Evolution of Traffic Handled by Container Ports, 1980-2010

Evolution of Traffic Handled by Container Ports, 1980-2010

Source: Adapted from Guerrero, D. and J-P Rodrigue (2014) “The Waves of Containerization: Shifts in Global Maritime Transportation”, Journal of Transport Geography, Vol. 35, pp. 151-164.

The geographical diffusion of container port growth took place in five major waves (phases)

Early trade susbtitution

The first containerized services were established by Sea-Land in the late 1950s and early 1960s. By the 1970s, regular transatlantic (Northern range of Western Europe and American East Coast) and transpacific services (Japan, Australia to a lesser extent, and American West Coast) were established through ports that were the firsts to adopt containerization and are thus considered to be the pioneers (e.g. New York, Yokohama, Oakland, and Hamburg). They are almost all part of the economic triad that leaded globalization; North America, Western Europe, Japan, and Australia. These ports accounted for the dominant share (about 80%) of the global throughput in 1970, but this share fell rapidly afterward. Few of these ports kept their primacy, which is partly explained by the fact that the rationale behind their emergence played to a much lesser extent or that limited room was available for terminal expansion.

A port site could be suitable for a specific volume, but there may be limited opportunities for port expansion once this volume has been reached. For instance, the initial primacy of Oakland was overtaken by the ports of Los Angeles / Long Beach, covering a wider regional market and having more room for expansion and better inland connections. The exception is Australia, where Sydney and Brisbane remained dominant gateways. The first wave underlines that several pioneers were able to initially capture the opportunities of containerization. Still, due to market or technical reasons, they were unable to keep this initial advantage because of factors completely outside their control, such as a shift in trade patterns.

Adoption of containerization

The second wave represents an expansion of containerization within the triad and its regional trade partners. It takes place in two phases, with the first occurring in the mid-1970s and accounting for a larger share of the world’s throughput. While many of these ports were operational in the early 1970s, their market share increased, and several became the world’s dominant container ports until overtaken by Chinese ports in the 2000s. This shift took place not because of a lack of growth but because of differential growth rates. Salient examples include Rotterdam, Tokyo, and Hong Kong.

In the late 1970s, growth mostly took place in ports adjacent to the triad, such as in the Caribbean, Latin America, the Mediterranean, and emerging East Asian tigers (Thailand, Taiwan, and Hong Kong). From a pattern dominated by the triad, containerization undertook the initial phase of its global diffusion by embedding itself in commercial relations through a substitution effect of conventional break bulk trades. More intermediary locations in the Middle East (and India to a lesser extent) were also involved since the growth of containerized shipping between Asia, and Europe presented opportunities to add port calls along pendulum routes. Figure 8 underlines that this wave (and the first wave as well) is dominantly bound to the dynamics spearheaded by North America, Western Europe, and Japan.

Setting of global supply chains

The third wave concerns the largest number of ports. It captures the massive diffusion of containerization, particularly the incorporation of East and Southeast Asia (without China) in global trade relations through the beginning of offshoring as well as the emergence of early transshipment hubs. As the number of container ports increased, the network strategy to serve them favored a shift from point-to-point services along pendulum routes to the usage of hubs-and-spoke services. Indeed, several ports that emerged during this wave became major transshipment hubs through their intermediary locations along major shipping corridors such as Singapore, Colombo, and Dubai. Many of these ports are small market-oriented city-states located on the edge of much larger countries (e. g. Indonesia [Singapore], India [Colombo], Iran [Dubai]) not well open to global trade. During that period (the mid-1980s), it was difficult to get transport documentation that was encompassing all the steps through to the final destination country, so containers were consigned to these hub ports, at which local freight forwarders and banks with good contacts in the destination country took the responsibility of the final leg of the journey.

China and transshipment hubs

From the mid-1990s, the container became the standard means for global freight distribution, particularly with the massive entry of Chinese ports in global shipping networks and the emergence of post-Panamax ships. Furthermore, this wave also represents the increasing regionalization of East Asian countries, with the resulting trade growth one of the drivers of the growth of East Asian ports. Several ports in this wave are new transshipment hubs been inserted to accommodate the growing network complexity and better link regional ports to deep-sea services (e.g. Salalah, Gioia Tauro, Colon, Freeport). New gateways are also emerging to accommodate growth in emerging economies (e.g. Vietnam, Mexico, India, Brazil).

The later stage of that wave concerns China gateway ports that provide additional export capabilities (some spillover effect) for massive manufacturing clusters (e.g. Ningbo, Guangzhou). For the rest of the world, they mostly concern additional transshipment hubs being set by global terminal operators (e.g. Tanjung Pelepas).

Peak growth

The fifth wave concerns ports that have emerged recently (late 2000s) and is linked to peak growth in global container shipping. It is particularly one of niche ports filling a specific role, such as a new gateway to cope with congestion along a range (Yingkou or Taicang), or a new transshipment hub inserted within maritime shipping networks (e.g. Tangier Med, Caucedo). In recent years, Prince Rupert in Canada is the only port of significance that has emerged on the North American west coast, capitalizing on short transpacific transit times and a direct rail connection to the heartland (Chicago).