Journal of Transport Geography 17 (2009)10-20 Contents lists available at ScienceDirect Transport Geograpny Journal of Transport Geography ELSEVIER journal homepage:www.elsevier.com/locate/jtrangeo Emerging inter-industry partnerships between shipping lines and stevedores: from rivalry to cooperation? Martin Soppea.",Francesco Parola b,Antoine Fremonta INRETS-SPLOT French National Institute for Transport and Safety Research,2 Avenue du GL.Malleret-Joinville,94114 Arcueil Cedex,France University of Genova-Department of Business Studies,CIELI-Italian Centre of Excellence for Integrated Logistics,Via Vivaldi 5.16126 Genova,Italy ARTICLE INFO ABSTRACT Keywords: Since late-1960s stevedoring operations assumed a dramatic importance for shipping lines,who have Shipping lines been securing dedicated berths for some decades.Over the last 20 years,the institutional turn in ports International terminal operators drove the overseas expansion of pure stevedoring companies.For quite a long time carriers and steve- Ports dores fiercely battled each other both for bargaining contractual arrangements and for securing new con- Corporate strategy Co-operation cessions in the key port areas.Currently this scenario is slowly changing and some early-forms of Maritime network partnership are coming out.This paper analyses the different pathways through which carriers satisfy their needs of handling services.Based on 2006 data it empirically demonstrates the growing resort to such forms of cooperation both contractually and via equity ventures. 2008 Elsevier Ltd.All rights reserved. 1.The liner shipping industry and the supply of port services Terminal Operators2(ITOs)is on the point of dominating the market. The advent of containerisation has deeply affected the organisa- The emergence of powerful pure terminal operators(PTOs). tion of maritime shipping industry as well as the relationships willing to diversify their portfolios and to increase their financial among the players within the transportation chain.The demand margins overseas,gave momentum to carriers'involvement in ter- for containerised transport has been continuously increasing and minals as major shipping lines were growingly constrained to de- leading shippers to progressively enlarge their focus towards a fend their enormous investment in maritime assets(i.e.vessels). 'global'perspective.The whole liner shipping industry had to adapt The last few years have been characterised by a strong battle be- to these changes of demand.Besides the expansion in marine oper- tween carriers and PTOs to get the control of the "port phase". ations,top shipping lines(SLs)have also aimed at reducing other Nevertheless,this scenario,characterised by a clear-cut separa- production costs,diversifying their investments and achieving tion and a fierce competition between SLs and PTOs (Parola and paths of vertical integration along the transportation chain(Panay- Musso,2007),is slowly changing (i.e."corporate realignment"- ides and Cullinane,2002).Major carriers have deeply invested on Slack,2004).The progressive scarcity of available port spaces for the land-side,set up a network of port facilities all over the world greenfield projects,the end of the "privatisation window"(early and become integrated shipping lines'(ISLs). 1990s/early 2000s).as well as the enormous cash-flows needed In reaction to the carriers'evolving and aggressive strategies, for the realization of modern terminal facilities,are leading PTOs but also in order to exploit the growing investment opportunities and carriers to stay "closer"to each other and to experiment with offered by the recent "institutional turn"in ports (De Monie, some forms of co-operation.In other words,the above changes are 1994:Airriess,2001:Juhel,2001;World Bank,2001),some pure driving towards a partial convergence of their respective interests, terminal operators (PTOs)have been expanding their operations giving rise to the establishment of contractual and equity internationally,by setting up wide networks of terminal facilities cooperative agreements. across various regions.The port handling sector has been experi- encing a similar consolidation trend:a handful of International 2 In this respect,a very common term used in the container handling business by Corresponding author.Tel.:+33 1 47 40 72 20:fax:+33 1 45 47 56 06. leading consultants (Drewry.OSC.etc.)is Global Terminal Operators (GTOs). E-mail addresses:martin.soppe@inrets.fr (M.Soppe),parola@economia.unige.it Nevertheless.in this paper,we prefer to use the term"ITO"because,as demonstrated (F.Parola).antoine.fremont@inrets.fr(A.Fremont). by Parola and Veenstra(2008).only a few terminal operators show a real global 1Shipping lines which have taken on many roles in the supply chain.involving terminal network.Therefore,it is more appropriate to discuss "international"players, more than just sea transport.One of these activities is terminal operations,which is of avoiding the potentially misleading GTO terminology.although widely used.ITOs(as interest in this paper. well as GTOs)refers to both PTOs and ISLs as defined earlier. 0966-6923/$-see front matter 2008 Elsevier Ltd.All rights reserved. doi:10.1016 j.jtrangeo.2008.04.006
Emerging inter-industry partnerships between shipping lines and stevedores: from rivalry to cooperation? Martin Soppé a,*, Francesco Parola b , Antoine Frémont a a INRETS-SPLOT French National Institute for Transport and Safety Research, 2 Avenue du Gl. Malleret-Joinville, 94114 Arcueil Cedex, France bUniversity of Genova – Department of Business Studies, CIELI – Italian Centre of Excellence for Integrated Logistics, Via Vivaldi 5, 16126 Genova, Italy article info Keywords: Shipping lines International terminal operators Ports Corporate strategy Co-operation Maritime network abstract Since late-1960s stevedoring operations assumed a dramatic importance for shipping lines, who have been securing dedicated berths for some decades. Over the last 20 years, the institutional turn in ports drove the overseas expansion of pure stevedoring companies. For quite a long time carriers and stevedores fiercely battled each other both for bargaining contractual arrangements and for securing new concessions in the key port areas. Currently this scenario is slowly changing and some early-forms of partnership are coming out. This paper analyses the different pathways through which carriers satisfy their needs of handling services. Based on 2006 data it empirically demonstrates the growing resort to such forms of cooperation both contractually and via equity ventures. 2008 Elsevier Ltd. All rights reserved. 1. The liner shipping industry and the supply of port services The advent of containerisation has deeply affected the organisation of maritime shipping industry as well as the relationships among the players within the transportation chain. The demand for containerised transport has been continuously increasing and leading shippers to progressively enlarge their focus towards a ‘global’ perspective. The whole liner shipping industry had to adapt to these changes of demand. Besides the expansion in marine operations, top shipping lines (SLs) have also aimed at reducing other production costs, diversifying their investments and achieving paths of vertical integration along the transportation chain (Panayides and Cullinane, 2002). Major carriers have deeply invested on the land-side, set up a network of port facilities all over the world and become integrated shipping lines1 (ISLs). In reaction to the carriers’ evolving and aggressive strategies, but also in order to exploit the growing investment opportunities offered by the recent ‘‘institutional turn” in ports (De Monie, 1994; Airriess, 2001; Juhel, 2001; World Bank, 2001), some pure terminal operators (PTOs) have been expanding their operations internationally, by setting up wide networks of terminal facilities across various regions. The port handling sector has been experiencing a similar consolidation trend: a handful of International Terminal Operators2 (ITOs) is on the point of dominating the market. The emergence of powerful pure terminal operators (PTOs), willing to diversify their portfolios and to increase their financial margins overseas, gave momentum to carriers’ involvement in terminals as major shipping lines were growingly constrained to defend their enormous investment in maritime assets (i.e. vessels). The last few years have been characterised by a strong battle between carriers and PTOs to get the control of the ‘‘port phase”. Nevertheless, this scenario, characterised by a clear-cut separation and a fierce competition between SLs and PTOs (Parola and Musso, 2007), is slowly changing (i.e. ‘‘corporate realignment” – Slack, 2004). The progressive scarcity of available port spaces for greenfield projects, the end of the ‘‘privatisation window” (early 1990s/early 2000s), as well as the enormous cash-flows needed for the realization of modern terminal facilities, are leading PTOs and carriers to stay ‘‘closer” to each other and to experiment with some forms of co-operation. In other words, the above changes are driving towards a partial convergence of their respective interests, giving rise to the establishment of contractual and equity cooperative agreements. 0966-6923/$ - see front matter 2008 Elsevier Ltd. All rights reserved. doi:10.1016/j.jtrangeo.2008.04.006 * Corresponding author. Tel.: +33 1 47 40 72 20; fax: +33 1 45 47 56 06. E-mail addresses: martin.soppe@inrets.fr (M. Soppé), parola@economia.unige.it (F. Parola), antoine.fremont@inrets.fr (A. Frémont). 1 Shipping lines which have taken on many roles in the supply chain, involving more than just sea transport. One of these activities is terminal operations, which is of interest in this paper. 2 In this respect, a very common term used in the container handling business by leading consultants (Drewry, OSC, etc.) is Global Terminal Operators (GTOs). Nevertheless, in this paper, we prefer to use the term ‘‘ITO” because, as demonstrated by Parola and Veenstra (2008), only a few terminal operators show a real global terminal network. Therefore, it is more appropriate to discuss ‘‘international” players, avoiding the potentially misleading GTO terminology, although widely used. ITOs (as well as GTOs) refers to both PTOs and ISLs as defined earlier. Journal of Transport Geography 17 (2009) 10–20 Contents lists available at ScienceDirect Journal of Transport Geography journal homepage: www.elsevier.com/locate/jtrangeo
