Port & Terminal Operation Management Dep,t of LSCM

Chapter One

1. Overview of Port Operation and Port Management

1.1. Port And Maritime Business

Traditionally, ports have been regarded as a sub-system of the shipping and maritime industry,
with their main roles being restricted to the provision of services to ships and their cargoes.
Shipping or maritime business is mainly concerned with the transport of goods by sea and/or
waterway connections. The economic approach treats maritime transports as a derived demand
from international trade. The term shipping is a generic term often used interchangeably, and
may and may be reduced to the sole provision of sea transportation or expanded to the provision
of other logistics and trading services. Shipping markets may be divided into four main
segments:

 The freight market: trades sea transport

 The new building market: trades new ships
 The sales and purchase market: trades second hand ships and
 The demolition or scrap market: trades old and obsolete ships
Shipping services are usually determined by the nature of trade, or traffic, and more specifically
by the type of cargo or commodity transported. Typically, seaborne trade is categorized into
bulk, break-bulk and general cargo trades, and this categorization has also been used to classify
different types of ships. Other criteria for ship classification include type of packaging (e.g.
containers: containerships; trailers: roll-on roll-off or Ro-Ro ships); ship’s size (e.g. Panamax
versus post- Panamax vessels, very large crude carriers (VLCC) versus ultra-large crude carriers
(ULCC)); technological specifications (e.g. conventional versus cellular containerships, single-
deck versus double-deck ships); and safety and security records (e.g. safety class for vessels,
ISPS ship security levels).

As with a ship’s specialization, modern port layout and operating systems are increasingly
designed to serve a particular trade, ship or cargo type, although many ports around the world
still operate multipurpose facilities. For instance, a bulk port provides berthing, cargo handling
and processing facilities for ships carrying bulk (liquid or dry) cargo, while a container port

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consists of a set of berths, yards, gates and, sometimes, extended landside connections solely
designed to accommodate containerships and their cargoes. Seaports must not be confused with
terminals; the latter are specialized units within ports.

When shippers (cargo owners, senders or receivers) outsource the transport of their cargo by sea
or water, shipping services are usually divided into liner-shipping and tramp shipping. While
liner shipping plies regular routes and ports according to published sailing schedules, tramp
shipping is irregular in both time and space. Sometimes, shipping services are performed directly
by the shipper (industrial shipping), for instance, in the case of vertically integrated global oil
firms and car manufacturing companies.
Industrial operators may use their own fleet and/or charter in vessels, usually on a voyage
charter, a time charter or a bareboat (demise) charter. Generally, industrial shipping is treated as
a separate market although it can account for as much as 35% of the world’s seaborne trade.

Both tramp and liner operators may be regarded as third-party transport operators. Traditional
third-party operators have focused their services on a single logistics operation (e.g. transport,
warehousing, information management, audit and payment, and so on). Modern transport
operators offer more than just transport services and can therefore be considered as third party
logistics (3PL) providers. Core activities of 3PL, also called logistics outsourcing or contract
logistics, include transport, warehousing, inventory management, information systems,
consolidation and distribution, freight management and consulting services. Other functions
include value-added capabilities such as labeling, packaging and telemarketing. A distinction
should be made between asset-based logistics (3PL) and non-asset-based logistics (fourth-party
logistics (4PL)).

A key feature in shipping and port markets is the use of intermediaries either between carriers or
between carriers and shippers. The use of intermediaries may add unnecessary costs to cargo
transport and logistics, but is often justified by the advantages of specialization and efficiency.
Depending on the services they provide, intermediaries may be called ship brokers, ship agents,
freight forwarders, multimodal transport operators (MTOs), non-vessel operating common
carriers (NVOCCs), export management houses, etc. In the context of logistics management,
shipping and port intermediaries may be assimilated to fourth party logistics (4PL) providers.

