Comparative Analysis Between Port of Genoa and the Port of Rotterdam
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Title: Comparative analysis between Port of Genoa and the Port of Rotterdam: how to gain market shares over the industrial poles of Baden-Württemberg and Bavaria with the new Alpine-Rhine Corridor. Student name: Giovanni Donega Student Number: 415702gd Supervisor: Bart Kuipers 1 Statement of originality this document is written by Giovanni Donega who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents. 2 Abstract The research paper focuses on analyzing the competitive position of Genoa and Rotterdam ports to determine who will be able to serve the Baden-Wurttemberg and Bavaria regions, currently delivered mainly by German ports, after the realization of the Alpine-Rhine Corridor. The comparison among port systems was based on four factors: availability, operational cost, supply- chain reliability and business environment. Currently, Rotterdam has a greater chance over Genoa to gain market share over the contested zone. The efficiency, capacity and quicker implementation of the northern part of the Alpine-Rhine corridor clearly gives a set of advantages to Rotterdam. However, over the next five years Genoa will be capable to compete with the Northern range ports. Through the new governance setting, new infrastructure projects along port and hinterland, Genoa can truly aim to become a main market player. However, the recent collapse of the Morandi Bridge sets a question mark on the short/long-term future competitive scenario. 3 Table of Contents 1.nIntroduction ........................................................................................................................................ 6 2. Theoretical Framework ........................................................................................................................ 8 2.1. Focus on the container sector .................................................................................................... 8 2.2 Port role development .................................................................................................................. 13 2.2.1 First stage: trade globalization ............................................................................................... 13 2.2.2 Second stage: logistic management transport ........................................................................ 14 2.2.3 Third stage: Global supply chain Management ...................................................................... 15 2.2.4 Conclusion: ........................................................................................................................... 16 3. Methodology: What is competition and how can we measure it? ....................................................... 17 3.1 What is competition and how can we measure it? ......................................................................... 17 3.2 Microeconomic factors driving competition ................................................................................. 20 3.3 Factors influencing ports competitiveness and used to compare port systems ................................ 24 3.2.1 Availability: .......................................................................................................................... 25 3.2.2 Operational service ............................................................................................................... 25 3.2.3 Business Environment ........................................................................................................... 26 3.2.4 Supply-Chain Reliability ....................................................................................................... 27 3.2.5 Moderators ............................................................................................................................ 27 4. Case study: Comparative analysis between Genoa and Rotterdam for the Rhine-Alpine Corridor ....... 30 4.1 Define the decision over the contestable hinterland and its competitors ........................................ 32 4.1.1 Why chose Rotterdam and Genoa as main competitors in the contested region?......................... 36 4.2 Port Description ........................................................................................................................... 38 4.3 Comparative analysis: Port of Genoa and Port of Rotterdam over contested area. ......................... 42 4.3.1 Availability ........................................................................................................................... 43 4.3.2 Operational service ............................................................................................................... 48 4.3.3 Supply-Chain Reliability ....................................................................................................... 52 4.3.4 Business Environment ........................................................................................................... 55 5. Evaluation of the inland new infrastructure projects impact on Genoa port-container traffic. .............. 56 6. Conclusion ........................................................................................................................................ 62 7. Events affecting the port of Genoa short term traffic and accelerating infrastructure. .......................... 67 7.1 Logistic Impact and immediate solutions ...................................................................................... 69 7.2 Economic impact ......................................................................................................................... 71 7.2.1 Direct economic impact ......................................................................................................... 72 4 7.2.2 Indirect economic impact. ..................................................................................................... 74 7.3 Possible future scenario ............................................................................................................... 76 7.4 Conclusions on the effect of the Morandi Bridge collapse ............................................................ 79 8. Discussion on long term growth prospect of Genoa, reaching the contested zone. ............................... 81 9. Bibliography ...................................................................................................................................... 83 10. Appendix ......................................................................................................................................... 88 5 1. Introduction In the last decades international trade has boomed driven by economic globalization and production regionalization. Industries and markets are more and more interconnected and every product it’s potentially now available in every corner of the world. According to an estimation of the United Nations (International Maritime Organization, 2017), 80% of global trade volume is transported by ship. Maritime transport has always played an important role in the international trade but the dimension of the volumes reached nowadays made the sea logistic a real complex industry. Ports efficiency and positioning are obviously a key success factors for developing a good logistic network but is not sufficient. Without an effective inland supporting infrastructure connecting markets and/or production centers by intermodal transports, the most efficient port cannot be attractive for the logistic industry. This is more evident in the container transport which is gaining more and more market share in the global logistic business. The port of Gioia Tauro in the south of Italy is a typical example of a modern, efficient and high capacity port missing an efficient hinterland intermodal network. Built within the frame of a long-term investment to promote the South of Italy regions’ economy, it was transformed in the nineties as container terminal to exploit its position close to the Suez Canal and to be part of the so called “autostrade del mare” as a transshipment port. Because of the bottleneck represented by the railway and the highways network and a non-favorable business environment, the port of Gioia Tauro cannot manage to profit of the growing containers transportation market because it does not function as a getaway node which directly distributes the European market. (“The decline of Gioia Tauro”, 2018). The geographical position has always played a key role for a harbor but the unfavorable location has been demonstrated that can be mitigated by other factors. In terms of distance travelled, Northern Europe ports like Le Havre, Rotterdam, Antwerp, Hamburg are not well positioned to receive or to ship goods arriving or departing from the Far East if compared with Southern Europe ones. For vessel crossing the Suez Canal to connect Europe to Asia it takes in average five more days to reach northern ports against a Mediterranean 6 harbor. It means less vessel rotation, higher shipping cost, slower transportation. But this negative effect is mitigated by the port efficiency and the good intermodal transportation network through Europe which makes the total cost of transportation to the final clients cheaper and more reliable. Currently,