Advertisement

Transportation

, Volume 33, Issue 6, pp 641–654 | Cite as

A measurement and Comparison of Cost Competitiveness of Container Ports in Southeast Asia

  • Jasmine S. L. Lam
  • Wei Yim Yap
Research Article

Abstract

Terminal users face a variety of costs associated with the container terminal and those that are harder to quantify should not be ignored for they might represent a larger component of the overall costs associated with using a particular terminal. Similarly, the competitive advantage of a container terminal operator goes beyond the elements that can be quantified. The paper uses and modifies Cournot’s simultaneous quantity-setting model as a means to derive the overall costs of using the terminal. The application of this model to the perspective of competition between container terminal operators in Singapore, Port Klang and Tanjung Pelepas finds that the increasingly cost competitive operators in Port Klang and Tanjung Pelepas were able to close the gap with PSA Corporation in Singapore in the overall costs of using their terminal facilities between 1998 and 2002 although PSAC continued to enjoy a dominant share of the container-handling market in the region. The paper also highlights the tremendous amount of opportunities available to these terminal operators to advance and capitalise on their competitive advantages beyond aggressive price competition.

Keywords

Competitive advantage Container terminal Cost competitiveness Cournot’s simultaneous quantity-setting model Port competition Southeast Asia 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Asian Shipper FaxNews: Northport reports lower profits, expands berths. May 7 (2002)Google Scholar
  2. Baird, A.J.: The economics of transhipment. In: Grammenos, C.T. (ed.) The Handbook of Maritime Economics and Business, pp. 832–859. LLP, London (2002)Google Scholar
  3. Bertrand, J.: Review of Cournot’s book in Journal des Savants; reprinted in English translation by Friedman J.W. In: Daughety, A.F (ed.) Cournot Oligopoly. Cambridge University Press, Cambridge, 1988, pp. 73–81. (1883)Google Scholar
  4. Bowley, A.L.: The Mathematical Groundwork of Economics. Oxford University Press, Oxford (1924)Google Scholar
  5. Bramness, G.: The general conjectural model of oligopoly: some classical results revisited. Warwick Economic Research Papers, 142 (1979)Google Scholar
  6. Bresnahan, T.F., Salop, S.C.: Quantifying the competitive effects of production joint ventures. Int. J. Ind. Org. 4, 155–175 (1986)CrossRefGoogle Scholar
  7. Cournot, A.A.: Researches into the Mathematical Principles of the Theory of Wealth; with Irving Fisher’s original notes. R.D. Irwin, Homewood, Illinois (1963)Google Scholar
  8. Cullinane, K.: The productivity and efficiency of ports and terminals: methods and applications. In: Grammenos, C.T. (ed.) The Handbook of Maritime Economics and Business, pp. 803–831. LLP, London (2002)Google Scholar
  9. De Langen, P.W. (2002) Clustering and performance: the case of maritime clustering in The Netherlands. Maritime Policy Manage. 29, 209–221CrossRefGoogle Scholar
  10. Drewry Shipping Consultants Limited: Intra-Asia Container Trades – Dynamism Beyond Bounds. Drewry Shipping Consultants Ltd, London (2003)Google Scholar
  11. Economides, N.: The principle of minimum differentiation revisited. Eur. Econ. Rev. 24, 345–368 (1984)CrossRefGoogle Scholar
  12. Fairplay Daily News (2004) Tanjung Pelepas already in profit. May 14Google Scholar
  13. Flor, L., Defilippi, E.: Port infrastructure: an access model for the essential facility. Maritime Econ. Logistics 5, 116–132 (2003)CrossRefGoogle Scholar
  14. Gateway: Container traffic hits 3.7 million TEUs. October (2001)Google Scholar
  15. Gibbons, R.: Game Theory for Applied Economists. Princeton University Press, Princeton (1992)Google Scholar
  16. Haralambides, H.E., Cariou, P., Benacchio, M.: Costs, benefits and pricing of dedicated container terminals. Int. J. Maritime Econ. 4, 21–34 (2002)CrossRefGoogle Scholar
  17. Hotelling, H.H.: Stability in competition. In: Stigler, G.J., Boulding, K.E. (eds.) A.E.A. Readings in Price Theory. Richard D. Irwin, Chicago (1952)Google Scholar
  18. Informa UK Limited: Containerisation International Yearbook. Informa Asia Publishing, Hong Kong (2001–2004)Google Scholar
  19. Informa UK Limited: Proving credentials. Containerisation International Magazine June 2002. (Informa Asia Publishing, Hong Kong 2002)Google Scholar
  20. Klang Multi Terminal Sdn Bhd.: (2002) http://www.westportmalaysia.com.my