M.Soppe et aL/Journal of Transport Geography 17(2009)10-20 11 1.1.Literature review partnerships in specific port projects,in which carriers are inter- ested in joint-investment for supporting their maritime network. Within the academic literature the topic of container port ser- Our paper demonstrates the legitimacy of such an hypothesis. vices has been considered by many studies.The involvement of showing the emerging forms(contractual and equity)of vertical shipping lines in stevedoring activities and the emergence of ded- coordination3 between carriers and stevedores and highlighting icated terminals have been discussed earlier by Slack(1993)and players which are resorting to such partnerships. Haralambides et al.(2002).Stopford (2002)showed the impor- The paper is structured as follows:Section 2 is dedicated to tance of the cost of handling operations that justifies their inter- methodological issues explaining the data used for our quantita- nalisation.Sys(2005)and Cullinane and Khanna (2000)explored tive analyses.In Section 3,we address the evolution of the con- the productivity-driven reasons related to the increasing size of tainer handling business characterised by the entry of carriers vessels.Other authors addressed the integration of terminal activ- and the extension of PTOs'networks and also the structure of the ities as a consequence of carriers'networks extension and their market comparing the demand and supply sides from a geograph- hub and spoke organization.(Baird,2006:Guy,2003;Heaver ical viewpoint.Our analyses reveal a gap in terms of geographical et al.,2000:Rimmer,2004).Analysed vertical integration strategies coverage and market maturity between carriers'demand and PTOs of carriers,highlighting the potential role of network economies in supply which is one of the elements explaining the carriers'strat- such a process.Intermodality is also among the leading factors egies vis-a-vis handling activities at the global level.Finally,Sec- pushing SLs to keep control on their terminal operations (Notte- tions 4-6 provide a deeper empirical study of the latter.aiming boom,2004a:Panayides,2002). at identifying "unrevealed"and geographically extended forms of Contrary to carriers'entry in ports,the emergence of PTOs has inter-industry co-operation between SLs and ITOs. been caught up by the mainstream literature relatively late.Early studies by Ferrari and Benacchio(2000)and Peters(2001),showed 2.Methodological notes leading players expanding in various markets.More recently,Not- teboom (2004b)discussed major PTOs in relation to the growing A quantitative analysis of carriers'traffic flow distribution over concentration in liner shipping and to the rise of global alliances. terminals is an interesting method of addressing the relationship Midoro et al.(2005).addressing the Peters'typology on terminal between terminal operators and SLs.The analysis of such figures operators'waves of internationalisation,focused on major drivers can give a novel insight into the way SLs satisfy their growing of carriers'vertical strategies in ports.Slack and Fremont (2005) needs of port services,such as the share of self-handling (through and Olivier et al.(2007)analysed the stevedoring industry clearly outlining the two dominant business models,PTO and ISL Finally WOS"and POS),the diversification of the suppliers portfolio,the degree of dependence on major third-party terminal operators Olivier (2005)approached the role of emerging (local)forms of partnerships between PTOs and ISLs and foresaw the future estab- (especially PTOs)or the relevance and the geographical spread of emerging cooperative ventures (Vs)between shipping lines and lishment of wider inter-industry relationships even at a global PTOs in ports. scale. For the purpose of this research,carriers'statistical data on traf- While much attention remains focused on global carriers and fic flows handled in each container terminal are probably the most PTOs as a customer/supplier duo or as competing port investors, relevant.Unfortunately,the latter are unavailable,being consid- no efforts have been made to evaluate the match between the de- ered as highly strategic and kept confidential by SLs.Nevertheless, mand and the supply of handling services in really quantitative terms.Moreover,the current trends reshaping the port industry the extrapolation of data on transport capacities(i.e.vessel slots) makes it possible to overcome the unavailability of carrier's (Olivier and Slack,2006)are also calling for a new understanding throughput per terminal.Fremont and Soppe(2004b)showed a of it,mostly based on terminals,instead of ports as a whole,as strong correlation (0.91)between the throughput and the trans- the new emerging "elementary unit"of analysis ("terminalisation port capacities of calling services per port.For this study we calcu- of seaports"-Slack,2007).A "terminal by terminal"approach lated such coefficient of correlation for the 145 individual facilities seems to be much more relevant to depict the existing correlations operated by ITOs.The resulting value (0.82)still shows a high de- between the top players of two industries gree of correlation and demonstrates the fairness of our approach replacing real traffic data(not available)by transport capacity. 1.2.Aim of the paper and research questions In this relation,we have collected information on maritime con- tainerised services in 2006(year-end)from the Containerisation The purpose of our research is to investigate the nature of the International on-line data set.We completed the work investigat- relationships between carriers and terminal operators in ports. ing the brand name of the different container terminal companies This paper addresses two relevant research questions.The first called at by each maritime service.This latter information is a re- one is to outline how carriers satisfy their growing need of port han- sult of an intense and deep research into all available sources dling services.We identify the ocean carriers'major handling (SLs'and terminal operators'websites,corporate interviews,Con- providers and consider whether they are predominantly interna- tainerisation International on-line,Drewry reports,professional tional or local players.We also evaluate the relevance of self-han- press releases and scientific papers).Such data on various terminal dling within the overall activity.Our methodology,which is handling suppliers,do not have a high confidentiality value at the quantitative and based on transport capacity,reveals the depen- level of a single port,but acquire a considerable value when col- dency of SLs on third-party handling providers as well as the rela- lected and aggregated on a regional or worldwide scale.In this re- tionship between carriers'maritime services and their own port network.This discussion leads to a second and even more chal- spect,accurate information on relevant shareholders has also been collected in order to weight their different financial involvement in lenging question:are carriers and stevedores really embracing a path each project. of co-operation in ports,after having fiercely battled for such a long- time?From a carrier's viewpoint,this would mean to rely on the handling capacity of the same stevedore in many ports around 3 Vertical coordination:adjustment between the different phases of the transpor- the world,thus projecting on an international scale a contractual tation chain;in this paper,such a concept is applied to the relationships between shipping lines and terminal operators in ports. relation previously managed only on a port by port basis.More- WOS:wholly owned subsidiaries. over,this much closer relationship could easily drive to equity >POS:partially owned subsidiaries
1.1. Literature review Within the academic literature the topic of container port services has been considered by many studies. The involvement of shipping lines in stevedoring activities and the emergence of dedicated terminals have been discussed earlier by Slack (1993) and Haralambides et al. (2002). Stopford (2002) showed the importance of the cost of handling operations that justifies their internalisation. Sys (2005) and Cullinane and Khanna (2000) explored the productivity-driven reasons related to the increasing size of vessels. Other authors addressed the integration of terminal activities as a consequence of carriers’ networks extension and their hub and spoke organization. (Baird, 2006; Guy, 2003; Heaver et al., 2000; Rimmer, 2004). Analysed vertical integration strategies of carriers, highlighting the potential role of network economies in such a process. Intermodality is also among the leading factors pushing SLs to keep control on their terminal operations (Notteboom, 2004a; Panayides, 2002). Contrary to carriers’ entry in ports, the emergence of PTOs has been caught up by the mainstream literature relatively late. Early studies by Ferrari and Benacchio (2000) and Peters (2001), showed leading players expanding in various markets. More recently, Notteboom (2004b) discussed major PTOs in relation to the growing concentration in liner shipping and to the rise of global alliances. Midoro et al. (2005), addressing the Peters’ typology on terminal operators’ waves of internationalisation, focused on major drivers of carriers’ vertical strategies in ports. Slack and Frémont (2005) and Olivier et al. (2007) analysed the stevedoring industry clearly outlining the two dominant business models, PTO and ISL. Finally, Olivier (2005) approached the role of emerging (local) forms of partnerships between PTOs and ISLs and foresaw the future establishment of wider inter-industry relationships even at a global scale. While much attention remains focused on global carriers and PTOs as a customer/supplier duo or as competing port investors, no efforts have been made to evaluate the match between the demand and the supply of handling services in really quantitative terms. Moreover, the current trends reshaping the port industry (Olivier and Slack, 2006) are also calling for a new understanding of it, mostly based on terminals, instead of ports as a whole, as the new emerging ‘‘elementary unit” of analysis (‘‘terminalisation of seaports” – Slack, 2007). A ‘‘terminal by terminal” approach seems to be much more relevant to depict the existing correlations between the top players of two industries. 