SEAFARING IN THE DAYS OF THE MULTI-DECKER

The multi-decker ship is still around; not every port is equipped to receive the container, whose benefits are mostly enjoyed when it arrives full and ideally for one receiver. But how many (full-container) shoes or laptops do we need in some small island states in the Caribbean or South Pacific?

When the multi-decker was the norm, however, i.e. before the arrival of the containership, cargohandling (photo) could take weeks if not months. To be a seafarer in those days was great fun and when the captain would set foot on land, the coffee shop in his native island, somewhere in the Aegean Sea, was packed every morning by islanders who would come to listen to his stories from the four corners of the earth.

Today, the containership is turned around in 48 hours and the port itself is most probably many miles away from downtown. There's thus neither time nor mood to just take a bus (if there is one) and go there even for a short visit.

(my 'gigantism in container shipping and ports' little book, one of the most widely read texts in maritime literature ever (21,000 downloads) is still available gratis here: https://lnkd.in/exPVKDA)

MARITIME ECONOMICS & LOGISTICS: DOES & DON’TS OF ACADEMIC PUBLISHING 2020

 

 General introduction

In this new post of my ‘dos and don’ts’, I have decided to stitch together Part I (2016) and Part II (2018) of the earlier MEL editorials, and at the same time update the text with important editorial policy changes and advice to authors. Unavoidably, some repetition may be visible in what follows, but I hope we shouldn’t disagree that repetition is the mother of learning. Posting this note rather than publishing it has the added advantage of making revisions easy. In this regard, I will be looking forward to comments and suggestions from authors, readers, editors, referees, or anyone interested in the further advancement of MEL.

Dos and don’ts of scholarly publishing (Part I)

Publishing in a good journal is not as difficult as it may appear at first sight; but there are certain rules on how this game should be played. In many universities, courses are even given to PhD students on “how to interact with your editor”. The few points below are intended as a ‘check list’, throughout the publishing process, until you see your name in print.

When choosing a journal, try first to understand its scope and objectives, in order to satisfy yourself that your paper ‘fits’ there. Otherwise you may be losing your time and eventually receive a frustrating negative decision. The prestige of the journal itself is less important. What is important is to select a journal where your paper will have the highest impact (and thus citations); we have seen papers in the most prestigious of journals, albeit with 3 citations in, say, 5 years.

When you draft your paper, do so with your reader in mind. Starting from the abstract, try to make your paper as ‘appetizing’ as possible, constantly ensuring that your reader will continue reading it to the very end. Your abstract is crucial in this respect. This is the place where you should tell people what is innovative in your paper, or why your paper had to be written, over and above what others have done before you. This is a good point to stress that most journals publish “incremental contributions”, i.e. contributions which build on the work others have done before us. Rarely would applied journals such as MEL publish the ‘discovery of the wheel’.

Decide who your reader is and write accordingly. Does your paper intend to address people with a theoretical background, or business and policy makers? In other words, is your main contribution a methodological one, or does it have policy implications of direct applicability? This decision should determine the choice of journal, your writing style, and the contents of your paper (e.g. the desirability of full exposition of technical detail, in a paper whose value is in its policy recommendations).

As much as reasonably possible, try to avoid arguing with a referee. Once your paper has been assessed as one worth looking at further, referees are there to help you publish. To the best of your ability, try to comply with their requests, rather than stubbornly insist on a certain opinion. When a referee asks a question, he does not only expect an answer, but rather to see that answer reflected in your text. Avoid journals with poor reputation on the ‘rigor’ of their reviewing process. Would you really submit again to a journal which has accepted your previous paper just by informing you that “this is a good paper and we would like to publish it”? Would you really submit to a (predator) journal who is trying hard to get your paper? Or one which promises you publication in one month? Your peers understand your need to publish, and to publish rather fast. But they also know ‘who is who’ in the world of publishing and they might not even look at a paper published in a predator journal, notwithstanding the latter’s impact factor.

It is quite common amongst upcoming academics, particularly PhD students, to want to publish as sole authors. In some universities, this may even be a requirement from PhD students. If, however, you can co-author your paper with a senior academic, e.g. your supervisor, that would be the smart thing to do. Today, we are overwhelmed by information and our reading time is limited. No matter how good your paper is, the chances of it being read (and cited) are much thinner, than if you would co-author it with an acclaimed scholar. I know a lot of rising academics who even pursue this as a strategy; i.e., to co-author with everyone who is someone. And do not forget: the objective is “citations” rather than seeing your name in print.

