Concentration in the port industry: alliances, innovations and synergies for the development of door-to-door logistics
Συγκέντρωση στη λιμενική βιομηχανία: συμμαχίες, καινοτομίες και συνέργειες για την ανάπτυξη door-to-door logistics
KeywordsConcentration ; Port industry ; Terminal operations ; Liner shipping ; Innovation ; Port regulation
The main driver and motivation of this dissertation is to analyze issues pertaining to the concentration of capital within the port industry. More specifically, it aims to provide a robust and holistic understanding on the realization, motivating powers and evolution of the concentration phenomenon within the containerized transport segments of port terminal operations and liner shipping as well as on the effects it exerts on market competition, port organization and governance. In this framework, this thesis analyzes the role of containerized transport chains within the context of capitalist development while through an adjusted circuitist approach unveils the reproduction mechanism through which transport or commercial capital achieves and accelerates its expanded reproduction. Having portrayed the tendency of commercial (transport) capital towards accumulation, the focus of attention is turned on investigating its evolution. In this vein, while measuring concentration amongst the major market actors in liner shipping and terminal operations, issues relating to market structure, centralization strategies pursued, inter-firm relationships arisen as well as the potential effects of the competitive functioning of the respective markets are discussed. In extension, the effects of market concentration exerted on the conduct of international trade in ports is emprirically examined in two relevant case studies. More specifically, the first employs primary data to investigate the extend to which the formation of liner alliances favors the inclusion of affiliated port terminals in the formers itineraries, while the second utilizes concentration ratios namely, CR4, CR8, HHI, as well as methodological tools such as the Gini Coefficient and Shift-Share analysis to measure the level of concentration/consolidation of container flows in the port system. As results indicate, the diachronic increase in concentration has led to the formulation of an oligopolistic and oligopsonistic market structure in the liner shipping and terminal operators’ markets respectively and hence to the emergence of incumbent firms with significant market share and power. While by itself increased sectoral concentration would be a potential threat to the competitive functioning of the containerized transport market, it has been revealed that market actors, both in liner shipping as well as in container terminal operations, not only have expanded throughout the chain network through successive waves of vertical and horizontal integration, bundling services, but have established robust inter-firm relationships. These facts reinforce their capacity to adopt potentially anti-competitive behavior for their own gain as well as to influence the conduct of international trade (traffic flows) at ports. The empirical results of the two cases studies conducted partly affirm such a claim. Additionally, this thesis examnines whether innovation and knowledge creation act as an underlying force in enhancing the capacity of transport actors to concentrate and solidify their market positions. Within the context of the dissertation, for the first time within maritime and port literature an examination of the relationship amongst concentration and innovation is undertaken while also the innovative behavior of major containerized liner shipping and terminal operating firms is captured through an investigation and classification of the patents they hold. In this case study, results indicate that while not all major liner shipping companies and terminal operators exhibit the same level of innovativeness, a considerable number of them has turned to the development of novel inventions to achieve a sustained competitive advantage and enhance their market positions. This examination similarly to other concentrated markets (i.e., pharmaceuticals) largely affirm that oligopolies and oligopsonies exhibit an increased degree of innovativeness, while also suggests that market actors from both sectors under study, with sufficient market shares and deep pockets but with little or none, innovative activity, also have the option to acquire novel technologies through third parties instead of inventing them. Further on, considering the above analysis, this dissertation examines the effects of the recorded concentration in the terminal operators’ market in the organization and governance structure of the ports. Through another case study, which depicts the rising bargaining power of concentrated globalized market actors vis-à-vis public port authorities (even states), it portrays the increasing role these actors seek within the organization and management of ports, by recording the magnitude of change in the division of responsibilities amongst public and private bodies. As results suggest, the shift of power towards the side of consolidated market actors such as Global Terminal Operators (GTO’s) and Mega Carriers, necessitates as a counterbalance the reconceptualization of the public’s role in the governance of ports. In this context, this dissertation suggests that economic regulation emerges as a new strategic frontier, however not necessarily in the hands of port authorities. Similarly, to the case of network industries, this thesis suggests that the delegation of the regulatory function to specialized independent regulatory authorities for ports, provided they are handed the appropriate tools, can be a more adequate and effective solution to prevent anti-competitive behaviors and hence safeguard public interest. In parallel, this dissertation calls for the reconsideration and extension of the regulatory reach, beyond the context of the port premises, throughout the supply chains denoting that as market actors aknowledge the latter as a unified and integrated network, regulators ought to do so too. In this regard, to achieve a robust and widened framework for the regulation of globalized and consolidated containerized transport actors, the reconformation of the regulatory governance structures also on a regional and global level is proposed, through the reinforcement of transnational cooperation and coordination amongst the competent national and peripheral port regulators, on eminent regulatory issues that surpass the national boundaries. To this end, based on empirical evidence provided, this dissertation contributes to the maritime and port literature by providing a novel holistic and inclusive approach for analyzing the phenomenon of concentration within the port industry as well as some unique insights with regards to the realization, motivating powers and evolution of capital concentration within the containerized transport network. Finally, it promotes the reinforcement of ports’ regulatory governance and substance in an effort to prevent potentially anticompetitive practices by incumbents, that may not only hinder the competitive functioning of the port sector but of the global economic system as a whole.