Horizontal Collaboration in the Maritime Industry: Ports and Terminals

A critical literature review and field study


Master's Thesis, 2012
77 Pages, Grade: A

Excerpt

Table of content

Abstract

Acknowledgement

List of figures

List of tables

Abbreviations

Chapter 1 - Introduction
1.1. Research obj ective and questions
1.2. Dissertation structure

Chapter 2 - Literature review
2.1. Concept of collaboration
2.1.1. Definition
2.1.2. Ways of collaboration
2.1.3. Horizontal relationships
2.1.4. Horizontal collaboration
2.1.5. Horizontal collaboration in the maritime industry
2.2. Collaboration initiatives
2.3. Drivers
2.4. Benefits
2.5. Barriers
2.6. Effective management of collaboration initiatives
2.7. Conclusion

Chapter 3 - Methodology
3.1. Research structure
3.2. Research approach
3.3. Research strategy
3.4. Method choices
3.5. Timeline
3.6. Data collection
3.6.1. Secondary data
3.6.2. Primary data
3.7. Data analysis
3.8. Research quality
3.8.1. Reliability
3.8.2. Validity
3.9. Research limitations
3.10. Conclusion

Chapter 4 - Findings and results
4.1. Interview no. 1 - X
4.2. Interview no. 2 - X
4.3. Interview no. 3 - X
4.4. Interview no. 4 - X
4.5. Interview no. 5 - X
4.6. Interview no. 6 - X
4.7. Interview no. 7 - X
4.8. Conclusion

Chapter 5 - Content analysis of the interviews
5.1. Initiatives
5.2. Drivers
5.3. Benefits
5.4. Barriers
5.5. Effective Management
5.6. Conclusion

Chapter 6 - Analysis
6.1. Initiatives
6.2. Drivers
6.3. Benefits
6.4. Barriers
6.5. Effective management
6.6. Conclusion

Chapter 7 - Conclusion
7.1. Summary of findings and results
7.2. Further research opportunities

List of references

Appendix

Appendix A - Cover sheet, information sheet and interview guideline

Abstract

This dissertation investigates horizontal collaboration initiatives of ports and terminals. It includes the identification of drivers, benefits and barriers. Moreover, it examines how collaboration initiatives can be managed effectively. At first, a literature review has been conducted. Secondly, an in-depth case study based on semi- structured interviews with several organizations has been carried out. Both have been compared and discussed.

The study shows that ports and terminals collaborate in the field of marketing and business development, operations, administrative, regulatory and spin-off. The field research revealed consulting, joint purchasing and joint coordination of operational sequences as additional activities. Organizations are forced to collaborate by following drivers: Bargaining power of shipping lines, increased efficiency in sea- transport and hinterland-connections, as well as increased requirements of shippers and shipping lines. The study found "increasing amount of cargo volumes" and "increasing environmental awareness" as new drivers. The benefits of collaborating can be classified in the sections efficiency / cost reduction, knowledge and competency, positioning of the company, as well as marketing and service benefits. Competitive benefits and cost reduction have been highlighted from the case study. Social benefits and green benefits have also been discovered. The main barriers are anti-competition regulations and discrepancies between partners, strategic fit and different interests. Moreover, differences in management style, missing trust, differences of social interaction, the fear to boost performance of competitors, the unwillingness to collaborate, political boundaries and missing time deadlines have been added to the findings from the literature. The top three factors of effective collaboration management are regular face to face meetings, integration of information and trust. The willingness to collaborate and decision involvement have been revealed as new factors. Information and communication technology seems to play a secondary role and strongly depends on the initiative.

This qualitative research examined a limited number of organizations. Thus, further research can assess the findings by a quantitative approach investigating a broader range of cases. All in all this study makes several contributions to the rarely available literature of horizontal collaboration in the maritime port and terminal industry.

Acknowledgement

Firstly I would like to thank my supervisor Dr. Maja Piecyk for her excellent support and advice during the whole research project. Furthermore, my gratitude goes to the interviewees and their organizations for contributing practical experiences and information to this dissertation.