Writing is an art. A lot of otherwise technically excellent papers are rejected because of poor style, experience in academic writing, or command of the English language. Your reader does not have the time to try to decipher what you “would like” to say. Try to be succinct and to the point. Use short sentences. Avoid wordiness and repetition. Saying something once should suffice. Before submitting, always ask a couple of your colleagues (ideally good English speakers) to have a look and comment.

Long literature reviews are usually not appreciated by many readers who often tend to skip them, particularly when the cited works are remotely related to yours. Stick, therefore, to works that are relevant to yours, i.e. works that you have actually used, or they have influenced the development of your paper. When reviewing a work, rather than describing what that author did, try instead to discuss his conclusions and the way they impact your own work. If possible, instead of discussing each author separately, which may involve repetition, try to identify central themes in your work (e.g. your methodology), and list authors who have work on them.

Depending on how the journal has prioritized your paper, reviewing time can be quite lengthy and good referees are an ‘endangered species’. An occasional inquiry to the editor would be appreciated but do not overdo it.

Finally, there is the big question of ‘publishing ethics’; e.g. submitting your paper simultaneously to more than one journals, or publishing it electronically at various depositories while your paper is under consideration, etc.. Many journals blacklist such authors. On this, I would advise you to take a good look at COPE: Committee on Publication Ethics – www.publicationethics.org  which I am sure you will find very enlightening.

Good luck with your research and I am looking forward to considering it in MEL.

Professor HE Haralambides
Dalian, China, 2016

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Dos and Don’ts of Scholarly Publishing (Part II)

Introduction

This sequel to Part I (above) was written with the rising star in mind: the ‘promising young academic’ or the one on a career path / tenure track. Today, these colleagues represent a growing body of both our readership and of our contributing authors. Senior academics are familiar with all that follows below, of course, but their advice on improving our procedures would be more than welcome.

Your subject

Be knowledgeable about the subject you want to write about (if possible, co-author your paper with industry executives). If you write about a ship, or a port, or a terminal, make sure you have actually seen one. MEL is an applied journal. If visiting your subject (e.g. a dry port) is difficult, and often it is, do keep in mind that, today, there are hundreds of good videos around, freely accessible on the internet. When you thus talk about a ‘containership bay’, or a ‘terminal apron’, or a ‘container twist lock’, it is important that you have seen one and understand how it works. Shipping companies and ports are run by some very successful, albeit practically-minded, executives, often with a notable disdain for the maritime academia.[1] With your paper, try to bridge this gap and allay their misgivings. In the same vain, while preparing your paper, do not read only scientific works; familiarize yourself with the professional world around your subject, including newspapers and sectoral Press.

Before you submit your paper to a journal, distribute a working paper and invite comments from colleagues and business contacts. Even better, organize a staff seminar and present your paper. Do not be afraid to do that. This is the best advice I could give you. Most likely, upon submission, your editor may also ask you: “have you ever shown your paper to anyone before submitting?”. MEL, same as many other applied journals, very rarely publishes ‘exercises on paper’, or research no one has asked for, or research that addresses questions that exist only in the author’s mind.

Which journal?

Unless you already have considerable publishing experience and are familiar with the journals of your sector, choosing the right journal (and editor) is no easy job. The first question you should ask yourself is ‘whom am I writing for?’. Are you addressing a broader audience (business; government; policy-making) or rather technical academics (Operations Research / Econometrics)? This should determine your writing style. In other words, is your contribution to be found in the paper’s methodology, or in its policy/business ramifications? If your contribution is methodological, then submit to an OR/Econometrics journal. If however your contribution is in your paper’s “policy/business ramifications”, the technical discussion (as well as math) should be limited to a bare minimum in the main text; a good reference provided for the interested reader; and the methodology placed in an appendix. There, the detail should be sufficient so that your model(s) can be easily replicated by others.

Most journals do not take well to declarations of confidentiality (e.g. the company name cannot be mentioned, or the data cannot be submitted due to confidentiality, etc.). Your editor will ask you to explain the reasons for the confidentiality and if they are not valid/strong, your paper will probably be rejected. In the same vain, for papers based on surveys, be prepared to disclose the names of the interviewees, if requested by the editor.

Read many issues (abstracts) of the proposed journal and try to understand its Aims and Scope: is it for you? Does it publish papers like yours? This understanding is crucial to avoid a disappointing rejection. If in doubt, it is not a bad idea to send an abstract to the journal’s editor and ask; most editors will be happy to enlighten you. Always submit to a journal with a proper impact factor. If your proposed journal did not have an impact factor in certain years, inquire with the EiC as to the reasons why. Consult JCR (journal citation reports) for journals that may have been suspended and/or not given an impact factor.