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As far as shipping services and trading routes are concerned, ports may be classified as network
ports, transshipment ports, direct-call ports and/or feeder ports. However, this taxonomy is
neither exhaustive nor comprehensive for modern port logistics.
 Network ports provide high value-added services to both ships and cargo and generate
traffic from/to the port and its hinterland and foreland. Given their extensive channels of
distribution, network ports are commercially attractive and offer low unit cost per ship.
 Transshipment ports provide high value-added services to ships but low value-added
services to cargo. They are mainly dedicated to ship–shore operations and provide fast
turnaround times for ships. They are also suitable for cargo concentration and distribution.
 Direct-call ports provide low value-added services to ships but high value-added services to
cargo. They are particularly attractive to tramp shipping and some forms of liner shipping.

Feeder ports provide low value-added services to ships but not necessarily to cargo. They are
not physically, or possibly, economically suitable for direct call and need to be linked to network
or transshipment ports.

From a spatial and geographical perspective, the relationship between freight flows and port
development is better understood through the concepts of gateways, articulation points, freight
corridors and distribution centers:
 Gateways: are locations that bring together different modes of transportation along with
warehousing, freight forwarding, customs broking and other logistics services. Many
textbooks differentiate between transport gateways as hubs for major regions and freight
gateways which serve cities and regional areas.
 Articulation points: are nodal locations interfacing several spatial systems and serving as
gateways between spheres of production and consumption, and may include terminal
facilities, distribution, warehousing and trading centers. The difference between gateways
and articulation points is that the latter are viewed from an urban perspective, whereas
gateways do not necessarily need to be located at city interfaces. From this perspective,
seaports are seen as hard terminals since they are immoveable, whereas inland terminals
dispose of a great degree of location flexibility.
 Freight corridors: represent transport links of freight transportation supported by an
accumulation of transport infrastructures and activities servicing these flows. Traditionally,
flows in freight corridors tended to be fragmented and segmented since each mode tried to
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exploit its own advantages in terms of cost, service, reliability and safety. Hence, maritime
corridors may be assimilated to geographical trade routes. However, evolving routing
patterns, such as hub-and-spoke and transshipment networks, currently reduce the capacity of
maritime corridors to accommodate operational and logistics patterns of maritime transport.

Criterion Port category

Cargo/commodity type Dry bulk port, liquid bulk port, general cargo
port, etc
Ship type Ferry port, Ro-Ro port, multipurpose port,
LNG port, etc
Trade type Import port, export port, transshipment port,
transit port, etc
Institutional model Landlord port, tool port, service port, etc
Ownership model Private port, public port, semi-public port, etc
Management model Trust port, corporatized port, autonomous
port, etc
Organizational model Centralized port, decentralized port, devolved
port, etc
Geographical scope Gateway port, local port, coastal port, inland
port, etc
Logistics status Feeder port, hub port, transshipment port,
network port, etc

 Freight distribution centers: serve as locations for cargo transfer and distribution to
regional or extended markets, depending on corridor capacity and articulation point links.
Traditionally, many distribution centers were located close to central areas mainly as a factor
of market proximity, but are currently relocating to peripheral areas. Functionally, a freight
distribution is the combination of a freight corridor and an articulation point or a gateway.

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1.2. Port Development

Ports have developed in different ways with a combination of trade, economic, spatial, political,
social, and even cultural and military influences, and no clear pattern of port development exists.
Ports have also transformed from labor-intensive merchant ports into capital and technology-
intensive enterprises. Since the industrial revolution, ports have progressed into become
manufacturing sites moving vast quantities of goods and commodities and using larger and
expensive equipment. Following the process of containerization and the growing specialization
of ships and terminals, ports became even more capital and technology intensive with
sophisticated handling equipment and technological systems being deployed across modern ports
and terminals. Ports have also developed as spatial and regional entities. Through the years, the
relationship between port-cities and their hinterlands has been influenced by many factors such
as economic development, industry specialization, trading relations, military expansion, social
migration, family networks, and cultural exchange.

More recently, the importance of ports and their corresponding hinterlands has been influenced
by new factors such as containerization, inter-modal integration, shipping networks, logistics
patterns, information technology, environmental sustainability, land use and policy.

