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Port-centric
Port-centric logistics logistics
John Mangan and Chandra Lalwani
The University of Hull Logistics Institute, Hull, UK, and
Brian Fynes
Michael Smurfit School of Business, University College Dublin, 29
Dublin, Ireland

Abstract
Purpose – The purpose of this paper is to examine traditional, current and emerging roles played by
ports in the context of logistics and supply chain management practice and strategy. The paper also
seeks to elaborate the emerging concept of port-centric logistics.
Design/methodology/approach – The paper draws its insights and conclusions from a review of
the literature, and an analysis of current trends and data concerning the ports and maritime transport
sector.
Findings – The paper shows that ports can play a variety of different roles within supply chains and
that they are not restricted to their traditional role of simple transhipment point for freight.
Research limitations/implications – While the paper reviews the roles played by ports in
logistics and supply chain management generally, a useful next step would be to analyse specific flows
and activities at/through ports within selected supply chains, thus allowing validation of a framework
of roles for ports in the context of various supply chain strategies.
Practical implications – The paper highlights the potential, which in many cases is still latent, for
ports to engage in port-centric logistics activities.
Originality/value – The paper both highlights (given the fact that the vast majority of freight
at some point transits ports) and extends the understanding of the role(s) of ports within supply
chains.
Keywords Supply chain management, Marine transport, Warehousing, Freight forwarding
Paper type General review

1. Ports and supply chains

Ports and maritime transport have existed for some thousands of years and have
developed in line with the evolution of international trade which has been inherent in
shaping the modern world. Some 6 billion tonnes of freight moves by maritime transport
each year and is estimated to comprise 45 per cent liquid bulks, 23 per cent dry bulks and
32 per cent general cargo. Total freight movements vary according to region, commodity
and freight origin/destination. In the European Union (EU), for example, the ports sector
handles more than 90 per cent of the union’s trade with third countries and
approximately 30 per cent of intra-EU trade, as well as over 200 million passengers every
year. According to the World Bank (2001), there are more than 2,000 ports around the
world, from single berth locations handling a few hundred tonnes a year to some of the
world’s largest ports such as Shanghai, Singapore and Rotterdam, which individually
handle multiples of this (in the case of Shanghai, for example, the 2005 estimate is The International Journal of Logistics
443 million metric tonnes American Association of Port Authorities, 2005). Management
Vol. 19 No. 1, 2008
pp. 29-41
q Emerald Group Publishing Limited
The authors wish to thank the anonymous referee for his/her valuable feedback and constructive 0957-4093
comments. DOI 10.1108/09574090810872587
IJLM Ports and maritime transport thus play an important role today in global commerce.
19,1 It is important to first define exactly what is meant by the term “port”. According to
Stopford (1997), a port is “a geographical area where ships are brought alongside land to
load and discharge cargo – usually a sheltered deep water area such as a bay of river
mouth”. Often ports comprise multiple terminals, a terminal being “a section of the port
consisting of one or more berths devoted to a particular type of cargo handling”
30 (Stopford, 1997). Ports handle various different categories of freight. Maritime freight is
typically classified as: liquid bulk (the most significant sub-category here is oil), dry bulk
(such as coal and some agricultural products), unitised freight (which comprises both
lift-on/lift-off containers, i.e. Lo-Lo and roll-on/roll-off units, i.e. Ro-Ro), and other general
freight. Some ports handle all categories of freight, while others focus on particular
categories; different types of handling equipment at ports are usually required for these
different categories of freight.
This paper seeks to contribute to a theme in the wider literature concerned with
rethinking and clarifying the role of ports. One such other contribution is that by
Robinson (2002) who notes that past paradigms (of ports) are “of interest, but not of
problem-solving relevance. Indeed, to persist with an inadequate paradigm is to find
the wrong answers”. Robinson suggests that:
[. . .] the role of ports and the way in which ports position themselves [. . .] must be defined
within a paradigm of ports as elements in value-driven chain systems, not simply as places
with particular, if complex, functions.
Another contribution, aptly titled “Rethinking the port,” by Olivier and Slack (2006),
noted that the emergence of port operating TNCs (a trend discussed further below)
requires a fundamental epistemological shift in reconceptualising the port. Heaver et al.
(2000) in their research into the European ports and shipping sectors noted that
“the role of the port and port authorities has to be redefined to guarantee that it remains
a fully fledged player in this fast evolving market”. Reflecting wider logistics and
supply chain management issues, there has also been recognition within the literature
concerning the evolution of the demand for maritime transport. Panayides (2006) for
example notes that:
[. . .] the demand for maritime transport nowadays cannot be solely considered to be a derived
demand emanating from the need for products, but rather as an integrated demand
emanating from the need to minimise costs, improve reliability, add value, and a series of
other dimensions and characteristics pertaining to the transportation of goods from the point
of production to the point of consumption.
The focus of this paper, and its contribution to the discussion on the role of ports, is on
the (changing) role of ports in supply chains, a role which can vary from that of simple
transshipment hub to important logistics node, and which in turn is heavily dependent
upon the supply chain strategies of those who use these ports. In particular, the paper
considers the engagement of some ports in what is sometimes labeled “port-centric
logistics”. The paper is structured as follows. Various trends in maritime freight
transport and shipping (such as increasing vessel size and directional imbalances) are
reviewed and this is followed by a discussion of various pertinent trends in the ports
sector, in particular concerning port development and ownership, the evolution of
so-called global port operators (GPOs), growing competition between ports, and the
link between ports and economic growth. The next section considers the role of ports in
the supply chain and the emergence of “port-centric logistics” is elaborated. The area of Port-centric
supply chain strategy is discussed and, using the global supply chain taxonomy logistics
developed by Christopher et al. (2006), it is suggested that ports can have various
different roles in the context of these different supply chain strategies, a topic on which
further research is recommended.

