It is widely acknowledged that the competitive environment in the maritime and port sector is changing at an ever increasing pace. 'Globalisation' and 'the reinforcement of the world economy' are frequently used concepts to summarize current economic developments, also and particularly in container handling in sea ports. Container-handling companies have engaged in various forms of expansion, many of which have a co-operative character. Inrecent years, this evolution has gained momentum. A particularly strikingquestion in this respect deals with the effect that such expansionist moves have on cost structures. On the one hand, such effect can be felt in the fixed part of the costs, leading to for instance lower prices for capital goods installed or shared overhead costs. On the other hand, variable costs can be influenced by co-operation or expansion as they lead for instance to lower prices for variable inputs. In this paper, both effects are assessed for a number of real-life terminal configurations. The fixed-cost and the variable-cost effect translate into two research questions that arepursued in this paper. Values for fixed capital goods are relatively well-commented in literature, although between-terminal comparisons are not always explicit. Therefore, the paper aims at assessing whether or not a fixed-cost effect occurs in container-handling companies. This effect can be termed an overall company-size effect. The related hypothesis states that container-handling companies feature economies of company scale. Often less clearly identified than the fixed terminal costs are the true operational costs involved in running a container terminal, and their evolution withchanging output levels. It is generally accepted that a broad set of variables may impact to a larger or lesser extent on the supply and demand conditions at container terminals. However, the exact extent of such impact and of economies or diseconomies of scale has hardly been assessed in literature. Therefore, it is analyzed in this paper how co-operation and expansion determine container-handling conditions and therefore lead to different operational cost structures. This effect can be measured through the economies of scale in the variable inputs at a terminal, and is therefore termed the terminal-size effect. The corresponding hypothesis states that economies of scale differ in line with different terminal activity size. Trade-offs between fixed costs and operational costs have hardly ever been assessed in literature. Therefore, a third part of the research in this paperquestions the existence of such trade-offs. The hypothesis states that there is no trade-off: shared fixed costs usually go in line with larger economies of scale. For testing the first research hypothesis, the methodology consists of comparing companies of different size, i.e. with a differentamount of fixed inputs required, on the unit costs that these inputs stand for. For this assessment, companies need to have comparable types of fixed inputs. The respective companies therefore need to be carefully screened with respect to their terminal configurations. 89 variables that were characterized as influential to the level of terminal costs, and that are summarized as policy, scope, chain and terminal-specific variables, serve asa starting point for selecting terminal configurations for the analysis. The terminals of the companies selected have clearly identified values forthe policy, scope and terminal-specific variables, as well as the non-size chain variables, whereas the chain-variables that determine company sizeare left flexible. The real-life cost values corresponding to the fixed inputs are collected by assessing the limited scientific literature available as well as the broad and diverse business-related literature. Testing the second research hypothesis involves simulating and analyzing cost functions at container terminals. In view of the data nature, the engineering technique is used: data are not always comparable or sufficiently availablefor allowing econometric analyses. For the simulation of the cost functions, a cost typology is elaborated which covers all operational costs. Again, the 89 variables are the basis for selecting and comparing different types of terminals. The configurations selected are tested on their economies of terminal activity scale as they are integrated in a larger or smallercompanies. For the covering abstract see ITRD E135582.
Abstract