Defining Maritime Logistics Hub and Its Implication For Container Port PDF
Defining Maritime Logistics Hub and Its Implication For Container Port PDF
To cite this article: Hyung-Sik Nam & Dong-Wook Song (2011) Defining maritime logistics hub
and its implication for container port, Maritime Policy & Management: The flagship journal of
international shipping and port research, 38:3, 269-292, DOI: 10.1080/03088839.2011.572705
Taylor & Francis makes every effort to ensure the accuracy of all the information (the
“Content”) contained in the publications on our platform. However, Taylor & Francis,
our agents, and our licensors make no representations or warranties whatsoever as to
the accuracy, completeness, or suitability for any purpose of the Content. Any opinions
and views expressed in this publication are the opinions and views of the authors,
and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content
should not be relied upon and should be independently verified with primary sources
of information. Taylor and Francis shall not be liable for any losses, actions, claims,
proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or
howsoever caused arising directly or indirectly in connection with, in relation to or arising
out of the use of the Content.
This article may be used for research, teaching, and private study purposes. Any
substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,
systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &
Conditions of access and use can be found at http://www.tandfonline.com/page/terms-
and-conditions
MARIT. POL. MGMT., MAY 2011,
VOL. 38, NO. 3, 269–292
Since the hub-and-spoke concept was introduced to the aviation market after the
US airline deregulation in the late 1970s, it becomes a primary distribution model
employed by leading international logistics companies. This pattern drives the
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
1. Introduction
Logistics has become a significant area of interest in global business and
management, and is seen as a way to enhance firms’ performance and outcomes
[1]. The importance of logistics has dramatically increased, as evidenced by the
significant degree of attention paid to it by practitioners and academics alike, due in
large part to the internal and external environmental factors affecting firms, such as
globalisation, changing customer demands, advances in technology and industrial
deregulation. Logistics centre (or so-called logistics hub or distribution centre) was
introduced in early 1980. Initially, the function of logistics centre was mealy limited
in simple warehouse which store the fished goods. However, modern logistics centre
provides a wide range of services including sophisticated and comprehensive value-
adding services. In the field of logistics and supply chains, however, the hub concept
has been often introduced in various terms in accordance with functionality: for
example, logistics centre, logistics zone, freight terminal, distribution centre and
warehouse. Such a heterogeneous terminology on the concept of logistics hub seems
still in usage by practioners and academics alike.
Having recognised this rather ambiguous concept and definition in the literature,
the main purpose of this article is to critically review the concepts and definitions
Maritime Policy & Management ISSN 0308–8839 print/ISSN 1464–5254 online ß 2011 Taylor & Francis
http://www.tandf.co.uk/journals
DOI: 10.1080/03088839.2011.572705
270 H.-S. Nam and D.-W. Song
associated with the existing hub literature applicable to maritime transport and
logistics by synthesising the existing studies and perspectives. As Webster and
Watson [2] and Lewis and Grimes [3] claim; an effective review creates a foundation
for advancing knowledge, closes areas where a plethora of research exists and
uncovers areas where research is needed. In this sense, this article also makes a
further proposition that hub ports (in particular, container ports) should be
examined with not only their container throughputs in terms of Twenty-Foot
Equivalent Units (TEU) but also their connections with shipping lines in the inter-
and intra-region. It is therefore addressed that an applicability of network-based
analyses would be made in the context of maritime logistics hub.
and its most visible manifestations. Logistics has traditionally been viewed first and
foremost as the physical distribution brought about by a focus on transportation and
warehousing [11], and is often regarded as the ‘whole process in managing the flow of
goods, services and information flow from raw materials to final customers’ [12].
Baudin’s [13] definition also encompasses all the relevant activities associated with
the flow of goods, including the functions of transportation, warehousing,
purchasing, distribution and so on. Christopher [14] employs a marketing and
cost-effective oriented approach, which highlights that logistics is a planning
framework with marketing channels to create a single plan for the flow of products
and information.
