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To cite this article: Lucie Sislian & Anicia Jaegler (2018) A sustainable maritime balanced
scorecard applied to the Egyptian Port of Alexandria, Supply Chain Forum: An International
Journal, 19:2, 101-110, DOI: 10.1080/16258312.2018.1481716
Article views: 12
ABSTRACT KEYWORDS
The multifaceted systems of seaports and the activities around them generate major envir- Maritime transportation;
onmental impacts. Green management objectives and goals are thus of great importance. port sustainability; maritime
The main aim of this study is to develop a sustainable maritime balanced scorecard taking balanced scorecard;
structural equation
into account economic, social, and environmental indicators. We examine the environmental
modelling; sustainability
management strategies that can reduce the ecological footprint in the case of the Port of
Alexandria and identify the most significant environmental aspects of this seaport. Applying a
sustainable maritime balanced scorecard and structural equation modelling, we show that
the Port of Alexandria could reduce its gas emissions by implementing a more environmen-
tally, socially, and economically friendly approach to port operations over the long run.
According to Hiranandani (2014), the concept of Through this study, we also seek to answer some
sustainability requires ports to acquire new cap- further specific research questions: Which sustainabil-
abilities and apply new practices. Air pollution is ity objectives have been accomplished and which
considered the main sustainability problem for sustainability processes should be further improved?
ports (Chen, Govindan, and Golias 2013; Chiu, What steps should the port take in view of future
Lin, and Ting 2014; Hiranandani 2014; Wang and sustainability development? To answer these ques-
Corbett 2007; Wang, Corbett, and Winebrake 2007; tions we develop an SMBSC that enhances the tradi-
Wang 2013; Yang and Chang 2013; Yang and Lin tional BSC by including sustainability indicators.
2013; Yang et al. 2013). The basic aim of sustain-
ability in ports is to increase financial perfor- Implementing an SMBSC for the port of
mance, reduce CO2 emissions, find safer ways to alexandria
provide logistic services, save the environment,
In today’s fast-changing environment, ports dedicate a
and reduce the consumption of natural resources
significant amount of time, energy, human and financial
for future generations (Notteboom and Rodrigue
resources to assessing and determining the efforts to
2005; Gibbs et al. 2014).
achieve their strategic goals (Notteboom and Lam 2014;
Through corresponding improvements in sustain-
Park and Min 2014). Port sustainability can be included
ability, ports can achieve greater economic stability
within the framework of business activities. However,
and continuous improvements in performance under
ports frequently face several obstacles in their efforts to
the prevailing environmental regulations (United
develop performance measurement systems that deal
Nations Conference on Trade and Development
with all the important issues. What is still lacking is a
2011) encouraging ports to implement social and
system that first balances the historical accuracy of finan-
environmental policies (Notteboom and Vernimmen
cial measures with future performance, and second, pro-
2009). The BSC enables integrating the three dimen-
vides assistance to implement the strategies. We selected
sions of sustainability and offers ports the opportunity
the Port of Alexandria for the present study as it is one of
to embrace a sustainability approach. A value-based
the most important in Egypt and in the Mediterranean,
approach to port sustainability enables simulta-
and sustainability is a key concern for this port.
neously achieving economic, environmental, and
The sustainable maritime balanced scorecard
social goals (Figge et al. 2012; Schaltegger and
(SMBSC) performance measurement system is a tool
Burritt 2000).
that is capable of providing solutions for the afore-
Applied to port and maritime activities, this
mentioned issues and at the same time incorporate
approach allows integrating the triple bottom line
sustainability indicators using established financial
framework with a BSC, thereby providing new insights
procedures to evaluate the prospects of the port’s
for port sustainability and achieving an overall SMBSC.
current and future value, including its surrounding
The present study seeks to implement an SMBSC for
community, suppliers, workers, technology, innova-
one of the most important ports in the Mediterranean
tion, and internal processes (Alemany 1999).
and test the significance of the relationships among
the various components of the SMBSC through SEM.
Reasons for implementing an SMBSC in the port
of alexandria
When a port’s operations achieve profits above
Problem statement and research questions
the opportunity costs, it acquires a comparative
The main research question guiding this study is: To what advantage, and positive economic added value
extent can the Port of Alexandria benefit from implement- (Beth 2007). The adoption of a performance mea-
ing a sustainability policy and integrate it into more sus- surement system is necessary to achieve the stra-
tainability-friendly network design operations? tegic objectives. The BSC that Kaplan and Norton
To this end, we develop an approach for the more (1992; 1996) developed can assist ports in dealing
efficient and effective management of port activities. with the two following issues:
This would lead to positive sustainability effects benefit-
ting the surrounding community in the long run. We ● Measuring a port’s performance in relation to its
focus on the two main points of port sustainability and objectives.
network design. The numerous countermeasures intro- ● Successfully implementing a port’s strategy.
duced to improve maritime activities in many ports world- Balance is the key characteristic that the BSC
wide are generally considered successful. To answer our system can guarantee (Faust 1985) when
main research question, this article introduces a new assessing financial and non-financial indica-
approach for a BSC incorporating port sustainability, tors, and the internal and external compo-
including environmental and social indicators. nents of the port.