Your editor is probably a senior colleague; treat him as such and write to him personally, rather than asking your secretary (or a student assistant) to submit the paper. If you do not have time for him, perhaps he and his referees may not have time for you.

The MEL Cover Letter

Your Cover Letter (CL) is very important and it is an immediate ‘sample’ of your paper. By reading your CL, your editor will get a first idea (and there is never a second chance for a good first impression) about the quality of your paper, as well as about your skills and publishing experience.

 Do not duplicate your abstract in the CL; rather, and just in a few lines, try to convince your editor why publishing your paper has merit and it is a good idea.

Give full details of all co-authors, including their (institutional) email, affiliation, and designation.

Mention some key publications of each co-author, in the English language, and published in an English medium. If possible, quote papers in refereed journals. Usually, editors have a lesser interest in conference proceedings or book chapters.

Try to answer, as accurately and to the point as possible, the three questions posed at the end of the Cover Letter.

Declare (no) conflict of interest and your acknowledgements (if any).

The template of the MEL Cover Letter can be downloaded from the journal’s website.

Co-authorship

A common mistake, usually made by aspiring academics, is to try to publish as a sole author. It is a mistake because a senior co-author, e.g. your supervising professor, will bring you citations. This should be your real objective and not to see your name in print, albeit with zero citations. Our reading time becomes scarcer and scarcer, while at the same time we are drowning in information and new publications. Many people will read a paper co-authored by a famous professor, but very few (if any) will read one by a relatively unknown young researcher, no matter how good her paper might be.

A senior co-author brings another benefit onboard: most probably he is also a seasoned writer and, as I discuss below, writing is an ‘art’ which takes years to develop. A common reason for rejecting a paper is poor English and writing style, notwithstanding how good, technically, the paper might be.

As regards authors name order, in MEL and in many other journals, most of the time, co-authors appear in alphabetical order of family name. MEL assumes that all co-authors are equally and indistinguishably responsible for the paper. If this is not the case, and thus authors require a different name order, the journal may need to explain ‘respective roles’ in a footnote.

Writing is and art

The minute a student assistant sits behind a computer, he often believes they are ready for the Nobel Prize. This is particularly true if the SA is a skillful and talented mathematician, trying to apply his skills to a relatively under-researched problem in humanities and social sciences.  

However, it is one thing to come up with good results, or prepare nice tables and graphs, and another thing to write a good paper. Differently, it is one thing to put words in a sentence, and another to compose a sentence conveying a clear message in a structured and impactful way.

Write succinctly. Use short sentences and avoid wordiness and repetition. If your English is good, do not try to show it off; our discipline is an applied one; not literature. Avoid the superlative and words like ‘fabulous’, ‘tremendous’, etc., which are quite common in expressions of many countries.

If you are not native English speaker, use the services of an English editor prior to submitting. There are many of them around, from the prestigious ones of international publishers, to one-person internet-based companies. Their prices vary greatly,[2] ranging from $100 to $500 per paper or even more. If necessary, seek advice because what matters is not price but price-quality, as well as the amount of work your paper requires (which can range from light grammatical improvements to actual ‘heavy rewriting’).

Finally, write with your readers in mind and not yourself or your colleagues. Your readers may not know as much as you do and thus you should not take too many things for granted. A part in your introduction should provide your reader with all the information necessary to understand your paper.

Title and abstract

Think of an “appetizing” title which should be as brief as possible but also representative of your contents. A good title, consisting of carefully selected, albeit ‘hot’, words is your ticket to citations. I have come across many papers of mediocre content but with hundreds of citations, just because the author was smart enough to choose the right words in the title. Unfortunately, life is not always serious and sometimes –for longevity too- it should not be taken too seriously either.[3]

To the extent possible, your Abstract (200-250 words) should be written in non-technical language, aimed at the general reader. It should not contain formulas, symbols, references or footnotes. This is the most important part of your paper, and the one that everybody will read; it needs to convince the reader that the paper is worth reading. In non-technical language, explain to the reader why you wrote this paper; who has asked for it; what do you add to existing knowledge; what is your methodology; what are your main conclusions. Remember: your abstract is something very different from your introduction, which will probably follow. Thus, do not duplicate.

Literature review

Long literature reviews are usually not appreciated by readers. This does not mean you should neglect important contributions, but instead of discussing each work individually (which might involve some repetition), try instead to discuss a theme or an issue, and put in parentheses the authors who have dealt with it.

