TERMINALS AND PORTS IN FREIGHTS
Airfreight Services and other services are related to each other and it is because of their healthy ports. Its genius: by intelligently mutualizing properties, money is made. The gain for companies: less need for asset investments. Its first instance: Careem
Shipping is typically not related to cool stuff like that. Almost the reverse. Nearly every shipping conference speaks of this enigmatic shipping over which almost all can come to interrupt. Many of us seem to wait for the sexy sharing economy to meet the rusty shipping market, including the supply chain management and land transportation also.
The fact that container transportation is now a sharing economy is easily forgotten. Nearly every global carrier shares its ships by sharing contracts or alliances. Three of the big alliances have a 95% market share of significant container trades from East to West. Container distribution has incredibly high entry barriers, so shipping arrangements could be the equivalent to a shared economy for container transport.
This is disruptive enough: the way ports are regulated has progressive repercussions and involves many forms of freight services such as maritime freight, air freight.
The merits of the ‘landlord’ port model have been accepted over the last decades. Under this model of cargos handling, private operators invest in cranes, facilities and port workers employ, while the public port authority acts as a landlord: concessions, rules and investments in common infrastructures are established. This model may not over establish its dominance: currently, approximately 90% of all ports are landlord ports – and the model is at the heart of the port reform toolkit influenced many port reforms by the World Bank.
But times have changed, and in a world with powerful alliances and mega-ships, which have made them more available and given them a wide variety of facilities, the port is far less viable air freight services.
What is the reason? Mega-ships carry large cargo peaks which require the deployment of many cranes, equipment and staff, even if cargo levels remain the same then would be required for smaller ships. Thus: fewer investment returns. Only three alliances remain, so it becomes a matter of life and death to lose one or two alliances to a neighbouring end. Thus, terminals might feel forced to make investments that do not make financial sense for them, as the alternative would be to lose a third, half of all of the cargo, which would mean making losses as well.
Join the economy of sharing. It would be a way out of the dilemma to converge terminal assets on the same port. Any harbour that could be used at a given moment, but not at any other time by the terminals that need it, could have a common pool of cranes, yard equipment, yard room and work. These sharing agreements might improve the use of port terminals, just as shipping agreements allow carriers to improve the use of their ships. This shared asset model will probably fit better for terminals with adjacent quay lines and yards, which allows for the free movement of port cranes and yard equipment at no other expense than eliminating the fence between the terminals. In some situations, this could be more complicated, but the mutation of assets and labour could also aid in the usage of terminals, such as joint container depots and a working pool. The logical consequence of this may be the introduction of a new model of Port Governance: some kind of private port tool in which a joint port terminal operator entity would typically intend to deploy common tools (equipment, manpower, workspace) at that port. They compete, but they work together as well. Very different from the present port of the landlord.
Is that ever going to occur? The response to this question hinges on the ability of regulators to ease anti-trust laws for port terminals. There are some exceptions for the transport of liner, so why not for the terminal? Coherence in policy would require such an exception or none of all lines and terminal operators. It is unacceptable and deserves revision that container shipping may have a sharing economy, but not inside container terminals.