Coyle et al. [15] provide three major stages in terms of logistics developments. The
first stage is in 1960s to 1970s when logistics was considered as mere physical
movement of goods. There existed recognition on relationships between the various
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
functions within logistics, and companies recognising the change in the structure and
control over their distribution chain. Large retailers developed their own distribution
structures, which were based on the concept of regional or local distribution depots
to supply their stores. Moving to late 1980s and 1990s, the second stage is linked to
implementation of information technology concept [16] and integration of individual
logistics functions in that logistics was regarded as materials management (i.e.
inbound logistics) with physical distribution (i.e. outbound logistics). Finally, the
third stage of logistics development took place in 2000 and beyond. Companies
experienced a number of business challenges in order to maintain or improve their
competitiveness against competitors. During this period, there was a positive value
added role of logistics, while the traditional view of logistics being treated as merely a
cost burden became a minor viewpoint, regardless of any other implication.
Brief processes and related activities of logistics can be summarised as presented
in Figure 1.
Management actions
Inputs into Outputs from
logistics Planning Implementation Control logistics
Natural Marketing
resources orientation
(land, facilities (competitive
and equipment) advantage)
Customers
Suppliers
Information Proprietary
resources asset
Logistics activities
1990s, the hub concept became the primary distribution model employed by logistics
integrators such as DHL, TNT, UPS and FedEx and leading international carriers.
Shipments coming from several origins are consolidated at major terminals (i.e. hub)
and redirected to their respective destinations through radial links (i.e. spoke) [19].
The hub concept has been often introduced in various terms in accordance with
mainly its functionality of storage and transportation: for example, logistics centre,
logistics zone, freight terminal, distribution centre, warehouse, intermodal
terminal international transport terminal, intermodal terminal and so on. Such a
heterogeneous terminology on the concept of logistics hub seems still in usage by
practioners and academics alike.
According to Rimiene and Grundey [20], the ‘logistics facilities’ (so-called logistics
centre) concept appeared around 30 years ago and can be classified into three
different generations over the course of its evolution. Europlatforms [21] provides a
precise definition of logistics centre that the hub for a specific area where all the
activities relating to transport, logistics and good distribution, both for national and
international transit, are carried out, on a commercial basis, by various operators.
Johnson and Wood [22] views logistics centre as cost reduction centre which is
defined as a facility where commodities move constantly to the end of circulation and
the warehousing amount and relevant costs are reduced as much as possible. An UN
report [23] states that a logistics centre should be able to equipped with all the public
facilities necessary to carrying out the all logistics related activities. Logistics centres
serve a variety of purposes including cargo transhipment, production synchronisa-
tion, facilitating business and trade, whereas others aiming to strengthen the logistics
capability for transforming a region a more attractive or competitive market.
However, the fundamental requirements as per logistics centre are on nodal point of
transport network, common infrastructures, intermodality and logistics and trans-
port services [24].
Over time there have been changes to how things are stored, produced and moved,
which have been significant for the development. The logistics facilities concept
could be, however, derived from three different perspectives such as a ‘traditional
logistics and supply chain management’ perspective (i.e. distribution centre or
warehousing), a ‘freight transport’ perspective (i.e. load centre, freight village and
transport node point) and a ‘Foreign Direct Investment’ (FDI) perspective (i.e.
international logistics zone and international free trade zone). Rimiene and Grundey
[20] provide three stages of developments of logistics facilities: (i) 1960s–1970s,
(ii) 1980s-early 1990s and (iii) mid 1990s-present, respectively. At the first stage,
Defining maritime logistics hub and its implication for container port 273
and international transit, are carried out by various operators [20]. It is claimed that,
there are four requirements for being a freight village – that is, (i) it must allow to
access to all companies involved in the logistics activities in order to comply with free
competition rules, (ii) it must be equipped with all the public facilities including staffs
and equipment, (iii) it should preferably be served by a multiplicity of transport
modes (i.e. intermodal transportation) and (iv) it is imperative that a freight village
be run by a single body, either public or private [21]. Logistics facilities at the last
stage have become a supplicated logistics node, which offers value-added services
and a point where diverse routes converge to [30]. UN [23] identifies determinant
factors that can be a successful logistics centre as follows:
. A community desire to have a comprehensive hub development strategy,
. Existence of comparative cost advantages,
. A favourable fiscal environment,
. Existing high-tech manufacturing industry base,
. One-stop-shop local marketing organisation that proactively promotes the
location,
. Supporting infrastructure at all transport terminal facilities and human
resources and
. Appropriate incentive packages for foreign investors.