When you discuss a work, don’t mention only what the author did but, more importantly, discuss his results and how these impact your own work; this is the reason you quote a work, and not just to show that you have read a lot. In this sense, your literature review should comprise works relevant to yours in a narrow sense; e.g., when you optimize stowage on a ship, don’t review papers on stacking yard optimization, although both subjects may be using the same methodology).

Identify top researchers (and top papers) and stay away from the trivial ones (no citations). Most definitely, do not build your paper, based on trivial publications. Finally, your references should be as recent as possible, in English, and easily traceable.

Tables and figures

Spare no effort to produce high quality, professional, tables and figures. If you do not have such skills, seek advice, or help from a colleague or a graphic designer. Tables and figures are the ‘mirror’ of your paper and they show to the reader the degree of diligence and amount of investment you have put into the drafting of your paper. An impressed referee my feel obliged to reciprocate and invest in your paper as a quid pro quo.

Tables and figures should be self-explanatory; thus, you should not repeat/discuss them (a lot) in the text.

It is easy to create lots of tables and figures; however, readers are not impressed by their number. Often, a table or a figure is redundant, just taking up journal space which is very expensive. If you can say something in conventional sentences, instead of a table or figure, do so. Same is true for bullet lists: if you can avoid them, and structure your text in the usual way, do so.

Peer review

Once your paper is submitted, the EiC will decide if it should be considered further or returned as not fitting into the journal’s aims and scope.[4]

In the former case, the paper is forwarded for refereeing. Referees will have to do the same test: i.e., advise the EiC on Outright Rejection (ORR), or proceed with their review. Instances where ORR is common are “exercises on paper” -mostly of the optimization/simulation type-, with little or zero practical relevance. Other ORR cases consist of “attempted solutions” to problems that exist (or created) only in the author’s head, i.e. solutions no one has asked for. Finally, several editors feel that an additional reason for an ORR might be their expectations on a paper’s impact (citations); something not totally uncorrelated with an author’s prior publishing experience.

If the referee decides to review your paper, he becomes your friend and your advisor (at least in MEL); thus, treat him nicely! His objective is to help you improve your paper. He will be constructive, therefore, and will not ask you to do impossible things, e.g. re-estimate a model. If he wanted to do that, he would have rejected the paper at the beginning (ORR).

Dedicated and reliable referees are difficult to find; an ‘endangered species’ I would say. We therefore need to treat them with a lot of understanding as regards their time and busy agendas. The refereeing process of a serious journal is a lengthy one. If you look for ‘quick and dirty’ refereeing, there are plenty of journals around, but think of your reputation: Would you submit again to a journal whose only comment was “this is a good paper and we accept it”? Or one that promises to publish your paper in one month?

Conclusions

For journals like MEL, the ramifications of your results for business and society are more important than figures and percentages in the conclusions.

 Start from your most important results and move down to the less important.

Same as in the abstract, conclusions should be written in non-technical language, to the extent possible. As many people may decide to start reading from your abstract and then conclusions, both should be written in ‘perfect English’; if necessary, seek advice.

Conclusions are ‘conclusions’ and although you may also want to summarize the paper (legitimate), you should not introduce aspects of it, or new ideas, which have not been discussed in the main text. Also, try not to include references, tables, or graphs in your conclusions. Finally, also discuss the limitations of your paper and your ideas on furthering your work.

Good luck with your research!

Professor HE Haralambides
Rotterdam, 2018 / Paris 2020

 

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[1] A very important econometrician once approached the port of Rotterdam, with Archimedes lever in hand, and said: “give me the data and I will solve all your problems”. They are still laughing at the Port of Rotterdam.

[2] I made a mistake: I used superlative, i.e. ‘greatly’ rather than, say, ‘significantly’.

[3] I was once talking to the EiC of a top economics journal. With a big smile on his face I remember him telling me that 75% of his rejections were ending up in two competing journals which, interestingly, had a much higher impact factor than his own!

[4] As said above, this is ‘research’ you should be doing before submitting.

COVID-19 and The Economics of Blank Sailings

 

2020, the year of COVID-19, will be remembered for years to come by future generations. Production, trade, employment and economic activity by and large, all saw significant and very worrisome declines; apart from one industrial sector which, to the contrary, realized handsome profits: Liner Shipping. This was made possible by the ‘withdrawal’ of shipping capacity (20-30%) from the main trade lanes (something that has come to be known as ‘blank sailings’), which allowed carriers to maintain tariffs at profitable levels, assisted at the same time by low fuel prices.

