THE STRATEGIC WAY FORWARD

On the one hand, the increase in trade volumes and the emergence of new distribution patterns, means that the demand on port seashore infrastructure (and the immediate land behind it) is nearing capacity, hence the need to expand land-wise to accommodate future volume growth and logistics-driven capacity requirements. On the other hand, reported inefficiencies in ports indicate that landside logistics operations are far behind their optimal efficiency, with most observed malfunctions (unproductive moves, congestion, delays, etc. ) taking place at inland and intermodal port interfaces.

OPERATIONAL AND STRATEGIC ORIENTATION In today's highly competitive market place, port management teams are required to redefine their core businesses and competencies so as to accommodate different pattern arrangements of modern trading and logistics systems. The integration of inland networks could constitute an additional core mission for ports, but this requires an appropriate strategy directed towards inland transport and logistics providers. Undertaken in isolation, such strategy could be detrimental to ports given the risk of splitting sea and inland management systems. The optimal solution is to integrate ports in the wider logistics and supply chain network, with equal emphasis on landside networks as on seaside links. In this way, ports could be approached as integrated logistics centres for both maritime and inland transport services.

In international shipping and logistics, seaports can be treated as maritime logistics centres when they provide logistics services at the seashore and shore-land interfaces. Many ports in the world have an established experience in providing value-added logistics for shipcargo consignments, but not all ports can claim a logistics-centre status. Typical logistics functions of ports include cargo handling and transfer operations, storage and warehousing, break bulk and consolidation, value-added activities, information technology management, and other related services.

Ports may also be seen as inland logistics centres when they operate as nodal interfaces intersecting the different segments of the inland transport system, such as in terms of road/rail, road/road, rail/rail, and even rail/road and air combinations. In recent years, there has been some emphasis on the role of inland ports, where all logistical operations not necessarily requiring to be carried out in the seaport area, can take place. Opportunities for developing port facilities that can provide logistics-like services at some distance away from traditional seaport locations arose from several experiences around the world. As a result, some new concepts such as distribution centres (DCs), inland terminals, and dIstriparks have emerged. Other generic terms include dry ports and inland clearance or container depots (ICDs), both bounded by Customs presence and common-user service arrangements. Nevertheless, there is no clearcut separation between all such facilities in terms of spatial dimension, functional or organisational status.

Figure 1 depicts the interaction between sea, land, and intermodal systems and the scope for ports to integrate all three such interfaces. Port landside integration can be undertaken through many strategies, including as intermodal terminals, warehousing sites, logistics centres, or a combination of one or all of these. At the seashore interface, maritime logistics centres operate and provide value-added logistics services for sea-bound goods at both origins and destinations. Cargo flow can take different routes including through intermodal interchange points and inland warehousing facilities. The inland logistics interface is primarily concerned with managing physical flows for inland cargo, but can also process sea-bound or intermodal cargo without being physically linked to the sea (e. g. inland ports). The intermodal system intersects the inland and maritime interfaces as well as other modal flows of inland cargo (e. g. road with rail). Its main role is to act as an interchange point rather than a logistics centre.

New opportunities for ports may be through operating inland distribution centres located outside the port area, but linked to it via rail/road/waterway networks. The concept of processing cargo at sites even further removed from the port's perimeter has been recognised for its economic benefits. In regional trading blocks such as the EU or NAFTA, these sites could even handle import/export cargo away from border crossing points such as conventional seaports. Practical illustrations already exist in Western Europe and North America, and are generally backed by governments keen to ease traffic and urban congestion around seaport locations.

Strategies of horizontal integration (owning and operating other seaports and terminals) away from the port's hinterland do not however fall under the subject of spatial expansion, and may be better explained by the need for scale and scope economies prompted by a deregulated port industry.

POLICY ISSUES AND THE PRIVATISATION FACTOR Although there is no established framework for port spatial or functional expansion, many ports in the world may find their inland development plans and strategies restricted by regulatory, spatial or competitive constraints. Sometimes, ports have sizeable land capacity but cannot develop it to undertake other non-shipping related activities. On the other hand, if ports are allowed to expand freely beyond their traditional functional or spatial bases, there is no guarantee that they won't shift their operations to more lucrative businesses such as leisure and real estate property development.

Evidences of such practices can already be found in many ports in the world, particularly those operating in a fully deregulated environment.

The aim is to provide a framework that balances between the need of ports to expand, and the requirement upon them to provide facilities and services to the international shipping industry.

Unlike strategies for sea and nautical developments, port landside expansion plans are likely to have further implications on land transport systems, urban and spatial planning, land use, and environmental standards, with the likely involvement of politicians along with other economic and community interests. Variations between restrictive, protective, and promotion-led policies will largely shape the nature and dimension of port landside logistics development. In addition, inland facilities are likely to be built, operated and managed by the private sector. As illustrated in figure 2, port authorities are better positioned to act as facilitators through creating a platform of joint planning and management with various stakeholders and market players.

Because of a variety of conflicting standpoints (economists, politicians, urban planners, environmentalists, private companies, etc. ), as well as the wide-ranging implications of landside spatial expansion, port management must carefully plan its land-interface integration at both strategic and operational levels. At strategic levels, ports need to take into consideration the economic, political, legal, and social environments under which they plan and implement these integration strategies. Of paramount importance is the adaptability of exiting regulations and the involvement of different market players. By integrating various stakeholders, cost benefit analysis (CBA) should provide for a balance between the interest of ports and that of other businesses and communities. At operational levels, ports must ensure optimal land utilisation, on-time project completion, and efficient facility operation in-line with the specific needs of inland transport operators and logistics providers.

Khalid Bichou is currently undertaking research and consultancy, and is a member and coordinator of the Port Operations Research and Technology Centre -PORTeC-, a recently formed centre at Imperial College London.

Seaport development, design and planning schemes have traditionally aimed at logistics integration at the maritime interface and, to a lesser extent, at the intermodal sea interface. Strategies of inland integration whereby seaports seek to either pull outside cargo-operations into the port base, or geographically expand beyond traditional maritime spatial bases, are uncommon in the port industry. Legal, spatial, institutional, and even functional constraints may prevent ports from adopting such strategies, with three main issues being at stake: (1) the extent of the port's roles, functions and missions, (2) the geographical limit (perimeter) of port inland expansion, and (3) the operational and organisational models that can accommodate such strategic orientation.

Strategies of land interface integration can be perceived in two folds: the first is targeting inland transport operators and logistics providers, while the second is aiming at expanding the functional and spatial attributes of ports beyond traditional port land territory. Neither strategy can be undertaken in isolation (1) from each other and (2) from the integrated logistics and supply chain system. But in so doing, ports could develop appropriate strategies and policy initiatives that consolidate their position as network logistics and freight distribution centres.

Such strategies can serve as a useful tool for gaining competitive advantage, but also as a successful differentiation strategy and a higher barrier to imitation within an industry increasingly running the risk of commoditisation and footloose arrangements.