My deepest appreciations go to my girlfriend Sissi and my family Helmut, Christina and Corina for their exhaustless support and giving me the opportunity to study in Bremen and Edinburgh.

Declaration

I declare that the thesis embodies the results of my own work and has been composed by myself and meets the University policies on plagiarism and ethical research. Where appropriate within the thesis I have made full acknowledgement to the work and ideas of others or have made reference to work carried out in collaboration with other persons.

Signature of student

Word count: 14,939

List of figures

Figure 1.1 - Dissertation layout

Figure 2.1 - Scope of collaboration
Figure 2.2 - Relationships between competitors
Figure 2.3 - Horizontal co-operation and the level of integration
Figure 2.4 - Three types of logistics collaboration
Figure 2.5 - Value net concept

Figure 3.1 - The research onion
Figure 3.2 - Research choices
Figure 3.3 - The culminating and redefining process of a literature review

Figure 4.1 - Location of the collaborating terminals of interview no. 1
Figure 4.2 - Location of the collaborating ports of interview no. 3
Figure 4.3 - Location of the collaborating ports of interview no. 2
Figure 4.4 - Location of the collaborating ports of interview no. 4
Figure 4.5 - Location of the collaborating ports of interview no. 5
Figure 4.6 - Location of the collaborating ports of interview no. 6
Figure 4.7 - Location of the collaborating terminals of interview no. 7

List of tables

Table 2.1 - Opportunities for ports to cooperate
Table 2.2 - Co-operation activities between ports
Table 2.3 - Drivers of collaboration initiatives
Table 2.4 - Benefits of collaboration initiatives
Table 2.5 - Barriers of collaboration initiatives
Table 2.6 - Efficient management of collaboration initiatives

Table 3.1 - List of databases
Table 3.2 - List of generated key-words
Table 3.3 - Overview of interviewed contact persons and organizations

Table 4.1 - Overview of findings from interview no.1 Fehler! Textmarke nicht definiert
Table 4.2 - Overview of findings from interview no.2
Table 4.3 - Overview of findings from interview no.3
Table 4.4 - Overview of findings from interview no.4
Table 4.5 - Overview of findings from interview no.5
Table 4.6 - Overview of findings from interview no.6
Table 4.7 - Overview of findings from interview no.7

Table 5.1 - Content analysis of initiatives
Table 5.2 - Content analysis of drivers
Table 5.3 - Content analysis of benefits
Table 5.4 - Content analysis of barriers
Table 5.5 - Content analysis of effective management

Table 6.1 - Colour indications for comparing literature and field research
Table 6.2 - Comparing initiatives from the literature review and the field research ...
Table 6.3 - Comparing drivers from the literature review and the field research
Table 6.4 - Comparing benefits from the literature review and the field research
Table 6.5 - Comparing barriers from the literature review and the field research
Table 6.7 - Comparing facilitators from the literature review and the field research

Chapter 1 - Introduction

Several trends, such as globalisation, the growth of shipping alliances, the growing size of vessels and the development of intermodal transportation, have caused competition amongst ports and terminals to become intense (Song, 2002, 2003, 2004; Wortelboer-Van Donselaara and Kolkmana, 2010; Lee and Song, 2007). Nowadays, a port cannot maintain a monopoly status as it did in the past. To adapt to increasing competition, ports and terminals are forced to implement new strategies (Song, 2004). One approach to remain competitive in the changing business environment is the implementation of collaborative initiatives between ports. By collaborating with other ports and terminals, benefits can be obtained that cannot be achieved alone. Due to this relatively new development, literature regarding collaborative practices within the port industry is quite rare. Detailed investigations regarding the drivers, benefits, barriers and facilitators are, with a few exceptions, completely absent. In addition, Song (2004) mentioned in his paper of port co-opetition, that a questionnaire survey or interview-based research can overcome his content-analysis-based research and help to build a solid theory. Due to the identified research gap, this dissertation aims to make a contribution to the field of horizontal collaboration between ports and terminals.

