Tuesday, June 15, 2021

Port Centrality and the ‘Composite Connectivity Index' - CCI


Port Centrality and the ‘Composite Connectivity Index’-CCI: Introducing a New Concept in Assessing the Attractiveness of (Hub) Ports

A lot of ink has been shed on the concept of (port) connectivity, following the pioneering work of Jan Hoffmann. This is particularly true these days in view of the strength of global shipping alliances (GSA) in ‘managing’ their joint supply of tonnage, and the impact this power has on the frequency of services; number o companies calling at a port; ship- and call sizes, and much more that I have covered before.

But ‘simple connectivity’ alone cannot explain the importance of a port as an international hub, its attractiveness to shippers, and its ability to develop new transshipment traffic. Connectivity needs to be combined with measures of ‘centrality’, as these are derived from network theory (no matter how well connected is a port in the Arctic, or in Tierra del Fuego, it will never assume hub-port functions). 

In our forthcoming research, I have therefore coined the term “composite connectivity”. Through the use of advanced optimization techniques and network theory (Two-Stage Data Envelopment Analysis), we first measure ‘connectivity’ and we use this measure as input to the second stage, which measures the strength of ‘centrality’. The “Composite Connectivity Index” - CCI is thus introduced as a weighted additive (or geometric) mean.



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