Bird’s (1980) ‘any-port model’ is one of the first structured attempts to explain port
development. The model suggests a three-stage process of port development:
 Setting,
 Expansion, and
 Specialization.
Although Bird’s model may be still valid for a number of conventional ports, it neither explains
the recent rise of transshipment and network type of ports and terminals, nor integrates the inland
and spatial dimension of port development. The geographical system would evolve from an
initial pattern of scattered, poorly connected ports along the coastline to a main network
consisting of corridors between gateway ports and major hinterland centers.
The models of Barke (1986) and Hayuth (1981) are quite similar, though they have introduced a
process of port system de-concentration. Waters (1974) considers that port activities could be
developed in three ways in relation to cargo-space dimensions:

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 The attraction to water transportation of cargo otherwise moved by non-water transport

modes (dominant hinterland),
 The attraction of cargo moved through other ports (competitive hinterland), and
 The development of its own cargo from industrial expansion in its dominant hinterland
(uncompetitive hinterland).
Some authors have introduced modifications to the above models in order to reflect the
uniqueness of some port regions. UNCTAD’s ‘port generations’ model’ is another widely quoted
reference describing the evolution of world ports and terminals. The main benefit of the
UNCTAD model is that it explains port development from a functional and institutional
perspective rather than a geographical or spatial one. Not only port roles and functions, but also
institutional structuring, operational and management practices vary significantly from
generation to generation.
 First and second generation ports, relating to ship/shore and industrial interfaces,
respectively, operate bulk and break bulk cargo in a traditional manner, with
 The second generation ports relying more on capital than labor.
 Third generation ports are the product of the unitization of sea-trade and multimodal cargo
packaging (mainly in the form of containers) which has led to the development of ports as
logistics and inter-modal centers offering value-added services, with technology and know-
how being the major determining factors.
 Fourth-generation ports are mainly the result of recent vertical and horizontal integration
strategies and are identified as being separated geographically but with common operators or
administration.

1.2.1 Issues in Developing a Unified Port Model

From the above categorization, it seems that the interactions between port missions, institutions
and functions have resulted in a variety of approaches to port operations and management.
Probably, the major obstacle against adopting a unified model for port development and strategy
refers back to the complexity and diversity of the port business at more than one level, including:
 Organizational differences: issues of ownership (public versus private), institutional status
(landlord/tool versus service), social arrangements (labor and manpower), etc.
 Operational differences: types of cargo handled, ships serviced, terminals operated, etc.

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 Physical and spatial differences: location, access, connectivity, available capacity, etc.

Legal and regulatory differences: trade and transport policy, administrative procedures, safety
and security regulations, environment, etc. If the institutional framework is the defining attribute,
each institution will apply a distinct viewpoint to its activity within the institutional framework,
to the activity of other actors, and to its role in the aggregate port management.

Much of the current literature on ports has been developed by international organization and
institutions in the field (UNCTAD, IAPH, the World Bank, etc), and a resulting terminology has
evolved depicting specific concepts hardly understood by professional and academics outside the
field. On the other hand, many areas of port operations and management still remain unexplored,
and there are few references outlining the different features of operational, logistics and strategic
management in ports. Generally, the activities and operations of ports have been studied from
three main perspectives:

1. An economic approach
2. An engineering/operations approach and
3. An evolving logistics and supply chain management(SCM) approach

The Economic Approach

Standard economic approaches and theories on international trade and development, production
output and capacity, geography and spatial organization, market structures and industrial
organization, and policy and regulation have been applied to the economic activity of ports and
terminals along with other transport infrastructures. A central tenant in the economic approach to
ports is that freight and maritime transport is a derived demand from trade, essentially
international trade. In other words, there will be no need for transport if no trade takes place. Key
economic characteristics of the port industry include, but are not limited, to the following:

1 Multi - product/multi - output system

2 Multi-agent system,
3 Requirements for market, safety and environmental regulation
4 Externalities, spillovers and wider effects
5 Natural monopoly and economies of scale and scope

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6 Location and network structure

