Chapter One: Introduction

Ports are not just seaports. In some countries such as the USA, the term port usually includes
airports and sometimes inter-modal facilities such as railway and road connections. Today, ports
are not only a transfer points between sea and land but also serve as distribution, logistics, and
production centers. Ports can also serve leisure, fishing, and/or military ships, thus deviating
from traditional commercial cargo-ship activities. In some ports, non-sea-related activities can
also fall under the wider definition of ports. For instance, dry ports are inland logistics centers
not directly linked to sea or waterway connections.

1.1 Definition of Port

Ports are not only the intersection points between land and sea transport systems, but they are
regarded as more complex, logistics, and multimodal transport centers and value-added
organizations. Seaports are the main links in the supply chain systems that add value to the
port users and final customers. Ports play an important role in the management and
coordination of materials and information flows, as transport is an integral part of the entire
supply chain Ports play a significant role in this system by providing effective functioning of the
whole system and creating value for the players of the supply chain. The instigation of new
logistics patterns of maritime and intermodal transportation means that modern ports can now
compete for far-reaching cargoes with far-distant counterparts.

The term port simply can be defined as “The interface between land and a sea or a waterway connection
providing facilities and services to commercial ships and their cargo, as well as the associated
multimodal, distribution and logistics activities.”

A port is a place characterized by the essential functions of exchanging cargo between the ship
and the shore (land at the edge of the water). And it can be seen as a special node located in such
a way as to facilitate connectivity between interacting places.
A port can also be viewed as a transshipment place where feeder shipping routes are connected
with one another and with trunk (main road with a high volume of traffic) routes for ocean-going
voyages.

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 Transshipment: it occurs when containers (cargoes) are first unloaded from a ship and then
loaded to another ship at the same Container Terminal (CT).
This is often the case due to physical and economic constraints i.e. large container ships
requiring more space and depths, shipping line operational strategies such as feeder and hub
operation for smaller ships/ports and larger ships/ports, respectively. In reality, many shipping
lines are serving geographic regions by establishing one or two ‘main hubs’ from which they
will transship containers on to smaller ships that will feed them to other ports in the region or
vice versa. This strategy leads to more containers transshipment at main hubs.

Anchorage- is a place to hold boats secure. It is a place in or near a harbor where boat/ships
are moored/ securely parked. Barge a freight boat along narrow flat-bottomed.

The dry port concept is based on a seaport directly connected by rail to inland intermodal
terminals, where shippers can leave and/or collect their goods in intermodal loading units as if
directly at the seaport.
In addition to the transshipment that a conventional inland intermodal terminal provides,
services such as storage, consolidation, depot, maintenance of containers and customs clearance
are also available at dry ports.’

Dry port concept is an intermodal transportation system, itself is an IIT (Inland Intermodal
Terminal) connected by high capacity mode with additional services located inland.

It is directly connected by rail to seaport or in some cases two or more seaports. In a dry port
concept the maximum possible amount of freight transportation is accomplished by rail between
the dry port and the seaport. Only the final leg of the door-to-door transportation is carried out by
road transport. In an optimal dry port implementation the whole freight transportation between
seaport and dry port is carried out by rail. However, that is not usually possible due to capacity
constraints of rail connection.
1.2 The Purpose and Organization of Ports
Ports are very dissimilar in their assets, roles, functions and institutional organization, and even
within a single port the activities or services that are, or could be, performed are broad in scope
and nature. Furthermore, the scope, nature and stages of port development vary greatly across the
world’s ports and terminals.

