An Analysis of Port Selection

The objective of this research is to study the competition among ports. In particular we study the relation between port characteristics and port market share of maritime traffic. Maritime carriers make two primary decisions that affect ports. In the long-term, they assign vessels to routes. In the short-term, they assign each shipment to a vessel and, with that vessel, a port. In this research, we assume that vessel schedules are fixed and model the assignment of shipments as a function of the attributes that describe each port. For a carrier, some assignments are simpler than other assignments. Each assignment should, however, take into account the same criteria. We begin by examining the scheduling of vessels for its effect on the assignment of shipments. We measure the impact of being a vessel's first or last port of call on a port's market share, and we discuss factors that might influence these schedules. We then examine the assignment to ports for exports of various commodity types as a function of geographic location (oceanic and inland distances), port characteristics (vessel capacity and port charges), and characteristics of vessel schedules (frequency and the order ofvisits). We use a multinomial choice model to analyze port choice. We find that the most significant factors are the geographic factors, which are beyond port control. The factors that ports can influence directly appear to be of far less significance. We also find that the choice processes vary with commodity type as well as carrier. The decisions are also found to differ between local and discretionary cargo. Our findings could affect decisions made by port managers as well as carriers or shippers. With the recognition of geographic advantages, port managers could focus marketing more effectively. Recognizing the impact of each carrier's schedules, they could suggest changes to carriers presently visiting the port or recruit new carriers to use present facilities more efficiently. Port managers could also evaluate more effectively investments designed to increase market share. Facilities or technologies could be incremented with a more accurate vision of future traffic levels at individual ports.