7 Long-life assets and long lead times for planning and project completion
1. Multi-product/multi-output system: Port production, in economic terms, is highly
heterogeneous with many attributes. This is because most ports handle different cargo and
ship categories, hence providing different types of port services. Even within specialized
ports or terminals, different port services may be provided such as in terms of services to
ships and services to cargo, or in terms of nautical services, cargo handling services and
value added services. Traditionally, port services have been categorized into services to ships
(pilotage, towage, mooring, bunkering, ship repair, etc) and services to cargo (e.g. loading
and unloading, stacking and storage), but other complimentary and value-added services,
such as consolidation and break bulk, packaging and labeling, repositioning and distribution,
may also be carried out in ports or around their vicinity.
2. Multi-agent system: From a microeconomic perspective, ports are seen as entities producing
private goods for which the levels of supply and demand and relative prices are determined
by agents’ behavior, market mechanisms and regulatory requirements. From a
macroeconomic approach, ports are critical infrastructure producing public goods that are
hardly captured in market transactions but which create direct benefits to port operators as
well as indirect effects, be they positive or negative.
Traditional microeconomic port models limit port agents to two main actors:
 ports and port operators, representing the supply side, versus
Ocean carriers and shipping lines, representing the demand side.
3. Requirements for market, safety and environmental regulation: Since ports are public
goods, port policy becomes an integral part of the country’s general economic, trade and
social policy. Generally, port policy is formulated based on two understandings:
i. The role of ports in the development of the country and
ii. The set of policy measures that are needed in order to support and further promote this
role. It is these measures that constitute the components of a port policy.
Port market regulation may also include such aspects as port prices and user’s charging, market
access, mergers and acquisitions, concessions and private sector participation, incentives and
subsidy programs, and efficiency and yard-stick benchmarking. Another important element of

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policy intervention is the assessment of port capacity and whether or not industry and market
mechanisms alone should plan and finance current and future capacity of the port system.

Other issues of policy and regulatory intervention in ports are safety, security and environmental
sustainability. Examples of regulated activities in ports include port state control, harbor and
traffic management, hazardous materials (HAZMAT) the handling of storage, port safety and
security, environmental protection and impact assessment, health and occupational safety, etc.
4. Externalities, spillovers and wider effects: Externalities are indirect effects that can be passed
on to third parties, other interests and the wider economy beyond port firms and investors.
External microeconomic benefits of ports include the improvement of the efficiency of the
productive and trade-logistic system and the reduction of congestion and generalized port costs,
which can then be transferred to port users (e.g. shipping lines) and their clients (e.g. shippers).
External macroeconomic benefits include spatial spillover effects (e.g. higher accessibility,
agglomeration economies, regeneration and redistribution), socio-economic and multiplier
effects (e.g. increases in employment, earnings and consumption), and innovation and
technological progress. Port externalities may also be negative, arising from the costs of
congestion, safety hazards, environmental degradation and pollution, as well as negative location
effects on certain industries such as tourism and real estate development.
5. Natural monopoly and economies of scale and scope: Ports have large sunk assets and
therefore tend to exhibit increasing returns to scale (cost per unit traffic tends to fall as a port
expands) and increasing returns to scope or density (cost per unit traffic usually falls when more
vessels and cargo are handled by existing facilities). Sometimes, economies of scale are defined
as being associated with the efficiencies associated with supply-side changes of a single product
type such as increasing or decreasing scale of production; for instance, when a port achieves
higher container throughput.
6. Location and network structure: Ports are immovable assets and their exclusive location
attribute has been used to explain the monopolistic nature of ports, although this is no longer the
case in modern port systems where the traditional captive hinterland is now being contested by
different ports as well as other transport infrastructure systems. An equally important aspect in
port economics is the network structure of the port system. Here ports may be viewed as
infrastructure facilities which are part of a wider transportation economic network for moving