1.1. Research objective and questions

The overall purpose of this research is to investigate and to analyse horizontal collaboration initiatives of ports and terminals. This includes the identification of drivers for collaboration initiatives as well as benefits and problems involved organizations are facing. Finally, it has been examined how collaboration initiatives can be managed effectively.

In order to respond to the research objective, the research questions have been compiled as listed below:

- What collaboration initiatives are currently being undertaken in the port and terminal industry?
- What are the drivers for collaboration initiatives?
- What are the benefits and problems experienced by companies involved in collaborative initiatives?
- How can collaboration initiatives be managed effectively?

1.2. Dissertation structure

The dissertation is divided into six chapters.

Chapter 1

This chapter gives a short introduction to the topic with current trends as well as informing about the research objective and research questions.

Chapter 2

The second chapter reviews the relevant literature on theoretical concepts, initiatives, drivers, benefits and barriers. Where port collaboration-specific literature is not available, the review refers to the literature on horizontal collaboration or even just collaboration in general.

Chapter 3

The third chapter explains the research methodology including the research design and research strategy. Furthermore, the data collection process, the analysis process, the quality of the data and the limitations have been addressed.

Chapter 4

Chapter four presents the findings of the interviews.

Chapter 5

The fifth chapter includes a cross organization analysis and a content analysis where the findings of all interviews have been put together and the mentions of the respondents have been counted.

Chapter 6

Chapter six discusses the findings from the primary research and compares them to the relevant literature from the literature review.

Chapter 7

Chapter seven concludes the dissertation and suggests ideas for further research.

illustration not visible in this excerpt

Figure 1.1 depicts the dissertation layout.

Chapter 2 - Literature review

This section assesses the existing literature and establishes what research has been published in the field of collaboration between ports and terminals. It is written as a critical review and thus makes judgements in terms of value and organizes as well as summaries the findings and ideas of other researchers that are of value into a review. According to Saunders, Thornhill and Lewis (2009) a critical review is of importance as it improves knowledge of a research area and demonstrate awareness of the current state of knowledge in a subject. In addition, it shows how this research fits into the research area.

Firstly this chapter defines the term collaboration and reviewed the general concept of collaboration. Secondly the topic has been narrowed down to collaboration issues and concepts in the maritime industry of ports and terminals. The last subsections focus on collaborative initiatives, drivers, barriers and factors on which effective management is based on.

2.1. Concept of collaboration

2.1.1. Definition

The literature provides several definitions for collaboration which varies to a certain extent. It has to be noted, that the term "collaboration" is used interchangeably with other terms like "co-operation" or "alliances".

According to Daugherty et al. (2006, p.61) "collaboration involves two or more independent companies working together to jointly achieve greater success than can be attained in isolation". This definition is clearly focused on the objective, which is supposed to be a "greater success". This focus is also part of the definition from Lupgens (2004 cited in Wortelboer-Van Donselaara and Kolkmana, 2010, p.271), which states that "co-operation is a relation between two or more parties with compatible or additional interests or aims where the relationship is foreseen to be of reciprocal advantage". Both definitions focus on the mutual gain as an output of the collaboration initiative. But a question has to be asked about the input of such initiatives as no definition mentioned this. The definition of UNCDAT (1996, p.3) helps to answer this question. The organization describes collaborations as "joint activities carried out by at least two parties who are reciprocally committed. Each party commits resources such as financial resources, know-how or time, etc., and draws advantages from the co-operation such as financial savings, improvements in quality of services, increased market share, etc.". In contrary to the other explanations, this definition describes the input and the output as "reciprocally committed" and therefore provides a comprised definition.

Mentzer, Foggin and Golicic (2000) diversified the terms collaboration and co­operation. According to an interview with supply chain executives, the authors conclude that collaboration includes much more about information-, knowledge-, risk- and profit-sharing than co-operation. Anyhow, all definitions highlighted the importance of aimed objectives i.e. profit or greater success in general.

