Port choice in a competitive environment: from the shipping lines' perspective

TLDR

Globalization and regional competition have amplified shipping lines’ influence on port development, eroding port monopolies, yet most operators still base strategies on shipping lines’ stated preferences. The study seeks to identify shipping lines’ port selection criteria, focusing on revealed preferences rather than stated ones. The authors surveyed major shipping lines in Singapore and Malaysia to assess their port choice. The survey revealed that port charges and a wide range of services are the sole significant determinants of port choice, and that shipping lines’ stated and revealed preferences are inconsistent.

Abstract

The present era of globalization and regional competition has witnessed the increasing influence of the global operations of the shipping lines on port development and the declining monopoly of ports. This warrants the need for an identification of the port selection criteria from the perspective of the shipping lines. Hence, an attempt is made to determine the port choice from the perspective of the shipping lines. Moreover, most port operators have designed their strategies based on the 'stated preference' of the shipping lines. However, the stated preference approach can have several shortcomings such as the shipping lines would tend to overstate their demands for services at the port. This directs for an examination of the port choice of the shipping lines based on a revealed preference approach. The 'revealed preference' approach aims at judging the port choice of shipping lines purely from their 'actions' rather than what they actually 'state'. The empirical study in this article is based on a survey conducted among major shipping lines operating in Singapore and Malaysia. The findings have shown port charges and wide range of port services to be the only significant factors in their port choice. Moreover, the results show no consistency between the stated and revealed preferences of shipping lines.