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goods and people. From a network economics approach, the port network is comprised of
network users (port users), service providers (ports and port operators) and the rest of the
economy.
7. Long-life assets and long lead times for planning and project completion: The long-term
strategy for port planning and project completion also affects the determinants of economic
decision making in ports. The long lead time for port construction, including a lengthy planning
and design period, and for superstructure and equipment procurement has always meant that
short-term matching of the supply of port facilities to the expected demand is difficult to achieve,
particularly in times of uncertainty and for unstable port markets. Port assets, in terms of both
infrastructure and superstructure, have a long economic life and therefore entail a long pay-back
period for investment and project appraisal.
1.3.2 The Operations Approach
From the engineering and operations approach, ports are seen as fixed assets and operations
systems. Engineering applications in ports are mainly associated with the aspects of port design,
construction, modeling, planning, operations, maintenance, and optimization and performance
measurement. The sub-branches of engineering that are mostly concerned with port operations,
planning and logistics include transportation engineering, environmental engineering and
industrial engineering. The last sub-branch is often used to study ports using a systems and
process approach, and is therefore closely related to the fields of logistics and SCM. A system is
often defined as a set of components standing in inter-relations among themselves and with the
environment. A port’s internal system is composed of at least four components:
 Physical assets (infrastructure and superstructure),
 Labor and human resources,
 Technology and information systems, and
 Management and workflow processes.
Outside the nautical infrastructure, key port operations that have been mostly examined in the
literature include ship and berth scheduling, stowage plans and quay-crane efficiency, vehicle-
flow dispatching and scheduling, staking and storage in the yard, empty container management,
automated operating systems, and inter-modal transport operations. Despite this,
manyoperational features of port systems remain under-researched including aspects such as
network structure, reliability and interoperability.

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1. Network structure: Most transport and freight distribution systems follow a node-link
network structure, although the nature and properties of the network differ greatly between
and within systems. For instance, unlike rail and road system maritime links may be
established between any two or more seaport locations subject to a number of infrastructural
(ports, canals, locks, etc), operational(volume, capacity, price, etc) and organizational (liner
shipping versus tramp shipping) constraints.
From an engineering and operations perspective, ports are a central node of the maritime and
inter-modal transport networks. Mathematically, a transport network can be represented by a
graph consisting of a set of links (edges) and a set of nodes (vertices). The links represent the
transport movements between the nodes, which in turn represent points (e.g. ports) in space
and sometimes in time as well. A path is a collection of links and nodes specifying both the
route and the mode(s) of transport.
2. Reliability: Another area of interest in network analysis is network reliability, which studies
the vulnerability and robustness of a transportation network including topics of connectivity,
link failure, disruption and redundancy, vulnerability and security. However, reliability in
ports include aspects that go beyond the field of transport network reliability, for instance,
terminal reliability, capacity reliability, operational reliability, transit (travel time) reliability
and encounter reliability.
3. Interoperability: Interoperability refers to the capability of diverse systems and
organizations to operate and work together. In seaports, interoperability must be achieved at
operational, communication and technology levels. Operational interoperability refers to the
ability of port operators to handle various types and sizes of ships and their cargoes.
The ability to integrate various inter-modal systems is also a key to achieving a high degree
of operational interoperability in ports. Communication and business process interoperability
between various members of the port community is a key to successful port operations. The
use of standard communication systems, such as vessel traffic services (VTS), electronic data
interchange (EDI), EDI for Administration, Commerce and Transport (EDIFACT) and
enterprise resource planning (ERP) systems, ensures the exchange of documentation, data
and information in interoperable semantics, communication protocols and file formats.

1.3.3 The Logistics and Supply Chain Management Approach

Most concepts of logistics and SCM also apply to ports include the following.