SUPPLY CHAIN FORUM: AN INTERNATIONAL JOURNAL 103
services, effective communications with the local To conclude, the SMBSC is a powerful tool for port
community, and efficient and effective systems devel- managers to create a competitive advantage and
opment. Lastly, the innovation and worker learning achieve higher port performance. We therefore for-
perspective strategy promotes ready and motivated mulate the following six hypotheses that we tested
personnel with the related measures. with a structural equation model (SEM) based on the
Butler and Henderson (2011) and Figge et al. (2012) research model (Figure 2):
describe different ways of dealing with a sustainability
concept either by introducing sustainability as a fifth H1. The better the port’s social and environmental
perspective or integrating sustainability measures indicators, the higher the port’s productivity.
throughout the four perspectives. An SMBSC system
should include a combination of causal and output H2. Internal process practices have a positive impact
indicators, given that output indicators without causal on the port’s financial performance.
indicators do not show how the port’s objectives are
being accomplished, and causal indicators without H3. Internal process practices have a positive impact
output indicators may indicate short-term improve- on innovation and worker learning.
ments (Kaplan and Norton 1992; Kaplan and Norton
1996). Output indicators represent past performance H4. Internal process practices have a positive impact
and cannot project future output with clarity. Thus, on society and the port environment.
causal indicators serve as guides for the performance
of the output indicators, but cannot show whether H5. The higher the innovation and worker learning,
these improvements enhanced the results for all inter- the higher the port’s profitability.
ested parties (Kaplan and Norton 1992; 1996).
To implement the SMBSC, the port should set its H6. The higher the innovation and worker learning,
objectives, such as time, quality, efficiency, and servi- the better the social and environmental indicators.
cing, and then translate these into specific measures.
The port should also be sensitive to the cost of opera-
tions (financial perspective). Figure 2 summarises the research framework
Based on the proposed research model shown in identifying the independent, control, and depen-
Figure 1 that summarises the different dimensions of dent variables with the respective hypotheses
the SMBSC as identified in the previous section, we implemented for the case study and based on
develop our hypotheses. Figure 1.
As Table 2 shows, an increase in profit from 12% to The development of efficient and effective systems
19% in the last year was the top financial measure, is crucial for the Port of Alexandria to improve its
and an increase in capital productivity from 7% to internal operations and achieve higher productivity
11%. Although this shows a clear improvement in and efficiency in the medium and long term.
the financial indicators, the other indicators of the
SMBSC needed to be tested to establish whether the
port’s strategy was successful. Innovation and worker learning perspective
This final SMBSC perspective is shown in the results of
the questionnaire in Table 5.
Social and environmental perspective
There was a sharp decrease in the number of sur-
The objective of this perspective is to obtain a com- veys on the working environment and specialised
prehensive list of all strategically relevant social and seminars offered, both of which are important for
environmental indicators (see Table 3). innovation and education for port workers.
Table 3 shows that working conditions have been There is no link among the different SMBSC per-
worse for port workers since the turnover increased, spectives when applied to the Port of Alexandria,
and they were generally less motivated between 2014 making it difficult to clearly identify the achievement
and 2016. Moreover, gas emissions have increased, of the perspectives’ strategic objectives, which leads
and it would seem that no clear procedures to control to failure in implementing the port’s strategy. There
these emissions are in place as they increase from appears to be a lack of interest in the overall vision of
year to year. A green management approach is also the port. As the financial indicators show, the port has
lacking, and the port does not undertake tangible achieved higher profitability over the past few years,
environmental protection initiatives. but has done so through sacrificing innovation, crea-
tivity, learning, worker motivation, and, most impor-
tantly, environmental gas emissions, which are
Internal processes perspective increasing at an alarming rate.
Enhanced port services have become more important
through increased interest in creativity and innova-
Structural equation model
tion. In the case of the Port of Alexandria, commu-
nication with the surrounding community is almost To test the different hypotheses, we used SEM with
non-existent; there are no informative meetings or SPSS 20.0 software. SEM allows concurrently testing
performance research seminars to increase the effec- an integrated set of dependent links while accounting
tiveness of communications with the local commu- for measurement errors (Anderson and Gerbing 1988;
nity, as Table 4 shows. Bentler 1980). We used the maximum likelihood
estimation procedure, which is often preferred in The Port of Alexandria seems to achieve profits and
management and social sciences studies (Ping 1996). optimising port operations, but this result is not
The following subsections present the results for each linked to the other three perspectives, which must
of the four perspectives. be improved to achieve a fully integrated SMBSC.
