Erasmus University Rotterdam MSc in Maritime Economics and Logistics 2009/2010 Piraeus Container Terminal Competitiveness in the Eastern and Central Mediterranean by Georgios I. Cholis i. Acknowledgements I would like to thank the following people for their support in a scientific and friendly level for the completion of this thesis. At first, I would like to express my gratitude to Professor Acciaro for his very valuable assistance and recommendations. The confidence which he showed me during our cooperation made me more dedicated to my work. Also I would like to thank Mr. Vaggeli Kounoupa for his very valuable assistance. Without his recommendations and comments at the beginning of my research the outcome would have been far less valuable. Furthermore, I would like to thank Professor Karli for providing me with all necessarily data and information concerning the port of Piraeus and the rest of the examined Mediterranean ports. I would also like to acknowledge all my colleagues and especially my friend George for his support, during the last year, who stood by me almost like a brother. On a more personal level, I would like to thank my friend Despoina for being close to me for the entire year. Her patience helped me cope in many difficult situations. Last but not least, would like to give credit to my family‟s support. Their encouragement and love helped me overcome the many difficulties I faced during my research. II ii. Abstract Our thesis focuses on the competitiveness of the Piraeus container terminal in the eastern and central Mediterranean region. More specifically, our analysis consists of the nine biggest container ports (in terms of cargo volume) in an inter-port level. Unfortunately, due to severe lack of available statistical data we could not include in our core analysis, if the selected ports operate in the transshipment or the getaway market. In order to reach the desired conclusions, the thesis has the following structure. At the beginning, we present the necessary literature in order to identify which are the crucial factors, which influence the competitiveness of a container port. Later on, we define which are the available methodologies for the identification and measurement of inter-port competition. Before proceeding with the core of our analysis we defined our market and selected the ports that we will study. Later, we take under consideration elements which influence the demand (in terms of TEU‟s) and the supply side of the E. & C. Mediterranean port industry (e.g. cargo handling equipment). We analyzed those elements in an attempt to pave the way for our core study. In the beginning of our main analysis we identified the port competition in the East and Central Mediterranean Sea by classifying nine ports into four homogeneous subsets. The first subset represents the lowest (average) cargo volumes and the fourth one the highest. With the help of the one-way ANOVA analysis and a post-hoc test (Tukey's honesty significant difference) we concluded that the port of Gioia Tauro ranked first (subset 4), Port Said and Marsaxlokk ranked second (subset 3) with the rest of the ports following. These conclusions are based on the cargo volume data for the years 2003 to 2009. In a second, more analytical effort, we used a model that has been proposed by Dr. Michalopoulos in 2006. This model measures port competition and determines the market position of ports by using a remarkable number of variables. It is based on the benchmarking technique and we came to the conclusion that the port of Gioia Tauro is the leader port, while the port of Piraeus is clearly below the average in the eastern and central Mediterranean Sea. Finally, we came to the conclusion, that through the investment plans and strategies of both terminal operators, the container terminals of Piraeus will create the appropriate conditions for a positive shift in competitiveness. III iii. Table of contents i. Acknowledgements .................................................................................... ii ii. Abstract .................................................................................................... iii iii. Table of contents ...................................................................................... iv iv. List of Tables ............................................................................................ vi v. List of Figures .......................................................................................... viii vi. List of Acronyms ........................................................................................ ix Chapter 1: Introduction 1.1 Introduction .............................................................................................. 1 1.2 Research questions ................................................................................... 2 1.3 Data collection ........................................................................................... 4 1.4 Overview of thesis ..................................................................................... 4 Chapter 2: Literature review on port and container terminal compete- tiveness 2.1 Introduction ............................................................................................... 6 2.2 Different types of port competition ............................................................. 6 2.3 Literature review on container port competitiveness .................................. 7 2.4 Important remarks and conclusions of the literature review ..................... 15 Chapter 3: Overview of methodologies for the identification and measurement of port’s competition 3.1 Introduction ............................................................................................. 19 3.1 Methodologies for the identification of port competition ........................... 19 3.1.1 Porter‟s Five Forces ........................................................................ 19 3.1.2 Analysis of Variance (ANOVA) ........................................................ 22 3.2 Methodologies for measuring of port competition .................................... 26 3.2.1. The method of market sahres ........................................................ 26 3.2.2 Strategic Positioning Analysis or SPA method (PPA, SSA, PDA) .... 26 3.2.2.1 Product Portfolio Analysis (PPA) .......................................... 27 3.2.2.2 The Shift – Share Analysis (SSA) ......................................... 28 3.2.2.3 Product Diversification Analysis (PDA) ................................. 29 3.2.3 The Benchmarking technique ......................................................... 30 3.2.3.1 The concept of Benchmarking .............................................. 30 3.2.3.2 The objectives of Benchmarking ........................................... 30 3.2.3.3 Types of Benchmarking ........................................................ 32 IV 3.2.3.4 Advantages and benefits of this technique ............................ 32 3.2.3.5 Applications of Benchmarking in the transportation sector .... 34 3.2.3.6 The adoption of the Benchmarking for the measurement of port competition ................................................................................ 35 Chapter 4: The Demand and Supply of the eastern and central Mediterranean port industry 4.1 Introduction ............................................................................................. 37 4.2 Selection of the container handling ports in the eastern and central Mediterranean region ............................................................................. 37 4.3 Demand Analysis of the E. & C. Mediterranean port industry .................. 40 4.3.1 The identification of demand based on the total container volumes (TEU‟s) ............................................................................................ 41 4.3.2 Nature of demand (transshipment or getaway) for the selected ports ............................................................................................. 46 4.4 Supply of the E. & C. Mediterranean port industry ................................... 51 4.4.1 Number of container terminals and distribution of terminal operations in the ports of the eastern and central Mediterranean region ......... 51 4.4.2 Cargo handling equipment of the eastern and central Mediterranean ports .............................................................................................. 57 4.4.2.1 Quay cranes of the examinee ports ...................................... 58 4.4.2.2 Yard cranes & vehicles in the examinee ports ..................... 60 Chapter 5: Identification and measurement of E. & C. Mediterranean inter-port competition 5.1 Introduction ............................................................................................. 65 5.2 Identification of port competition with one-way anova analysis ................ 65 5.3 Measurement of inter-port competition in the E. & C. Mediterranean Sea 67 5.3.1 Methodology ................................................................................... 67 5.3.2 The model ...................................................................................... 68 5.3.3 The analysis .................................................................................... 72 5.3.3.1 The average Mediterranean port .......................................... 74 5.3.3.2 The Port Competitiveness Degree (PCD) ............................. 75 5.3.3.2 Detecting the leader Mediterranean port ..............................