The importance of the collaboration objective can be strengthened by Wortelboer-Van Donselaara and Kolkmana (2010, p.271), who pointed out that "co-operation between companies is not an aim in itself, but a means to reach a certain objective". Regarding the objective one can diversify in tangible and intangible objectives. On one hand, Sandberg (2007) claimed, that researchers found lowered total costs, improved service and shorter lead times as the main objectives. On the other hand, more intangible effects like the objective to strength the market position and increase competitiveness can be seen as a driving force to setup collaboration initiatives.

2.1.2. Ways of collaboration

Barratt (2004) provides a framework with various ways of collaborating. The ways can be mainly categorized into two forms; vertical and horizontal (Figure 2.1). Beside the horizontal and vertical form, Simatupang and Sridharan (2002) defined the lateral form of collaboration.

In a supply chain context, the vertical form includes collaboration with customers, suppliers and internally (Barratt, 2004). Vertical collaboration within the port industry mainly deals with supply chain integration of ports and includes activities like providing value added services, integration of transport modes and IT-systems, building a relationship with shipping lines, and inland transport providers (Song and Panayides, 2008) as well as providing dedicated terminals to shippers (Bichou and Gray, 2005).

The horizontal form of collaboration is a relationship between competitors, non­competitors or internal departments (Barratt, 2004). In the port industry, this way of horizontal integration is often conducted due to port co-operation and mergers (Bichou and Gray, 2005).

By comparing horizontal and vertical collaboration, Bengtsson and Kock (1999, p.178) stressed that "horizontal relationships between competitors have not been analyzed to the same extend as vertical relationships". This general statement seems to be also valid for the port industry as Bichou and Gray (2005, p.85) maintain that "horizontal integration strategies were less common in the past but are gaining more support in recent years". Furthermore, Bengtsson and Kock (1999) argue, that vertical relationships are easier to capture due to their nature of economic activities among supply chain members. "Horizontal relationships, on the other hand, are more informal and invisible" (Bengtsson and Kock, 1999, p.178). Nevertheless, both types of relationships can be equally valuable for a firm.

Regarding the internal form of collaboration (across functions), Barratt (2004, p.32) pointed out the importance of internal collaboration by saying that many companies see external collaboration as a "fresh battlefield which is free of many of the longstanding internal disputes".

The lateral form of collaboration is a combination of the horizontal and vertical form and mainly aims "to gain more flexibility by combining and sharing capabilities" (Simatupang and Sridharan, 2002, p.19).

illustration not visible in this excerpt

Figure 2.2 - Relationships between competitors (Bengtsson and Kock, 1999)

At first, the co-existence relationship includes only social and information exchange. No economic exchange is taking place, and the companies are reaching their goals by themselves. In the competitive relationship, both companies have same sources, same aims and same customers. This results in an action-reaction pattern. Bengtsson and Kock (1999) call this relationship a "zero-sum game". Within the type of co-opetition relationships, companies are collaborating in some fields while at the same time competing in other fields. When co-operating, tight links are established between both companies including economic-, information- and social-exchange.

According to the definition of collaboration, which has been made at the beginning, co-existence and competition relationships cannot be treated as collaborative relationships. Consequently the dissertation focuses on co-opetition and co-operation. Both forms include joint activities and can therefore be treated as horizontal collaboration.

2.1.4. Horizontal collaboration

The general definition of collaboration has been discussed at the beginning and need now to be specified for horizontal relationships. The European Union (2001, p.2) claims that "a co-operation is of a 'horizontal nature' if an agreement or concerted practice is entered into between companies operating at the same level(s) in the market". Therefore, the level of the market in which firms are operating can be considered as the specifying factor.

Within the literature there are many authors presenting several types of collaboration in terms of the intensity (Lambert, Emmelhainz and Gardner, 1996; Zinn and Parasuraman, 1997; Spekman, Kamauff and Myhr, 1998; Muckstadt et al., 2001; Gulati and Kletter, 2005). Most of them are mentioned in a supply chain context. Due to the statement of several authors, that not supply chains but networks compete against each other (Christopher, 2005; Pfohl and Buse, 2000), the classification of Lambert, Emmelhainz and Gardner (1996) will be presented in this dissertation which focuses on networks. They developed a classification for the vertical form of collaboration, later on Visser (2007) and Cruijssen, Dullaert and Fleuren (2007) adapted it to the horizontal form of collaboration (Figure 2.3).

