Improving port-city performances

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In a bid to help ports become more competitive, the Organisation for Economic Co-operation and Development’s (OECD) recent report looks at mitigating negative port impacts and regaining their role as drivers of urban economic growth.

The Port of Rotterdam has strong maritime connectivity

While ports and cities are historically strongly linked, the OECD report says the link between port and city growth has become weaker.

According to the report, one tonne of port throughput is on average associated with US$100 of economic value added, and an increase of one million tonnes of port throughput is associated with an increase in employment in the port of 300 jobs in the short term. The ports sector is also associated with innovation, with nine out of the 10 world regions with the largest amount of patent applications in shipping home to one or more large global ports, including Los Angeles/Long Beach, Tokyo, Oakland, Rotterdam and Houston.

But, “a port cannot be a driver of urban economic growth if it is not competitive”, says the report. The three main factors for competitive ports identified in the report are: extensive maritime forelands, effective port operations and strong hinterland connections.

According to the report, shippers rank as the main decision-maker on port choice, followed by forwarders, shipping companies and terminal operators, and it’s vital that ports invest in extensive maritime connections to be more attractive to shippers, since they can offer direct services and faster delivery of goods.

“Ports can increase maritime connectivity by engaging in internationalisation strategies,” the OECD reports. “Ports traditionally market themselves in relation to shipping lines, freight forwarders and shippers, which is self-evident, considering their important role in port choice. However, some ports are increasingly focusing on co-operation with ports in emerging markets.”

For example, the Port of Rotterdam has financial participations in the ports of Sohar (Oman) and Suape (Brazil), where Antwerp has similar partnerships in Duqm (Oman) and India.

The OECD says long-term competitiveness of the port is also dependent on the support of the local population, which is necessary to sustain port functions in metropolitan areas.

Elsewhere, using ports to develop cities into leading maritime clusters, industrial complexes or waterfront developments could help drive economic growth.

“The most successful port-city economic models use a panoply of instruments ranging from development support, spatial planning, incentive schemes, co-ordination mechanisms to human capital matching,” the report adds. “The instrument mix should be adapted to the maturity of the sector.”

According to the report, the most effective operations when it comes to vessel turnaround and crane movements seem to be located in Southeast Asia, the Far East, Middle East and Northwest Europe.

Port-city policies are also key to success and according to the OECD’s studies, policy effectiveness in port-cities could be increased by focusing on transportation policies – one of the most effective policy areas – and policy coherence in general.