274
Traditional Distribution Place for a physical facility used to complete the procedure for the [4, 19, 20, 22, 25, 26]
logistics and centre/warehouse product line adjustment in the exchange channel.
supply chain Warehouse for storing finished goods.
perspective Facility from which wholesale and retail orders can be filled.
Place where consignments from different origins are grouped
and/or split.
Control the product flow in contrast to storage.
Place for creating value-added services.
Connecting link between producer and customer.
Freight Freight village/ Place for transport, logistics and goods distribution functionality. [21, 24]
transport logistics node Provide geographic coverage.
perspective Facilities which include warehouse and storage area.
Provide for public service and full territory access.
Freight terminal A terminal for freight transport modes change. [24, 27]
Provide a service for handling operation.
Place for value-added services.
H.-S. Nam and D.-W. Song
Dry port Inland location for consolidation and distribution of goods. [27, 28]
An integrated and intermodal extension of ports.
FDI/international International Parts of the territory of a state where any goods introduced are [29, 30]
facility location logistics zone generally regarded, in so far as import duties and taxed are exempted.
perspectives (or international Space for an arrangement where different trading entities, usually
free trade zone) member countries, agree to cut or scrap taxed in order to lower
business costs and remove bureaucracy.
cargoes to/from a vessel, but also various value adding services including
warehousing, storage and packing and arranging inland transportation modes.
Freight forwarding as the third component of the whole maritime logistics systems,
encapsulates the process of sea transportation in order to arrange the complex
process of international trade such as booking vessels on behalf of shippers,
preparing documents for ocean carriage and arranging logistics services for the
shippers. Figure 2 illustrates those elements in relation to the traditional logistics
functions.
Over the past decade, the maritime industry has experienced a number of
challenges occurred mainly due to changes in trade patterns, deployment of larger
vessels, regional competition among shipping lines and ports and intermodality.
Because of cost and capacity advantages, maritime transportation has always
remained a primary choice in global trading. As of 2007, seaborne trade accounted
for approximately 90% of global trade in terms of volume and 70% in terms of value
[35]. The liner shipping industry is the major contributor to this significance to the
world economy as it accounts for over 70% of total trade value shipped by sea [36].
A substantial volume of containers are delivered every day through its fast, frequent
and reliable transport network to almost any destination worldwide. The develop-
ment of the liner shipping industry has been accelerated through the process of
globalisation. The total volume of international container trade reached 117.2
million TEUs in 2006, more than twice that of 1999. In order to cope with this
increasing demand for container transportation, the total capacity of liner shipping
services was increased from 4.7 million TEUs in 1999 to 10.8 million TEUs in 2006,
an average annual growth rate of 8.7% [37].
Having been affected by the growth of containerisation traffic, shipping lines now
compete to acquire vessel sizes as large as they can, in order to gain the advantages of
economies of scale while also attracting the interest of powerful shippers with a large
amount of products to be shipped [31]. This movement redefines the geographical
structure of sea transport. Huge vessels now make it possible for only a few ports
(e.g. hub ports) to accommodate them, leading to the division of container ports into
hub and feeder ports. Under these conditions, an imbalance of power tipped in
favour of the shipping lines and the added capability of dealing with huge amount of
cargo has posed a new threat to both small-sized shipping lines and port terminal
operators.
Most shippers traditionally arrange two or more forms of transport modes in
order to ensure that their goods are efficiently delivered to their final destination.
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
276
Demand forecasting
Purchasing
Key components
of maritime logistics Requirements planning
Production planning
Materials management
Warehousing Logistics
Maritime
logistics
Materials handling
Port operation
Industrial packaging
Physical distribution
Distribution planning
Freight forwarding
Order processing
H.-S. Nam and D.-W. Song
Transportation
Customer service
devoted to larger and more fuel-economic vessels, and these indeed produced
substantial reductions in cost per TEU of capacity provided [43]. Larger ships have
often have a lower cost per TEU-mile than smaller units with the same load factor
[44, 45]. Table 2 shows the increasing scale of vessel size (in terms of percentage of
total shares) during the period of 1991 to 2006. Since late 1990s, there have been
three main integrations in shipping lines including trade agreement (i.e. liner
conference), operating agreement (i.e. vessel sharing agreement and strategic
alliances) and mergers and acquisitions [41].
