Source: adapted from Ashar (2009).
A transshipment hub can emerge under specific circumstances involving three main patterns:
- Direct service. A default configuration where a sequence of ports (A, B and C) are all serviced by the same shipping route.
- By-passing. Mainly because of insufficient volume a port call may be dropped along a port sequence and replaced by a feeder service. It could also concern a port that is judged not productive enough for the original service sequence and be the cause of delays impacting the level of service. In the above figure, port B is dropped (by-passed) from a route sequence. The amount of throughput handled at hub A now includes twice the throughput handled at port B since each container imported or exported through port B must also be handled at port A. For instance, a service along the western European northern range calling Felixstowe, Le Havre, and Rotterdam could see Le Havre being dropped and replaced by a feeder service from Rotterdam.
- Tail Cutting. Involves a similar rationale to by-passing, but in this case, the furthest port(s) along a route sequence is(are) dropped to be replaced by a feeder service. The main rationale is an attempt to rationalize the performance of the pendulum route by removing the additional delays servicing the last port along the chain implies. For instance, a pendulum service calling from Asia to Antwerp and finally Hamburg could see Hamburg being dropped and replaced by a feeder service from Antwerp (likely covering several ports of the Baltic Sea).
- Hubbing. Concerns the concentration of transshipment activities at a hub for the purpose of serving a regional market and accommodating larger ships. New “pure” transshipment hubs (PTH) can emerge as the only port call within a regional market. Ports no longer directly serviced are now part of a new smaller shipping route that acts as a feeder for the transshipment hub. For instance, several ports along the Mexican Gulf Coast could be serviced by a transshipment hub in the Caribbean (e.g. Kingston).
- Intersection. Involves connecting different mainline (mother) services that are reaching different markets. This commonly involves connecting at a PTP east-west and north-south trade routes. The Port of Salalah in Oman is an example of an intersection PTP connecting east-west shipping routes between Asia and Europe and north-south routes linking the Middle East and East Africa. A similar function is performed by the Port of Algeciras, often used to connect Northern European, Mediterranean, West African, and transatlantic routes.
- Relay. This occurs along mainline routes that are usually along a trade axis but which are servicing a different set of ports. For instance, Singapore could be used as a hub connecting Europe – Asia mainline services, one calling coastal China ports while the other calling South Korea and Japan.
Thus, in the case of by-passing and tail cutting, the port selected for transshipment is not generally a transshipment hub as it still handles a substantial amount of gateway throughput. Usually, transshipment accounts for at most 30 or 40% of the port throughput. However, in the case of a hub-and-spoke structure, a pure transshipment hub commonly emerges where transshipment can easily account for 90% of all the throughput.