The withdrawal of capacity from OQc to OQm, and the consequent maintenance of tariffs at the higher level Pm, rather than Pc (above graph),  does not only deprive shippers (and consumers) of a substantial part of their consumer surplus/welfare (equal to PmPcGB) but, for society too, it results in a substantial misallocation of resources equal to QmQcEG (returning ships to their quasi-bankrupt beneficial owners or anchoring them at a layup berth represent a cost and a waste).

In Industrial Economics, the distance AB is known as Lerner’s Degree of Market Power. That is, the ability of the carrier to keep tariffs above marginal costs and thus appropriate part of consumer surplus. In free competition, this distance would be zero.

The above ramifications of blank sailings would not have been possible with a more pro-active and less lenient Regulator, especially in Europe. 

The comments made above should not be taken as an attack to this most useful of institutions in shipping -global shipping alliances- but only as a criticism to the Regulator whose role is to ensure that  the whatever privileges are rightfully afforded to shipping (conference price-setting or alliance capacity coordination) are not abused by inadmissible concerted business practices, even when such practices are deemed necessary for the ‘survival’ of a sector crucial to our trade and prosperity.

HH

Port management and governance in a post-COVID-19 era: quo vadis?

 

With the emergence of port economics as a distinct academic discipline some 30 years ago, researchers have invariably perceived and analyzed ports as some sort of hybrid organizations which, although institutionally anchored in public administration and governance structures, are often desperately striving for more managerial autonomy that would enable them to compete in a landscape of increasing regional port competition. 

This rather awkward public-private symbiotic model has persisted over the years, assisted in no small measure by the interest of academics and funding agencies to classify ports in well-structured definitions of port ‘models’, such as landlord, tool and service ports. 

In this, admittedly long, editorial, Theo and I have tried to show, through many examples from real-life day-to-day port management experiences, that a new approach to port management and governance is needed going forward: without diverting much from a port’s institutional ‘ecosystem’, port stakeholders, together with an enlightened port management team, can develop flexible strategies to cope efficiently and resiliently with major disruptions, such as those introduced by the impact of COVID-19 on port- and supply chain operations by and large. 

The COVID-19 pandemic couldn’t provide us with a better example, highlighting the disruptions caused to port and supply chain operations by the blank sailings of mega-carriers, their consequently larger call sizes, and the challenges these developments pose on quay-side and stacking-yard operations; gate congestion; and congestion on connecting infrastructure and city traffic. 

As it is common to MEL editorials, we advise our readers not to skip our many footnotes which, at times, furnish more interesting, if not ‘entertaining’, information than the main text that invoked them.

https://doi.org/10.1057/s41278-020-00162-7

NEWS from Maritime Economics & Logistics (MEL)

As MEL is moving into its third decennium, we take pride in launching two high-profile projects, mapping somewhat our history and our contribution to the development of maritime research during the past two decades.  

Professor Adolf K.Y. Ng of the University of Manitoba (Canada) will be working on the history of our PhD Competition (launched in 1999). He aims to acknowledge not only all persons who have been involved in those unique events, but also to trace the career development of our winners and the way MEL has contributed to their advancement.

Professor Thanos Pallis of the University of the Aegean (Greece) will be developing a similar project, this time tracing the recipients of the MEL-Palgrave Macmillan Springer Prize for best IAME Conference paper, awarded each year at the annual conference of the International Association of Maritime Economists (IAME).

With years, memories weaken and records and archives might prove to be incomplete. We would be grateful therefore if ‘maritime economists’ and of course anyone else who has been involved in any of the two projects, and in possession (or recollection) of interesting anecdotal information of any type, to contact Adolf, Thanos or me. Their assistance will be duly recorded in the two projects. 

HH

China-India tensions: A game of chess?

Admiral James Stavridis (author of the Bloomberg article, link below) is a wise man and his article is exquisitely written and worth reading. I wouldn’t agree with parts of it however. I read: […]One Belt, One Road has one big problem: India, which sits athwart the trade lanes China wants to use to dominate in the 21st century. In that sense, the Himalayan dispute is about control of the Indian Ocean[…].
We have addressed all these issues in our (with Olaf Merk) forthcoming Working Paper (already on the website of ITF-OECD). Assuming naval control was indeed the issue, the Indian Ocean (Bay of Bengal) could be much more effectively controlled through China's investments in Sri Lanka and Myanmar, rather than from the Himalayan plateaus, 5 km above sea level! And it is precisely for this reason India has deployed her navy in the Andaman Sea (Andaman and Nicobar islands), outside the Hambantota-Kyaukpyu notional line that connects the two ports (in Sri Lanka and Myanmar respectively), and, in her view, in a way 'fences off' the Bay of Bengal.
Instead, we believe the ‘message’ of the current Himalayan tensions to PM Modi is a different one: “If you want a good neighbor who doesn’t put his music too loud in the evening, please don’t get too much in bed with the US”.
That simple.
HH
Here is the Bloomberg article of Admiral James Stavridis
Here is our OECD paper