1.2. Aim of the paper and research questions The purpose of our research is to investigate the nature of the relationships between carriers and terminal operators in ports. This paper addresses two relevant research questions. The first one is to outline how carriers satisfy their growing need of port handling services. We identify the ocean carriers’ major handling providers and consider whether they are predominantly international or local players. We also evaluate the relevance of self-handling within the overall activity. Our methodology, which is quantitative and based on transport capacity, reveals the dependency of SLs on third-party handling providers as well as the relationship between carriers’ maritime services and their own port network. This discussion leads to a second and even more challenging question: are carriers and stevedores really embracing a path of co-operation in ports, after having fiercely battled for such a longtime? From a carrier’s viewpoint, this would mean to rely on the handling capacity of the same stevedore in many ports around the world, thus projecting on an international scale a contractual relation previously managed only on a port by port basis. Moreover, this much closer relationship could easily drive to equity partnerships in specific port projects, in which carriers are interested in joint-investment for supporting their maritime network. Our paper demonstrates the legitimacy of such an hypothesis, showing the emerging forms (contractual and equity) of vertical coordination3 between carriers and stevedores and highlighting players which are resorting to such partnerships. The paper is structured as follows: Section 2 is dedicated to methodological issues explaining the data used for our quantitative analyses. In Section 3, we address the evolution of the container handling business characterised by the entry of carriers and the extension of PTOs’ networks and also the structure of the market comparing the demand and supply sides from a geographical viewpoint. Our analyses reveal a gap in terms of geographical coverage and market maturity between carriers’ demand and PTOs’ supply which is one of the elements explaining the carriers’ strategies vis-à-vis handling activities at the global level. Finally, Sections 4–6 provide a deeper empirical study of the latter, aiming at identifying ‘‘unrevealed” and geographically extended forms of inter-industry co-operation between SLs and ITOs. 2. Methodological notes A quantitative analysis of carriers’ traffic flow distribution over terminals is an interesting method of addressing the relationship between terminal operators and SLs. The analysis of such figures can give a novel insight into the way SLs satisfy their growing needs of port services, such as the share of self-handling (through WOS4 and POS5 ), the diversification of the suppliers portfolio, the degree of dependence on major third-party terminal operators (especially PTOs) or the relevance and the geographical spread of emerging cooperative ventures (JVs) between shipping lines and PTOs in ports. For the purpose of this research, carriers’ statistical data on traf- fic flows handled in each container terminal are probably the most relevant. Unfortunately, the latter are unavailable, being considered as highly strategic and kept confidential by SLs. Nevertheless, the extrapolation of data on transport capacities (i.e. vessel slots) makes it possible to overcome the unavailability of carrier’s throughput per terminal. Frémont and Soppé (2004b) showed a strong correlation (0.91) between the throughput and the transport capacities of calling services per port. For this study we calculated such coefficient of correlation for the 145 individual facilities operated by ITOs. The resulting value (0.82) still shows a high degree of correlation and demonstrates the fairness of our approach replacing real traffic data (not available) by transport capacity. In this relation, we have collected information on maritime containerised services in 2006 (year-end) from the Containerisation International on-line data set. We completed the work investigating the brand name of the different container terminal companies called at by each maritime service. This latter information is a result of an intense and deep research into all available sources (SLs’ and terminal operators’ websites, corporate interviews, Containerisation International on-line, Drewry reports, professional press releases and scientific papers). Such data on various terminal handling suppliers, do not have a high confidentiality value at the level of a single port, but acquire a considerable value when collected and aggregated on a regional or worldwide scale. In this respect, accurate information on relevant shareholders has also been collected in order to weight their different financial involvement in each project. 3 Vertical coordination: adjustment between the different phases of the transportation chain; in this paper, such a concept is applied to the relationships between shipping lines and terminal operators in ports. 4 WOS: wholly owned subsidiaries. 5 POS: partially owned subsidiaries. M. Soppé et al. / Journal of Transport Geography 17 (2009) 10–20 11
12 M.Soppe et aL/Joumal of Transport Geography 17 (2009)10-20 Table 1 Table 2 Sampled leading shipping lines groups and strategic alliances Sampled international terminal operators Shipping Lines Country of Alliance or Fleet capacity Vessels Terminal Type Country of Throughout No.of ports (SL) 01g1n independent (TEU) operator ongin million TEU share (mid-2006) Maersk Line Denmark Independent 1608431 518 (2005) MSC Switzerland Independent 942205 306 Hutchison Port H. PTO Hong Kong 51.8 13.0 44 CMA-CGMP France Independent 569708 220 APM Terminals" Denmark 40.4 10.1 Evergreen Taiwan Independent 539801 166 PSO Nedlloyd ISL UK/Netherlands 25 a.6 Hapag-Lloyd Germany Grand Alliance 448840 138 PSA Corporation PTO Singapore 40.3 10.1 Coscon China CKYH Alliance 385368 125 Dubai Ports PTO Dubai 12.9 3.2 36 China Shipping China Independent 349105 98 Worldb APL Singapore New World 329896 102 PSO Ports PTO UK 23.8 6.0 Alliances China merchant h PTo Hong Kong 245 6.1 12 Hanjin South Korea CKYH Alllance 322482 11 Cosco Pacific/ ISL China 14.7 3.7 Shipping Coscon NYK Line Japan Grand Alliance 273779 84 Eurogate PTO Germany 121 3.0 OOCL Hong Kong Grand Alliance 268502 70 Evergreen ISL Taiwan 8.7 22 12 K-Line Japan CKYH Alliance 247396 80 MSC ISL Switzerland 78 2.0 1 Yang Ming Line laiwan CKYH Alliance 223192 80 SSA Marine PTO USA 7.3 1.8 MISC Malaysia Grand Alliance 43615 16 HHLA PTO Germany 9 APL ISL 9 1.4 Source:our elaborations from Cl-on line database (as October 1st,2006). Singapore New World PTO Hong Kong 5.5 1.5 a Maersk includes Safmarine Holdings bCMA-CGM includes Delmas. Modern terminals PTO Hong Kong 5.0 1.3 Evergreen includes Italia Marittima and Hatsu Ltd. d The New World Alliance is not included in the sample as the paper is only Hanjin ISL South Korea 4.9 1.2 focused on the two biggest alliances. ISL Hong Kong 4.3 NYK ISL Japan 4.2 1.0 Dragados PTO Spain 0.9 8 CMA-CGM ISI France 3.4 0.8 Our quantitative analysis focuses on the distribution of trans- MOL ISL Japan 8 TCB PTO Spain port capacity for fourteen selected shipping lines(Table 1).The K-Line ISL lapan 2 87 7 sample covers exhaustively all the ports of call,14 top shipping ICTSI PTO Philippines . 0 5 lines(ranked by fleet capacity),including their main subsidiaries, Yang Ming ISI Taiwan 1.5 .4 the two major strategic alliances and the 27 current ITOs(Table China Shipping ISL China 1.2 0.3 5 2).both PTOs and ISLs(ranked by throughput).The stevedoring TD. Hyundai ISL South Korea 1.2 0.3 5 companies outside our sample have been labelled as"local play- Hapag-Lloyd ISL Germany 0.9 0.2 ers".Our sample covers all the shipping services directly operated International operators total 304.8 76.4 by the selected carriers,deploying owned and chartered vessels World throughput 3992 100.0 Feeder connections have been considered only if directly Total PTO 197.5 49.5 operated. Total ISL 107.3 26.9 For all the services we examine the "call capacity"(ie.vessel size in TEUs)in container terminals(2006).The data from Contain- Hong Kong.Taiwan and China are considered separate political entities. Source:our elaborations from Drewry (2006)and company annual reports. erisation International provide for each service the port rotation The Maersk Group(APMT and Maersk Line)took over P&O Nedlloyd in 2005. the number and the capacity of ships deployed by each carrier DPW took over P&O Ports in early-2006. and the frequency.The above parameters have been organised APM Terminals and Cosco Pacific/Coscon are hybrid operators.They changed within the "WCTC database"(Weekly Containerised Transport their'dedicated terminal'strategy,looking for third-party customers. Capacity database)which has the called port(per each carrier's service)as its elementary record.In case of services jointly run by an alliance or a consortium the real contribution (i.e.shared vessels)of each SL has also been specified.For reasons of unifor- 3.A geographical frame for vertical coordination:demand mity and consistency all capacities have been converted to weekly versus supply offset equivalent terms called "weekly capacity".More specifically,the relationship between the carrier(demand)and the terminal oper- The SLs'strategies are determined by the supply of terminal ator(supply)has been managed weighting the WCTC by the finan- facilities made available by the terminal operators.Size,market cial involvement of different terminal shareholders.Thus,the shares bargaining power,prices,portfolio of terminals and geo- WCTC generated by a vessel call of any maritime service has been graphical reference determine the very context in which the verti- split among and associated to various shareholders as explained in cal coordination takes shape. the following example.The weighted weekly containerised trans- As transport activity is strongly location-dependent,we will first port capacity is referred to as WWCTC. examine the geographical match between the supply (i.e.container terminal networks)and the demand(i.e.geographical distribution Let's consider a terminal 6 with the following shareholders:A of transport capacities),focusing in particular on the global scale. (50%).B(40%).C(10%). Fig.1 reveals a considerable lag of the stevedoring industry on the Let's consider a maritime service X calling at 5. pathway to globalisation.This in fact is a relatively young industry WCTC is the weekly capacity of the service X calling at 8. contrary to liner shipping which is a mature sector.This lag can be ex- WWCTC is the weighted capacity of the service X calling at 8 plained by the different globalisation mechanisms affecting container assigned to the shareholder A. handling and liner shipping industries(as well as manufacturing sec- The WCTC is split among the three shareholders A,B,C: tors).Production sectors have been at the core of the globalisation WCTC=WWCTC+WWCTC+WWCTC. process and have sought to exploit geographical differences,econo- WCTC =(0.5WCTC)+(0.4WCTC)+(0.1WCTC). mies of scale and the possibility of overcoming national constraints
