Competitiveness in the port industry: an insight into the cases of Venice and Copenhagen

Containerization leaded to the construction of larger and larger vessels specifically designed to carry container and to create economies of scale in the deep-sea part of the transport chain.

In this manner, on one side, the average transportation cost for the single container is lowered but, on the other side, building and moving the new vessels becomes extremely expensive.

Therefore economies of scale in shipping work only when the vessel is sailing; while when it stations at the berth dwell costs arise. Consequently, in order not to lose the gains coming from such economies, it’s critical that the ship moors at the quay as less time as possible for loading and unloading operations.

Shipping companies may achieve this goal by means of two major strategies: asking ports for higher container handling rates and quicker turnaround times (briefly: faster services), and/or carefully re-designing shipping routes in order to reduce the number of ports of call and so as to increase the productive journey time at sea.

In my opinion, the first issue is quite intuitive and it is mainly related to efficiency increasing in port operations and to smoother coordination between all the actors involved in the transportation path, also by means of IT systems implementation.

The relationships between the members of the terminal community have to evolve towards the creation of structure acting in a unified way. On the contrary, I think that the second concern is not that obvious; hence I’m willing to go a bit more in details, analyzing the reasons behind it.

Consequently to the container revolution and to all the already analyzed changed in te transportation industry (especially development of intermodality and horizontal and vertical integration amongst actors involved in the transportation chain), carriers nowadays rarely operate more than one terminal within a specific region.

In particular, Martin and Thomas (2001) estimated that there has been a reduction from eight or more ports of call to two or three at each end of the trade route. Operating two terminals within a region would not allow economies of scale in terminal operations, while offering a little advantage in terms of accessibility to inland regions, since inland intermodal transportation is very developed.

For instance, if a shipment si loaded upon a vessel that is scheduled to make additional stops in various ports before reaching the harbor of discharge, the shipment would be in transit longer than necessary, causing avoidable higher costs. That’s the reason why shippers are redesigning routes to minimize the number of ports of call.