PORT ROLES AND

MANAGEMENT CHALANGES
By Murdjito

Laboratory of Sea Infrastructure and Port

Study Group Sea Transportation

Department of Naval Architecture
Faculty of Marine Technology ITS Surabaya

Surabaya, February
2013

References
Yi-Chih

Yang, Introduction of Port

Management, Department of Shipping
and Transportation Management,
National Kaoshiung Marine University
Constantinos I. Chlomoudis, The Need
for A New Phylosophy of Port
Management, Department of Maritime
Studies, University of Piraeus
World Bank, Alternative Port
Management Structures and Ownership
Models, Module 3

New challenges for Port Management

A

port is essentially a point where goods

are transferred from one mode of transport
to another. In an era of economic
globalization ports are evolving
rapidly from being traditional land/sea
interfaces to providers of complete
logistics networks.
This means the ports had to face many
challenges due to unpredictable
environmental changes and trends in
the shipping, port and logistics
industries

Port functions
Landlord

for private entities offering a

variety of services;
Regulator of economic activity and
operations;
Planning for future operations and capital
investments;
Operator of nautical services and facilities;
Marketer and promoter of port services
and economic development;
Cargo-handler and stores;
Provider of ancillary activities

Integrated View of Port

Element

Evolution in Port Function

Impact of bad service

quality in Port
Port

congestion
Chronic service failures

Main problems contributed to the

gradual deterioration of service quality
labor practices Antiquated
work practices and methods

restrictive

needed to be transformed and renegotiated to

adjust to modern bulk handling methods, unitized
handling and containerization rapid
modernization of port handling equipment
centralized

government control in the port

sector many ports failed to respond
adequately to the increased demands
1980s increasing introduction of market-oriented
policies on a worldwide basis open the way for
decentralized port management and for reduced
government intervention in port affairs

inability

or unwillingness of many
governments to invest in expensive
port infrastructure or the "misinvestment" in infrastructure

To define the conditions for

successful hub port
Location

(proximity to major
world routes)
Quick turnaround time
Quality service with efficiencies
and productivity
Reasonable costs
Ability to accommodate super
larger ships-deep water,
advanced equipment

Excellent

networks covering
neighboring feeder ports
Existence of logistics cluster
supporting value-added logistics
activities
No burdensome paper works
Intermodal infrastructures-access to
rail, air and road distribution networks
Local market producing freight volume

Emerging Challenges and issues for

most ports

Globalization of world economy

bolsters the increasing importance of
international trade and the roles of
ports

International trade platform of

global ports

Diversified supply chain for

port network

Developing tendency of Mega size

Gantry Crane

Evolution of Container Handling

Technology

Developing trend of Mega size ship

Forecast of Global Ocean cargo

volume

Static of Global Strategic Alliance

A shipping lines perspective of how

to select a hub port

Port Characteristics

Categories of Port Modal

Port Regulator
Regulatory

activities within a port

will generally be related to duties
and responsibilities such as
enforcing regulations and
providing pilotage services and
vessel traffic management, most
of which will have been
established by statute.

Port landowner
They key tasks a port landowner will need
to undertake include:
Managing and developing the port estate
Conceiving and implementing policies and
development strategies
Supervising major civil engineering works
Providing and maintaining channels,
breakwater, locks, truing, basins, berths,
piers and wharves.
Providing or arranging road access to the
port complex

Port operator
Operations

may include a range

of valueadded activities and free
trade zones related activities
within the port estate

Port Administration
Models

A number of factors influence the way port

are organized, structured and managed
including:
The socio-economic structure of a country
(e.g., market economic, open borders);
Historical developments (e.g., former
colonial structure)
Location of the port(e.g., within an urban
area, in isolated regions);
Types of cargos handled(e.g., liquid and
dry bulk, containers).

Basic port management

models

Public-Private Roles in Port

Management

The public-private balance of Risk

and Regulation

Division of responsibilities
between the public and private
sectors

port

development had collateral consequences

and effects on public interests in land use,
environmental impact, job creation and economic
stimulation for economically blighted areas
Largescale government involvement in port
operations was self-defeating and destructive
of private initiative the role of government in
a market economy should focus on the provision
of "public goods"
public sector mainly acts as planner, facilitator
and regulator, whereas the private sector acts as
service provider, operator and developer.

Focused of Port Management

Increased

service levels for

infrastructure users;
Increased efficiency in operations;
Improved allocation of limited public
funds

Roles of port in public and private goods

Ports

produce a combination of public and private

goods.
Public goods include nondivisible and non-consumable,
coastal protection works necessary to create port basins.
Private goods are both consumable and divisible and their
use entails a minimum of economic externalities.

value

of private goods can be captured in market

transactions between private parties. A substantial
portion of the value of public goods, on the other
hand, cannot be captured in arms length
transactions Public goods create positive
externalities when they are used
Ports represent a mix of public and private goods
generate direct economic benefits (private goods) through
their operations as well as additional indirect benefits
(public goods) in the form of trade enhancement

Examples of Economic multiplier

effects of ports
Petro-chemical industry
Value Added Services

Repair and maintenance

Packing and repacking
Labeling
Testing

Telecommunications
Banking
Customs
Inland

transport

Architecture of port
logistics
Architecture

of port logistics
operation contain Nautical
Facilitating System, Cargo Handling
System, Storage System and Inland
Access.
Port logistics IT extend
aforementioned scope of port
operation to international inbound /
outbound and domestic factory /
market.

Framework of Value Added

Service
Ports

are becoming part of so-called

integrated logistics chains.
Value Added Service can be divided
into Value Added Logistics and Value
Added Facilities.
Value Added Logistics has two major
components: General Logistics
Services (GLS) and Logistics Chain
Integration Services (LCIS).

Overview of VAS in Port

Logistic Centre Evolution

What We Know
Today... Will Be
Surely Be
Different
Tomorrow!