Traditional function of ports has been limited for transhipment in order to
transfer goods from one mode of transport (shipping) to another (either another
maritime transport or inland transport) [47]. At present, however, ports play an
important role in the management and coordination of materials and information, as
the transport is an integral part of the entire supply chain. In order to develop
maritime transport as an integrated logistics system, ports have to simultaneously
work in several directions, by taking into account the requirements of the senders
and receiver of goods (such as physical accessibility from land and systematic
organisation of the information flow, which are regarded to the choice of seaport) as
they become their business partners in addition to the traditional ones (such as
shipping companies, terminal operators and forwarding companies). Chen [48]
pointed out that the main contribution of modern ports depend upon: the
availability of efficient infrastructure and inland connections, as part of a global
transport system; and the ability of logistics and transport operators to contribute to
the value creation and to accomplish also the qualitative attributes of customer
demand (such as reliability, frequency, availability of information, security, etc.).
As Notteboom and Rodrigue [12] indicate the main roles of traditional seaports
have been viewed as areas made up of infra- and super-structure capable of receiving
ships (such as pilotage and towing) and other modes of transport, and handling their
cargo from ship to shore and vice-versa (i.e. stevedoring that facilitates the loading
and uploading of cargoes). At present, however, ports play an important role in the
management and coordination of materials and information, as the transport is an
integral part of the entire supply chain [47], and as the importance of port’s
capability of providing logistics services (i.e. creation of value-added service) is
highlighted [49].
Among a number of logistics value-added service (such as consolidation,
packaging, labelling, assembly, economic processing, contingency protection
and operation efficiency), the importance of port’s value-added service is varied
Defining maritime logistics hub and its implication for container port 279
by different authors. Carbone and De Martino [47] indicate procurement and pre-
assembly service are becoming of considerable significance, but Panayides and Song
[33] conclude the provision of port facilities for adding value to cargoes is an
important criteria for ports integrated in the supply chain. In order to develop
maritime transport as an integrated logistics and supply chain management system,
ports have to simultaneously work in several directions, by taking into account the
requirements of the senders and receiver of goods (such as physical accessibility from
land and systematic organisation of the information flow, which are regarded to the
choice of seaport) as they become their business partners in addition to the
traditional ones (such as shipping companies, terminal operators and forwarding
companies). Chen [48] also points out main contribution of modern ports depend
upon: the availability of efficient infrastructure and inland connections, as part of
a global transport system; and the ability of logistics and transport operators to
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
contribute to the value creation and to accomplish also the qualitative attributes
of customer demand (such as reliability, frequency, availability of information,
security, etc.).
(e.g. hub ports) to accommodate them, which then cause the division of container
ports into hub and feeder ports. These ports must be supply driven, and hence
government support or an entrepreneurial drive should be followed. High produc-
tivity, turnaround time, equipment to cater the larger vessels are key factors when
shipping line chooses the calling port. Robinson [54] studied the history of
containership development and generalised the ports and maritime transport
network evolution in the Far East, and concluded that the hub-and-spoke networks
in the region will evolve continuously based on their operational cost and efficiency.
Operational flexibility must not be undermined. The changing nature of trade results
in lines needing flexibility, and ports that cannot or refuse to adapt will face
consequences in the future.
There have been a number of studies concerned with building seaport based
logistics hub and its integration to the global supply chain network [16, 32, 55]. The
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
Source: [57].
It was for these reasons that important changes in transportation technology were
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
neglected.
Moving to the next pattern (ports built between 1960 and 1980), ports had a
system comprising government and port authority, so the port service providers
could understand each other and cooperate for mutual interests. The activities in
these ports were expanded ranging from packaging, labelling to physical distribu-
tion. A variety of enterprises have also been founded in ports and hinterlands.
Compared to first-generation ports, the second-generation ports have a character-
istic that freight forwarders and cargo owners had a tighter relationship. We can say
that the second-generation ports had begun to notice the needs of customers, but
when it came to keeping a long-term relationship with customers, they took a passive
attitude.