Dovetailing European and Global Transport Infrastructure Networks

When China’s president Xi Jinping visited Rome and Brussels last year, many politicians expressed to him their concerns about China’s investments in ‘strategic’ sectors, such as ports. Italy’s president, Sergio Mattarella was crystal clear in voicing these concerns: «we are deeply Europeans», he said, «we have our own plans» (NB: apparently referring to Trans European Transport Networks- TEN-T), «to which we fully adhere, and we are nations living under the rule of law. These said and out of the way, we are open to discuss with you anything you like». 

President Xi’s answer came the following day in Brussels: «It is not China’s intention to cause problems and disrupt your infrastructure plans; on the contrary, we wish to work “with” you and dovetail those plans with our Belt and Road Initiative (BRI), so that win-win outcomes are achieved in the end».

With Paolo and Roberto we thus decided to write this paper, meant as a ‘roadmap’ towards a revision of our European transport network, dovetailing two extremely complex systems: Our Trans European Transport Network (TEN-T) and China’s Belt and Road Initiative (BRI). The reasons that made us believe such an undertaking would be worth its salt were: a) TEN-T will be revised in three years (2023) anyway; b) Europe’s economic center of gravity moves towards its eastern end; c) it is Europe’s eastern end too that attracts China’s interest, as evidenced by its investments in the port of Piraeus, as well as in Serbia, Hungary, Slovakia, Poland and the Baltic States. I am not sure if we achieved our objective. It would be rather naïve anyway to believe that issues of such complexity could be addressed comprehensively through a short paper. At any rate, though, we believe that a step in the right direction has been taken, even in the form of ‘advice’ to policy makers in Europe and China. 

HE Haralambides
June 2020

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Costa, P., HE Haralambides and R. Roson (2020) ‘From Trans-European (Ten-T) to Trans-Global (Twn-T) Transport Infrastructure Networks. A Conceptual Framework’ in: Francesco Saraceno and Floriana Cerniglia (eds) ‘A European Public Investment Outlook’. Open Book Publishers, Cambridge, UK. https://doi.org/10.11647/OBP.0222.

Oliver Blanchard said about the book: […]Let’s stop being penny wise and pound foolish. Read the carefully argued set of essays contained in this book, and you will understand why increasing public investment is a high priority…(Olivier Blanchard: Robert Solow Professor of Economics Emeritus, Massachusetts Institute of Technology).

Delineating the dynamic hinterlands of container ports

[free to download in the next 50 days; see footnote]

In our newest research, published in the Journal of Transport Geography, we have attacked afresh the fundamental issue of port hinterland; that is, the areas of origin or destination of the cargoes passing through the port.[1] Our objective was to see if novel research methods, such as the membership degree method and the Huff Model could be used to demarcate a container port’s hinterland more accurately than what earlier research has achieved. Today, such knowledge is paramount to a port’s planning and development endeavors, in a landscape of intensifying port competition.

And this is why.[2] 

Thirty years ago, when port hinterlands were captive, thus giving ports a considerable degree of monopoly power, my students could easily calculate the optimum size of a port, based on a country’s trade, population and growth data. Today, with land transport infrastructures expanding at an impressive rate, and with containerization and the footloose nature of the container, hinterlands have become stochastic and thus difficult to define: they may be expanding or contracting, they are shared among ports, and, more importantly, from the captive hinterlands of the past, they now become increasingly contestable hinterlands (i.e. shared by more than one ports). In Europe, for example, the whole continent constitutes, potentially, the hinterland of each major port, from Rotterdam to Piraeus and, as I have calculated years ago, there are 147 different ways to bring a bicycle from Wuhan, China, to Paris, France.  

A port’s hinterland is therefore the manifestation of the demand for the port’s services. In an era of ‘demand-driven’ port investments; of ‘assigning roles’ to ports; and of increasing cooperation and coordination among them, so as to avoid unfettered and wasteful expansion, the boundary lines of the hinterlands of container ports -for as long as these exist- serve as reference points for future port development and infrastructure planning. In such a landscape, knowledge of one’s demand is the single most important factor determining the future development of port business, as well as the future of the port itself by and large. 

