Configuración Interna

2.2.1 Location, distance and costs

Early location theory, and earlier studies of port growth, often suggested a crude locational determinism. Locational advantage arises, it was often argued, when firms such as ports were located near the sources of raw materials or near the markets (Mersha and Adlakha 1991). By locating close to the sources of inputs or near markets, firms can substantially reduce access and transportation costs – which represent a large proportion of the total cost – and hence improve their competitiveness and profitability. If the cost shippers incur varies linearly with their distance to the port of shipment as the Hotelling (1929) model, for example, would predict and if transportation costs are the key for competitive advantage, shippers would not defy the penalty imposed by inland transport costs to ship their cargo through distant ports as they often do.

It should be apparent that, in competitive markets, it is neither the proximity nor the comparative cost advantage per se that matters but rather the accessibility to markets and the net benefits or competitive advantage a port can create and deliver to shippers. Competitive advantage includes but is not limited to or determined by cost savings and favourable physical location of a port. Competitive advantage is created through the ability of a port to capture opportunities for trade. Regardless of a port's specific location, for it to capture opportunities it must offer acceptable value to shippers; it must provide better access to markets to the shippers who are on the lookout for attractive opportunities for easy spatial interaction with other economic agents in the quest for competitive advantage.

As the focus of inter-port competition shifts from competition between individual ports to competition between supply chains in which a port is a critical functional element (Robinson 2003), the role and significance of location also shifts.

In value-driven supply chains which operate highly complex and cost-effective logistics systems that integrate shipping and inland networks to effect the movement of freight from one end of the market to another, the locational advantage of a port should be defined in terms of its relative position within supply chain networks. This means that a port will have locational advantage if the position within the supply chain networks in which the port is embedded is the most valuable. A competitive port will attempt to find a strategic location within the existing networks and will also configure its activities in such a way as to be regarded as an attractive and critical value-adding element.

Now shippers and more often carriers evaluate and choose ports that have favourable location within these complex logistics network. Shippers move their cargo over routes or logistics pathways which offer best outcomes in terms of overall service provision and focus on total logistics costs to determine the quality and effectiveness of a market offering. Specific port choice as Hayuth and Fleming (1994) argue is in a sense becoming a secondary concern as carriers are more concerned with selecting an efficient and marketable logistics supply chain in which a port is just an element. Therefore, finding a favourable location – a location that is critical to the supply chain's

performance and value delivery and appropriation – within this complex network is central to a port's growth, profitability and survival.

2.2.2 Location within regions and port growth

It is clear that some locations within a region offer more favourable conditions than others to promote port activities and port growth. Identifying such specific locations is, however, a serious challenge.

Central place theory (Illeris and Philippe 1993), for example, suggests that the growth of a port reflects the size of its hinterland and the income power of the economic agents and the population within the hinterland. In this view, ports which are located in extended hinterlands with sizeable income will grow faster than those located and servicing smaller hinterlands because bigger and richer hinterlands offer extensive opportunities for trade.

A different view which is embodied in the notion of growth pole or growth centres (Perroux 1955; Myrdal 1957; Hirschman 1958), suggests that opportunities for port growth exist if the port is located where there is a concentration of dominant industries or firms. In such places growth is fostered by high levels of productivity, entrepreneurial activity and innovation and the continual response to the tensions of alternating high and low levels of supply that the strategies of different firms are capable of providing. Generally, it is toward such places that other firms tend to gravitate or are attracted and their subsequent growth is induced mainly as a result of industry spin-off and multiplier effects (Lloyd and Dicken 1997; Higgins and Savoie 1995).

When ports are located in growth poles they have significant opportunity to capture trade. The output of firms in growth poles becomes a captive market for the port and the source of its permanent growth.

More recently, Porter (1998) has argued that agglomerations (Weber 1929) by themselves do not provide competitive advantage nor do they sponsor sustained growth. In Porter's view the critical issue is not the location of firms near one another or within

the sphere of influence of dominant firms but instead the ability of the firm to cluster or interact and establish working relationships with customers and suppliers and with other organisations with which the firm is related by technology, skills or economic activity. In this context clusters (Porter 1998) and not agglomerations grow because of the concentration of highly specialised knowledge, inputs, and institutions; the motivational benefits of local competition; and more often the presence of sophisticated demand for products and services (Porter 1998). It is towards favourable port-related clusters that ports should locate if their aim is to grow because it is there where competition and intensive interaction between customers and suppliers take place in order to create deliverable value.

In the real world for a port to grow the issue is not whether a port is located in a bigger or smaller hinterland or in a growth centre but rather whether within the region in which it operates it can compete for opportunities to trade and it can capture positions of advantage – whether it can interact with both port customers and port-related industries and establish effective linkages or working relationships such that enable it to create and deliver value to shippers and also to capture value for itself.

With deregulation and 'reregulation' of both domestic and international markets, with the improvements in transport networks and with the integration of transport systems, competition for cargo has extended beyond the natural hinterlands regardless of their sizes. Hinterlands are now overlapped, intertwined and diffused in such a way that the number of market access options available to shippers and the extent of competition between ports have markedly increased. Demand for port services originates in a much broader competitive landscape and hinterlands are now subject to penetration by other ports and third party service providers which may be located within or in distant regions. In a competitive environment captive markets and captive hinterlands are virtually non-existent or, if they exist, they only represent temporary inefficiencies in the markets.

Now shippers and more often carriers evaluate and choose ports that are located within their complex logistics network. Shippers move their cargo over routes or logistics networks which offer best outcomes in terms of overall service provision (Robinson

2003). Also shippers and carriers favour ports that are well located within their logistics networks. Specific port choice, as Hayuth and Fleming (1994) argue, is in a sense becoming a secondary concern as carriers are more concerned with selecting an efficient and marketable logistics supply chain in which ports are just elements. Therefore, finding a favourable location within this complex of networks is central to port growth and survival.