Modal shift ambitions of large North European ports: A contract-theory perspective on the role of port managing bodies

Port managing bodies (PMBs) need to respond to increased societal pressures for improving environmental performance. For many PMBs, a modal shift (MS) from road to rail and barge transport (where available) represents a strategic priority. Yet, in practice, few PMBs have set clear MS targets or have been able to achieve their MS objectives at the level of the port cluster. In this context, the extant port management literature has not yet provided actionable and generally applicable conceptual guidance for PMBs towards achieving ambitious MS goals.

In their latest port study, PortEconomics members Michael Dooms, Theo Notteboom, Elvira Haezendonck, along with Mychal Langenus and Alain Verbeke (Vrije Universiteit Brussel, Brussels) develop such guidance by following a contract theory approach to the effectiveness of MS strategies implemented by PMBs. The authors argue that a PMB, in its role of port cluster manager, can facilitate a MS through strategically deploying governance mechanisms based on sound economic theory. Here, an arsenal of incentives and penalties can be used to push port users (PUs) towards achieving MS targets. Building upon insight from contract theory, we also assess the importance of information management as a prerequisite for a successful MS strategy. We formulate strategic directions for PMBs and identify a future research agenda that should allow improved under- standing of how MS goals can be achieved in real-world settings