Location As a Matter of Attraction for Hub Ports



Location As a Matter of Attraction for Hub Ports

Authors

F Cadoni, A Miglior, G P Ritossa, Università di Cagliari, IT

Description

Abstract

Container transport has experienced an impressive evolution over the last few decades, involving all the links of its logistical chain.

Despite some periods of uncertainty, figures provided by the experts in the field suggest optimistic expectations for the growth rate of containerisation for the next years. For instance, in the year 2000 more than 200 million TEUs were handled in ports world wide, and by the year 2005 this figure is expected to top 300 million TEUs.

Such a huge business is characterized by considerable economies of scale: unitary profits are eroded to such an extent that the operators in the sector are forced to continually readjust their systems in a dramatic seek for the optimization of every single activity.

In this context, the consequences of the choices made are borne by three different categories of subjects:
* the same operators directly evaluate their choices in terms of profit
* consumers, as final users of the service, buy goods at a price that is strongly influenced by the transport cost
* the collectivity bears costs, which are indirect and uneasy to gauge, but nonetheless increasingly relevant, linked to environmental pollution, space consumption, unbalanced distribution of wealth, etc.

For this reason, any effort towards the improvement of the decision-making process is of really great importance. Models, but also in-depth analyses of situations constitute a desirable link between researchers and operators, necessary to pursue the highest possible profits for all the subjects involved.

This paper investigates a specific pattern of maritime transportation, which is currently developing at a noticeable rate: the hub & spoke transhipment within a maritime basin. The origin of such a practice finds its basic reason in the increase in the dimension of oceanic container ships, which has brought about profound changes that mainly concern the shipping systems: in fact, the wide employment of post-Panamax vessels in the intercontinental services has caused a progressive shift of traffic from round the world onto pendulum routes.

Consequently, more than 15 million TEUs currently cross the Mediterranean on the deep-sea routes through Suez and Gibraltar. According to a detailed prediction by the Ocean Shipping Consultants Ltd, such a figure is going to rise up to 25+ million TEUs by the year 2010, and more than a half of that traffic will be transhipment traffic. In this light, the Mediterranean represents the ideal condition for the development of hub & spoke maritime networks: a transoceanic ship entering this sea is able to limit its calls to one or two ports, and then continue its journey to further destinations.

Moreover, owing to the need of reducing transport costs, decision makers have become very sensitive to the difference in time between alternative choices: on one hand ports are demanded higher and higher levels of service, on the other hand this fact puts ports near the shortest route at an advantage, even if this is countable only in terms of hours.

In this respect, the authors are developing a model to point out the fundamental requisites of a hub port. Supply factors (such as sea depths and gross productivity) together with the demand of movements are considered, in a gravitational model providing a measure of the port?s ability to attract (transhipment) traffic.

The denominator of the model is a sub-model resulting in an impedance factor, calibrated by considering two parameters representing different aspects of the location of the port in question: the deviation from the deep-sea route and the distance from an idealistic centre of the basin (or network) containing the port.

Authors who have investigated the attributes of hub ports have generally characterized location through their proximity to the deep-sea route, thus evaluating transport costs with reference to the arc of transport connecting the deep-sea route with the hub node.

Compared to those models, the one proposed here introduces (and quantifies) a concept characteristic of the hub & spoke networks, that measures the cost of short-sea transportation as well as the aforementioned one.

More precisely, the location parameter of the model is a linear combination of the deviation from the deep-sea route and of the parameter representing the ?non-centrality? of the port within its corresponding basin. For the sake of reliability, three trials ? that is three different types of linear combinations ? have been produced.

The parameter has been elaborated with respect to two different approaches.

One only takes into account the nodes composing the network: in this case the mutual distances between the hub and the other nodes (i.e. the spokes) have been measured to provide the average distance relative to each hub port. Such a point of view reflects the working of feeder services in a determined network.

The other one considers each node in the network associated to its function: in other words, some ports are origin / destination of a certain traffic (direct traffic), depending on the economy of the hinterland that they serve. The amount of direct traffic of such a port has been viewed at as a mass, so that a maritime basin is characterized by a centre of traffic: the distance separating a hub port from that point is a measure of its non-centrality.

The paper will explain the calibration of the location parameter, which has been effected for 26 Mediterranean ports, and will present the results of the application of the model to the same ports. Owing to the width of the Mediterranean basin, it has been divided into three sub- basins.

Finally, the results of the application to each sub-basin will be provided, compared and commented.

Publisher

Association for European Transport