Shipping was traditionally viewed as a direct service from port to port, with the misconception that direct shipping represents the most efficient mode of moving goods (Hanley 2003). But increasingly, this is not the case due to a number of converging factors. First, this has to do with the fact that in order to support traffic on a certain route, ports need to be of certain size. Moreover, with direct shipping, routes and scheduling have become very complex, and that complexity has led to inefficiencies. Ports that are able to create mechanisms to improve efficiency in this environment will gain a greater share of the market.
An examination of the shipping volumes at major ports conducted by Hanley (2003) shows that a very significant proportion of the trade is handled by a small group of port operators. Lambert's (1999) study illustrates that the top ten ports (1.4 percent of ports) in the world out of a total of 700 ports surveyed handled 38 percent of the global container cargo in 1997. Should this be extended to the top 25 ports (3.6 percent), the volume handled would increase to 56 percent or over half.
Formulation of shipping strategies in the complex environment is the focus of Coyle, Bardi, and Novack's (2006) study. The study provides a very useful approach to in a fast-paced and hastily changing industry. ...Show more