2. Trends in maritime freight transport and shipping 31

The increased emphasis on the role and efficiency of ports needs to be viewed in the
context of the considerable growth that has occurred in recent years in world trade in
general and in maritime transport in particular. Today, many of the world’s economies
are becoming increasingly interrelated as a result of increasing trade and the growing
trend towards globalisation of production. Over the past half-century, most countries
have seen an increase in exports as a share of GDP, with the vast bulk of these exports
transported by sea. A number of trends affecting the maritime sector have been central
to efficiency and productivity gains. These include better, faster and larger vessels, and
improvements in cargo handling at ports.
Vessel size has increased dramatically in recent years (a trend termed by some as
“gigantism”). Maersk Line’s new flagship vessel the “Emma Maersk”, which won the
title of ship of the year at the 2007 Lloyd’s List awards in London, is said to be the
world’s largest container vessel with an operating capacity of some 11,000 twenty foot
equivalent units (TEUs) (BBC, 2006). The Emma Maersk is one of five such sister
vessels and their actual maximum potential capacity is said to be up to 14,500 TEUs.
Only, certain ports can handle such ultra large vessels however, and consequently
many container vessels in routine operation are much smaller than this.
With fewer ports able to handle larger vessels, there is growing traffic concentration
at certain ports. Increasingly, many mid-sized ports are playing a feeder role to the very
large ports as hub and spoke networks have emerged. In these networks, the larger
vessels ply between the major transshipment hubs, with the result that the prosperity of
the smaller ports is increasingly dependent on the route strategies of the major shipping
lines. Indeed, alterations in route network design by the major lines can also have
significant impacts on the fortunes of the larger ports. Such lines tend to favour ports
which: are in a good geographical position relative to other ports of call for best vessel
transit/steaming time and port rotation; are close to marketplaces; have the necessary
facilities, services and infrastructure; and are sufficiently flexible to allow service to be
maintained if ships are out of schedule (Livey, 2005). It is not uncommon for vessels
plying long international routes to get delayed and a challenge for ports is to ensure that
they manage the utilisation of their available berthing capacity effectively, including to
accommodate delayed vessels if necessary.
Global shipping companies have also increased significantly in scale. The largest
container ship operator in the world is Maersk (also known as AP Moller – Maersk) which
operates over 600 owned and chartered container vessels (the company, which earned
revenues of just under £19 billion in 2005 and employs over 110,000 people, also operates
bulk vessels and container terminals, and has various other interests also). Other global
container companies of considerable scale (but not as big as Maersk) include Mediterranean
Shipping Company, Evergreen, American President Lines, COSCO and NYK Line.
While global maritime freight has grown considerably in recent years, a particular
feature of this growth is that it has as a result of trade imbalances been unevenly
IJLM spread across different corridors especially in the case of containerised traffic
19,1 (Figure 1). This has led to directional imbalances, with the result that large numbers of
empty containers may flow in one direction along a corridor, while high-freight rates
will apply on the opposite direction along the same corridor as a supply-demand
mismatch occurs. This is particularly acute with regard to export container traffic from
Asia as can be seen in Figure 1.
32 A number of other trends are also impacting the maritime sector. Demand for “new
builds” (i.e. new ships) in the sector is far outstripping supply, driven in part by the
increased demand for export capacity out of Asia. This in turn is leading to capacity
constraints, especially in container traffic (Port Strategy, 2007). Increased regulation is
also a growing feature of the sector, particularly with regard to environmental and
(post9/11) security issues (Psaraftis, 2005). In July 2004, a new international security
code known as International Ship and Port Facility Security Code came into effect and
was designed to detect and deter threats to international security. A final trend is the
apparent renaissance in short sea shipping, especially in Europe, in response to
congestion and other issues affecting contiguous land transport networks.