As said above, in this paper we use the membership degree method and the Huff Model to delineate the hinterlands of ports, using China's 20 major foreign trade container ports as an example, albeit in a fully generalizable approach. Among others, this has allowed us to ‘assign roles’ to ports and classify them in four novel categories: international hubs; regional hubs; node ports; and feeder ports. 

Our research has important policy implications for central- and local governments, as well as port authorities. This is particularly true for those countries (like China) who aim for better ‘coordination’ of port activities among neighboring ports, seeing unfettered port competition as a waste of scarce resources, and believing, as we do, that ports (as well as infrastructure by and large) are there to facilitate competition among companies, rather than competition among themselves.

And, to finish this little introduction with a merry note, those of us who might complain about ‘concerted business practices’ among ports don’t have to look much further than the ‘business  practices’ of the ports’ main clients, i.e. the container shipping companies and their consortia and alliances.

HH

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[1] For a discussion on the various types of hinterlands and their significance for port competition, see: Haralambides (2019) ‘Gigantism in container shipping, ports and global logistics: a time-lapse into the future’. Maritime Economics & Logistics, 21(1), pp. 1-60. (freely downloadable at: https://doi.org/10.1057/s41278-018-00116-0).

[2] This is a simplified introduction for the general reader. The technical paper can be downloaded freely (for the next 50 days) from: https://www.sciencedirect.com/science/article/pii/S0966692319308518?dgcid=coauthors.

Dovetailing Trans European Networks and China’s Belt and Road Initiative

When China’s president Xi Jinping visited Rome and Brussels last year, many European leaders expressed to him Europe's concerns about China’s investments in ‘strategic’ sectors, such as ports. Italy’s president, Sergio Mattarella was crystal clear in voicing these concerns:

«we are deeply Europeans», he said, «we have our own plans» (NB: apparently referring to Trans European Transport Networks- TEN-T), «to which we fully adhere, and we are nations living under the rule of law. These said and out of the way, we are open to discuss with you anything you like».

President Xi’s answer came the following day in Brussels:

«It is not China’s intention to cause problems and disrupt your infrastructure plans; on the contrary, we wish to work “with” you and dovetail those plans with our Belt and Road Initiative (BRI), so as win-win outcomes are achieved in the end».

With Paolo and Roberto we thus decided to write this paper, meant as a ‘roadmap’ towards a revision of our European transport network, dovetailing two extremely complex systems: Our Trans European Transport Network (TEN-T) and China’s Belt and Road Initiative (BRI). The reasons that made us believe such an undertaking would be worth its salt were: a) TEN-T will be revised in three years (2023) anyway; b) Europe’s economic center of gravity moves towards its eastern end; c) it is Europe’s eastern end too that attracts China’s interest, as evidenced by its investments in the port of Piraeus, as well as in Serbia, Hungary, Slovakia, Poland and the Baltic States.

I am not sure if we achieved our objective. It would be rather naïve anyway to believe that issues of such complexity could be addressed comprehensively through a short paper. At any rate, though, we believe that a step in the right direction has been taken, even in the form of ‘advice’ to policy makers in Europe and China.-

ΗΗ

P.S. Paper under review, to be uploaded soon as a preprint in ResearchGate.

Port-Hinterland Transport and Logistics

[…]In spite of the sustained growth of port throughput worldwide, as well as of the substantial infrastructure investments of ports and their efforts to reform and modernize, hinterland transport—representing 60% of the costs of the global maritime supply chain—has not kept pace; productivity in the maritime leg of the supply chain has not been followed by productivity in its hinterland part, apart from the introduction of double-stack trains in the US in the 1980s, or the adoption of the dry port concept in the 2000s.

Moreover, the gigantism in container shipping is straining port infrastructure and cargohandling capacity, causing significant diseconomies of scale, which propagate throughout the supply chain. For many seaports, the weakest link in their transportation chains is hinterland access, due to congested roads and inadequate or non-existent rail connections, causing delays and increases in transport costs.

[…]A reversal of trends can recently be seen however. From the earlier days when ports were obliged to move downstream to find space, ports now look back to their hinterlands to find the additional space they require. Inland intermodal terminals (or dry ports) are thus mushrooming, connected to seaports by rail, road or inland waterways. As such, inland intermodal terminals are usually developed close to railway and motorway junctions to facilitate the transfer of containers between modes of transport, favouring, to the extent possible, the more environmentally friendly transport modes, such as rail and inland waterways[…]

(for the full article click here)

HE Haralambides

Georgia's Anaklia mega-container facility on the “Belt and Road” backpack?

The 2.5 billion deep-water mega container facility at Anaklia has been shelved. The ‘official’ explanation is that the Anaklia Development Consortium (ADC) has been unsuccessful in securing finance. The true reasons, however, may be quite different, having more to do with regional geopolitics rather than anything else.