From 1980, container transportation has developed quickly, and the new
intermodal transport system emerged. The activities of production and transporta-
tion have linkage to form an international network. The former services function has
been enlarged to include logistics and distribution services. The environment
protection facilities are becoming more important, so the ports are developing closer
relationships with those in their surrounding neighbourhoods. Compared to the past,
today’s port authorities are focusing on efficiency rather than effectiveness. In the
third-generation ports, the needs of customers were analysed in detail and port
marketing has been actively engaged. The late 1980s saw the emergence of major
changes [12]. Customers began to ask ports to provide a greater variety of services.
Providing value-added services is a powerful way for ports to build a sustainable
competitive advantage. Shippers and port customers are becoming increasingly
demanding. Customers now tend to look at Value-Added Logistics (VAL) services as
an integral part of their supply chain. As a result, ports must attempt to satisfy these
needs by offering differentiated services.
According to hub-and-network development, the container port can be divided
into three categories: hub port, trunk port and feeder port. Huang et al. [57] pointed
out that the main criterion a to be a hub port is not throughput cargo rate but
transhipment cargo rate. They conclude that there are five hub ports in Asia Pacific
region, which are two in Southeast Asia (Tanjung Pelepas, Hong Kong and
Singapore) and three in Northeast Asia (i.e. Kaohsiung and Busan) in terms of total
throughput and transhipment (see Table 3 for more). In 2005, the ratio of
transhipment container and container throughput for these five ports are all over
40%. Singapore port handles the highest transhipment volume, 18.79 millions TEU,
equivalent to 81% of throughput volume. The second highest is Hong Kong, which
282 H.-S. Nam and D.-W. Song
a temporary storage and sorting and (iii) a place creating and facilitating value-added
services on the regional and/or international scale.
The above definition could be easily applicable to the regional or international
container ports, competing to have more shipping lines called at a particular port
that wants to be a maritime logistics hub in the region or on the global by keeping
establishing, extending and sustaining networks for the shipping lines.
3.3.2. Singapore: Asian distribution centres. Singapore has the same position in
Asian logistics as the the Netherlands does in Europe. There has been a growing
trend for multinational firms to establish Central Distribution Centres (CDCs) in
Asia. Using CDCs, they can meet their own standards of service quality and timely
service to their own customers. They have better control and could respond more
readily to the needs of the marketplace, with focused distribution from one hub
to the surrounding region [53]. Because of the fierce competition in manufacturing
and marketing, logistics plays a vital role in gaining a competitive advantage. In
Singapore, multinational firms partner with third party logistics service specialists.
284 H.-S. Nam and D.-W. Song
rapid growing neighbouring economies. Since the Southeast Asian countries have
recorded average annual growth of 7% before the foreign exchange crisis of the late
1990s, the strong neighbouring economies have helped Singapore to build a regional
distribution hub successfully. By mid 2000s, over 500 multinational firms have
chosen as their Southeast Asian logistics/distribution hub. The logistics companies,
which were over 6000 in Singapore, provide comprehensive services such as
transport, forwarding, warehousing and distribution to the multinational firms.
seaport in Korea, in 2006 [62]. Rapid growth of Asia’s container seaports and their
market position in the 2000s can be seen in Table 4. In addition, total container
throughput of major container ports in Northeast Asia (with particular reference to
Japan, Korea, Singapore, Taiwan and China) since 1970s is illustrated in Figure 3.
As noted by UN [37], the region’s economic opportunity is optimised if an
appropriate transport and logistics system is carried out, including adequate port
and shipping services in place to facilitate the efficient and effective flow of sea-based
trade within the region as well as to and form overseas markets. However, there is an
increasing concern that inadequate infrastructure and a lack of harmonised policies
among the Northeast countries may cause serious bottlenecks in the transport and
logistics system, and ultimately hinder the potential of trade and economic
developments of the region. Multilateral maritime cooperation among the three
countries seems essential to the establishment of a common shipping and port
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
system. It will also help the maritime transport network evolve into other modes of
transport throughout cross-boarder of different countries such as the projected
Trans-Asian Railway. It is well recognised that seaports are the focal point of global
distribution and logistics systems and therefore a priority should be given to the
balanced development of the ports in the Northeast. The demand for container
ports, and competition and cooperation within the Northeast region will further
increase in the future. This trend will heighten competitive pressures on these major
ports in Northeast Asia.
