The circularity transition leads to changes in PoA’s business model, with an increasing focus on new services that create synergies, and a decreasing importance of the share of port dues in the total revenue mix.
There is a gradual but clear transition towards a circular economy (CE) that will potentially have significant impacts on ports, both in their function as transport nodes and as locations for logistics and manufacturing activities. A rough appraisal of new investments in circular manufacturing activities in ports in Europe drawn from organizational reports and official webpages illustrates the (slow) development of circular activities in ports.
The latest study by PortEconomics members Peter de Langen and Henrik Sornn-Friese – along with James Hallworth (Port of Amsterdam) – deals with the implications of CE for the business model of the port development company. The study assesses if and how the circularity transition affects the role and business model of port authorities as developers of port clusters.
The authors outline a framework for analyzing the consequences of CE on the business model of the port authority. They then apply this framework to get a detailed understanding of the emerging CE ecosystem in the Port of Amsterdam, which is clearly a frontrunner in the transition, and the role of the government-owned Port of Amsterdam port development company (PoA) in developing this ecosystem.
In Amsterdam, a CE ‘business ecosystem’ has emerged and continues to evolve with three types of synergies between the companies in this ecosystem: logistics infrastructure and services synergies, input-output synergies, and industrial ecology synergies. The study findings suggest that the spatial scale of the CE value chains in the port varies between segments and that they are generally less international than ‘linear’ value chains.
The development of CE activities occupies a central place in PoA’s strategy, and PoA assumes new and active roles in advancing the circular business ecosystem, most notably through developing industrial ecology synergies and nurturing and attracting new, innovative CE companies. Finally, the circularity transition leads to changes in PoA’s business model, with an increasing focus on new services that create synergies, and the decreasing importance of the share of port dues in the total revenue mix.
You might read the full study, published in the scholarly journal Sustainability here: Peter W. de Langen, Henrik Sornn-Friese, and James Hallworth (2020), The Role of Port Development Companies in Transitioning the Port Business Ecosystem; The Case of Port of Amsterdam’s Circular Activities.