3. Trends in the ports sector

3.1 Port development and ownership
Traditionally, most ports acted as simple transshipment hubs where freight passed
between ships and landside transport. This was typically a very labour intensive
activity, but technological developments (such as increased use of containers and more
sophisticated cranes) together with reform of dock labour schemes led to significantly
decreased employment at many ports. This was further exacerbated by the fact that for
reasons of geography, some ports are located in peripheral locations (to allow short sea
crossings) where alternative employment is scarce. With changes in ship type, and the
nature of freight being transported new facilities were developed either at alternative
locations within ports, or in some instances on greenfield sites, with the result that many
original port areas fell into disrepair. Some port areas however, leveraging their
waterfront location, have benefited from significant developments in areas such as
residential property and, with the growth of the leisure sector, marina development.
Recent years have seen significant reform concerning the ownership and management
of the ports sector with, according to Brooks and Cullinane (2007), the relationship
between ports and government changing profoundly over the past quarter of a century.

14
12
millions of TEUs

10
8
6
4
2
0
Asia-USA USA-Asia Asia- Europe- USA- Europe-
Figure 1. Europe Asia Europe USA
Major container trade
Route
corridors
Source: Rodrigue and Hesse (2007)
They note that many governments have moved to extract themselves from the Port-centric
business of port operations and have concentrated on monitoring and oversight logistics
responsibilities. Baird (1995) put forward four models of port administration (Table I)
for the various aspects of a ports activities.
Most of the world’s top container ports are PUBLIC/private although examples of
the other models also exist (Cullinane and Song, 2002): Shanghai is an example of a
pure PUBLIC port, Hong Kong an example of a PRIVATE/public port, while a number 33
of the UK’s largest ports are pure PRIVATE ports. Privatisation (of some or all of the
activities outlined in Baird’s model) of ports has been a popular strategy for a number
of ports, although, Cullinane and Song (2002) caution that privatisation is only a partial
cure for what ails the world’s ports and that, if implemented in isolation, it simply
cannot deliver the much-needed panacea for all of the industry’s woes. Other drivers
for improvement thus include areas such as reform of dock labour, a favourable
regulatory climate and contestable markets for ports and their services.
Privatised ports are often of much interest to investors. In the UK, for example, PD
Ports (which operates Teesport and has interests in a number of other UK ports plus
related logistics activities) was acquired by the Australian investment company
Babcock and Brown Infrastructure Ltd in late-2005. Meanwhile, the main private UK
port operator, Associated British Ports (ABP), delisted from the London Stock
Exchange in 2006 following the completion of the takeover of the company by Admiral
Acquisitions UK Ltd. The next section discusses the endeavours by GPOs to extend
their global footprint by acquiring overseas port facilities. Increasingly, privatised
ports are owned by investors outside of the country where the port(s) are located,
and some commentators express worries about a lack of national control over such
important assets as ports in any country’s infrastructure (for example, the recent take
over of P&O by Dubai Ports World (DPW) as discussed below).

3.2 Global port operators (GPOs)

Globalisation of shipping and trade is resulting in increasing pressure on ports to
reduce container terminal costs and improve operational efficiency. Mega shippers of
freight are generally seeking single supplier contracts looking for carriers that can
provide efficient and cost effective services. In turn, the carriers are seeking cost
reductions and efficiency gains at the ports they utilise, with single sourcing across
ports in terms of port terminal operations becoming more common. In response to this
and to the need for integration in international supply chains a number of GPOs have
emerged who manage an increasing number of the world’s ports. This has been helped
by port deregulation and changes in ownership in many countries.