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1. Customer service: The concept of customer service associates many aspects of logistics
closely with marketing. It can be broadly described as the measure of how well the logistics
system satisfies its customers and their expected levels of service. Customer service must be
viewed as an integral part of the design and operation of any logistics system. In ports, much
of the debate to date has been on how to perform efficient operations while still satisfying a
wide range of port users and customers.
In SCM, the concept of customer service takes on another dimension since it assumes that the
network of organizations in a port supply chain should work collaboratively in order to
ensure superior customer service and competitive advantage vis-à-vis other supply chains.
This means that port competition is moving to a further level: ports are not only competing
against other ports on the basis of operational efficiency, price and location, but also, and
more importantly, on the basis that they are embedded in quality supply chains that offer
shippers, shipping lines and other customers a greater value than alternative ports, routes and
supply chains..
2. Value added: In logistics, the term value added is closely related to customer satisfaction.
The most appropriate customer service level is the one that gives the customer the maximum
value added. The performance of a logistics system is assessed based on how well it performs
in creating value-added benefits to the customer in a cost-effective way. Logistics activities
are key elements in the value chain, and thus contribute greatly in the creation of value added.
Apart from their traditional function as a sea–land interface, ports are a good location for
value-added logistics activities such as consolidation and break bulk, sequencing and order
processing, packing and packaging, postponement and customization, promotion and market
intelligence, facilitation of contacts and procedures, and so on.
3. Process and integrated approach: Much of the logistics philosophy is based on a process
approach to business. This means that logistics is not an isolated activity, but rather a series of
continuous and inter-related activities whereby planning, organization, operation and
management apply. One of the main benefits of logistics is that it offers an integrated
approach to a range of activities and functions (e.g. purchasing, production, transport,
warehousing and so on), and enables manufacturers and other organizations to identify the
total cost of the system, and balances (or trades off) one aspect against another. Over the past
two decades or so, the integration of the international logistics chain has become a focal issue

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in developing strategic plans and long-term objectives for 3PL, shipping lines and even port
operators. Today, 3PL providers offer packages that include full coverage of logistics services
from origin to destination.
4. Ports and international logistics: Most of the logistics concepts discussed above are also
relevant in the international sphere. However, there is a great degree of complexity and
uncertainty in international logistics compared with domestic logistics. The areas of
complexity listed below also apply to international port and terminal management:
 International trade complexities: Different terms of sale and documentation, terms of
payment, problems with the use of different currencies and the fluctuations of the
exchange rate, etc.
 The international and changing nature of markets: involvement of supranational trading
blocs (EU, North American Free Trade Agreement (NAFTA), Association of Southeast
Asian Nations (ASEAN), etc), different national/regional tastes, languages, traditions,
regulations, etc.
 The nature of international supply chains, procurement and sourcing: multiple choice of
production, inventory location and management; difficulty of control over deliveries and
inventories; different expectations for customer service.
 The involvement of multinational and global corporations: aspects of channel control and
power, footloose strategies and risk of mobility, the growth of intra-firm trading, etc.
 The general trend of outsourcing transport and logistics activities: through contracting out
with 3PL/4PL providers.
 The frequent use of transport agents and intermediaries: including brokers, agents, freight
forwarders and other intermediaries.
As the world economy becomes more integrated through an accelerated process of
globalization of production, consumption and services, the market place for an increasing
number of port users and customers is now simply the globe. In international logistics, the
relentless striving for greater economies of scale, global coverage, higher efficiency and
improved service quality have leveraged port competition for cargo and shipping services to
a global market level. Logistics integration and network orientation in the port and maritime
industry have redefined the functional role of ports in value chains and have generated new
patterns of freight distribution and new approaches to port hierarchy. Successful ports have