Our quantitative analysis focuses on the distribution of transport capacity for fourteen selected shipping lines (Table 1). The sample covers exhaustively all the ports of call, 14 top shipping lines (ranked by fleet capacity), including their main subsidiaries, the two major strategic alliances and the 27 current ITOs (Table 2), both PTOs and ISLs (ranked by throughput). The stevedoring companies outside our sample have been labelled as ‘‘local players”. Our sample covers all the shipping services directly operated by the selected carriers, deploying owned and chartered vessels. Feeder connections have been considered only if directly operated. For all the services we examine the ‘‘call capacity” (i.e. vessel size in TEUs) in container terminals (2006). The data from Containerisation International provide for each service the port rotation, the number and the capacity of ships deployed by each carrier and the frequency. The above parameters have been organised within the ‘‘WCTC database” (Weekly Containerised Transport Capacity database) which has the called port (per each carrier’s service) as its elementary record. In case of services jointly run by an alliance or a consortium the real contribution (i.e. shared vessels) of each SL has also been specified. For reasons of uniformity and consistency all capacities have been converted to weekly equivalent terms called ‘‘weekly capacity”. More specifically, the relationship between the carrier (demand) and the terminal operator (supply) has been managed weighting the WCTC by the financial involvement of different terminal shareholders. Thus, the WCTC generated by a vessel call of any maritime service has been split among and associated to various shareholders as explained in the following example. The weighted weekly containerised transport capacity is referred to as WWCTC. Let’s consider a terminal d with the following shareholders: A (50%), B (40%), C (10%). Let’s consider a maritime service X calling at d. WCTCX d is the weekly capacity of the service X calling at d. WWCTCX A is the weighted capacity of the service X calling at d assigned to the shareholder A. The WCTC is split among the three shareholders A, B, C: WCTCX d ¼ WWCTCX A þ WWCTCX B þ WWCTCX C . WCTCX d ¼ ð0:5WCTCX d Þþð0:4WCTCX d Þþð0:1WCTCX d Þ. 3. A geographical frame for vertical coordination: demand versus supply offset The SLs’ strategies are determined by the supply of terminal facilities made available by the terminal operators. Size, market shares bargaining power, prices, portfolio of terminals and geographical reference determine the very context in which the vertical coordination takes shape. As transport activity is strongly location-dependent, we will first examine the geographical match between the supply (i.e. container terminal networks) and the demand (i.e. geographical distribution of transport capacities), focusing in particular on the global scale. Fig. 1 reveals a considerable lag of the stevedoring industry on the pathway to globalisation. This in fact is a relatively young industry contrary to liner shipping which is a mature sector. This lag can be explained by the different globalisationmechanisms affecting container handling and liner shipping industries (as well as manufacturing sectors). Production sectors have been at the core of the globalisation process and have sought to exploit geographical differences, economies of scale and the possibility of overcoming national constraints. Table 1 Sampled leading shipping lines groups and strategic alliances Shipping Lines (SL) Country of origin Alliance or independent Fleet capacity (TEU) Vessels Maersk Linea Denmark Independent 1 608 431 518 MSC Switzerland Independent 942 205 306 CMA–CGMb France Independent 569 708 220 Evergreenc Taiwan Independent 539 801 166 Hapag–Lloyd Germany Grand Alliance 448 840 138 Coscon China CKYH Alliance 385 368 125 China Shipping China Independent 349 105 98 APL Singapore New World Allianced 329 896 102 Hanjin Shipping South Korea CKYH Alliance 322 482 77 NYK Line Japan Grand Alliance 273 779 84 OOCL Hong Kong Grand Alliance 268 502 70 K-Line Japan CKYH Alliance 247 396 80 Yang Ming Line Taiwan CKYH Alliance 223 192 80 MISC Malaysia Grand Alliance 43 615 16 Source: our elaborations from CI-on line database (as October 1st, 2006). a Maersk includes Safmarine. b CMA-CGM includes Delmas. c Evergreen includes Italia Marittima and Hatsu. d The New World Alliance is not included in the sample as the paper is only focused on the two biggest alliances. Table 2 Sampled international terminal operators Terminal operator Type Country of origin Throughput million TEU (2005) % share No. of ports (mid-2006) Hutchison Port H. PTO Hong Kong 51.8 13.0 44 APM Terminalsa ISLc Denmark 40.4 10.1 42 P&O Nedlloyda ISL UK/Netherlands 2.5 0.6 42 PSA Corporation PTO Singapore 40.3 10.1 20 Dubai Ports Worldb PTO Dubai 12.9 3.2 36 P&O Portsb PTO UK 23.8 6.0 36 China Merchant H. PTO Hong Kong 24.5 6.1 12 Cosco Pacific/ Coscon ISLc China 14.7 3.7 19 Eurogate PTO Germany 12.1 3.0 10 Evergreen ISL Taiwan 8.7 2.2 12 MSC ISL Switzerland 7.8 2.0 14 SSA Marine PTO USA 7.3 1.8 9 HHLA PTO Germany 6.0 1.5 9 APL ISL Singapore 5.7 1.4 10 New World Holdings PTO Hong Kong 5.5 1.5 3 Modern terminals Ltd. PTO Hong Kong 5.0 1.3 3 Hanjin ISL South Korea 4.9 1.2 10 OOCL ISL Hong Kong 4.3 1.1 4 NYK ISL Japan 4.2 1.0 13 Dragados PTO Spain 3.6 0.9 8 CMA–CGM ISL France 3.4 0.8 5 MOL ISL Japan 3.2 0.8 8 TCB PTO Spain 2.8 0.7 8 K-Line ISL Japan 2.7 0.7 7 ICTSI PTO Philippines 1.9 0.5 5 Yang Ming ISL Taiwan 1.5 0.4 3 China Shipping TD. ISL China 1.2 0.3 5 Hyundai ISL South Korea 1.2 0.3 5 Hapag–Lloyd ISL Germany 0.9 0.2 2 International operators total 304.8 76.4 World throughput 399.2 100.0 Total PTO 197.5 49.5 Total ISL 107.3 26.9 Hong Kong, Taiwan and China are considered separate political entities. Source: our elaborations from Drewry (2006) and company annual reports. a The Maersk Group (APMT and Maersk Line) took over P& O Nedlloyd in 2005. b DPW took over P& O Ports in early-2006. c APM Terminals and Cosco Pacific/Coscon are hybrid operators. They changed their ‘dedicated terminal’ strategy, looking for third-party customers. 12 M. Soppé et al. / Journal of Transport Geography 17 (2009) 10–20
M.Soppe et aL/Journal of Transport Geography 17(2009)10-20 13 SLs have been the vector for this new economic organisation and the Data reported in Figs.2 and 3 show the geographical match be- match with a new global demand has been a real competitive chal- tween SLs'networks and those of container terminals.In spite of lenge for them.For the handling sector,the interest for and the possi- the general evolution towards global networks,and although the bilities of global extension have been more constrained.Geographical gap in concentration levels has been progressively filled by PTOs differences or configuration are not a real and direct source of benefits a geographical offset remains between the demand and the supply or competitiveness for them.Their international growth was driven sides.For the time being scarcely any terminal network has reached by the growing power of the carriers and by investment opportunities the critical size to be able to provide a global coverage.Although in ports opening the doors to foreign private investors. only few shipping lines can really claim to be global carriers Notwithstanding the lag in the stevedoring industry,the ship- (Fremont and Soppe,2004a).the SLs'networks have generally a ping and handling sectors have been experiencing a similar consol- wider geographical spread tending to a worldwide scale,achieved idation trend.The respective market concentration ratios both by the means of external growth or horizontal integration. converged to a similar level.In fact,in each industry the top 5 con- This geographical offset and maturity gap sets a frame in which trol over 40%of the market and,in 2006,the concentration ratio in the vertical coordination takes place.In spite of ongoing extension the stevedoring business experienced a strong acceleration follow- of PTOs'networks,the offer of terminal networks is still frag- ing the intense M&A activities.This means that stevedoring oper- mented.On one side such a situation prevents SLs from achieving ators have progressively filled the gap with their customers (i.e. an oligopoly of some mega-PTOs spread across all the major port SLs)in terms of concentration,increasing in turn their bargaining regions.On the other side,this limits the potential emergence power in negotiating handling contracts. and the related benefits of large scale co-operation between SLs 55% 50% 45% 40% 35% Liner shipping 30% Port handling 25% 20% 15% 10% 19901991199219931994199519961997199819992000200120022003200420052006 Fig.1.Evolution of market shares controlled by top five players in liner shipping and container handling.Note:Data on liner shipping are referred to the cellular fleet capacity of major carriers while port handling figures are referred to the total throughput of leading container terminal operators(both PTOs and ISLs).Throughput data of terminal operators are not calculated on an equity basis.Source:our elaborations from Containerisation International (various years).Drewry(2003.2004,2005.2006)and companies' websites.2006 figures are estimations. 100- 80 ☐Maersk MSC 60 ■CMA-CGM 40 Hapag-Lloyd Evergreen 20 三三 East ific ca Eur Africa F ar Nort So Fig.2.Shipping lines'weekly containerised t city regions(2006 data.%of the total SL's WCTC).Source:WCTC database(2006).Soppe M.,Parola F.,Fremont A
SLs have been the vector for this new economic organisation and the match with a new global demand has been a real competitive challenge for them. For the handling sector, the interest for and the possibilities of global extension have been more constrained. Geographical differences or configuration are not a real and direct source of benefits or competitiveness for them. Their international growth was driven by the growing power of the carriers and by investment opportunities in ports opening the doors to foreign private investors. Notwithstanding the lag in the stevedoring industry, the shipping and handling sectors have been experiencing a similar consolidation trend. The respective market concentration ratios both converged to a similar level. In fact, in each industry the top 5 control over 40% of the market and, in 2006, the concentration ratio in the stevedoring business experienced a strong acceleration following the intense M& A activities. This means that stevedoring operators have progressively filled the gap with their customers (i.e. SLs) in terms of concentration, increasing in turn their bargaining power in negotiating handling contracts. Data reported in Figs. 2 and 3 show the geographical match between SLs’ networks and those of container terminals. In spite of the general evolution towards global networks, and although the gap in concentration levels has been progressively filled by PTOs, a geographical offset remains between the demand and the supply sides. For the time being scarcely any terminal network has reached the critical size to be able to provide a global coverage. Although only few shipping lines can really claim to be global carriers (Frémont and Soppé, 2004a), the SLs’ networks have generally a wider geographical spread tending to a worldwide scale, achieved by the means of external growth or horizontal integration. This geographical offset and maturity gap sets a frame in which the vertical coordination takes place. In spite of ongoing extension of PTOs’ networks, the offer of terminal networks is still fragmented. On one side such a situation prevents SLs from achieving an oligopoly of some mega-PTOs spread across all the major port regions. On the other side, this limits the potential emergence and the related benefits of large scale co-operation between SLs Fig. 1. Evolution of market shares controlled by top five players in liner shipping and container handling. Note: Data on liner shipping are referred to the cellular fleet capacity of major carriers while port handling figures are referred to the total throughput of leading container terminal operators (both PTOs and ISLs). Throughput data of terminal operators are not calculated on an equity basis. Source: our elaborations from Containerisation International (various years), Drewry (2003,2004,2005,2006) and companies’ websites. 2006 figures are estimations. Fig. 2. Shipping lines’ weekly containerised transport capacity distribution over world’s regions (2006 data, % of the total SL’s WCTC). Source: WCTC database (2006), Soppé M., Parola F., Frémont A. M. Soppé et al. / Journal of Transport Geography 17 (2009) 10–20 13