Port functions
Models Land ownership Regulation Cargo handling

1. Pure PUBLIC sector Public Public Public

2. PUBLIC/private Public Public Private
3. PRIVATE/public Private Public Private
4. Pure PRIVATE sector Private Private Private Table I.
Four models of port
Source: Baird (1995) administration
IJLM Leading GPOs include Hutchison (Hong Kong), PSA Corporation (Singapore), DPW (Dubai),
19,1 AP Moller – Maersk (the group’s terminal operations are headquartered in The
Netherlands) and COSCO (Beijing). These companies have expanded their operations
extensively beyond their home ports. For example, following a bidding war with PSA, DPW
acquired in 2006, the port operations of P&O, a company headquartered in London and
listed on the London Stock Exchange. In fact the takeover caused initial controversy in the
34 USA as it also involved P&O’s port assets in the USA moving into new ownership.
Different ports claim the title of world’s busiest port. In terms of cargo tonnage, the port
of Shanghai was the world’s number one port in 2005, while Singapore claimed the number
one title when measured in terms of shipping tonnage. Traditionally, competition for the
number one title was between Rotterdam and Singapore, but Shanghai’s rise reflects the
very considerable growth in maritime traffic from China. In terms of container volumes,
most of the top ten container ports are in Asia, with some handling over 20 million TEUs
each year. Rotterdam, Europe’s largest container port, is ranked approximately number
seven in the top ten and handles around ten million TEUs each year. Other container ports
in the top ten include Hamburg, Dubai and Los Angeles (the latter closely followed by
Long Beach):
Dubai Ports World (DPW)
Dubai Ports World (DPW) is owned by the Government of Dubai in the United Arab Emirates
(UAE) and is one of the world’s leading port operators with port operations in a number of
countries throughout the world. In 2006, it was involved in the takeover of the London
headquartered P&O, beating Singapore based rivals PSA who were also interested in acquiring
P&O. Before the takeover by DPW, P&O was the world’s fourth biggest port group with 27
container terminals around the world, including terminals in the UK ports of Tilbury and
Southampton.
DPW’s Jebel Ali port and free trade zone in Dubai was ranked number eight in the world
in 2006 in terms of TEUs and is at the heart of major plans for the area. A key advantage
of Dubai is that it is ideally positioned along the trade corridor between Europe and Asia
and, as part of a larger development titled Dubai World Central, the Dubai government is
seeking to exploit the areas obvious locational advantage. The Dubai World Central
development is on a colossal scale and one of its six components is the development of
Dubai World Central Logistics City (other components of the master plan include the
development of a residential city, a new airport and an enterprise park). The project seeks
to establish Dubai as a global logistics hub comprising an integrated, multimodal logistics
platform.

3.3 Interport competition

Notteboom and Winkelmans (2001) noted that inter-port competition has intensified, even
among more distant ports, and point out that for example the competition between
European ports situated in different port ranges has increased considerably in recent
years. Such inter-port competition challenges the traditional assumption where each
country has to have its own port(s). Delays in new container port development in Britain
for example have led some commentators to note that Britain could “find itself in danger of
becoming little more than an appendage to the major North European continental ports”
(Asteris and Collins, 2007) (the implication being that Britain’s international traffic would
transit to and from deepsea routes via ports such as Rotterdam and Antwerp). Of course, it
should be added that ports can cooperate as well as compete! – the example of the merger
of the European ports of Copenhagen and Malmo being a case in point. Fleming and Baird Port-centric
(1999) noted that there have been many recent remarks and written comments that the real logistics
future competition will not be between ports and individual transport carriers per se,
but between a handful of “total logistics chains”. Indeed, Goss (1990), drawing upon
Verhoeff (1981), discussed five different forms of competition which ports are subject to,
namely – competition between whole ranges of ports or coastlines; competition between
ports in different countries; competition between individual ports in the same country; 35
competition between the operators or providers of facilities within the same port; and
competition between different modes of transport.
In Asia, as major ports in China such as Shanghai and Shenzhen develop, neighbouring
ports such as Hong Kong, Singapore and Busan in South Korea are feeling the effects of
competition (Sang-Hun, 2006; Wright, 2007). Up to now, many ports in China struggled to
keep up with growing traffic volumes. Now however as more capacity comes on stream,
they are looking to attract other traffic, especially transshipment traffic, which passes
through ports in neighbouring countries. These ports outside of China are pursuing a
variety of strategies, such as developing tax free zones and developing facilities for
value-adding activities within the port area, in order to retain their traffic from the
onslaught of competition from ports in China. Hong Kong port is anxious that burdensome
cross-border trucking rules concerning traffic between Hong Kong and mainland China
be relaxed so that it can compete more effectively. Similarly, it is worried that its
differential advantage in terms of the efficiency of customs clearance at Hong Kong will be
eradicated if China’s customs services are made more efficient.

