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

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The Performance of Seaport Clusters
services, such as pilotage and towage is limited in the three cases. Since all three cases are
large ports, internal competition is likely to be absent to an even larger extent in small and
medium sized ports. The lack of internal competition can be explained to some extent by
regulation (especially pilotage), but mainly because scale economies are so substantial that
the minimum efficient size is so large that internal competition is unstable.
Regulation, to tender and benchmark monopolies might be necessary in some cases to
prevent monopoly pricing. However, regulation does not provide incentives for specialization
and innovation. Thus, regulation is the least desirable policy direction.
Policies to create internal competition are difficult and only desirable when firms can
specialize. In these cases an arrangement that reconciles scale economies with the
presence of internal competition is desirable. Such an arrangement is only possible when
the port authority makes fixed investments and leases these assets to firms. In this case the
port authority creates scale economies. An example could be pilotage equipment (ships as
well as ICT infrastructure) that can be leased by independent pilotage firms as well as ship-
owners. Such opportunities are discussed in the final chapter.
14.3 The organizational infrastructure in seaports
The three port clusters are characterized by ‘institutional thickness’ 95 . The number of
collective organizations (and to some extent public private partnerships) is large. Most of the
collective organizations have a long history. Because of this institutional thickness, the
infrastructure for coordination is relatively good. However, a consolidation of associations is
widely regarded as a step forward, because current associations have limited resources to
add value to their members. The results from the survey show that associations are not
regarded as important intermediaries. Furthermore, the port experts indicate that the
associations are not important as knowledge intermediaries.
Finally, notwithstanding the presence of a substantial number of associations in the three
cases, the organizational infrastructure is judged as moderate: in Rotterdam the average
95 In the sense of a variety of collective organizations and arrangements between governments
and firms. This is a particular use of the term ‘institutional thickness’, others use the term
institutions strictly for ‘rules’ and not for ‘organizations’.