illustration not visible in this excerpt

Figure 2.3 - Horizontal co-operation and the level of integration (adapted from Cruijssen, Dullaert and Fleuren, 2007)

The classification shows that there is a minimum and a maximum level of collaboration (Arm's length and horizontal integration). Arms length relationships consist of one-time exchanges or multiple transactions, a sense of joint operations is not present. Type 1 co-operations include jointly coordinated activities, which are limited in terms of time, strength, closeness etc. Type 2 co-operations have a long­term horizon and the involved organizations are planning and conducting integrated activities. Type 3 co-operations can be seen as "forever" as the organizations see the other firm as an extension of itself; activities are very close integrated. Horizontal integration includes merger activities and joint ventures (Lambert, Emmelhainz and Gardner, 1999). As this dissertation follows the definition of collaboration made by UNCDAT (1996), where joint- operations and planning are elementary components of the collaborative initiative, all types of collaboration except the arm's length type will be investigated.

Vos et al. (2003) as well as Wortelboer-Van Donselaara and Kolkmana (2010) identified a classification and maintain that collaboration can take place at the operational, coordination and strategic level. Vos et al. (2003, cited in Visser, 2007) defines different types of collaboration by three characteristics, which are scope, objective and horizon (Figure 2.4). According to him, operational collaboration uses the existing network and deploys activities more efficient within a short time horizon. Consequently the time horizon is extended in the coordination collaboration form which reduces costs by coordinating two organizations. Finally at the strategic level of collaboration, partners invest together to restructure the network and work together on a long term basis.

illustration not visible in this excerpt

Figure 2.4 - Three types of logistics collaboration (Visser, 2007)

2.1.5. Horizontal collaboration in the maritime industry

Within the port collaboration-specific literature, Hwang and Chiang (2010) identified two types of port co-operation which are in line with the distinction made by Bengtsson and Kock (1999) (Figure 2.2). This are complementary co-operation and co-opetition. Hwang and Chiang (2010) explain that "complementary co-operation is developed as a port needs another port and it also can create situations where ports may complement one anthers competitive advantage". Relationships between hub and spoke networks are one example mentioned by Yap and Lam (2004).

Collaboration due to the form of co-opetition has been introduced to public discussion by Brandenburger and Nalebuff in 1996. Song (2003) applied this concept in the port industry. Co-opetition can be defined as a combination of competition and co­operation (Noorda, 1993 and Song, 2004). Song (2004) says that co-opetition is a strategic approach for organizations in the same market to reach a win-win situation instead of a win-lose one. Hamel, Doz and Prahalad (1989) add that it is a practice of collaborating to compete and that partners can strengthen each other against outsiders. Research in this area confirms that there is a positive correlation of the level of co- opetitive relationships and the ability to remain competitive (Massanti and Zoboli, 2008 and Macedo and Martins, 2008). Co-opetition mainly bases on the theory, that beside the group of suppliers, customers and competitors, there is another group interacting in business which can be called "complementors" (Brandenburger and Nalebuff, 1996). Song (2004, p.3) defines a complementor as "a player whose products or services are complementary to the company's production". The expression "player" has its origin from Brandenburger and Nalebuff (1996) who applied game theory to explain co-opetition. The players are illustrated in the Value- Net framework which has been developed for a general business view. Hwang and Chiang (2010) have modified this framework in order to apply it to the port industry

illustration not visible in this excerpt

Figure 2.5 Value net concept(Hwang and Chiang, 2010)

