describe in detail all these markets in Europe and because of that I would like to stop only on particular aspects which, however, give a link to broader understanding of of the situation in the European port industry.
Many studies pay their attention to container market and I will continue this trend. Container market is of particular importance because, first, the concept of containerisation has caused the fundamental change in the maritime shipping and work of ports and, secondly, the share of container cargo is higher than other cargo types.
The European container port system is considered to be one of the busiest container ports systems in the world. There are about 130 seaports in Europe that are engaged in container cargo handling and one third part of them participates in intercontinental transportation. It is interesting that there only 35 container seaports in North America and only 17 of them are parts of intercontinental transportation (ITMMA, 2009).
C:\Users\Voldemaron\Desktop\Studies\Bachelor Work 2\top 15 european container ports.png
Table 1. The top 15 European container ports (1985-2008, in 100 TEU)
Source: ITMMA, 2009
Table 1 shows us the list of the biggest European container ports in the time period from 1985 till 2008. It is possible to make several conclusions from this table. First of all, three biggest container ports in Europe - Rotterdam, Hamburg and Antwerp - have very stable positions already for a long period of time. Rotterdam is still the market leader, although its dominant position has weakened a bit in the last time (ITMMA, 2009). Among the reasons for that can be, for example, scarcity of space in the port, lower quality of road connection and intensifying competition among ports in Europe in general and particularly in the Northwestern Europe (Zauner, 2006).
All these three ports - Rotterdam, Hamburg and Antwerp - are located in the Le Havre-Hamburg range, which, according to statistical data, handles about half of the total European container throughput (ITMMA, 2009). Besides that, there is a visible trend towards container cargo concentration in the biggest container ports. For example, in 2008 the share of 10 and 15 biggest ports in container cargo transportation was 59% and 69% correspondingly. At the same time there is no single opinion among scholars if the process of concentration is taking place or not (Notteboom, 1997; Notteboom, 2010).
Another approach for comparing container throughput figures is based not on individual ports but on grouping seaports within the same gateway region together to form multi-port gateway regions and comparing throughput data in this dimension. The criterion for grouping selected seaports is "the locational relationship to nearby identical traffic hinterlands" (ITMMA, 2009). According to ITMMA (2009), using multi-port gateway regions as units of analysis can be better for examination and description of container throughput dynamics in Europe than using, for example, broader groupings as sea areas.
C:\Users\Voldemaron\Desktop\Studies\Bachelor Work 2\main gateway regions.png
Figure 2. The European container port system and logistics core regions in the hinterland.
Source: ITMMA, 2009
This map shows very clearly container port system structure in Europe. There are shown main multi-port gateway regions (all together 12), logistics core regions and inland corridors. The highest concentration of logistics core regions is observed in Benelux, Germany and the northern part of France. Main shipping routes - through Atlantic to America and through the Mediterranean and the Suez Canal to Middle and Far East - are shown as well.
C:\Users\Voldemaron\Desktop\Studies\Bachelor Work 2\main gateway regions cargo.png Table 2. Container throughput figures (1985-2008, in 1000 TEU)
Source: ITMMA, 2009
This table shows container cargo throughput in different multi-port gateway regions. Top three regions in the time period from 1985 till 2008 are extended Rhine-Scheldt Delta, Helgoland Bay and UK Southeast coast. According to ITMMA (2009), extended Rhine-Scheldt Delta includes the following ports: Rotterdam, Antwerp, Zeebrugge, Amsterdam, Ghent, Zeeland seaport, Ostend and Dunkirk. To Helgoland Bay belong Hamburg, Bremen/Bremerhaven, Cuxhaven, Emden and Wilhelmshaven. UK South East Coast consists of Felixstowe, Southhampton, Thamesport, Tilbury and Hull. It is also necessary to mention that Rhine-Scheldt Delta and Helgoland Bay regions belong to the bigger region - Hamburg- Le Havre range.