  21. Klang Multi Terminal Sdn Bhd.: (2000) http://www.westport.com.my/faboutus/fact.htm
  22. Kleywegt, A., Goh, M.L., Wu, G.Y., Zhang, H.W.: Competition between the Ports of Singapore and Malaysia. The Logistics Institute – Asia Pacific, National University of Singapore, Singapore (2002)Google Scholar
  23. Lloyd’s List: Tanjung Pelepas aims high. January 8 (2002a) Google Scholar
  24. Lloyd’s List: No regrets as Maersk settles in at Tanjung Pelepas. May 24 (2002b)Google Scholar
  25. Lobo, A., Jain, V.: Port users’ perspective of the container transhipment business: hierarchy of service quality attributes and dimensions. Singapore Maritime Port J. 4, 154–161 (2002)Google Scholar
  26. Luo, M., Grigalunas, T.: A spatial-economic multimodal transportation simulation model for US coastal container ports. Maritime Econ. Logistics 5, 158–178 (2003)CrossRefGoogle Scholar
  27. Maggi, G.: Strategic trade policies with endogenous mode of competition. Am. Econ. Rev. 86, 237–258 (1996)Google Scholar
  28. Malaysia Business Times: Local ports expect growth despite cloudy world economy. February 7 (2002)Google Scholar
  29. Malaysia Shipping Times: Westport sees three-fold rise in pre-tax for 2000. February 12 (2001)Google Scholar
  30. New Straits Times: Northport commits surplus to expand, enhance capacity. April 7 (2003)Google Scholar
  31. Northport (Malaysia) Bhd.: (2001) http://www.northport.com.my/corporate_relations/fin _hlights.htm
  32. Northport (Malaysia) Bhd.: (2002) http://www.northport.com.my
  33. Ocean Shipping Consultants Limited: The World Containerport Outlook to 2015. (Ocean Shipping Consultants Limited, Surrey England 2003)Google Scholar
  34. Porter, M.E.: The Competitive Advantage of Nations: With a New Introduction. The Free Press, Singapore, pp. 69–175, 543–615 (1998)Google Scholar
  35. PSA Corporation. (1998–2002) Annual Report. http://www.psa.gov.sg
  36. PSA PortView: PSA gives huge discounts and assures customers of a more flexible and dynamic approach to business (2002)Google Scholar
  37. Robinson, R.: Ports as elements in value-driven chain systems: the new paradigm. Maritime Policy Manage. 29, 241–255 (2002)CrossRefGoogle Scholar
  38. Ruffin, R.J.: Cournot oligopoly and competitive behaviour. Rev. Econ. Stud. 38, 493–502 (1971)CrossRefGoogle Scholar
  39. Sanchez, R.J., Hoffmann, J., Micco, A., Pizzolitto, G.V., Sgut, M., Wilmsmeier, G.: Port efficiency and international trade: port efficiency as a determinant of maritime transport costs. Maritime Econ. Logistics 5, 199–218 (2003)CrossRefGoogle Scholar
  40. Shaked, A., Sutton, J.: Relaxing price competition through product differentiation. Rev. Econ. Stud. 49, 3–13 (1982)CrossRefGoogle Scholar
  41. Singapore Business Times: Smooth sailing for Syed Mokhtar’s PTP port deal. December 14 (2002a)Google Scholar
  42. Singapore Shipping Times: Klang’s Northport begins terminal 3 expansion. August 21 (2002b)Google Scholar
  43. Singapore Business Times: Malaysia’s PTP posts 30% in 2002. January 2 (2003a)Google Scholar
  44. Singapore Business Times: PSA’s Singapore box volumes up 8.8% in July. August 8 (2003b)Google Scholar
  45. Singapore Business Times: PSA ventures into new territory. September 2 (2003c)Google Scholar
  46. Team Northport: Northport Throughput 1997–2001. November (2001)Google Scholar
  47. The Star: Tanjung Pelepas port begins operations. October 11 (1999)Google Scholar
  48. The Star: Port Klang box traffic up despite stiff competition. August 26 (2002a)Google Scholar
  49. The Star: PTP pull off a coup. December 31 (2002b)Google Scholar
  50. Tiwari, P., Itoh, H., Doi, M.: Shippers’ port and carrier selection behaviour in China: a discrete choice analysis. Maritime Econ. Logistics 5, 23–39 (2003)CrossRefGoogle Scholar
  51. Veldman, S.J., Bückmann, E.H.: A model on container port competition: an application for the West European container hub-ports. Maritime Econ. Logistics 5, 3–22 (2003)CrossRefGoogle Scholar
  52. Wu, G.Y., Kleywegt, A.: Comparative Study on Port Tariffs of Ports in Asia. The Logistics Institute – Asia Pacific, National University of Singapore, Singapore (2003)Google Scholar
  53. Zeng, Z., Yang, Z.: Dynamic programming of port position and scale in the hierarchised container ports network. Maritime Policy Manage. 29, 163–177 (2002)CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2006

Authors and Affiliations

  1. 1.School of Civil and Environmental EngineeringNanyang Technological UniversitySingapore
  2. 2.Maritime and Port Authority of SingaporeSingapore

Personalised recommendations