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

128
The Performance of Port Clusters
A second reason for the fierceness of internal competition in the LMPC is the geography of
the cluster: the cluster is not one compact port area, but a collection of port facilities
stretched out along the river banks. Space for expansion is widely available, which makes
entry easier.
In the expert interviews in the LMPC the ‘specialization’ argument and ‘vibrant environment
argument’ were validated. Experts indicate that internal competition in the LMPC is very
fierce. Firms are willing to make specific investments to attract customers and continuously
try to improve their performance. On the other hand, due to fierce competition in the LMPC
average profitability is so low that most firms have limited resources for investments.
In Durban, internal competition is limited in most cargo segments. Only in breakbulk is the
competition moderate to fierce, in the other segments, including container handling, internal
competition is limited or absent. This is widely regarded as a weakness of Durban’s port
cluster. A tender procedure to lease the container handling facility to one private operator is
planned. The dominant opinion of the experts from Durban is that this would seriously
damage the competitiveness of Durban’s port cluster.
In Rotterdam, internal competition is limited. In none of the seven market segments is
internal competition fierce, even though Rotterdam is, in tons throughput, the largest seaport
in the world. With regard to pilotage and mooring, efforts to introduce internal competition to
date have failed.
The argument that internal competition fosters specialization is supported by results from a
small additional survey, carried out only in Rotterdam among the executives of four
container terminal operators. All four executives agree with the proposition ‘internal
competition fosters specialization’. These executives scored the importance of a number of
variables for the competitive position, both vis-à-vis internal and external competitors. Table
40 shows the results.