These both gateway regions together represent 44.3% of the total European container throughput in 2008. The Seine Estuary, the third region in the Le Havre-Hamburg range, suffers from a gradual decline in its market share (ITMMA, 2009).
The Le Havre-Hamburg range remains volume-wise the strongest port range in Europe because successful development of the extended Rhine-Scheldt Delta and Helgoland bay outperform the weakening position of the Seine Estuary. It is also interesting that the market share of the Le Havre-Hamburg range differs in different market segments: for example, 48.4% in the container business, 26.8% in dry bulk segment, 24.6% in liquid bulk segment, 19.5% in the conventional general cargo market and 18.3% in the ro/ro market. It is also necessary to mention that the container cargo market segment is more concentrated than other cargo handling segments in the European port system (ITMMA, 2009).
In our more and more globalizing world where continents and countries build even higher number of interconnections, it is impossible to describe and examine the European port system in the isolation.
So, the following table provides the list of 20 world biggest container ports based on the container throughput figures from 2004. It is evident that European ports do not have a dominating position in the world anymore as it was earlier the case. In 2004 6 biggest container ports in the world were situated in Asia. It is possible to say with certainty that this trend will continue and Asian ports will strengthen their positions in the world port industry.
Only 3 European container ports are in top 10, and these are Rotterdam, Hamburg and Antwerp.
C:\Users\Voldemaron\Desktop\Studies\Bachelor Work 2\top ports 2004.png
Table 3. Top 20 world ports according to container throughput volumes (2004)
Source:Yeo et al, 2011
Driving forces and factors influencing the current situation of the European port industry
This part is devoted to drivers and determinants of the development of the European port industry in last decades. These driving forces took place on different levels - political, economic, social etc. - and had both direct and indirect impact on the performance of European ports. I will try to bring the most important factors that are mentioned by the highest amount of researchers.
The overall picture of the European port industry looks quite different compared even to 15 years ago.
First of all, shipping industry and ports depend on the industrial production and general economic developments. Thus, economic and political changes that have taken place in the European Union at the end of the XX - beginning of the XXI century had an enormous impact on ports.
For example, the European Union has went through the expansion to the East and, as a result, number of the EU members increased from 15 to 27 in 2007. These new members got more opportunities to fully participate in the economic development of Europe and, thus, new players appeared. So, there are two trends on the European economic arena. On the one side, markets in Western Europe are becoming mature and growth rates in Europe's most important countries are quite small in comparison with the boom that has taken place in these markets in 70s and 80s of the XXth century. On the other side, there are appearing new economic centers - for example, in Scandinavia, the Iberian Peninsula and East and Central Europe - that play an important role on the same level as the traditional economic heartland of Europe. The fact is partly a consequence of the major production and manufacturing shift taken by many companies to lower cost regions in Eastern Europe. This led to the increased trade volumes between East and West Europe (Notteboom, 2010).
Some of these major economic and geopolitics trends are still taking place or are even in the emerging stadium, and due to this fact I will describe them in the part devoted to future challenges and trends. Now I would like to pay more attention to factors inside the shipping industry and global transportation itself.
It is widely recognized that one of the major changes that has taken place in global transportation in the XX century and has completely reshaped the development and the image of ports and shipping is containerization. This major technological innovation that started in April 1956 "has revolutionized the nature of maritime-based freight transport of manufactured goods" (OECD/ITF, 2008). One of the major consequences of containerization is the increasing standardization of port services that means that the specialization is not a key component of the successful development of a port and ports are becoming closer substitutes to each other (OECD/ITF, 2008).
One of the reasons of success of containerization is that this method of transporting goods has a number of economic and technological advantages in comparison to more traditional methods of transportation (Cullinane and Song, 2006).
