The Role of Ports in the Development of Mediterranean Islands

This paper examines the role of ports in the economy of Sardinia by means of the employment generated by port and port-related industries. The subject is important since Sardinia and other Mediterranean islands suff er from chronic unemployment and poor economic performance. The increase of the Europe-Asia commercial fl ows, the European Union enlargement and the renewed centrality of the Mediterranean have induced optimistic expectations on the development opportunities that may be created for the island communities by the maritime and port sectors. The employment generated by the maritime and port industry is an essential, although partial, measurement of the development impact of ports. Therefore its quantifi cation is indispensable in order to correctly estimate the impacts that a more central role of the Mediterranean might have on the local island economies. In the case of Sardinia, ports generate approximately three percent of the total island employment, and over eight percent on average of the employment of the single municipalities. This result adds to the vital role that ports have to play as transportation nodes and in creating value added

A Critical Review of Port Pricing Literature: What Role for Academic Research?

AbstractFew topics in the area of port economics have attracted so much attention from the side of the academic community as port pricing. The impact of such literature has been quite tangible in terms of policy development and the adoption of cost-based charging practices by many ports. Nonetheless as the port sector changes, new areas of research emerge and the academic community needs to look beyond the traditional theories to provide research that matters.This manuscript provides a review of the existing literature on port pricing with a specific focus on the literature of the last decade. In the paper the author carried out a systematic analysis of the main maritime and port economics journals and highlighted the current literature gaps and the areas that can benefit from academic attentions. Among the most interesting ones there are charging practices aiming at reducing externalities, the development of all inclusive port charges and the application of revenue management for port infrastructure utilization

Bundling Strategies in Global Supply Chains

The development of logistics has offered a wide range of new business opportunities for transport operators. Shipping lines have been taking advantage of these opportunities and have expanded their business scope beyond the movement of cargo, to include, for example, coordination among transport modes, route rationalisation and even value added logistics services. Carriers offer today transportation as part of integrated global supply chain solutions in an attempt to provide a better service to their customers as well as improve their bottom lines. This appears to be a winning strategy since an increasing number of industry players are investing in logistics operations and infrastructure. The offering of products and services jointly as a package or bundle is a common marketing strategy in a variety of industries and also appears to be a successful strategy for enhancing shipping lines’ competitiveness and profitability. Only limited research is available though to better understand under what conditions such bundled sales are possible; what attitude shippers show towards this industry trend; how bundling strategies could be developed optimally; and how they could be priced. This thesis is a contribution to research in this area and provides an analysis of the viability and the benefits of bundling strategies in the container industry, and specifically with reference to the joint provision of ocean transportation and other logistics services

Real option analysis for environmental compliance: LNG and emission control areas

Abstract A wide array of technical and operational solutions is available to shipowners in order to comply with existing and upcoming environmental regulation within Emission Control Areas (ECAs). Liquefied Natural Gas (LNG) is a promising alternative since it offers potential cost savings in addition to ensuring compliance with ECA regulation. But investment to retrofit existing vessels to be able to use LNG carries significant upfront costs, and a high degree of uncertainty remains on the differential between the prices of LNG and conventional maritime fuels, as well as on the availability of LNG and the reliability of its supply chain. New technologies such as LNG inherently carry substantial risk and an ill-chosen investment strategy may have irreversible consequences that could jeopardise the future of the shipping company. One important question is whether interested owners should invest in LNG now to comply with ECA rules in 2015 and reap the benefits of lower LNG prices, or whether it would be advisable to wait until some of the uncertainty is resolved. While traditional discounted cash flow techniques are unable to account for the value of managerial flexibility linked, for example, to the possibility of deferring an investment, real option analysis can be used to analyse such cases. The paper discusses the optimal time for investment in LNG retrofit and takes specific account of the value of an investment deferral strategy versus the advantages obtainable from the immediate exploitation of fuel price differentials. Through the use of a real option model the paper shows that there is a trade-off between low fuel prices and capital expenses for investment in LNG retrofit. The development in LNG is critically dependent on its future price as well as the reduction in capital costs and ship retrofitting costs. In this respect, policy makers can play a critical role in providing support to advance technical knowledge, maintain LNG prices at favourable levels and in avoiding ambiguity on regulation