The Performance of Seaport Clusters - RePub - Erasmus Universiteit ...

Chapter 10 – Structure and Performance in Seaport Clusters; Results of the Cases 127
Table 39: Fierceness of internal competition (IC) in seven market segments in the cases
LMPC Rotterdam Durban
Activity No IC Limited IC Fierce IC No IC Limited IC Fierce IC No IC Limited IC Fierce IC
Container 1 13 10 3 33 * 4 24* 7 0
Dry bulk 0 6 18* 1 37 * 2 2 18 6
Liquid bulk 1 15 8 5 32 * 2 3 16 6
Breakbulk 0 6 19* 1 28 * 11 0 13 15
Pilotage 26* 0 0 38 * 4 0 31* 1 0
Towage 0 16 9 2 28 * 11 31* 1 0
Mooring 1 16 7 30 * 12 0 31* 1 0
Overall frequency 17% 42% 41% 28% 61% 11% 59% 28% 13%
* Significant majority
Pilotage is a regulated monopoly in all three ports. Especially in the LMPC, this monopoly
has a clear negative effect on the performance of the cluster; this issue is discussed in more
detail later. Apart from pilotage, internal competition in the LMPC is moderate to fierce. Two
reasons explain the presence of internal competition in the LMPC.
First the LMPC is not administered by one port authority, but by five competing port
authorities. Entry is relatively easy because port authorities are eager to accommodate an
entrant, even if this entrant duplicates existing port facilities. In contrast, in Rotterdam or
Durban, entry is more difficult because the port authority is not necessarily interested in
creating internal competition, especially when the minimum efficient scale is relatively large
compared to the size of the market.
Most experts indicate that the port authority in Rotterdam traditionally followed a strategy to
enable local cargo handling firms to make a reasonable profit, based on the assumption that
in this market environment these firms would be willing and able to make investments that
improve the competitiveness of the port cluster. According to the experts, the port authority
in Rotterdam started to encourage internal competition only recently, partially in response to
the internationalization of the cargo handling industry.