14 M.Soppe et aL/Joumal of Transport Geography 17(2009)10-20 100 ☐HPH 60 APMT ■PSA 40 DPW CMH South Fig.3.Terminal operators'throughput distribution over world's regions(2006 data, th or's throughput) Source:Containerisation International 2006 Soppe M.,Parola F..Fremont A. and PTOs.In the following sections our quantitative analysis will self-handling 13% disclose the relations between carriers and their port providers, in order to identify the strategies devised by SLs to secure reliable terminal operations. 4.Shipping lines'operations in ports:the selection of major other ITOs handling providers 15% local TOs Fig.4 provides a breakdown of the WCTC by type of terminal 44% operator.The diagram reveals that the local operators account for nearly half of global capacity of the shipping lines.This suggests that despite the inroads of the vertically or horizontally integrated global companies,local and independent terminal operators re- main an important part of global container handling activity.It may be in part a reflection of the geographical disconnection men- top 5 ITOs tioned in the previous section,whereby the needs of global carriers 28% in the lesser markets are not yet served by ITOs and therefore use the local firms. Fig.4.Overall distribution of weighted weekly containerised transport capacity The market share of the other types of terminal operators(Fig.4) (2006 data)Source:WWCTC database(2006).Soppe M..Parola F..Fremont A. reveals the relative weight of"TOP 5"and"other ITOs",which to- gether account for a similar market share of local TOs.The "TOP 5".as expected,are particularly important,representing 28%of total shipping capacity.In contrast,shipping lines'terminal handling more vertical integration are still concentrating their efforts in subsidiaries account for only 13%of the total capacity,a figure hid- ports of their home market(Hanjin in Asia,Cosco in China,MSC ing substantial differences among various carriers'behaviour. in Europe). In this respect,Fig.5 provides a breakdown of the shipping The second group(Gp2)is composed of CMA-CGM,MSC,NYK lines'capacity by type of terminal operator,self-handling,interna- and Yang Ming.Similarly to the previous cluster these shipping tional providers and local operators.The triangular graph reveals lines are characterized by their wish for independence through four groups of carriers with similar strategies for securing terminal portfolio diversification in ports.Their traffic is handled by a wide services.The first group (Gp1)is composed of Maersk,Evergreen range of terminal operators both local or international,without and Hanjin.In the stevedoring market they are quite'independent' relying on a restricted set of partners.Their use of local players carriers as they are not heavily committed to any third-party ITOs outside Europe and the Mediterranean,areas in which they have and use their own network of facilities.Maersk handles 30%of its invested in many port facilities,shows the typical approach of WCTC through its own subsidiaries and JV.while for Hanjin and MSC and CMA.This is due both to their desire for independence Evergreen this share is around 26%and 22%,respectively.In this from major PTOs and to the structure of their maritime network, relation Maersk,as a pioneer in integrated handling activity,holds often calling secondary ports where international stevedores are a notable strategic and economic advantage.Its network is not only not present.Also the other two carriers of the cluster,NYK and the widest among ISLs,but also the most diversified among all ter- Yang Ming,reveal a high WCTC share handled by local operators. minal operators (both ISLs and PTOs).Its maritime network relies The major characteristic of the two remaining SLs groups(Gp3 on hub ports whose control is of strategic importance.While Ever- and Gp4)is to have a high share of WCTC handled by ITOs.How- green follows the Maersk's pathway towards a global network of ever,they reveal different self-handling activities and resort to lo- almost exclusive terminals,other top shipping lines striving for cal operators.Hapag-Lloyd,China Shipping and MISC(Gp3)have
and PTOs. In the following sections our quantitative analysis will disclose the relations between carriers and their port providers, in order to identify the strategies devised by SLs to secure reliable terminal operations. 4. Shipping lines’ operations in ports: the selection of major handling providers Fig. 4 provides a breakdown of the WCTC by type of terminal operator. The diagram reveals that the local operators account for nearly half of global capacity of the shipping lines. This suggests that despite the inroads of the vertically or horizontally integrated global companies, local and independent terminal operators remain an important part of global container handling activity. It may be in part a reflection of the geographical disconnection mentioned in the previous section, whereby the needs of global carriers in the lesser markets are not yet served by ITOs and therefore use the local firms. The market share of the other types of terminal operators (Fig. 4) reveals the relative weight of ‘‘TOP 5” and ‘‘other ITOs”, which together account for a similar market share of local TOs. The ‘‘TOP 5”, as expected, are particularly important, representing 28% of total shipping capacity. In contrast, shipping lines’ terminal handling subsidiaries account for only 13% of the total capacity, a figure hiding substantial differences among various carriers’ behaviour. In this respect, Fig. 5 provides a breakdown of the shipping lines’ capacity by type of terminal operator, self-handling, international providers and local operators. The triangular graph reveals four groups of carriers with similar strategies for securing terminal services. The first group (Gp1) is composed of Maersk, Evergreen and Hanjin. In the stevedoring market they are quite ‘independent’ carriers as they are not heavily committed to any third-party ITOs and use their own network of facilities. Maersk handles 30% of its WCTC through its own subsidiaries and JV, while for Hanjin and Evergreen this share is around 26% and 22%, respectively. In this relation Maersk, as a pioneer in integrated handling activity, holds a notable strategic and economic advantage. Its network is not only the widest among ISLs, but also the most diversified among all terminal operators (both ISLs and PTOs). Its maritime network relies on hub ports whose control is of strategic importance. While Evergreen follows the Maersk’s pathway towards a global network of almost exclusive terminals, other top shipping lines striving for more vertical integration are still concentrating their efforts in ports of their home market (Hanjin in Asia, Cosco in China, MSC in Europe). The second group (Gp2) is composed of CMA–CGM, MSC, NYK and Yang Ming. Similarly to the previous cluster these shipping lines are characterized by their wish for independence through portfolio diversification in ports. Their traffic is handled by a wide range of terminal operators both local or international, without relying on a restricted set of partners. Their use of local players outside Europe and the Mediterranean, areas in which they have invested in many port facilities, shows the typical approach of MSC and CMA. This is due both to their desire for independence from major PTOs and to the structure of their maritime network, often calling secondary ports where international stevedores are not present. Also the other two carriers of the cluster, NYK and Yang Ming, reveal a high WCTC share handled by local operators. The major characteristic of the two remaining SLs groups (Gp3 and Gp4) is to have a high share of WCTC handled by ITOs. However, they reveal different self-handling activities and resort to local operators. Hapag–Lloyd, China Shipping and MISC (Gp3) have Fig. 3. Terminal operators’ throughput distribution over world’s regions (2006 data, % of the terminal operator’s throughput). Source: Containerisation International 2006, Soppé M., Parola F., Frémont A. Fig. 4. Overall distribution of weighted weekly containerised transport capacity (2006 data). Source: WWCTC database (2006), Soppé M., Parola F., Frémont A. 14 M. Soppé et al. / Journal of Transport Geography 17 (2009) 10–20
M.Soppe et aL/Journal of Transport Geography 17(2009)10-20 Gp3 self-handling 100% Fig.5.Distribution of weighted weekly containerised transport capacity over the main categories of handling providers (2006 data).Note:The lines inside the triangle indicate the average value for each of the three categories of terminal operators.Source:WWCTC database(2006).Soppe M..Parola F..Fremont A no relevant handling activity on their own.These carriers focus on investments in ports. the horizontal growth in their core business,liner shipping. In order to evaluate various carriers'behaviour in getting han- The last group(Gp4)is mainly composed of Asian carriers such as dling services,we split their WCTC in accordance to the different Cosco,APL and K-Line.Basically they have developed an interna- ways adopted to 'defend'their maritime assets: tional self-handling activity which is supplemented with ITOs'ser- vices.In this respect,the self-handling is essentially,though non Contract:simply signing a contract with an independent third- exclusively,on a regional basis and accounts for 10-20%of the party terminal operator (either international or local): respective carriers'capacity.The two major alliances,CKYH and Joint-venture (JV):entering in a joint-venture with local and/or Grand Alliance also belong to this cluster and the mutual resort to international partners (equity share <50%): the facilities of the partners produce advantages for all the members. Partially Owned Subsidiary (POS):establishing or acquiring a Predictably,the relations between carriers and ISLs of other mar- company acting as terminal operator(equity share 50%): itime groups are limited(Appendix 1).Rarely does the terminal divi- Wholly Owned Subsidiary (WOS):establishing or acquiring a sion(ISL)of a competing carrier appear as one of the major container company acting as terminal operator (equity share 100%). handling providers of a top carrier.However,two specific cases should be noted.Although originating from a carrier,APMT as"hybrid Except for the first option,all the others usually drive the carrier operator"is an exception to the above general rule,as it figures among to obtain dedicated or.at least prioritised,handling services for its the main suppliers of Evergreen,CMA-CGM,Cosco and APL Similarly. calling vessels.This points out how carriers differentiate their con- as mentioned above,within the CKYHand the Grand Alliance,a recipro- sumption of port services,either by adopting a self-handling strat- cal co-operation is evident in port operations,as the partners often re- egy,in its various forms,or resorting to third-party suppliers as sort to using facilities where other members have financial interests. shown in the previous section. The general situation shown by sampled carriers reveals the rel- 5.The carriers'dilemma:how to invest in ports to defend the evance of contracts,76%on average.The share of WCTC(11%)man- aged through owned subsidiaries(POS or WOS)is still low and the maritime assets? portion of capacity handled via JVs is slightly higher(13%).Fig.6 In this section,the approach of securing handling services by and Appendix 2 reveal significant differences in SLs'behaviour and identify four clusters of carriers. carriers goes beyond the self-handling versus third party option. The first group(Gp1)comprises Maersk and the CKYH Alliance. It analyses the intensity of direct financial involvement of carriers in terminal facilities.As mentioned earlier,carriers are increasingly The market leader and pioneer,Maersk Line,shows a quite atypical called on to defend the big maritime assets,which means that they and aggressive strategy,handling through its own port network over 45%of the WCTC.Almost half of it is through WOS.In some have to support their maritime investments through additional specific port facilities,this carrier has equity relationships with PSA,HPH,DPW and,regionally,with Eurogate. The CKYH Alliance also shows an equity involvement above the APM Terminals is probably the most interesting example of"hybrid operator" This term,coined by Drewry.refers to those ISLs having a relatively high share of average.It must be remembered that such an outcome refers to third-party traffic.Normally,in fact,most ISLs provide dedicated handling services to investments made by single members,as allied carriers appear reluc- their own vessels and very rarely become port suppliers of other shipping lines. tant to jointly invest in the same facility and prefer to pursue indepen-