One more driving force that has a direct impact on the development of ports is the use of ever larger containerships. This process was triggered by containerization, and last decades witnessed a rapid increase in sizes of containerships, starting with first purpose-built containerships in 1969 and followed by the introduction of Panamax-containerships. At the moment linehaul carriers are increasingly using Post-Panamax vessels which are already too wide to pass through the Panama Canal, and there is a trend to even bigger vessels - Super post-Panamax and megacontainerships (World Bank, 2001). The use of larger vessels for transportation leads to the fact that fewer port calls are needed for the same amount of cargo. On the one side, it means that shipping lines become less dependent on particular ports (OECD/ITF, 2009). On the other side, it puts additional pressure on ports, especially on those which are situated in the upstream. Ports must constantly improve their technological equipment and widen in order to be able to deploy these large vessels.
In addition to that, the European port system was influenced by "significant advances in inland transportation" (Notteboom, 2010). The use of barges, railway and short sea shipping was stimulated by different national and supranational policies (Notteboom, 2010). The development of inland types of transportation led to the extension of gateway ports' geographical reach which in its case has caused overlapping among ports' hinterlands and increased competition among these ports (OECD/ITF, 2008).
One example of stimulation of use of inland transportation is the liberalization of the railway freight market which completely reshaped the organisation of the European rail transport. It made possible to use a wide range of contractual models and service offerings in the rail industry. One of such models that came to existence after the market liberalization is the container shuttle market (ITMMA, 2009).
It is also necessary to mention that European ports have different demands in terms of usage of railway transport. Among the largest rail ports in Europe are Hamburg, Rotterdam, Antwerp, Zeebrugge and Bremerhaven (ITMMA, 2009).
Another mode of inland transport in Europe which is, however, "strongly linked with the availability and navigability of inland waterways and canals" is barge service. The area between Antwerp, Rotterdam and the Rhine basin is the territory where barge container transport was firstly used in Europe. Nowadays it also became common along the north-south axis between Benelux and the northern France, but Antwerp and Rotterdam are still keeping their dominating position in this field, handling together about 95% of total European container transport by barge (ITMMA, 2009).
Besides that, the development of global supply chains affected the performance of ports a lot in the last decades. "These chains link strongly dispersed production and sourcing sites to more geographically concentrated consumption regions" (OECD/ITF, 2009). So, the result of development of global supply chains is the increasing concentration on different levels: in the dimension of shipping lines as well as port terminal operations. In addition to that, flows are getting more concentrated on the geographical level as well. For example, it is recognized that there is the imbalance among ports between North and South of Europe, and this imbalance is getting even larger. One of the reasons is more developed hinterland transport structure in the northern Europe (OECD/ITF, 2009).
One more important factor that has an impact on ports is increasing regulation and legislation in the fields of environmental protection, safety and security both on the European and global level (Notteboom, 2010).
I would like additionally stop on two more drivers that are typical of today's port system in Europe - high level of competition among ports and competitive position of ports towards other actors in the market.
It is widely recognized that the bargaining power of other actors in the maritime industry, for example, users of port services has increased recently against port service suppliers due to technological and economic development of liner shipping. As a result, "ports have gradually become the servants of their users where increasing borderless trade, especially in developed regions like Western Europe, would break down discrete natural hinterlands and be replaced by common ones" (Liu, 2012).
The fact that ports are getting more and more involved in the global logistics chains nowadays also weakens their competitive position because shipping lines and other actors can get additional power to affect the development of different ports. Besides that, shipping lines put additional pressure on ports because no matter how the shipping line is effective itself its revenue cannot materialize if containers are not handled efficiently (Liu, 2012).
Another special feature of the European port industry on the regional level as well as in the world that is very typical nowadays is the intensified competition between ports. In my opinion, it belongs to one of key features of the port industry in the current situation.
