HANSA 05-2017

Nor-Shipping
Centralization through regionalization
Short sea shipping services that are needed along the Norwegian coast are challenged by
low volumes, multiple port calls and competition from liner companies. Thus, the country
seeks a new port strategy for the future
Traditional port costs, with respect to
handling cargo, port dues and terminal
operations, often exceed 30% of total
door-to-door distribution costs. Consequently,
the Norwegian government
commissioned a report asking for recommendations
to the country’s future port
strategy. Researchers of Molde University
College, Norway, and Edinburgh Napier
University, United Kingdom, presented
their findings at the 2016 IAME conference
in Hamburg, giving an insight into
the state of Norwegian port and cargo distribution
system.
The port of Oslo is by far the largest port
in terms of container throughput (2003–
2014), with over 210,000 TEU handled in
2014. In addition, there are several ports
that are serving Eastern Norway and the
greater Oslo region: Borg, Moss, Drammen,
Larvik and Grenland. Ships calling
these ports also call the southern port of
Kristiansand. Norway can be split into
Oslo, Oslo region, western and northern
ports, with a low share of container traffic
in the north. The ten biggest ports hold
85% of the country’s container market.
Oslo alone has a market share of 29%, followed
by Larvik and Ålesund (9% each).
While there is a sharp increase in growth
for Oslo region ports in 2008, at the same
time there is a decrease for Oslo. Levels for
both fall distinctively in 2009 likely as a result
of the financial crisis. The same trend
shows again from 2012 and onwards. When
the Oslo region increases sharply, the port
of Oslo decreases and has stabilized at lower
levels. Therefore a key point to understand
is why the Oslo region ports are able
to win the competition with a much bigger
port and absorb the entire growth from
2012–2014. There is no capacity problem in
Oslo and indeed the port recently has commenced
a significant expansion of capacity
for containers.
At national level, there is a clear progression
towards port concentration from
2003 to 2008 and then a deconcentration towards
2014. This is also the case in the East
of the country. There is a different story in
Western Norway, with a continuing deconcentration
across the time period, starting
very slowly and then increasing in recent
years. Therefore, Norway conforms to the
predictions that port systems move towards
concentration then deconcentration.
To understand the dynamics of port
choice, a number of shipping companies
were interviewed. While transport time
is a key factor for port choice this seems
not to be the case for shipping lines serving
the Norwegian market. It is not time that
is critical, but frequency. Cargo volume is
a dominant port selection criterion. Even
small volumes can influence shipping lines
decisions in a feeder system. Generally, the
relatively low cargo volumes characterizing
these port systems also cause regional
markets to quickly reach their saturation
point. The degree of competition at a port is
an important factor evaluated by shipping
lines before deciding to call a port or not.
Several reasons can be found to why Oslo
region ports have grown at the expense of
the port of Oslo. First of all, there is the
trend of production and logistical hubs being
relocated to other areas in the region.
Other issues such as inadequate railway
connections and higher port charges may
also have had an influence. One important
aspect underlined by interviewed shipping
companies, is that bigger ports may not adjust
as easily to the requirements of shipping
lines in terms of flexibility and implementing
new customer-oriented solutions,
as they think secondary ports may not pose
a real threat. The port of Oslo is obviously a
The Port of Oslo is losing ground to smaller competitors in the region
Photo: Harald M. Valderhaug
42 HANSA International Maritime Journal – 154. Jahrgang – 2017 – Nr. 5