2.2. Collaboration initiatives

Collaboration amongst ports and terminals can take place in several fields. Brooks et al. (2011) identified 21 different initiatives of port collaboration involving more than 70 ports on five continents. The initiatives for ports located in the same geographical region often include joint development of infrastructure, joint regional marketing and promotion as well as common approaches to environmental issues. Common collaboration activities for ports located in distance to each other are joint training, technical co-operation, sharing of information on port development, environmental activities and the development of common positions at international fora. These findings are also in line with UNCDAT (1996), which furthermore claims that the conclusions from the maritmime meetings between 1986 and 1990 shows, that collaboration initiatives like training, exchange of know-how, standardization of statistics and tariffs, and participation in the activities of regional and international port associations are well developed and used quite often. On the other hand, co­operation initiatives consisting of "joint investments in equipment and infrastructure on a commercial basis was not reviewed" (UNCDAT, 1996: p2). Furthermore, Song (2004) claimed that collaboration in the way of co-opetiton is a new concept in the port industry. In addition, UNCDAT (1996) as well as the Association of Danish Transport and Logistics Centres (2009) distinguish collaboration initiatives into formal and informal. According to them, formal collaboration relies on legal agreements and written contracts. Informal collaborations are "ad hoc in nature" in order to react to a specific situation.

Beside specific activities, the Association of Danish Transport and Logistics Centres (2009) provides an overview where potential opportunities exists for port collaboration. These have been listed in Table 2.1 and a short explanation is provided in the same row.

illustration not visible in this excerpt

Table 2.1 - Opportunities for ports to cooperate (adapted from the Association of Danish Transport and Logistics Centres, 2009)

Brooks et al. (2011) developed general categories where previous mentioned areas and initiatives can be distinguished and therefore gives a comprehensive overview of port collaboration initiatives. The categories are: Marketing and business development, operations, administrative and regulatory. These categories are used as a basic overview of initiatives in this dissertation. Furthermore, the categories have been enriched with other initiatives and authors found in the literature (Table 2.2).

illustration not visible in this excerpt

Table 2.2 - Co-operation activities between ports (adapted from Brooks et al., 2011)

2.3. Drivers

According to the Oxford Dictionary (Oxford University Press, 2012), a driver is "a factor which causes a particular phenomenon to happen or develop". Therefore, a driver can be treated as a reason why ports participate in collaboration initiatives. Often drivers and benefits are used interchangeably (Van Klink, 1997; Hwang and Chiang, 2010; Juhel, 2000). This is because sometimes companies start a project in order to get the benefit and not because they are forced. However, in this dissertation both terms are separated and this section focuses clearly on the causing factors which force ports and terminals to collaborate.

Song (2004) used content analysis to examine widely quoted journals of the maritime industry in order to find out the reasons for port co-opetition at Hong Kong and Shenzhen. He summarised co-opetition reasons into five different categories, namely strategic motivation, financial motivation, economic motivation, operational motivation, and marketing motivation. The results show that strategic motivations, which relate to the position of the port in the market, are the main drivers for co- opetition.

One strategic motivation is the new role ports play in global supply chains. Organizations are re-evaluating their sources for competitive reasons. They found that internal sources and functions have been exploited in terms of efficiency and identified logistics and supply chain management as a new source to reduce business costs and improve efficiency (Lee and Song, 2007). Therefore, ports have become a vital node in global supply chains recently (Huybrechts et al., 2002) where shippers and shipping lines make high demands in terms of cost, service, reliability, speed, communication, low congestion and accessibility (Alderton, 2005; Song, 2003). Furthermore, ports are stressed by the dominant role of shipping companies. Song (2002, 2003) as well as Wortelboer-Van Donselaara and Kolkmana (2010) claim that global competition in the shipping market leads to large shipping alliances and consortia which represent a strong bargaining power against ports and terminal operators. Alliances of shipping companies are jointly negotiating with ports regarding charges and conditions. Loosing one alliance, often results in a loss of massive sales (Song, 2003). In addition, the penetration of shipping lines in the business of terminal operations strengthened their market power against ports (Song, 2004). As a reaction, ports have to "supply their services on a world-wide basis by collaborating with other ports" (Song, 2003, p.30). This argument can be enforced by Beth (2000), who states that ports have to collaborate in order to create a countervailing power.