3.4 Ports and economic growth

Increasingly, ports are recognised as key components in determining the overall
competitiveness of national economies. Cullinane and Song (2002) point out that ports
constitute a critical link in the supply chain and that their level of efficiency and
performance influences, to a large extent, a country’s competitiveness. Similarly, Sanchez
et al. (2003) in the context of a number of Latin American countries, showed that port
efficiency is a relevant determinant of a country’s competitiveness and interestingly they
add that, unlike most other relevant variables, port efficiency can be influenced by public
policies. Bryan et al. (2006) provide a comprehensive review of the literature generally on
ports and regional economic development and, taking the case of ABP’s port activities in
South Wales, they quantify the economic significance of that set of ports activities on the
region. These issues then have generated the drive today to improve port efficiency, lower
cargo handling costs and integrate port services with other components of the global
distribution network.

4. Port-centric logistics and supply chain strategies

It is now generally accepted that supply chains, and not individual firms or products,
are the basis of much marketplace competition (Christopher, 1992). Transport services
(links in supply chains) and transport infrastructure (nodes in supply chains) are key
elements in efficient logistics systems. Maritime transport (comprising ports as nodes
and shipping services as links) is the dominant mode for international freight
movements and is thus crucial to international trade and a vital component of many
supply chains. When difficulties arise in the maritime chain, the results can be quite
dramatic, as was the case for example in the second-half of 2004 when congestion at
IJLM the port of Long Beach in the USA, which had its origins in labour disputes, led to ships
19,1 remaining idle and anchored at sea for up to four days with a considerable knock-on
effect on consignors and consignees (Marshall, 2005).
Looking beyond the ports physical boundaries, Notteboom and Rodrigue (2005) argue
for a new phase in port development, viz regionalisation, where the reach of the port
extends beyond the port perimeter and involves, inter alia, market strategies and policies
36 linking it more closely to inland freight distribution centres. In the UK, some ports are
actively encouraging companies to locate distribution centres at ports rather than in their
traditional locations, which tend to be in geographically central, inland locations. They
argue that current patterns of (inland) distribution centre location ignore the fact that most
of the freight that passes through these distribution centres first passes through a port.
Therefore, they argue that it is logical (and often times easier in terms of land cost, lack of
congestion, etc.) to site such distribution centres at ports. Such an approach (in-port
distribution centres) is not in conflict with the regionalisation approach (connections to
inland distribution centres) advocated by Notteboom and Rodrigue (2005) – depending
upon the specific context, mixes of both approaches would be valid.
It has also been recognised that the gateway position of major seaports offers
opportunities for the development of value-added logistics and other activities proximate
to ports. Port clusters (de Langen, 2002) have thus evolved which Haezendonck (2001)
defines as:
[. . .] the set of interdependent firms engaged in port related activities, located within the
same port region and possibly with similar strategies leading to competitive advantage
and characterised by a joint competitive position vis-à-vis the environment external to
the cluster.
Attempts have been made to define the conceptual and other boundaries of a port
cluster, for example the Busan port cluster in Korea (Roh et al., 2007). Another concept,
“port-centric logistics”, has recently been promoted in the maritime logistics sector
(Falkner, 2006; Wall, 2007; Analytiqa, 2007); we define port-centric logistics as the
provision of distribution and other value-adding logistics services at a port. Ports are
increasingly recognising that higher profit margins can be made on some non core port
activities and this is driving them to engage in activities beyond simply providing
berths for ships and other core port services:
Port-centric logistics in the UK
One advantage of establishing a distribution centre at a port is that it cuts down on the
number of empty (return) containers on roads by “stripping” (i.e. emptying) imported
containers at the port. This also allows faster repositioning of containers to another port
where they are required. In the port of Felixstowe in the UK for example, the BAP Group
operates half a million square feet of on-port warehousing and is a major logistics provider for
the retailer Sainsburys. They cite a variety of examples where port-centric logistics has been
effectively employed (Ship2Shore, 2007):
.
Sainsbury’s previously took imported containers to an inland RDC, but now the containers
are stripped at the port, eliminating a return leg of empty containers. They estimate that
this saves 700,000 road miles for every 5,000 TEUs handled.
.
Many imported containers are not completely full because of weight restrictions on UK
roads. However, if the containers are to be emptied at the port, and not travel on the roads,
 then the containers can be filled to capacity, which they estimate can in some instances be Port-centric
up to 40% more.
Other ports are also developing port-centric logistics offerings. At the PD Ports owned port of
logistics
Teesport in the North of England the retailer ASDA-Walmart has constructed a 500,000 square
feet import centre. PD Ports have also established a company known as PD logistics to provide
various logistics and supply chain services for a diverse range of clients including companies
such as Corus Steel and Lidl. PD Logistics has its own transport fleet which includes nearly 300
trailers, over 400 staff and 280,000 square metres of warehousing across the UK. The company
37
has also diversified into a number of other areas such as waste and recycling.