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realized that in order to survive and prosper in today’s business environment, they have to
adopt a global view. Today, many port operators have reached a global status by extending
their activities to international port markets.
5. Ports and supply chain management: Supply chain management extends the logistics
concept of integration to a network of organizations by advocating trust, closer collaboration
and partnership arrangements. SCM corresponds to external integration where a systems
approach is used for managing the entire flow of information, materials and services from raw
materials’ suppliers through factories, warehouses, distribution centers and retailers to the
final customer or end user. Key SCM decisions include supply chain configuration, planning
and forecasting, suppliers’ selection, process and product design, plant and warehouse
location, demand management, supply chain risk and security, IT integration and enterprise
systems, ecommerce and electronic markets, etc. Partnership arrangements in SCM require an
abatement of conflictual attitudes in favor of long-term trust and cooperative relationships.
Nevertheless, traditional relationships in the international logistics and shipping industry,
including ports, have been more adversative than collaborative and where arm’s length
arrangements seem to prevail over integration.
1.4 Port Roles and Functions
Ports have been defined through a macro-analytical approach as being geographical, physical
and corporate assets. Here the word port often refers to waterway connections, relating to sea,
lake, river, inland waterways and/or canal locations. Additionally other generic terms, not
necessarily water-related, are also used, including dry ports with no waterway access and
multimodal and inter-modal ports, combining the sea/waterways interface with road, rail and/or
air transport, a concept widely used. Port roles and functions are identified through political,
geographical (urban and spatial), economic and social perspectives.
Nautical infrastructure Quay and berth Port superstructure
(marine services) infrastructure (logistics and
(terminal services) value-added services)
•Conservancy and protection • Pilotage and towage • Cargo storage and stacking
• Access and navigation • Berthing • Equipment services
• Shipping services •Bunkering and supply • Distribution and
• Vessel traffic management • Ancillary services related services

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• Dredging and maintenance • Stevedoring and cargo • Information processing

• Repair and maintenance handling • Real estate and rental
• Quay transfer services
operations • Logistics and value-added
services

1.5 Port institutional and organizational structure

Institutional dissimilarity also hinders a comprehensive approach to ports, as there are several
organizational and ownership models applicable to world ports, even between those performing
similar roles and functions. Traditionally, ports have been owned, operated and regulated by
state-controlled public organizations. However, the introduction of private sector participation in
ports and the emergence of new forms of port governance have led to the adoption of new
models of port ownership and institutional structuring. Current models for classifying port
organizational and institutional structure use one or a combination of the following criteria:
Mode of administrative governance (central or local),
The institutional framework (private or public),
Regulatory and policy system (protection, liberalization, market regulation, etc), and
Labor affiliation and organization.
some authors distinguish between four major models of port ownership and administration:
1. The public port,
2. The public/private port with the public sector being dominant,
3. The private/public port with the private sector being dominant and
4. The private port
A more elaborate approach analyses port ownership through combining the aspects of port
facilities and services with the status (i.e. private, public or joint/ mixed) of the entity owning
and/or providing for them. Here the port literature provides generic terms where ports are
classified into:
Landlord
service or tool organizations, or
Variations and combinations of some or all of these

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In the service model, the port authority owns, maintains and develops both infrastructures and
superstructures, operates all handling equipment and performs all other commercial port
functions on its own. Both the landlord and tool organizations own and develop port
infrastructure and generally lease it to the private sector. However, while the superstructure is
owned and operated by private operators in the landlord model, the tool institution still owns the
superstructure but may lease it out for operational purposes to private companies.
Infrastructure Superstructure Workforce Regulation
Landlord Public Private Private Public
Tool Public Public Public Public
(private) (private)
Service (public) Public Public Public Public
Service (private) Private Private Private Private

1.6 Value-added services in port

According to World Bank (2001), Services provided at a container port by its service providers
consist of core (traditional port) and value-added (non-traditional port) services. Core services
consist of marine, terminal, and repair services. Marine services include, for example, pilot age,
towage, and vessel traffic management services. Examples of terminal services include vessel
tie-up, container handling and transfers, container storage, and container stuffing and stripping.
Examples of repair services include dredging and maintenance of channels, dry dock ship
repairs, lift equipment repairs, container repairs, and chassis repairs. Service providers at
container ports are increasingly delivering nontraditional port services that expand their role in
the supply chains of shippers. “These services create value for shippers by expanding the scope
of markets that they can economically access, by reducing the delivered cost of products they
sell, or by reducing the cost to complete buy/sell transactions” (World Bank 2001: 10).
Nontraditional port services (e.g., information, office and equipment rental, and equipment
maintenance services) typically add value to the logistics activities, e.g., inventory management
and warehousing, of shippers.

By: Geremew G. Page 16