no relevant handling activity on their own. These carriers focus on the horizontal growth in their core business, liner shipping. The last group (Gp4) is mainly composed of Asian carriers such as Cosco, APL and K-Line. Basically they have developed an international self-handling activity which is supplemented with ITOs’ services. In this respect, the self-handling is essentially, though non exclusively, on a regional basis and accounts for 10–20% of the respective carriers’ capacity. The two major alliances, CKYH and Grand Alliance also belong to this cluster and the mutual resort to the facilities of the partners produce advantages for all the members. Predictably, the relations between carriers and ISLs of other maritime groups are limited (Appendix 1). Rarely does the terminal division (ISL) of a competing carrier appear as one of the major container handling providers of a top carrier. However, two specific cases should be noted. Although originating from a carrier, APMT as ‘‘hybrid operator”6 is an exception to the above general rule, as it figures among the main suppliers of Evergreen, CMA–CGM, Cosco and APL. Similarly, asmentioned above, within the CKYH and the Grand Alliance, a reciprocal co-operation is evident in port operations, as the partners often resort to using facilities where other members have financial interests. 5. The carriers’ dilemma: how to invest in ports to defend the maritime assets? In this section, the approach of securing handling services by carriers goes beyond the self-handling versus third party option. It analyses the intensity of direct financial involvement of carriers in terminal facilities. As mentioned earlier, carriers are increasingly called on to defend the big maritime assets, which means that they have to support their maritime investments through additional investments in ports. In order to evaluate various carriers’ behaviour in getting handling services, we split their WCTC in accordance to the different ways adopted to ‘defend’ their maritime assets: – Contract: simply signing a contract with an independent thirdparty terminal operator (either international or local); – Joint-venture (JV): entering in a joint-venture with local and/or international partners (equity share 6 50%); – Partially Owned Subsidiary (POS): establishing or acquiring a company acting as terminal operator (equity share > 50%); – Wholly Owned Subsidiary (WOS): establishing or acquiring a company acting as terminal operator (equity share = 100%). Except for the first option, all the others usually drive the carrier to obtain dedicated or, at least prioritised, handling services for its calling vessels. This points out how carriers differentiate their consumption of port services, either by adopting a self-handling strategy, in its various forms, or resorting to third-party suppliers as shown in the previous section. The general situation shown by sampled carriers reveals the relevance of contracts, 76% on average. The share of WCTC (11%) managed through owned subsidiaries (POS or WOS) is still low and the portion of capacity handled via JVs is slightly higher (13%). Fig. 6 and Appendix 2 reveal significant differences in SLs’ behaviour and identify four clusters of carriers. The first group (Gp1) comprises Maersk and the CKYH Alliance. The market leader and pioneer, Maersk Line, shows a quite atypical and aggressive strategy, handling through its own port network over 45% of the WCTC. Almost half of it is through WOS. In some specific port facilities, this carrier has equity relationships with PSA, HPH, DPW and, regionally, with Eurogate. The CKYH Alliance also shows an equity involvement above the average. It must be remembered that such an outcome refers to investments made by single members, as allied carriers appear reluctant to jointly invest in the same facility and prefer to pursue indepenFig. 5. Distribution of weighted weekly containerised transport capacity over the main categories of handling providers (2006 data). Note: The lines inside the triangle indicate the average value for each of the three categories of terminal operators. Source: WWCTC database (2006), Soppé M., Parola F., Frémont A. 6 APM Terminals is probably the most interesting example of ‘‘hybrid operator”. This term, coined by Drewry, refers to those ISLs having a relatively high share of third-party traffic. Normally, in fact, most ISLs provide dedicated handling services to their own vessels and very rarely become port suppliers of other shipping lines. M. Soppé et al. / Journal of Transport Geography 17 (2009) 10–20 15
16 M.Soppe et aL/Joumal of Transport Geography 17(2009)10-20 SOd o SOM Gp2. Contract 1000 Fig.6.Carriers'weighted weekly containerised transport capacity split in port operations:from third-party suppliers to owned subsidiaries(2006 data).Note:The lines inside the triangle indicate the average value for each of the three categories.These figures also include management contracts and subleases:Evergreen (Tokyo,2 in Osaka. Tacoma).APL(Kobe,Osaka).Hanjin(Osaka,Tokyo)Detailed data for this figure can be found in Appendix 2.Source:WWCTC database(2006).Soppe M.,Parola F..Fremont A. dent investment strategies in ports.Specifically in the case of the the assets deployed on the main services.The major results dis- CKYH Alliance,thanks to the networks of some members(i.e.COSCO closed through the elaborations of the WCTC database reveal various and Hanjin).the share of the WCTC covered through a direct finan- strategic approaches among shipping lines to secure such services cial involvement is as high as 40%,and over a quarter of it is through and ask to go beyond the traditional'make or buy'dichotomy.This JVs. raises the issue of the potential vertical coordination between steve- Two other Asian carriers Hanjin and Evergreen(Gp2)have a propen- dores and shipping lines in port investments and led to our ultimate sity to use equity ventures.Both reveal an important share of WOS and research question:are there any emerging or so far unrevealed JV and they avoid joining international players in equity ventures and forms of inter-industry partnerships in ports?If so,what is the spa- prefer local terminal operators(i.e.MTC on the US West Coast). tial coverage of such agreements?Are they predominantly on a con- Cosco and MSC(Gp3)have a specific propensity to use JV agree- tractual basis or do they imply a relevant equity involvement? ments.In the stevedoring market they are not attracted by day-to- Which are the major players involved in such co-operative patterns? day management as they prefer to have the bargaining power of a Fig 7 and Appendix 3 address this point powerfully.As far as the rel- shareholder but not the operational burden of a'stevedore'.Con- evance of the actual relationships between the major players of the two trary to COSCO,MSC is a latecomer in the port industry and there- industries is concerned,it matches their geographical extension with fore the share of JV is much lower(20.6%vs.34.3%).They partner the WCTC share that such contractual and equity arrangements repre- (JV)both with leading PTOs and local TOs. sent for each shipping line.A really global partnership should present a All the remaining carriers of the sample can be clustered in the very wide geographical coverage,reasonably spreading across five re- same group(Gp4).They present a share of owned subsidiaries(POS gions and even more,coupled with a strong relevance in terms ofWCTO WOS)and JV below the average and the role of contracts is still share (15%and over)for the carrier involved. dominant.Some of them are not involved in international port The current empirical evidence does not disclose any real global activities,like MISC and Hapag-Lloyd,while others are latecomers partnership between carriers and terminal operators.We have dis- (China Shipping and CMA-CGM)or have been involved in the ste- cussed a series of reasons for this point,including the maturity and vedoring market for a long time but do not consider it as a business geographical offset between the demand and the supply sides and priority.Within this group,the share of WCTC covered via equity the strategies of the largest carriers that prefer taking advantage of ranges in the best cases from 10%to 20%(NYK,K-Line,APL OOCL diversification of their suppliers portfolio at the global level rather etc.)with a peculiar focus on owned subsidiaries. than a close cooperation with a limited number of major pure ter- minal operators. Notwithstanding,some interesting cooperative relationships 6.Shipping lines and terminal operators in ports:from even at a transnational scale,come out.The three global PTOs re- opponents to partners? veal fairly wide relationships with shipping lines:HPH and PSA mostly in Far East and Northern Europe,and DPW with a more Previous sections showed how ocean carriers get port handling diversified network in five or six regions out of the eight.Undoubt- services from third-party providers (Section 4)and how they di- edly these three major players seems to be the strongest rectly invest in maritime facilities (Section 5)in order to defend candidates to become global partners of some shipping lines.On
