Standard setting and carrier differentiation at seaports

Abstract

The deployment of mega container ships with a capacity for 18,000 + TEU on major trade lanes is a recent trend within the ocean shipping industry. Larger ships pose multiple challenges to ports and hinterland connections as well as to the beneficial cargo owners. To achieve maximum utilization of their larger vessels, carriers have entered cooperative global alliances on predetermined routes, resulting in new discharge patterns at U.S. ports. These multi-partner networks involve several competing firms which voluntarily and interactively engage in service delivery. Container carriage is increasingly competitive, and requires continuing cost reductions. There is increasing evidence, however, that cargo shippers are less satisfied with the service their supply chains are receiving. Standardizing process performance through supply chain integration and removing inefficiency will be needed to stabilize the international shipping market, but the question remains how ocean carriers will be able differentiate themselves and create improved supply chain performance. This paper suggests an answer through a simple standard performance measurement model. We will suggest that old systems of carrier competition could evolve to greater cooperation and coordination between business competitors, a state sometimes called "coopetition", by development of standard setting processes for sharing information while retaining specific service delivery structures to provide differentiated value to customers.

The ostensible tension between competition and cooperation in ports: a case study on intra-port competition and inter-organizational relations in the Rotterdam container handling sector

“…This type of two-faced relationship is called 'coopetition'a portmanteau of competition and cooperation (Bengtsson and Kock 2000). Song (2003) and Heaver et al (2001) have explored this concept in relation to inter-port competition and Clott et al (2018) for the liner shipping industry, but it has particular relevance for the business environment within ports as well. Competition and cooperation are driven by fundamentally different and even conflicting conceptions of how organizations relate to one another, or "logics of interaction" (Bengtsson and Kock 2000), but a context of competitive pressures and mutual dependence may require companies to engage in both.…”

“…Competition and cooperation are driven by fundamentally different and even conflicting conceptions of how organizations relate to one another, or "logics of interaction" (Bengtsson and Kock 2000), but a context of competitive pressures and mutual dependence may require companies to engage in both. Among container shipping companies, this is done through strategic alliances (Panayides and Wiedmer 2011;Clott et al 2018), but such global formal cooperation agreements between competitors may not be feasible in the stevedoring industry, as, at port level, operators compete on the basis of local rules, customs, and market conditions. Sections 2.2 and 2.3 outlined how companies within ports are competitors but also have a shared interest in the port being able to integrate logistics processes effectively.…”

“…Of particular interest is the tension that arises when direct competitors also face pressures to cooperate. Recently, Clott et al (2018) considered horizontal coordination within the liner shipping sector, and a series of recent papers explored the relatively new idea of cooperation between competing seaports from various perspectives (see for an overview). However, while the ostensible balancing act between competition and cooperation has been researched for the liner shipping sector and seaports, these dynamics at the intra-port level are of considerable practical and academic interest as well, considering the often fierce competition between neighboring terminals in contrast with their shared interest in the overall performance of the port's logistics functions.…”

“…To academic research, the study contributes a missing perspective on coordination within seaports. Earlier research in this area focused predominantly on vertical coordination in container ports (notably Van Der Horst and De Langen 2008), or horizontal cooperation within the liner shipping sector (Clott et al 2018) or between seaports , whereas this study explores horizontal coordination between directly competing terminals. Following a qualitative case study approach, the study provides in-depth understanding of all aspects involved in an environment where competing terminals also face pressures to cooperate, including port policy, the institutional environment, terminal behavior, and the linkages between these.…”

A decision model on the repair and maintenance of shipping containers

“…This reverse globalization would then result in a decreasing world-wide shipping of goods. In order to counteract decreasing freight rates and continued uncertainty in maritime transport, shipping lines form alliances or cooperative agreements ( Clott et al 2018 ). On the other hand, the container vessel size is continually increasing to meet economies of scale at sea, but creating capacity and operating problems on the port-side ( Jeevan and Roso 2019 ).…”