Which issues need to be considered in order to modernise container port systems and respond to the growth of containerised maritime trade and to the development needs of their hinterland economies? How to best mobilise private investments and best proceed to port expansions with long-life spans and a structural influence on the local and national economy?
These questions are addressed in the OECD report “Port Investment and Container Shipping Markets” that is co-authored by PortEconomic co-director Thanos Pallis, PortEconomics assocaite member Mary Brooks and Steven Perkins (ITF, OECD).
The report benefits from the case study of Chile, where plans for a major expansion of port capacity in the central part of the country are well advanced.
Introducing the Report
Ports around the globe are planning expansions to respond to the growth of containerised maritime trade and to the development needs of their hinterland economies. Following the dip in trade induced by the 2007-2008 financial crisis, global volumes are on the rise again, driven by growth in the emerging economies. Growth in trade will be supported by the WTO Trade Facilitation Agreement signed in Bali in December 2013 and expanding container port capacity is again a pressing issue in many locations. Inadequate container port infrastructure can be a severe logistics bottleneck and a constraint on growth. Efficiency and capacity need to increase in step with demand. At the same time port policy makers and container terminal operators have to match capacity to demand carefully to avoid costly over-investment, a task complicated by rapid technological change in liner shipping markets with the introduction of larger vessels, rising fuel prices and restructuring through mergers and alliances.
Large-scale port projects have irreversible effects on land use and multiple impacts on the local economy and local community. They affect the way that the regional and national economy operates as a whole, not just in the vicinity of the port, with major impacts on regional transport systems. Port planners make better decisions when these broad impacts are examined as part of the development of a national freight transport and logistics strategy. Private investment in port terminals is also facilitated by the certainty engendered by development of such a national freight transport and logistics strategy. Decisions to invest in new container ports need in particular to take careful account of forecasts of hinterland demand for containerized trade, the broader context of evolving maritime transport markets, competition between ports, the development of port hinterland transport infrastructure, community attitudes towards port traffic and environmental issues.
This report summarises a roundtable on Port Investment and Container Shipping Markets held in Santiago, Chile in November 2013 that examined the issues that need to be considered before the decision to proceed to costly expansions with long-life spans and a structural influence on the local and national economy.
The study examines factors critical to decisions on container port investments everywhere including:
- demand forecasts;
- change in liner shipping markets;
- hinterland transport capacity;
- competition between container terminals; and
- financing of investment.
This way it proceeds vital lessons for port policy makers around the globe aiming to advance port competitiveness via the mobilisation of private sector and funds.
Download the Report
You might download the report via the relevant OECD website: Mary R. Brooks, Thanos Pallis and Stephen Perkins (2014), Port Investment and Container Shipping Markets, OECD-ITF Discussion Paper 2014-3, OECD: Paris.