Vertical integration between container lines and terminal operators : terminal operator’s perspective

• Main Author: Goh, Bao Hua.
• Other Authors: Lam Siu Lee
• Format: Final Year Project
• Language: English
• Published: 2009
• Subjects: DRNTU::Engineering::Maritime studies::Maritime management and business
• Online Access: http://hdl.handle.net/10356/16040
• Institution: Nanyang Technological University

This paper seeks to examine the vertical integration between container lines and terminal operators from terminal operator’s perspective. Global stevedores and hybrids are identified as the target group. From the survey analysis, dedicated container terminals (DCTs) are ascertained. Benefits, costs and risks of terminal operator offering DCT services to carriers are ranked by both DCT and non-DCT operators and the results are assessed and compared against. Additionally, the exclusivity of DCTs deployment is explored. Results yielded showed that terminal’s productivity generally increases when DCT services are offered while profitability remains almost constant. Fourteen global terminal operators’ portfolios are created to reflect their general investment and management trends. Joint ventures are used extensively as the investment approach while most terminals are operated by wholly or partially owned subsidiaries. The DCTs are also identified from the terminal portfolio to study the vertical integration. North America has the highest percentage of DCTs, followed by Asia, Africa and Europe. The investment and management methods adopted in DCTs in the four regions are analysed in detail. SSA Marine is the only global stevedore present in North America, with other operators being global hybrids. Most of the terminals are leased to terminal operators and managed by their wholly or partially owned subsidiaries. In Far East, most of the DCTs are in China, and terminal operators invest and manage through joint ventures due to local regulation. Africa is an emerging market and in Europe, investment and management by joint ventures are common with an equivalent number being managed by wholly or partially owned subsidiaries of terminal operators. Recommendations to increase the ownership and involvement of shipping lines in terminal operations are made with respect to the terminal operators, port authorities and shipping lines. Developments in the shipping and port industry are crucial factors contributing to the changes to be made.