Another factor is the increased efficiency in sea-transport and hinterland-connections. (Wortelboer-Van Donselaara and Kolkmana, 2010; Song, 2003). Well developed infrastructure and the use of intermodal transport hubs result in many alternative routes in the transport network (Wortelboer-Van Donselaara and Kolkmana, 2010). Due to this development, ports are losing their monopoly on the hinterland that geographically belonged to them in the past. Nowadays, intermodal terminals let containers easily be transferred over long distances to use an alternative port, which results in overlapping hinterlands (Wortelboer-Van Donselaara and Kolkmana, 2010; McCalla, 1999; Song, 2002). Furthermore, Song (2003) mentioned that increased ship size is influencing the competition of ports. Due to depth limits of ports, only few ports are able to serve these mega-carriers (Song, 2003). He concludes that previous developments result in an expanded fore- and hinterland and therefor boost competition amongst ports and terminals.

One more factor that can be treated as a driver for collaboration is the technological development of port facilities. Due to the increasing specialisation by focusing on container or chemicals etc., investments are expensive and the set-up barrier of a new service is high (Wortelboer-Van Donselaara and Kolkmana, 2010).

Mentioned factors are the reason why the motivation of ports to collaborate has been increased. Song (2002, p.106) maintains that ports are well aware of these factors. They react by forming "alliances with their competitors as a co-operative strategy".

The drivers which have been identified are listed in Table 2.3.

illustration not visible in this excerpt

Table 2.3 - Drivers of collaboration initiatives

2.4. Benefits

Previous research of Brooks et al. (2011, p.9) identified benefits of port co-operation. He claims that the benefits are threefold:

1. To better use assets in terms of efficiency, scale and scope;
2. To improve competencies; and
3. To gain positional advantage that may potentially pre-emt the competition

However, the literature provides a lot more benefits, where further categorization seems to be appropriate. Song (2004) built a categorization of collaboration motivations, as mentioned earlier in subsection 2.3. He defined motivations as reasons of co-opetetive formations and subdivided them into strategic, financial, economic, operational and marketing. Due to the fact that terms like cost reduction, expand market share and improved service are used in this classification, one can argue that benefits are classified instead of reasons. Following this, the classification of Brooks et al. (2011) and Song (2004) have been put together in order to provide a comprehensive categorization. Furthermore, while reviewing the literature, additional benefits in terms of social and environmental sustainability have been identified. Consequently both categories have been added.

Efficiency / cost reduction

The overall benefits of this category are financial performance, stability and efficiency. Song (2004) identified cost reduction as an achievement from the elimination of duplication as one important benefit. A recent study conducted by Hwang and Chiang (2010) emphasis that competition especially of adjacent ports in a region results in duplication and waste of resources. Another significant benefit is risk-sharing due to joint investments, common information co-ordination and joint planning (Magrath and Hardy, 1994 cited in Song, 2004). The benefits of economies of scale and scope by capacity utilization, resource pooling and focusing on core­activities are also identified by several authors in the port-specific literature (Song, 2004; Brooks et al., 2011; Hwang and Chiang, 2010). Brooks et al. (2011, p.8) found that joint coordination of hinterland connections would lead to more efficient container bundling. They claim that the container bundling would "allow deeper hinterland penetration and stimulate intermodal transportation through higher service frequency and better utilization of shuttle trains and barges".

[...]

Excerpt out of 77 pages

Details

Title
Horizontal Collaboration in the Maritime Industry: Ports and Terminals
Subtitle
A critical literature review and field study
College
Heriot-Watt University Edinburgh
Course
Maritime Logistics and Supply Chain Management
Grade
A
Author
Year
2012
Pages
77
Catalog Number
V205848
ISBN (eBook)
9783656333661
ISBN (Book)
9783656335221
File size
1134 KB
Language
English
Notes
The dissertation has been awarded with the "Marilyn Stone Memorial Prize" from the ELUPEG, which is given to a student producing the best MSc dissertation on a topic related to collaboration in the supply chain.
Tags
maritime logistics, supply chain management, collaboration, port, terminal, horizontal collaboration, partnership, cooperation, maritime industry, strategic collaborations, co-operation
Quote paper
Christian Schwab (Author), 2012, Horizontal Collaboration in the Maritime Industry: Ports and Terminals, Munich, GRIN Verlag, https://www.grin.com/document/205848

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