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Ports are very complex and dynamic entities where various activities are carried out by and on
account of different actors and operators; they are often dissimilar to one another. The literature
on port attributes provides a variety of terms such as waterfront, estuary and maritime bases,
ship/shore and multimodal/ inter-modal interfaces, distribution and logistics centers,
corridors and gateways, maritime industrial development areas (MIDAs) and trade and
distribution maritime centers (TDMCs), industrial clusters and district parks, free zones, trading
hubs and networks. Port functions are so diverse in scope and nature that it would be almost
impossible to provide an exhaustive list of them.
On the one hand, ports have been defined through a macro-analytical approach as being
geographical, physical and corporate assets. Here the word port often refers to waterway
connections, relating to sea, lake, river, inland waterways and/or canal locations. Additionally
other generic terms, not necessarily water-related, are also used, including dry ports with no
waterway access and multimodal and inter-modal ports, combining the sea/waterways interface
with road, rail and/or air transport, a concept widely used. Port roles and functions are identified
through political, geographical (urban and spatial), economic and social perspectives.
From a public policy perspective, ports are seen as critical trade and transport infrastructure
facilities and as economic and development catalysts for the nations or regions they serve. Other
port related topics of interest to the policy maker include urban planning and expansion, land
use, safety, security and environmental sustainability, with two major approaches being
identified at this level. Along with their economic and social impacts, ports play a major role in
a country‘s logistical and trade efficiency. Because they are controllable aspects of global
supply chains, ports deserve particular attention. Excessive costs and inefficiencies hinder trade
and economic development. The relative costs imposed at ports are influenced by a number of
factors such as low cargo volumes, trade imbalances, long distances, poor inland transport links,
fragmented logistics and supply chains, and other economic and geographical realities. Ports can
account for 8–12% of transport costs between a product‘s origin and its destination.
On the other hand, ports have been analyzed from a micro-perspective approach in terms of
sets of activities and operations shaping a port‘s roles and functional dimensions. A simple, yet
broad definition of ports considers them as facilities where vessel maintenance and
cargo/passenger transfer is ensured, but other definitions extend the port role beyond ship/cargo

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handling, storage approach perceives ports in terms of environmental factors where port
planning and management should allow sustainable development and waterfront regeneration.
A third approach perceives ports as general business ventures regardless of their specific role or
functional status. Here, ports are analyzed in terms of business and operational units such as
operations, human resources, sales and marketing. Much of recent professional and
academic literature falls under this category. Other approaches integrate ports within the
wider logistics and production system, and new generic terms have been used to illustrate port
inter-modal and logistical dimensions. These include industrial ports, network ports, trade
ports and teleports.
1.3 Evolution of the Port Environment
Ports have developed in different ways with a combination of trade, economic, spatial, political,
social, and even cultural and military influences, and no clear pattern of port development exists.
Ports have also transformed from labor-intensive merchant ports into capital and technology-
intensive enterprises. Since the industrial revolution, ports have progressed into become
manufacturing sites moving vast quantities of goods and commodities and using larger and
expensive equipment. Following the process of containerization and the growing specialization
of ships and terminals, ports became even more capital and technology intensive with
sophisticated handling equipment and technological systems being deployed across modern ports
and terminals.
Ports have also developed as spatial and regional entities. Through the years, the relationship
between port-cities and their hinterlands has been influenced by many factors such as economic
development, industry specialization, trading relations, military expansion, social migration,
family networks, and cultural exchange.
Bird’s (1980) ‘any-port model’ is one of the first structured attempts to explain port
development. The model suggests a three-stage process of port setting, expansion, and
specialization. Although Bird’s model may be still valid for a number of conventional ports, it
neither explains the recent rise of transshipment and network type of ports and terminals, nor
integrates the inland and spatial dimension of port development. Following this trend, Taaffe et
al. (1963) suggest an increasing level of port concentration as certain hinterland routes develop
to a greater extent than others in association with the increased importance of particular urban
centers. The geographical system would evolve from an initial pattern of scattered, poorly

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connected ports along the coastline to a main network consisting of corridors between gateway
ports and major hinterland centers. The models of Barke (1986) and Hayuth (1981) are quite
similar, though they have introduced a process of port system de-concentration. Waters (1974)
considers that port activities could be developed in three ways in relation to cargo-space
dimensions: the attraction to water transportation of cargo otherwise moved by non-water
transport modes (dominant hinterland), the attraction of cargo moved through other ports
(competitive hinterland), and the development of its own cargo from industrial expansion in its
dominant hinterland (uncompetitive hinterland). Some authors have introduced modifications to
the above models in order to reflect the uniqueness of some port regions.
UNCTAD’s ‘port generation’s model’ is another widely quoted reference describing the
evolution of world ports and terminals. The main benefit of the UNCTAD model is that it
explains port development from a functional and institutional perspective rather than a
geographical or spatial one. Not only port roles and functions, but also institutional structuring,
operational and management practices vary significantly from generation to generation.
First and Second generation ports, relating to ship/shore and industrial interfaces, respectively,
operate bulk and break bulk cargo in a traditional manner, with the second generation ports
relying more on capital than labor.
Third generation ports are the product of the unitization of sea-trade and multimodal cargo
packaging (mainly in the form of containers) which has led to the development of ports as
logistics and inter-modal centers offering value-added services, with technology and know-how
being the major determining factors.
Fourth-generation ports are mainly the result of recent vertical and horizontal integration
strategies and are identified as being separated geographically but with common operators or
administration UNCTAD, 1999).

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 1.4 Types of Ownerships

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