In a surprise move, the Georgian government has issued an authorization for the development of Anaklia’s southern rival, the port of Poti. The bid has been won by APMT (Maersk group). Looking at the latter’s plans, I cannot say I am very impressed however. These are about an initially general cargo facility, eventually developing a 300m container berth of limited drafts (11m).

The Poti authorization is a strategic move of high complexity, given that, at the same time, the Georgian government is talking to various international institutional investors (including China), in an effort to secure the financing of Anaklia. I am certain the government will succeed, and a new bid will be launched soon. Anaklia is a very strategic node on what I have earlier called  “a missing link of BRI”, i.e. that of connecting the Caspian and the Black seas, continuing to central Europe through the Romanian port of Constanza on its western part, and connecting to the Bandar Abbas (Persian Gulf)-Tehran-Baku (Azerbaijan)-Moscow North-South Corridor  on its eastern part (also strongly eyed by India). I launched this idea 4 years ago in Kuwait, and we were happy to see, last year, an implementation agreement signed between the governments of Turkmenistan, Azerbaijan, Georgia and Romania.

I expect that the Anaklia project will be re-launched very soon. One of the requirements would be the upgrading of the Baku-Tbilisi-Anaklia railway. If this happens, the Poti project will have to be scaled down, limiting itself to general cargo throughput only. The distance between the two ports is too short and, to my view, there is not enough room for container facilities in both ports.
This would be a waste of good money.

HH

Decision-making in container shipping: reactive or proactive?

“The best monopoly profit is a quite life” used to tell me Sir John Hicks many years ago when, as a student, I was writing my thesis -The Dynamic Stability of Competitive Equilibrium- based on his book Value and Capital.[1]

In our present research, Mike and I have tried to say something similar, albeit with different words: In imperfect markets (collusion, concentration, etc.), mistakes do not cost that much, and they can be easily corrected. Here, carrier short-run capacity deployment decisions could be described as ‘reactive’, or as ‘steady as she goes’. In other words, carriers’ approach is fairly mechanistic:  ‘let’s see what we did in the previous years, or what our competitors our doing, and do the same’. Expectations regarding future developments in their markets do not matter so much and, in a way, decisions are made reactively, like someone who tries to drive a car forward by looking in their rear view mirror. This is the essence of adaptive expectations.[2]

On the contrary, competition obliges you to stand on your toes; to sit on the edge of your chair; to bite your nails; to look around and ahead and try to fathom every scrap of information coming your way which could impact your bottom line. Here, mistakes cost; sometimes they cost a lot, as the bankruptcy of Hanjin Shipping has taught us. Such a decision-making approach reflects  the fundamentals of rational expectations.[3]

Mike and I therefore thought that if, through the use of shipping capacity deployment data, we could discover how shipowners form their expectations on future developments in their markets, i.e. adaptively or rationally, we should also be able to say something about the structure of their industry (imperfect or competitive). Such information, particularly today when the European Commission is considering extending for another five years its antitrust concessions to international shipping, might be of a certain value.

Admittedly, our results are not as strong as we would like them to be, but this is a good thing and a good starting point for other researchers who would like to follow us. We  however have been able to show that, in the more competitive Pacific market, carriers may tend to decide rationally; in the Atlantic market, instead, this could not be established and carriers there seem to be reactive rather than proactive, forming their expectations adaptively.

If true, the latter finding (Atlantic) comes only to validate, for one more time, what we said 15 years ago in our Erasmus Report:[4] “the disbanding of liner conferences from European trades has done little to increase competition in liner shipping”.

Hercules Haralambides
January 2020

PS. The complete paper is freely downloadable here: doi.org/10.1186/s41072-019-0057-2

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[1] J.R. Hicks (1939) Value and Capital: An inquiry into some fundamental principles of economic theory. Oxford: Clarendon Press, 1939.

[2] See Milton Friedman (1968). The Role of Monetary Policy. American Economic Review, 58 (1): 1–17.

[3] See John A. Muth (1961). Rational Expectations and the Theory of Price Movements. Econometrica 29 (6): 315–335, and Thomas Sargent (1986) Rational Expectations and Inflation. New York: Harper and Row, 1986.

[4] The Erasmus Report: Global Logistics and the Future of Liner Shipping Conferences. DOI: 10.13140/RG.2.1.3225.3200 (Report prepared for the European Commission’s Competition Directorate General “for assistance in processing public submissions to be received in response to the “consultation paper” on the review of Council regulation 4056/86)”.