The port is just one node in any particular supply chain and how goods flow through
that node will depend in part upon the strategy adopted by that supply chain. This of
course, is to presuppose that all supply chains work to a particular strategy. It could
however be argued that with regard to supply chain strategy sometimes theory is
ahead of practice! Godsell et al. (2006), for example, noted that while theory suggested
that supply chains should be demand-led, it has proven difficult to find empirical data
in support of such an approach. Furthermore, they suggest that the functional nature of
many organisations (in our view this could also include ports) at an operational level
acts as a barrier to aligning supply chains effectively with the markets they serve thus
obviating against a customer responsive supply chain strategy being pursued.
Christopher et al. (2006), building upon the work of Fisher (1997) and others, have
put forward a taxonomy (Figure 2) for selecting global supply chain strategies and
which uses both predictability of demand for products and replenishment lead times. It
also incorporates lean and agile philosophies as appropriate. They argue that a “one
size fits all” approach will not work and that companies need to continually assess their
product range and market characteristics so that changing scenarios may be identified
and appropriate supply chain designs configured. This is the approach also taken by
other authors, such as Gattorna (2006), who argues for a dynamic capability in supply
chain designs so that they can respond to any changes. Gattorna argues against
designing supply chains for specific products because, as he argues, different types
of demand can in fact exist for the same product, even among the same customer
depending on when and why they want to buy the product.
Table II provides a very tentative outline of suggested roles for ports within the four
supply chain strategies illustrated in the Christopher et al. taxonomy. The roles
identified for ports are neither exhaustive or mutually exclusive, and they require
further testing and development. What is important is that ports embrace the activities

Lean Leagile
Long lead time Plan and Execute Postponement

Lean Agile
Short lead time Continuous Quick response
replenishment Figure 2.
A taxonomy for selecting
Predictable demand Unpredictable demand global supply chain
strategies
Source: Christopher et al. (2006)
IJLM
Supply demand
19,1 characteristics Resulting pipelines Role(s) for port?

Short lead time Lean, continuous Import: provision of relatively cheap warehouse
þ predictable replenishment space close to point of import for example for vendor
demand managed inventory (VMI): supplier imports freight
38 through the port and replenishes direct to customer
from warehouse at the port
Export: if the sea crossing is short, the VMI can also
be managed at the export port
Short lead time Agile, quick response Import: provision of warehouse space and
þ unpredictable cross-docking facilities to allow rapid import, sorting
demand and distribution of varying product lines
Export: because of the short lead time and
unpredictability of demand, suppliers may choose to
also store goods at the port of export rather than at
the originating factory
Long lead time Lean, planning and Import: emphasis here on cost effective storage
þ predictable execution capabilities. Also due to long lead time, variation in
demand ships arrival times may arise, berthage space must
be available at the port when needed
Export: port may provide facility to store export
goods, especially if seasonality and variation in ship
departure times occur
Table II. Long lead time Leagile production/ Import: provision of warehouse/manufacturing
Some suggested roles þ unpredictable logistics postponement capabilities to allow activities such as postponed
for ports in the context demand manufacturing and pick and pack
of different supply chain Export: capability to handle/store generic (i.e. non
strategies customised) product

and strategies relevant to their context and customers. For example, some ports have
plenty of idle land-side space available which in the absence of other uses can be used
for container storage; others with limited space and good land-side transport linkages
may choose to maximise the available space for warehousing, distribution and light
manufacturing. Shipping companies will also have their own specific requirements.
Bulk vessels will typically take longer to load/unload and may also have variations in
their schedules. Unitised vessels will typically require faster turnaround times. Ports
have to decide how to serve these different customer groups. For example, some ports
with capacity constraints have decided to focus on unitised traffic, where margins are
higher and they seek to divert lower value bulk shipping business to alternative
facilities or even in some instances to competitor ports.

