Ports must develop hinterland strategies to survive

Dr Jean-Paul Rodrigue: Dr Jean-Paul Rodrigue: "We used to talk about economies of scale; now we need to talk about the diseconomies of scale."

The future of ports and the wider shipping industry hinges on hinterland strategies and logistic corridors, according to Dr Jean-Paul Rodrigue, department of global studies and geography, Hofstra University.

Speaking at the TOC Americas conference taking place in Cartagena this week, the professor described this shift as “crucial”.

“The shipping market has changed, the core principals have changed and the drivers are changing. We used to talk about economies of scale; now we need to talk about the diseconomies of scale,” Dr Rodrigue said.

“Containerisation is entering a phase of maturity and at this point in time we are having a very difficult time finding the drivers for the next wave of containerisation. China is dying; all the drivers pushing for transpacific trade have reached maturity. The offshoring and outsourcing cycle that has benefited the industry so much is now pretty much done. The next driver is going to result in less growth for containers because of nearsourcing.”

On a separate note, Dr Rodrigue added that changing port ownership models have led to decisions that he describes as “counter intuitive”.

“Ports have become financial assets that are managed. Those managers are smart people with very little wisdom and sometimes they don’t understand what they are playing with. This leads to decisions that are counter intuitive.”

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