Along with rapid trade expansion, manufacturing-dominant economies in East
Asia have created tremendous demand for maritime transport. Because container
transportation has been the most appropriate method for facilitating the efficient
movement of manufactured goods to export markets, there has been a surge in
demand for inter- and intra-regional shipping capacity and strong container
handling performance. Looking back the past 10 years, the development of
Northeast countries’ port can be summarised as remarkable investment on ports
by China, while Korea and Japan have experienced economic recession since late
1990s. Two main container ports in mainland China (such as Shanghai and
Shenzhen) ranked world third and fourth highest cargo throughputs which
accounted for approximately 40 million TEUs in 2006 (The figure is 3.5 times
more than Busan port in Korea) [63]. Even massive port construction both in China
and Korea have often been unable to keep pace with the dramatic increase in their
maritime traffic. Faced with these problems, countries in the Northeast have
implemented new approaches to port developments and management, which were
typically funded and managed by government. These new ways include deregulation,
improvement of FDI and private sector involvement in ports [64].
The container port industry in China has experienced a rapid expansion during
the past three decades. Throughput and capacity have been hitting record highs as
progress has been made in port infrastructure, cargo handling facilities and
administrative systems. Meanwhile, a significant amount of investment has been
poured into the container port industry to support its double-digit growth. As a
result, six of Chinese ports have ranked within the top 20 container ports in 2008.
The concentration of throughput is a fundamental characteristic of China’s
container port industry [65]. Adopting a geographical perspective, they can be
organised into three regions: Northern China (Qingdao, Tianjin and Dalian),
Central China (Shanghai and Ningbo) and Southern China (Shenzhen and
Guangzhou).
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
286
Table 4. Throughput of container ports in Japan, Korea and China since 1970.
Region Country Port 1970 1975 1980 1985 1990 1995 2000 2002 2004 2006
Northeast Asia Japan Kobe 90 904 727 1518 2595 1463 2265 1992 2176 2413
Tokyo 54 358 631 1004 1555 2117 2899 2712 3358 3969
Nagoya 44 95 205 422 897 1477 1911 1927 2155 2752
Yokohama 328 722 1327 1647 2756 2317 2364 2717 3200
Korea Busan 632 1148 2348 4502 7540 9436 11430 12039
North China Shanghai 206 456 1527 5613 8620 14557 21710
Qingdao 135 600 2120 3410 5139 7702
Tianjin 320 702 1708 2410 3814 5950
Yantian 2148 4148 2871
Ningbo 902 1860 4005 7068
Dalian 370 1011 2211 3212
South China Hong Kong 12549 18100 19144 21984 23539
H.-S. Nam and D.-W. Song
TEU (1,000)
2,500
8,000
2,000
6,000
1,500
1,000 4,000
500 2,000
0
0
70
75
80
85
90
95
00
02
04
06
19
19
19
19
19
19
20
20
20
20
1970 1975 1980 1985 1990 1995 2000 2002 2004 2006
Year Year
Container throughput in northeast Chinese ports Container throughput in southeast Chinese ports
since 1970 since1970
25,000 25,000
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
20,000 20,000
TEU (1,000)
TEU (1,000)
15,000 15,000
10,000 10,000
5,000 5,000
0 0
1970 1975 1980 1985 1990 1995 2000 2002 2004 2006
Year Year
Figure 3. Total TEUs by major container ports in Japan, Korea and China since 1970.
Japan is a long, narrow island country and, therefore, the port industry plays an
essential role in Japan’s economic activities. More and more top quality container
terminals are set to provide the response to the increasing demand for container
transportation. In Japan, major container ports were built in Tokyo Bay (the ports
of Tokyo and Yokohama), Ise Bay (the port of Nagoya) and Osaka Bay (the ports of
Kobe and Osaka). Japan has been well-endowed with port infrastructure for the
container trades since the 1970s. At that time, based on the advantage of its
industrialisation, Japan dominated the whole of Asia’s container trades. However,
such an illustrious situation has changed dramatically from the middle of the 1980s.