5. Conclusion and recommendations for further research

Ports have evolved from being simple transhipment points and can provide a range of
services and activities to support the wider supply chain. This can be of benefit to supply
chains by making them both more efficient and effective, while allowing ports to become
more profitable. The important, sometimes even critical, role which ports play in supply
chains should not be underestimated. The emerging area of port-centric logistics, as
outlined in this paper, is an area of potential revenue generation for ports. This is
especially relevant given the changing nature of the ports sector which is characterised
by inter alia increased competition between ports, changing port ownership structures, Port-centric
and more powerful shipping lines. Where ports traditionally may have had some logistics
“captive” traffic, this can no longer necessarily be taken for granted.
While this paper reviewed the roles played by ports in logistics and supply chain
management generally, and developed both the concept of port-centric logistics and our
understanding of the role(s) of ports within supply chains, a useful next step would be to
further investigate and quantify port-centric logistics activities. We believe there is 39
significant potential for ports to engage in more port-centric logistics activities, a
potential which is in our view still quite latent in the case of many ports. In order to
conduct such a research exercise, we would suggest that a representative sample of ports
is first identified and an attempt made to develop an inventory of freight flows through
these ports. The movement of such freight through a port represents the use of the port
just as one node in a supply chain. An effort should then be made to identify where
value-adding logistics activities take place along these supply chains, both before and
after the freight passes through the port (and, if appropriate, at the port). This may reveal
a potential for more port-centric logistics activities at ports. The supply chains reviewed
as part of such a research effort may fit to the Christopher et al. taxonomy (Figure 2).
That being the case, it may be possible to validate and augment the framework of roles
for ports tentatively developed in this paper and outlined in Table II in this paper.
We do not underestimate the complexity of such a research endeavour as outlined
above. Notwithstanding this, the aim of such research should be to contribute further
to the theme in the wider literature concerned with rethinking and clarifying the role of
ports, a theme which this paper has also hopefully contributed to. Care would have to
be taken at the sample selection stage – which ports to include in the research and
why. Ports can be quite heterogeneous in terms of their traffic mix and the potential for
port-centric logistics activities is likely to vary significantly among ports; nevertheless
we are of the view that the potential for port-centric logistics activities is not just
limited to container terminals at ports located close to end customers. Once the most
appropriate ports have been selected, care would have to be taken in accurately
mapping the flows of freight within supply chains passing through these ports. The
whole area of origin-destination freight analysis is quite detailed and complex (Mangan
et al., 2001), for example it is not unusual for ports not to know the final destination of
traffic transiting the port or the exact nature of the freight. The recent proliferation of
customs and security initiatives may however be of benefit in this regard by increasing
the visibility and accuracy of such information. Notwithstanding all of these challenges
(which in any event should not be seen as obstacles by good researchers!) the
unearthing and analysis of accurate data could, we believe, be of major benefit to the
ports and logistics sector, and to those of us who research in these sectors, and
particularly so if it can lead to greater insights into the emerging area of port-centric
logistics. Ports need to move from taking a passive role in the supply chain to a more
active role, and port-centric logistics may be the vehicle to allow them to do this.

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Further reading
de Monie, G., Hendrickx, F., Joos, K., Couvreur, L. and Peeters, C. (1998), Strategies for Global and
Regional Ports: The Case of Caribbean Container and Cruise Ports, Kluwer Academic
Publishers, Boston, MA.

About the authors

John Mangan is Director of the University of Hull Logistics Institute (www.uhli.org), where he
also holds the Peter Thompson Chair in Logistics. John Mangan is the corresponding author and
can be contacted at: [email protected]
Chandra Lalwani is Academic Director of the University of Hull Logistics Institute, where he is
also a Professor of Logistics and Supply Chain Management.
Brian Fynes is also a Professor of Supply Chain Management at the Michael Smurfit School of
Business at University College Dublin.

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