Earlier, due to geographical locations of ports and the concentration of cargoes at these locations, the inter-port competition was not so strong as nowadays and spheres of influence of particular ports were more or less distinct. But, „the rapid development and adoption of container and intermodal technologies have radically altered the structure of port markets from one of monopoly to one where fierce competition prevails in many parts of the world"(Cullinane and Song, 2006). As a result, ports are becoming closer substitutes to each other and their hinterlands overlap with each other as well. At the same time other factors also have an impact on more and more intensifying competition. These factors include, for example, globalisation and the increasing use of logistics, shipping and transhipment (Cullinane and Song, 2006).
In Europe the competition is even more intensive because of the emergence of a single market. Due to this reason countries cannot use protective measures in order to strengthen competitive position of their ports (Liu, 2012).
While examining port competition, we should not lose sight of the fact that a new dimension has been added to the issue of port competition. It concerns competition not so much between individual ports but between entire logistics chains. A port is either part of a successful logistics chain, or not. So clearly there is an incentive here for ports to continuously try to improve their 'product'. Indeed, any improvement in the economic efficiency of a seaport will enhance economic welfare by increasing the producers' surplus for the originators of the goods being exported and consumers' surplus for the final consumers of the goods being imported (Suykens and van de Voorde, 1997).
As a result, there exists a great pressure on ports. They must constantly develop and update their facilities and services in order to stay competitive and attract customers. They are not sure anymore about the stability of their market shares (Liu, 2012). All these "developments have transformed port operation to a much more complicated industry with particular complex functions and contemporary port development has been dictated by shipping development rather than other way round" (Liu, 2012).
The main dilemma faced by ports nowadays can be formulated as the following - in order to stay competitive, ports must heavily invest in their facilities, but even these actions do not guarantee a stable and appropriate traffic. Because of that, "port infrastructures were often built far ahead of existing demands simply in the fear that they would fall behind if they did not do so"(Liu, 2012).
Of course, everything has its limits, even the competition. In the reality, ports are not perfect substitutes because it is impossible to switch from one port to another absolutely without costs. It is caused by several reasons. First of all, ports' hinterlands do not overlap completely with each other, and ports still have a strong position in at least some of their service areas. In addition to that, ports also have some space limits, and starting from some point the quality of their services will be weakened by congestion inside ports or in their hinterland transport networks. As a result, its competitive position will weaken (OECD/ITF, 2009).
Future perspectives, trends and challenges
In this part I would like to describe future perspectives of the European port industry. It will be the overview of future trends and challenges in the industry as well as factors that can possibly have an impact on the performance and development of ports in Europe.
These factors belong to different dimensions, and because of that I tried to group them according to different levels.
Trends and factors in international economy and trade
Of course, trends in the global economy and trade have inevitably an impact on the port industry as well as all other industries.
For example, international trade flows are constantly changing and there is no sigh that this trend will stop. The large share of international trade takes place now inside economic blocks, among which the most influential are the European Union and NAFTA. The most important intercontinental trade flows include those between Asia-Pacific and North America, between Europe and North America and between Europe and Asia-Pacific (Notteboom, 2007).
Second, the economic growth of East Asia changed the shape of world trade. In addition to that, there is observed a general shift of global production and manufacturing to Asian countries. As the global transportation is directly connected with the production, the maritime shipping and port industry will also develop in these geographical areas. It is already noted that Chinese rapid growth has an impact on the liner service schedules of major shipping lines. "Shipping lines are dedicating higher capacities and deploying larger vessels to cope with increasing Chinese containerized imports and exports. The China effect has also resulted in changes to the ranking of the world's largest container ports" (Notteboom, 2007). But it is necessary to mention that not only China is growing rapidly, but also Brazil, Russia, India and Indonesia (Port Vision 2030). So, it will be no surprise if new significant trade flows are appearing in these directions as well.
There is a number of projects which can have an potential impact on the development of ports. First of all, these are plans in possible expansions of lock capacity in the Panama and Suez Canals (European Parliament, 2009). As the number of Post-Panamax containerships is increasing, these plans are getting more chances to be implemented.