dent investment strategies in ports. Specifically in the case of the CKYH Alliance, thanks to the networks of some members (i.e. COSCO and Hanjin), the share of the WCTC covered through a direct financial involvement is as high as 40%, and over a quarter of it is through JVs. Two other Asian carriers Hanjin and Evergreen (Gp2) have a propensity to use equity ventures. Both reveal an important share of WOS and JV and they avoid joining international players in equity ventures and prefer local terminal operators (i.e. MTC on the US West Coast). Cosco and MSC (Gp3) have a specific propensity to use JV agreements. In the stevedoring market they are not attracted by day-today management as they prefer to have the bargaining power of a shareholder but not the operational burden of a ‘stevedore’. Contrary to COSCO, MSC is a latecomer in the port industry and therefore the share of JV is much lower (20.6% vs. 34.3%). They partner (JV) both with leading PTOs and local TOs. All the remaining carriers of the sample can be clustered in the same group (Gp4). They present a share of owned subsidiaries (POS - WOS) and JV below the average and the role of contracts is still dominant. Some of them are not involved in international port activities, like MISC and Hapag–Lloyd, while others are latecomers (China Shipping and CMA–CGM) or have been involved in the stevedoring market for a long time but do not consider it as a business priority. Within this group, the share of WCTC covered via equity ranges in the best cases from 10% to 20% (NYK, K-Line, APL, OOCL, etc.), with a peculiar focus on owned subsidiaries. 6. Shipping lines and terminal operators in ports: from opponents to partners? Previous sections showed how ocean carriers get port handling services from third-party providers (Section 4) and how they directly invest in maritime facilities (Section 5) in order to defend the assets deployed on the main services. The major results disclosed through the elaborations of theWCTC database reveal various strategic approaches among shipping lines to secure such services and ask to go beyond the traditional ‘make or buy’ dichotomy. This raises the issue of the potential vertical coordination between stevedores and shipping lines in port investments and led to our ultimate research question: are there any emerging or so far unrevealed forms of inter-industry partnerships in ports? If so, what is the spatial coverage of such agreements? Are they predominantly on a contractual basis or do they imply a relevant equity involvement? Which are the major players involved in such co-operative patterns? Fig. 7andAppendix 3address this point powerfully. As far as the relevance of the actual relationships between themajor players of the two industries is concerned, it matches their geographical extension with the WCTC share that such contractual and equity arrangements represent for each shipping line. A really global partnership should present a very wide geographical coverage, reasonably spreading across five regions and evenmore, coupledwith a strong relevance in terms ofWCTC share (15% and over) for the carrier involved. The current empirical evidence does not disclose any real global partnership between carriers and terminal operators. We have discussed a series of reasons for this point, including the maturity and geographical offset between the demand and the supply sides and the strategies of the largest carriers that prefer taking advantage of diversification of their suppliers portfolio at the global level rather than a close cooperation with a limited number of major pure terminal operators. Notwithstanding, some interesting cooperative relationships, even at a transnational scale, come out. The three global PTOs reveal fairly wide relationships with shipping lines: HPH and PSA mostly in Far East and Northern Europe, and DPW with a more diversified network in five or six regions out of the eight. Undoubtedly these three major players seems to be the strongest candidates to become global partners of some shipping lines. On Fig. 6. Carriers’ weighted weekly containerised transport capacity split in port operations: from third-party suppliers to owned subsidiaries (2006 data). Note: The lines inside the triangle indicate the average value for each of the three categories. These figures also include management contracts and subleases: Evergreen (Tokyo, 2 in Osaka, Tacoma), APL (Kobe, Osaka), Hanjin (Osaka, Tokyo). Detailed data for this figure can be found in Appendix 2. Source: WWCTC database (2006), Soppé M., Parola F., Frémont A. 16 M. Soppé et al. / Journal of Transport Geography 17 (2009) 10–20
M.Soppe et aL/Journal of Transport Geography 17 (2009)10-20 17 Shipping lines PAo]1-Bed Hutchison Port H. Dubai Ports World PSA Corporation APM Terminals Hanjin NYK China Merchant H. Geographical coverage WCTC relevance below 5% transnational(5 regions and over) 5-10% multi-regional (2-4 regions) 10-15% regional (1-2 regions) above 15% Fig.7.Shipping lines and ITOs:from local to transnational partnerships.Note:In Fig.7 are represented only those partnerships with a regional coverage(or higher)or a WCTC relevance above 5%.Source:WWCTC database (2006).Soppe M..Parola F..Fremont A. the contrary,the outcomes reveal that APM Terminal,despite its it simply a problem of trust among partners which are reluctant highly diversified network.still has too many 'family ties'with to embrace a long-term and global relationship?Moreover,are Maersk Line for playing such a role in the near future. the players of the above mentioned 'triad'(HPH,PSA and DPW) Looking regionally,some PTOs like Eurogate,SSA and China the only real candidates for such potential co-operative ventures Merchant Holdings seem to be the most relevant partners for or could be even powerful hybrid players,i.e.APM Terminals and carriers.In this respect,future studies should investigate more Cosco Group,be called to act as global partners in a future deeply the peculiarities of such partnerships in the diverse regional perspective? contexts. In order to face the above unanswered questions,the research Despite the obstacles mentioned for ISLs to obtain third-party agenda should be focused on the evolving role of financial opera- traffic,some partnerships "between carriers"do appear:CMA- tions (V,takeover,etc.).In fact,although contractual agreements CGM,Coscon and K-Line(as carriers)with Maersk/APMT (as steve- between carriers and stevedores are the most common option dore),China Shipping (as carrier)with Cosco (as stevedore).Yang equity ventures already represent an attractive solution for sharing Ming(as carrier)with Hanjin (as stevedore)and Hapag-Lloyd(as investment risk (JV)and aggressive takeovers are the quickest way carrier)with NYK (as stevedores) to penetrate a profitable market with high barriers to entry. Moreover,the two major strategic alliances show some interests Finally,specific attention should be paid to the monitoring of in establishing a network of relationships with some selected port major global alliances.So far their members are still reluctant to providers.In particular,the CKYH Alliance often associates with jointly invest in asset-based activities but some emerging projects HPH and PSA networks,even in equity ventures participated by like in Northern Europe might suggest a possible reversal of trend. some of its members,mostly Cosco.The Grand Alliance is also close After a long period of 'hatching'and instability will the alliances fi- to the top PTOs but rather on a contractual basis.Such forms of nally reach a phase of maturity driving them to change approach cooperation by the two alliances reveal a good attitude to partner- in port investments? ships with PTOs in ports but mostly to contractual relationships. Several partnerships are close to the limits required for a "glo- Acknowledgements bal status"in terms of geographical spread or WCTC relevance. These might be developed in the future to achieve a real global The authors are grateful to Prof.Brian Slack of Concordia scale.The three major cases show HPH as protagonist.In fact,the University for his valuable support in the writing of this paper. relationships in ports between this stevedore and K-Line,CKYH The authors remain solely responsible for any errors and Alliance and Hanjin might potentially evolve and get a global focus. omissions. Besides such relevant relationships,predominantly on a contrac- tual basis,other interesting cooperative ventures emerge.Cosco and the CKYH Alliance reveal a good relationship with PSA also in equity ventures (Vs). Although examples of global partnerships have not come into the market yet,this study clearly demonstrates the legitimacy of In Antwerp.in the new Deurganck Dock complex,the Antwerp International Terminal (AIT)is a joint venture between the stevedore PSA and three (K-Line,Yang our starting hypothesis based on a growing use of co-operative Ming Line,Hanjin Shipping)of the four shipping lines that are members of the CKYH schemes between shipping lines and stevedores in ports.In this re- Alliance.Cosco.the fourth partner.is not(yet?)involved in this deal.In Rotterdam spect,future studies need to investigate the reasons beyond the HPH and the CKYH consortium signed a memorandum of understanding for the current lack of global partnerships between them.Is the stevedor- realisation of the Euromax Terminal (5.6 million TEU of capacity).Within the "Maasvlakte 2"project,the Rotterdam World Gateway(RWG).a consortium of DP ing market still not mature enough to experience such forms of World.New World Alliance(NWA)and CMA-CGM won the concession to operate the cooperation(geographical offset,not sufficient capacity,etc.),or is 4.2 million TEU/year capacity "Terminal 1"(2013 opening)
the contrary, the outcomes reveal that APM Terminal, despite its highly diversified network, still has too many ‘family ties’ with Maersk Line for playing such a role in the near future. Looking regionally, some PTOs like Eurogate, SSA and China Merchant Holdings seem to be the most relevant partners for carriers. In this respect, future studies should investigate more deeply the peculiarities of such partnerships in the diverse regional contexts. Despite the obstacles mentioned for ISLs to obtain third-party traffic, some partnerships ‘‘between carriers” do appear: CMA– CGM, Coscon and K-Line (as carriers) with Maersk/APMT (as stevedore), China Shipping (as carrier) with Cosco (as stevedore), Yang Ming (as carrier) with Hanjin (as stevedore) and Hapag–Lloyd (as carrier) with NYK (as stevedores). Moreover, the two major strategic alliances show some interests in establishing a network of relationships with some selected port providers. In particular, the CKYH Alliance often associates with HPH and PSA networks, even in equity ventures participated by some of its members, mostly Cosco. The Grand Alliance is also close to the top PTOs but rather on a contractual basis. Such forms of cooperation by the two alliances reveal a good attitude to partnerships with PTOs in ports but mostly to contractual relationships. Several partnerships are close to the limits required for a ‘‘global status” in terms of geographical spread or WCTC relevance. These might be developed in the future to achieve a real global scale. The three major cases show HPH as protagonist. In fact, the relationships in ports between this stevedore and K-Line, CKYH Alliance and Hanjin might potentially evolve and get a global focus. Besides such relevant relationships, predominantly on a contractual basis, other interesting cooperative ventures emerge. Cosco and the CKYH Alliance reveal a good relationship with PSA also in equity ventures (JVs). Although examples of global partnerships have not come into the market yet, this study