Japanese ports have been moving down in the world ranking over the last two
decades. The falling competitiveness of Japanese ports has been a serious concern for
both government and industry. In response to the challenge, investment in Japanese
container terminals was emphasised in 1996. In 1998, the Japanese government set
their target to ‘Surpass other major ports in Asia in terms of cost and service in about
3–5 years’.
South Korea is only a part of a small peninsula but with vast potential in
container transportation. Ideally located in the centre of the world’s main shipping
lines, particularly for the Trans-Pacific route, South Korea has set their target to be
one of the major logistics hubs in East Asia. Indeed, the container ports of South
Korea not only carry out about 99.8% of the cargo handling for national foreign
trade, but also handle transhipment cargo originating from China, Russia and
Northwestern Japan. The ports of Busan, Gwangyang and Incheon together
constitute the main force of South Korea’s container transportation. There are 21
container berths totalling 6220 meters at the port of Busan; 12 berths totalling 3700
288 H.-S. Nam and D.-W. Song
meters at the port of Gwangyang and five multi-purpose berths at Incheon port.
Apart from the port of Incheon, both Busan and Gwangyang have the ability for
hosting sixth generation container ships. Similar to the other countries in East Asia,
existing container handling capacity falls far behind the trade and transhipment
demand [17, 43].
Currently both Japanese and South Korean container ports have lost their
competitive position to Chinese ports in terms of container throughput. However,
it does not necessary indicate that they have also lost their relative hub port status;
it might have been maintained or even have been strengthened based on network
analysis. An analysis of regional hub port competition based on network theory
would enable to provide a useful insight into how regional ports take an advantage
against competitors and co-operate each other within the region.
5. Concluding remarks
This article has attempted to make a meaningful concept and definition of maritime
logistics hubs in the spirit that an effective literature review facilitates to enhance
academic knowledge depth and horizon. There have been a number of empirical-
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
based studies on the topic but those researches are conducted under vague
assumption or definition on maritime logistics hub, generally proxied in a form of
container hub ports. While those empirical analyses have their own merits by
offering a fact-based picture of the industry trend over the past years, they are
unfortunately unable to clarify issues of what a maritime logistics hub or container
hub port is, what factors make a hub, how to predict next steps, and what measures,
in terms of policy and strategy making, are to be made to be a hub. It is hoped that
the review made in this article initiates further discussion and scientifically rigours
examination on the topic from a variety of qualitative and quantitative perspectives.
This line of research will surely be beneficial to those engaged in port development
and policy making and in daily port operations and management, and other
strategically related industry sectors.
Nevertheless, this study has such inevitable shortcomings that existing literatures
are not rich enough to be directly applicable to the topic concerned, that the boundary
of disciplines associated with the issue is still high to be pushed down, which makes
things worse in making a consensus towards a precious concept, definition and scope
of the matter and that this line of review might not be comprehensive to digest all the
necessary aspects and perspectives related to the topic. It is sincerely hoped that those
listed shortfalls and others not identified herein are the ones that we maritime
academic community can deal with in an objective and scientific manner so that our
understanding and knowledge are elevated and embellished.
Acknowledgements
An earlier version of this article was presented at the 12th WCTR in Lisbon held on
11–15 July 2010. The authors are grateful to the conference organiser and scientific
committee members for constructive and helpful comments on the previous version,
which are well embraced into the current version with the enhanced quality as it is.
Due appreciation also goes to the guest editors of this special issue during the
preparation and review process.
2. WEBSTER, J. and WATSON, R., 2002, Analysing the past to prepare for the future: Writing
a literature review. MIS Quarterly, 26(2), xiii–xxiii.
3. LEWIS, M. and GRIMES, A., 1999, Metatriangulation: Building theory from multiple
paradigms. Academic Management Review, 24(4), 672–690.
4. RUSHTON, A., OXLEY, J. and CROUCHER, P., 2006, The Handbook of Logistics and
Distribution Management (London: Kogan Page).
5. STROH, M., 2001, A Practical Guide to Transportation and Logistics (Dumont:
The Logistics Network).
6. COUNCIL OF SUPPLY CHAIN MANAGEMENT PROFESSIONALS, 2010, http://cscmp.org/
aboutcscmp/definitions.asp?XX=1 (Accessed on 20th March 2010).
