Ports and Economic Location Factors

Ports and Economic Location Factors

Manufacturing activities are influenced in their locational choices by three main categories of factors having different considerations for ports:

  • The first is the material inputs of manufacturing such as energy, raw materials, and land. Since many of these factors involve ponderous resources such as coal, iron ore, grain, and petroleum, they are associated with industrial ports where activities are directly adjacent to port terminals.
  • The second concerns the non-material inputs of manufacturing such as labor and regulations, which is associated with manufacturing cluster ports.
  • The third involves the outputs of manufacturing such as its markets and customers, which is associated with gateway or transshipment ports.

With several aspects of manufacturing becoming less dependent on basic inputs costs, the value of manufacturing is more related to how a location can provide access to a wide pool of suppliers and customers. Areas having access to global and regional distribution systems thus convey an important advantage. Manufacturing has become more dependent on logistical capabilities and the flexibility they confer.

Since logistics is a high transport intensive activity, areas nearby port terminal facilities are offering an attractive proposition. The port, through its connectivity to global markets, raw materials, and parts, can be maximizing opportunities for manufacturing and appears to be the most stable location in a context where inputs cost and sourcing strategies could fluctuate. The higher the connectivity a port can offer, the better its value in the emerging manufacturing landscape.