clearly demonstrates the legitimacy of our starting hypothesis based on a growing use of co-operative schemes between shipping lines and stevedores in ports. In this respect, future studies need to investigate the reasons beyond the current lack of global partnerships between them. Is the stevedoring market still not mature enough to experience such forms of cooperation (geographical offset, not sufficient capacity, etc.), or is it simply a problem of trust among partners which are reluctant to embrace a long-term and global relationship? Moreover, are the players of the above mentioned ‘triad’ (HPH, PSA and DPW) the only real candidates for such potential co-operative ventures, or could be even powerful hybrid players, i.e. APM Terminals and Cosco Group, be called to act as global partners in a future perspective? In order to face the above unanswered questions, the research agenda should be focused on the evolving role of financial operations (JV, takeover, etc.). In fact, although contractual agreements between carriers and stevedores are the most common option, equity ventures already represent an attractive solution for sharing investment risk (JV) and aggressive takeovers are the quickest way to penetrate a profitable market with high barriers to entry. Finally, specific attention should be paid to the monitoring of major global alliances. So far their members are still reluctant to jointly invest in asset-based activities but some emerging projects like in Northern Europe7 , might suggest a possible reversal of trend. After a long period of ‘hatching’ and instability will the alliances fi- nally reach a phase of maturity driving them to change approach in port investments? Acknowledgements The authors are grateful to Prof. Brian Slack of Concordia University for his valuable support in the writing of this paper. The authors remain solely responsible for any errors and omissions. Fig. 7. Shipping lines and ITOs: from local to transnational partnerships. Note: In Fig. 7 are represented only those partnerships with a regional coverage (or higher) or a WCTC relevance above 5%. Source: WWCTC database (2006), Soppé M., Parola F., Frémont A. 7 In Antwerp, in the new Deurganck Dock complex, the Antwerp International Terminal (AIT) is a joint venture between the stevedore PSA and three (K-Line, Yang Ming Line, Hanjin Shipping) of the four shipping lines that are members of the CKYH Alliance. Cosco, the fourth partner, is not (yet?) involved in this deal. In Rotterdam, HPH and the CKYH consortium signed a memorandum of understanding for the realisation of the Euromax Terminal (5.6 million TEU of capacity). Within the ‘‘Maasvlakte 2” project, the Rotterdam World Gateway (RWG), a consortium of DP World, New World Alliance (NWA) and CMA–CGM won the concession to operate the 4.2 million TEU/year capacity ‘‘Terminal 1” (2013 opening). M. Soppé et al. / Journal of Transport Geography 17 (2009) 10–20 17
18 M.Soppe et aL/Joumal of Transport Geography 17(2009)10-20 Appendix 1.Five major terminal operators of shipping lines'portfolios(2006 data,by shipping line,in of WWCTC of each shipping line's portfolio) Top 5 port suppliers per carrier(WWCTC share) Top 5 share Top 5 minus self-handling Local players Maersk APMT HPH PSA DPW Eurogate 47.3 17.2 44.2 30.1 5.7 5.3 3.3 2.8 MSC MSC HPH PSA DPW Eurogate 36.0 26.2 55.1 9.7 9.6 7.8 5.0 3.9 CMA-CGM HPH PSA CMA-CGM DPW APMT 35.5 29.2 54.9 11.1 8.2 6.3 5.9 4.0 Evergreen Evergreen HPH PSA APMT DPW 46.4 24.7 45.9 21.7 12.2 .7 2.5 2.3 HL PSA HPH DPW NYK SSA 34.8 34.8 45.8 9.7 9.4 6.3 5.3 4.0 Cosco HPH Cosco PSA SSA APMT 47.1 34.2 40.2 14.9 12.8 11.5 4.5 3.4 APL APL PSA HPH DPW APMT 53.9 35.8 35.1 18.1 14.6 9.7 8.7 2.8 Hanjin Hanjin HPH PSA Eurogate DPW 55.8 30.2 37.6 25.6 13.6 2 4.1 3.4 NYK NYK DPW HPH HHLA 34.6 23.7 49.2 10.9 7.9 7.9 4.0 3.8 CSCL HPH PSA SSA Cosco DPW 34.8 34.8 48.3 14.9 .2 .2 4.0 2.6 OOCL HPH 00L PSA DPW CMH 42.9 32.0 37.9 11.0 10.9 7.8 7.3 5.8 Kline HPH KLine PSA APMT OOCL 50.3 34.9 39.9 20.2 15.5 6.5 5.2 3.0 YM HPH Yg2竖Mg PSA Hanjin DPW 41.2 31.9 45.8 14.5 7.8 6.6 3.0 MISC PSA DPW HPH TCB CMH 38.3 38.3 52.3 12.1 10.4 8.1 4.5 3.2 CKYH HPH PSA Hanjin KLine Cosco 46.4 27.3 36.0 15.9 11.4 10.1 4.7 4.3 GA PSA HPH NYK OOCL DPW 40.6 25.8 37.2 10.4 9.2 7.9 6.8 6.2 Source:WWCTC database(2006).Soppe M.,Parola F.,Fremont A. Appendix 2.Carriers'WWCTC split in port operations:from third-party suppliers to WOS(2006 data) Carrier Contract (third-party) V POS WoS Maersk 54.7% 19.8% 4.3% 21.1% MSC 79.4% 20.6% CMA-CGM 89.7% 7.1% 3.2% Evergreen 72.2% 8.8% 19.0% Hapag-Lloyd 96.6% 2.0% 1.4% Coscon 63.0% 34.3% 2.4% 0.3% China Shipping 98.4% 1.6% APL 80.8% 1.4% 17.8% Hanjin 68.0% 12.2% 19.8% NYK 83.9% 3.0% 7.7% 5.4% OOCL 89.1% 10.9% K-Line 80.3% 7.7% 2.5% 9.5% Yang Ming 87.3% 5.0% 7.7% MISC 100.0% Grand Alliance 80.9% 2.9% 4.7% 11.5% CKYH Alliance 60.8% 25.8% 12% 12.2% Note:These figures also include management contracts and subleases:Evergreen(Tokyo,2 in Osaka,Tacoma).APL(Kobe,Osaka),Hanjin (Osaka,Tokyo).Source:WWCTC database(2006).Soppe M..Parola F..Fremont A
Appendix 1. Five major terminal operators of shipping lines’ portfolios (2006 data, by shipping line, in % of WWCTC of each shipping line’s portfolio) Top 5 port suppliers per carrier (WWCTC share) Top 5 share Top 5 minus self-handling Local players Maersk APMT HPH PSA DPW Eurogate 47.3 17.2 44.2 30.1 5.7 5.3 3.3 2.8 MSC MSC HPH PSA DPW Eurogate 36.0 26.2 55.1 9.7 9.6 7.8 5.0 3.9 CMA–CGM HPH PSA CMA–CGM DPW APMT 35.5 29.2 54.9 11.1 8.2 6.3 5.9 4.0 Evergreen Evergreen HPH PSA APMT DPW 46.4 24.7 45.9 21.7 12.2 7.7 2.5 2.3 HL PSA HPH DPW NYK SSA 34.8 34.8 45.8 9.7 9.4 6.3 5.3 4.0 Cosco HPH Cosco PSA SSA APMT 47.1 34.2 40.2 14.9 12.8 11.5 4.5 3.4 APL APL PSA HPH DPW APMT 53.9 35.8 35.1 18.1 14.6 9.7 8.7 2.8 Hanjin Hanjin HPH PSA Eurogate DPW 55.8 30.2 37.6 25.6 13.6 9.2 4.1 3.4 NYK NYK DPW PSA HPH HHLA 34.6 23.7 49.2 10.9 7.9 7.9 4.0 3.8 CSCL HPH PSA SSA Cosco DPW 34.8 34.8 48.3 14.9 9.2 4.2 4.0 2.6 OOCL HPH OOCL PSA DPW CMH 42.9 32.0 37.9 11.0 10.9 7.8 7.3 5.8 Kline HPH KLine PSA APMT OOCL 50.3 34.9 39.9 20.2 15.5 6.5 5.2 3.0 YM HPH Yang Ming PSA Hanjin DPW 41.2 31.9 45.8 14.5 9.2 7.8 6.6 3.0 MISC PSA DPW HPH TCB CMH 38.3 38.3 52.3 12.1 10.4 8.1 4.5 3.2 CKYH HPH PSA Hanjin KLine Cosco 46.4 27.3 36.0 15.9 11.4 10.1 4.7 4.3 GA PSA HPH NYK OOCL DPW 40.6 25.8 37.2 10.4 9.2 7.9 6.8 6.2 Source: WWCTC database (2006), Soppé M., Parola F., Frémont A. Appendix 2. Carriers’ WWCTC split in port operations: from third-party suppliers to WOS (2006 data) Carrier Contract (third-party) JV POS WOS Maersk 54.7% 19.8% 4.3% 21.1% MSC 79.4% 20.6% – – CMA–CGM 89.7% 7.1% – 3.2% Evergreen 72.2% 8.8% – 19.0% Hapag–Lloyd 96.6% 2.0% – 1.4% Coscon 63.0% 34.3% 2.4% 0.3% China Shipping 98.4% 1.6% – – APL 80.8% 1.4% – 17.8% Hanjin 68.0% 12.2% – 19.8% NYK 83.9% 3.0% 7.7% 5.4% OOCL 89.1% – – 10.9% K-Line 80.3% 7.7% 2.5% 9.5% Yang Ming 87.3% 5.0% – 7.7% MISC 100.0% – – – Grand Alliance 80.9% 2.9% 4.7% 11.5% CKYH Alliance 60.8% 25.8% 1.2% 12.2% Note: These figures also include management contracts and subleases: Evergreen (Tokyo, 2 in Osaka, Tacoma), APL (Kobe, Osaka), Hanjin (Osaka, Tokyo). Source: WWCTC database (2006), Soppé M., Parola F., Frémont A. 18 M. Soppé et al. / Journal of Transport Geography 17 (2009) 10–20
M.Soppe et aL/Journal of Transport Geography 17(2009)10-20 19 Appendix 3.Major suppliers/partners of shipping lines in port operations:WCTC relevance,geographical coverage and forms of co- operation(2006 data) Carrier Major suppliers and WCTC share Number of Number of Number of weekly Forms of co-operation partners () regions ports calls (WCTC%split) Maersk HPH 5.7% 12 57 80.0 contract 20.0 JV PSA 5.2% 6 26 86.0 contract 14.0 JV DPW 3.3% 11 33 86.3 contract 13.7 JV Eurogate 2.8% 3 > 42 26.8 contract 73.2 JV MSC HPH 9.6% 6 13 60 100.0 contract PSA 7.8% P 49 56.8 contract 43.2 JV DPW 5.0% P 16 100.0 contract Eurogate 3.9% 31 55.3 contract 44.7 V CMA-CGM HPH 11.1% 76 100.0 contract PSA 8.2% 8 39 85.4 contract 14.6 IV DPW 5.9% 8 61 62.3 contract 37.7 JV APMT 4.0% > 12 59 97.2 contract 2.8 V Evergreen HPH 12.2% 12 100.0 contract PSA 7.7% 3 6 55 100.0 contract Hapag-Lloyd PSA 9.8% 33 100.0 contract HPH 9.4% 3 4 100.0 contract DPW 6.3% 6 6 100.0 contract NYK 5.3% 9 18 100.0 contract SSA 4.0% 4 12 100.0 contract Coscon HPH 14.9% 5 64.0 contract 36.0 V PSA 11.0% 6 43 57.9 contract 42.1 JV SSA 4.4% 个 3 68.5 contract 31.5 JV APMT 3.4% 5 32 29.0 contract 71.0 JV Eurogate 3.3% 2 100.0 contract DPW 2.9% 20 39.7 contract 60.3 IV China Shipping HPH 14.9% 11 2 100.0 contract PSA 9.2% 2 100.0 contract SSA 4.2% 2 5 7 100.0 contract Cosco 4.0% 37 100.0 contract APL PSA 14.6% 3 7 3 100.0 contract HPH 9.7% 36 100.0 contract DPW 8.7% 14 2 95.7 contract 4.3 V Hanjin HPH 13.6% 5 13 48 100.0 contract PSA 9.0% 2 3 21 100.0 contract Eurogate 4.1% 13 100.0 contract DPW 3.4% 13 21 96.9 contract 3.1 JV NYK DPW 7.9% 6 15 7 100.0 contract PSA 7.9% J 18 100.0 contract HPH 4.0% 9 100.0 contract HHLA 3.8% 2 > 100.0 contract CMH 3.2% 4 15 100.0 contract OOCL PSA 10.1% 2 23 100.0 contract HPH 8.8% 45 10 32 100.0 contract DPW 7.3% 3 CMH 5.8% 2 100.0 contract 100.0 contract Wharf H. 4.9% 12 100.0 contract (continued on next page)
Appendix 3. Major suppliers/partners of shipping lines in port operations: WCTC relevance, geographical coverage and forms of cooperation (2006 data) Carrier Major suppliers and partners WCTC share (%) Number of regions Number of ports Number of weekly calls Forms of co-operation (WCTC % split) Maersk HPH 5.7% 5 12 57 80.0 contract 20.0 JV PSA 5.2% 4 6 26 86.0 contract 14.0 JV DPW 3.3% 4 11 33 86.3 contract 13.7 JV Eurogate 2.8% 2 7 42 26.8 contract 73.2 JV MSC HPH 9.6% 6 13 60 100.0 contract PSA 7.8% 3 8 49 56.8 contract 43.2 JV DPW 5.0% 8 16 45 100.0 contract Eurogate 3.9% 2 5 31 55.3 contract 44.7 JV CMA–CGM HPH 11.1% 4 16 76 100.0 contract PSA 8.2% 4 8 39 85.4 contract 14.6 JV DPW 5.9% 8 17 61 62.3 contract 37.7 JV APMT 4.0% 7 17 59 97.2 contract 2.8 JV Evergreen HPH 12.2% 4 12 85 100.0 contract PSA 7.7% 3 6 55 100.0 contract Hapag–Lloyd PSA 9.8% 4 6 33 100.0 contract HPH 9.4% 4 13 47 100.0 contract DPW 6.3% 6 15 61 100.0 contract NYK 5.3% 3 9 18 100.0 contract SSA 4.0% 1 4 12 100.0 contract Coscon HPH 14.9% 4 12 75 64.0 contract 36.0 JV PSA 11.0% 3 6 43 57.9 contract 42.1 JV SSA 4.4% 1 3 5 68.5 contract 31.5 JV APMT 3.4% 5 8 32 29.0 contract 71.0 JV Eurogate 3.3% 1 2 4 100.0 contract DPW 2.9% 3 5 20 39.7 contract 60.3 JV China Shipping HPH 14.9% 3 11 62 100.0 contract PSA 9.2% 3 5 22 100.0 contract SSA 4.2% 2 5 7 100.0 contract Cosco 4.0% 2 7 37 100.0 contract APL PSA 14.6% 3 7 33 100.0 contract HPH 9.7% 4 13 36 100.0 contract DPW 8.7% 5 14 25 95.7 contract 4.3 JV Hanjin HPH 13.6% 5 13 48 100.0 contract PSA 9.0% 2 3 21 100.0 contract Eurogate 4.1% 2 3 13 100.0 contract DPW 3.4% 5 13 21 96.9 contract 3.1 JV NYK DPW 7.9% 6 15 27 100.0 contract PSA 7.9% 3 5 18 100.0 contract HPH 4.0% 4 9 21 100.0 contract HHLA 3.8% 2 2 7 100.0 contract CMH 3.2% 1 4 15 100.0 contract OOCL PSA 10.1% 2 4 23 100.0 contract HPH 8.8% 4 10 32 100.0 contract DPW 7.3% 5 17 38 100.0 contract CMH 5.8% 1 5 24 100.0 contract Wharf H. 4.9% 1 2 12 100.0 contract (continued on next page) M. Soppé et al. / Journal of Transport Geography 17 (2009) 10–20 19