7. PORTER, M., 1980, Competitive Strategy: Techniques for Analysing Industries and
Competitors (New York: Free Press).
8. STOCK, J. and LAMBERT, D., 1992, Becoming a world class company with logistics service.
In: Strategy Planning in Logistics and Transportation, edited by J. COOPER (London:
Kogan Page), pp. 35–52.
9. DAVID, P. and STEWART, R., 2008, International Logistics: The Management of
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
30. MIN, H. and GUO, Z., 2004, The location of hub-seaports in the global supply chain
network using a cooperative competition strategy. International Journal of Integrated
Supply Management, 1(1), 51–63.
31. FREMONT, A., 2007, Global maritime networks: The case of Maersk. Journal of Transport
Geography, 15(4), 431–442.
32. PANAYIDES, P., 2006, Maritime logistics and global supply chains: Towards a research
agenda. Maritime Economics and Logistics, 8(1), 3–18.
33. PANAYIDES, P. and SONG, D.-W., 2008, Evaluating the integration of seaport container
terminals in supply chains. International Journal of Physical Distribution and Logistics
Management, 38(7), 562–584.
34. NOTTEBOOM, T., 2002, Current Issues in Port Logistics and Intermodality (Antwerp:
Institute of Transport and Maritime Management Antwerp).
35. UNITED NATION ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC, 2005, Free
Trade Zone and Port Hinterland Development, ST/ESCAP/2377. (New York: UNESCAP).
36. UNITED NATION ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC, 2006,
Integrated International Transport and Logistics System for North-East Asia, ST/ESCAP/
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
56. NOTTEBOOM, T., 2006, The time factor in liner shipping services. Maritime Economics and
Logistics, 8(1), 19–39.
57. HUANG, W., CHANG, H. and WU, C., 2008, A model of container transhipment port
competition: An empirical study of international ports in Taiwan. Journal of Marine
Science and Technology, 16(1), 19–26.
58. LEE, S. and KIM, H., 2006, Performance Evaluation of Asian Port Distriparks Using
Factor Analysis (Seoul: Korean Maritime Institute).
59. INTERNATIONAL MONETARY FUND, 2008, World Economic Outlook (Washington DC:
IMF).
60. KWAK, S., YOO, S. and CHANG, J., 2004, The role of maritime industry in the Korean
national economy: An input-output analysis. Marine Policy, 29(4), 371–383.
61. www.people.hofstra.edu and http://www.bts.gov (Accessed on 15th March 2010).
62. KHALID, N., 2008, The East has arisen: The growth of the maritime sector in East Asia,
In International Shipping, Port and Logistics Conference, 28–29 March, Taiwan.
63. INFORMA, 2007, Containerisation International Yearbook (London: Informa).
64. UNITED NATION ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC, 2006,
Downloaded by [Chulalongkorn University] at 00:00 02 January 2015
Integrated International Transport and Logistics System for Northeast Asia (New York:
UNESCAP ST/ESCAP/2434).
65. CULLINANE, K., SONG, D.-W., JI, P. and WANG, T.-F., 2004, An application of DEA
windows analysis to container port production efficiency. Review of Network Economy,
3(2), 184–206.
66. WASSERMAN, S. and FAUST, K., 1994, Social Network Analysis (New York: Cambridge
University Press).
67. SCOTT, J., 2000, Social Network Analysis: A Handbook (London: SAGE Publication).
68. FREEMAN, L., 1979, Centrality in social networks: Conceptual clarification. Social
Networks, 1(3), 215–239.
69. DUCRUET, C., LEE, S. and ROUSSIN, S., 2009, Local strength and global weakness:
A maritime network perspective on South Korea as Northeast Asia’s logistics hub.
KMI International Journal of Maritime Affairs and Fisheries, 1(1), 32–50.
70. BLONIGEN, B. and WILSON, W., 2006, International trade, transportation networks, and
port choice. http://www.nets.iwr.usace.army.mil/docs/PortDevInternalTransport/
PortChoice114.pdf
71. DUCRUET, C., LEE, S. and NG, A., 2010, Centrality and vulnerability in liner shipping
networks: Revisiting the Northeast Asian port hierarchy. Maritime Policy and
Management, 37(1), 17–36.