UC Berkeley Dissertations Title The Institution of Infrastructure and the Development of Port-Regions Permalink https://escholarship.org/uc/item/23d3c7kx Author Hall, Peter Voss Publication Date 2002-10-01 eScholarship.org Powered by the California Digital Library University of California The Institution of Infrastructure and the Development of Port-Regions by Peter Voss Hall B. Soc. Sc Honors (University of Cape Town) 1989 M. Sc (University of London, London School of Economics and Politics) 1995 A dissertation submitted in partial satisfaction of the requirements for the degree of Doctor of Philosophy in City and Regional Planning in the GRADUATE DIVISION of the UNIVERSITY OF CALIFORNIA AT BERKELEY Committee in charge: Professor AnnaLee Saxenian, Chair Professor Elizabeth Deakin Professor Michael Teitz Professor Michael Reich Fall 2002 The dissertation of Peter Voss Hall is approved: Chair Date Date Date Date University of California, Berkeley Fall 2002 2 The Institution of Infrastructure and the Development of Port-Regions Copyright 2002 by Peter Voss Hall 3 Abstract The Institution of Infrastructure and the Development of Port-Regions by Peter Voss Hall Doctor of Philosophy in City and Regional Planning University of California, Berkeley Professor AnnaLee Saxenian, Chair This dissertation asks what role local public agencies might play in regional economic development through the market-shaping institutions they create and sustain. Recent economic geography literature has sought to account for patterns of regional development in terms of institutional differences across space. Research has sought to identify and understand these institutions, defined as taken for granted formal and informal rules, practices, norms and patterns of behavior. However, the current literature is vague about the role of public policy, and often ignores extra-regional economic forces. This dissertation confronts these problems directly by examining the institutionalized relationships between one type of local public agency, port authorities, and one global industry, automobile manufacturers. The evidence presented in this dissertation consists of case studies of two public port authorities (Baltimore and Long Beach) and various automobile importers (Toyota, Honda, Mercedes and Volkswagen), supported by documentary and economic data. The research strategy involves tracing the consequences for the geography of automobile import activity of institutional change in public ports. 1 I argue that the economic geography of automobile import and distribution activities can be systematically related to changes in the planning, leasing, pricing, and management policies of US public port authorities. Firms using such public infrastructure seek a relational fix, or an appropriate set of institutionalized relationships, that allows them to overcome the uncertainties associated with investment and other economic actions. How port authorities go about providing infrastructure – the planning policies they promote, the financing mechanisms they employ, the contracts they enter into, the labor relations they sustain, the organizations they create – these institutions all support particular relational fixes and devalue others. Changes in these institutions arising from the process of containerization have changed the actual and potential relationships between infrastructure providers and users. In turn, this influenced both the patterns of port usage and infrastructure investment decisions. The findings indicate that local public agencies are able to influence regional economic development outcomes through attention to the institutions governing the relationships between multinational firms and other economic actors. A central challenge for local public agencies is to achieve institutional compatibility with a diversity of economic actors, in a way that is both responsive to changes in industry organization and accountable to local communities. For planners in particular, this implies paying closer attention to the way in which institutions influence actual and potential public-private relationships. 2 Table of Contents Chapter 1: Introduction 1 Life after Fordism 4 The argument summarized 9 Studying variation and change in regional institutions: why seaports, why automobiles? 