The link among the various SMBSC perspectives The port itself has not established an SMBSC, and
should be established before applying and testing has little interest in a sustainability approach and in
SEM. Table 6 presents the descriptive statistics for environmental protection.
the SMBSC indicators.
In Figure 3, the standardised path coefficients are
presented along with the arrows and the squared
Discussion and conclusion
multiple correlations above the variables.
The social-environmental indicators, internal pro- Through this article, we have attempted to provide new
cesses, innovation and worker learning positively insights on the traditional BSC in the maritime field
affect financial performance (thus supporting H1, H2, through the implementation of our SMBSC tool that
and H5). Internal process practices have quite a strong incorporates the port sustainability triple bottom line
impact on innovation and worker learning (support- framework with four SMBSC perspectives. The applica-
ing H3). However, the impact is very different with the tion to the Egyptian Port of Alexandria case confirms
internal process practices – innovation and worker that this tool is easily implemented and tested, as well as
learning with the local community and the environ- an excellent tool for port managers and operators to
ment – which negatively affect the environment, as help them achieve higher productivity and profitability
shown by the path coefficients −0.242 and −0.365, while improving their social and environmental sustain-
respectively. Therefore, H4 and H6 are rejected. ability indicators in the long run.
108 L. SISLIAN AND A. JAEGLER
Indeed, ports suffer from air pollution as a result of show that automation is still incomplete in Egyptian
emissions produced by ships during their time at the ports and that its introduction will result in significant
port. A comprehensive assessment of ship emissions at positive developments in terms of facilitating port
berth is a critical first step to understand the impact of and customs services, including reducing the cargo
such emissions on air quality and community health. clearance time (USAID 2014). The Egyptian govern-
The SMBSC has been shown to be a helpful tool that ment could make use of available international
enables the efficient scheduling of operations to reduce funds allocated to trade facilitation to enhance its
the time ships spend in the port and increase the port automation plans. However, the introduction of
terminal’s productivity in terms of costs, the environ- automation should be balanced against the expected
ment, and society as a whole. negative impact on labour. A cost-benefit analysis
We highlight the following outcomes in answering should be undertaken on these effects.
the research questions set out at the beginning of this This article provides a starting point to integrate port
article: sustainability indicators into an SMBSC, indicators that
can be measured in future research by adding the fifth
● Which sustainability objectives have been accom- dimension of sustainability and implementing the
plished and which sustainability processes should SMBSC as a decision-making tool for maritime ports.
be further improved? Finally, additional hypotheses could be tested other
than those presented in this paper, such as, for example,
We provided the port with valuable information to the impact of workers’ learning on the port’s innovation
use in emissions and fuel planning. We collected and then its effect on the port’s overall performance.
empirical evidence for all the SMBSC perspectives by Balancing the various dimensions is fundamental and
setting the different emission controls. After the initial should be addressed in future research studies.
investment in technologies, there are few administra-
tive costs or efforts required for shipping companies
or port operators. Disclosure statement
The complete correctness of electronic information No potential conflict of interest was reported by the
means that emissions performance reporting is fair authors.
and transparent. Furthermore, the data on emissions
per ship and per company are collected electronically
on a timely basis. Notes on contributors
Relieving the port workers, company staff, and Lucie Sislian is currently an Assistant Professor at the
regulatory authorities of paperwork helps them use College of Management and Technology in the Arab
the technology and systems on the ships to daily Academy for Science and Technology and Maritime
Transport, Egypt. She holds a PhD in Management from
capture emissions data.
France. Her research interests are in sustainable supply
What steps should the port take in view of future chain management and logistics.
sustainability development?
Based on the questionnaires and the subsequent Anicia JAEGLER is Professor and Head of the Department of
Operations Management and Information Systems and head
intensive discussions, energy consumption should be of the Sustainable Supply Chain Laboratory at the Supply
reduced by 50% between 2017 and 2025. Zero carbon Chain Center of Excellence at KEDGE Business School. Her
dioxide emissions must be achieved by 2025. All rele- research focus on sustainable supply chain management in
vant purchasing of goods and services must include relation to business issues.
environmental requirements by 2017.
The following recommendations were made to the
Port of Alexandria authorities. First, a new department
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110 L. SISLIAN AND A. JAEGLER