Another project which is mainly derived from increasing trade volumes between Europe and Asia is a transit function played by Russia for good flows between these two geographic areas. It can possibly strengthen the position of railway transportation in Europe and weaken the role of ports in these trade connections (Notteboom, 2007; European Parliament, 2009).
Because of the global warming, the establishment of polar shipping routes can also soon become possible. For example, in 2020 the north-west passage crossing Canada's Arctic Ocean could become navigable on the regular basis. It can result in reduction of transit times and transportation costs. However, this project will not have a significant impact on European ports (European Parliament, 2009).
Logistics dimension
There are also different driving forces for change in the port industry in logistics as well. One of the most important drivers originates from the globalization of production. Multinational corporations are the key drivers of global production networks and associated distribution networks. Type of global sourcing chosen by them will inevitably affect global transportation patterns (Notteboom, 2007).
Other driving forces in the logistics dimension include, for example, shifts in supply chains; outsourcing and increasing demand for third party and fourth party logistics; logistics integration and consolidation in the logistics service provider industry; and new approaches towards logistics networks (Notteboom, 2007).
Liner shipping and the container terminal industry
Of course, there are driving forces in industries directly related to ports - liner shipping and the container terminal industry.
One of the drivers which were already discussed in the previous part is ever increasing sizes of containerships. There are already plans for building super Post-Panamax vessels and megacontainerships (World Bank, 2001). There are probably no technical limits for making ships bigger and bigger, but most likely there will be some economic or operational reasons that put a logical limit to this trend (Notteboom, 2007).
The next group of driving forces includes changes taking place among other actors of the maritime industry: terminal operators, shipping lines, logistics service providers and so on. It is noted that all these actors "have already gone through an unprecedented wave of consolidation" (Notteboom, 2010). This trend is likely to continue, and, as a result, these actors can gain even stronger bargaining power towards ports and their authorities (Notteboom, 2007). For example, main global terminal operators such as AP Moeller group from Denmark, Hutchinson Port Holdings from Hong Kong, PSA from Singapore and others have recently become important players in the European port industry (Notteboom, 2010).
Besides factors already mentioned above, there are some others as well. For example, actors start to pay more attention to landside logistics because it still one of the areas left where it is possible to cut costs. Inland transport has now a much larger share in costs than running the vessel and constitutes for around 40-80 percent of the total costs of container shipping (Notteboom, 2007). So, it is no surprise that logistics companies and shipping lines focus more upon inland transportation.
Besides that, one more driving force is the change in the role of transshipments. Gateway ports are becoming more involved in transshipment operations, and pure transshipment hubs have emerged. "More than 20 of the 100 largest ports worldwide are transhipment hubs, in the sense that at least half of traffic is ship-to-quay-to-ship. This evolution is related to increasing vessel size and fewer port calls per service. Major gateway ports are increasingly profiling themselves as transhipment terminals, because the fragmentation of production tends to pull production out of gateway cities. Shifting transhipment to pure transhipment hubs reduced the pressure on gateway port capacity, which can then focus on serving expanding hinterlands. It is interesting that there is no such hub in Northern Europe at present, so that some 30% of activity in gateway ports in the region concerns transhipment" (OECD, 2009).
In the end of this part I would like to bring the forecast about the development of European container ports. For example, the following table shows the estimated annual growth rates of biggest European container ports as well as cargo handling volumes in 2030.
C:\Users\Voldemaron\Desktop\Studies\Bachelor Work 2\ports 2030.png
Table 4. Top port handling in year 2030
Source: Grossmann et al, 2007
So, it is assumed that three biggest European container ports will remain the same - Rotterdam, Hamburg and Antwerp. Rotterdam will keep its dominating position, while Antwerp and Hamburg will continue their struggle for the second and third places. It is also interesting that ports of Bremen, Algericas, Valencia and Gloia Tauro will probably strengthen their positions.
In my opinion, the only limitation to this forecast is that it is made before the economic crisis. Probably nowadays forecasts are more pessimistic.
Conclusion
Literature
