Port Congestion and Implications to Maritime Logistics

Abstract Ports are widely recognised as crucial nodes in international trade and transport. However, for various reasons, capacity does not always match demand: sometimes there is overcapacity, whereas in other cases, demand exceeds capacity and there is a shortage of the latter. This chapter therefore looks at where port congestion occurs, both globally and in the port-calling chain; it analyses actual responses by various chain actors, and it sheds some light on potential future evolution and reaction patterns. Congestion, in general, can feature various forms of appearance: it can be more or less hidden, featuring congestion costs, or it can be visually present, featuring queues which are building up. The chapter discerns eight zones in the port-calling chain where congestion may emerge. As a result of a wide literature search, supplemented with a survey, it can first of all be observed that quite some congestion seems to occur, globally spread, and hitting larger as well as smaller ports. Most of the congestion is generated at the terminals, hinterland connection points and hinterland transport itself. In terms of reaction patterns, one would assume that pricing throughout the system is adapted in such way that demand equals capacity. In practice, prices are hardly making any effort to make marginal revenue equal marginal cost. The reason is mainly that the power balance is quite strongly in favour of shipping companies, who impose on port and port operators the need to expand capacity at low fees. Port operators, in turn, apply various kinds of technical and procedural adaptations. The same is true for hinterland operators. Looking towards the future, it seems that with the increase in world trade, the risk of port congestion will be even more outspoken, be it in some parts of the world more than in others. It is also very much likely that most problems will occur landside, as this is the part of the chain where solutions are least easy: who is going to take the initiative, how will co-ordination take place and where will the funding come from? Most actors seem to be aware of this trend, and seek for solutions like dedicated terminals and vertical integration or co-operation. With the above observations, the chapter sheds some light on where the future needs and trends in the abatement of capacity will lie. It is therefore useful from a scientific point of view as well as with an eye on policy-making and operational port management.