13 Outline of chapters 21 Part I: Ports and Regional Development 26 Chapter 2: Three approaches to the role of ports in regional development: ports as cargo, ports as infrastructure and ports as trade nodes 27 Ports as cargo and the economics of impact 33 Cargo-based descriptions of Ports 33 A cargo-based classification of US Ports 37 The economics of cargo impact 39 Ports as infrastructure and the economics of locational advantage 47 Infrastructure-based descriptions of ports 47 The economics of locational advantage 53 Ports as nodes in networks and the economics of trade 57 Network-based descriptions of ports 57 The economics of trade 62 On why being on or off the ‘network’ is not a sufficient condition 64 Exploring the relationship between cargo handling and employment growth in hinterlands 72 Correlation analysis 76 Differences in growth analysis 82 Specialization analysis 86 Summary: the relationship between cargo and employment growth 89 Conclusion: towards a dynamic view of ports in regional economic development 91 Chapter 3: Ports as Institutions 92 Mutual specialization: which Ports handle which autos? 94 On Local Public Agencies 109 Seeking a ‘relational fix’ 118 Institutions and Economic Geography 124 Mutual Specialization, Local Public Authorities and the Relational Fix 129 i Chapter 4: Processes and intermediary actors in the handling of automobile imports 131 Introduction 131 Ocean Carriage 134 Evolution of Car Carriers 137 Cargo Guarantee Arrangements 141 House Lines 144 Liner Services 146 Summary: ocean carriage 149 Discharge, Stevedores and Longshoremen 150 East vs West Coasts 154 Port-wide training 161 Shift-specific training 164 Summary: discharge 169 Processing and Storage 170 In-house processing 172 Foreign Trade Zones 174 Independent Processors 176 Landside Distribution 182 Trucking 185 Rail 187 Summary: landside distribution 192 Back to the waterfront 192 Part II: Case Studies 196 Introduction to the Case Studies 197 Chapter 5: Choosing a partner: Toyota and the Port of Long Beach 201 Introduction 201 Institutional Legacies of the entrepreneurial port 204 The city’s port 207 The landlord port 212 The carriers port 216 Containers and the land crunch 221 Planning Policies 221 Physical Development 224 Leasing Policies 228 Automobiles and the Port of Long Beach 231 ii Evolution of Automobile Leases at Long Beach 233 Why is Toyota still in Long Beach? 239 The Future for Toyota in Long Beach 244 Beyond Long Beach: the emergence of the Southern California niche ports 246 Port Hueneme 246 San Diego 249 Conclusions 250 Chapter 6: Failed intentions and unintended successes: Cars, containers and the Maryland Port Administration 253 Introduction 253 Founding Institutional Legacies 257 The shippers port 258 The states port 266 The common user port 281 Containing failure 287 Identifying the source of the problem 296 Tariff and leasing policy 299 Subsidies and Services 309 Infrastructure Spending 312 Legislative Reform and Blurring the Public-Private Divide 317 Consequences of Decline 323 The Automobile Surprise 330 Quality Automobile Handling 341 Conclusion 350 Chapter 7: Localization and Globalization Strategies in Moving Automobiles, 1980-1999 352 Introduction 352 Recent Trends in the Automobile Industry in the US 355 One way to be global? 364 Uncertainty, Flexibility and the Organization of Automobile Distribution 366 Toyota: localization in distribution 377 Central Atlantic Toyota, Baltimore 388 Honda: not so local after all 394 Comparing Toyota and Honda 398 Hybrid strategies: between local and global 399 Mercedes 400 Volkswagen 404 Conclusion 408 iii Chapter 8: Conclusions: Port Policy and Regional Economic Development 409 Review of argument and evidence 410 Challenges to an onymous policy of institutional design 413 Institutional Compatibility and Public Policy 419 References 423 Appendix A – Additional Tables and Analysis 450 A1: Exploring the relationship between cargo handling and employment growth in hinterlands 451 A2: Analysis of Commodity Specialization across the US Port System, 1982-1999 454 A3: Relative sectoral employment growth 462 Appendix B – Data Sources and Treatment 464 Overview 464 Interview Data and Qualitative Analysis 465 Documentary Data and Historical Analysis 466 Quantitative Data and Statistical Analysis 467 Waterborne Commerce of the US, 1982-99 468 Maritime Administration Commodity Data, 1990-99 473 PIERS Automobile Import Data, October 1980/90/00 474 Wards Auto Data, 1985-99 476 County Business Patterns 478 B1: List of Interviews 481 B2: Consent Letter 483 B3: Waterborne Commerce of the US Commodity Classification System 485 B4: Definitions of Port Hinterlands and FIPS Codes 493 Appendix C – Glossary of Port Terms 498 iv List of Figures Figure 1.1: Sales of Foreign Automobiles and Light Trucks, USA 1976-2001 3 Figure 2.1: Reference ports 32 Figure 2.2: Containers handled by reference ports, 2000 34 Figure 2.3: Traffic-based classification of value of 2000 cargo handled by Baltimore, Long Beach and All US Ports 36 Figure 2.4: Port Calls by Vessel Type, 2000 60 Figure 3.1: Automobiles Handled by Reference ports, 1999 96 Figure 5.1: Long Beach: containers and automobiles, 1988-99 202 Figure 5.2: Terminals of the Port of Long Beach 220 Figure 6.1: