International Journal

on Marine Navigation

and Safety of Sea Transportation

Volume 3

Number 4

December 2009

457

1 INTRODUCTION

Polish seaports, like all ports in the world, are being

confronted by forces of change and uncertainty that

are reducing their abilities to control their own des-

tinies. Since several years, other actors in the trans-

portation industry (the shipping lines in particular)

are shaping port development. They have been put

‘at mercy’ of the shipping alliances dominating

world trade not only on water, but also on land.

Moreover, the process of deregulation in the com-

mon transport policy in the EU enables shaping eq-

uity mergers and alliances on land. For instance, the

rationalisation of rail services raises the potential of

differential access to ports. Most port authorities

play only a secondary role in the global game. More

than ever before, as intermediate points in transport

chains, linking shipping with road and rail modes,

ports are vulnerable to developments on both land

and water. These developments have brought about

uncertainty and change that has made port planning

extremely difficult.

2 GLOBALISATION AND INTEGRATION IN

THE MARITIME TRANSPORT

Seaports’ development is influenced by many fac-

tors. Especially, the globalisation and integration

processes affect the evolution of their management

systems and models. Vertically integrating transport

chains make seaports vulnerable to rapidly changing

contemporary environment.

The coastline of the European Union is many

thousands of kilometres in length and contains well

over 600 individual ports. These handle around 90%

of EU external trade and more than 35% of trade be-

tween EU countries. This involves handling 3.5 bil-

lion tonnes of goods and 350 million passengers be-

ing transported on millions of ship journeys each

year (www.emsa.europa.eu/end, 25.02.2007). The

ongoing process of cargo flows concentration bene-

fits to the biggest EU ports, mostly in the northern

part of the continent. A big part of the increase over

the years can be attributed to the increase of import

of oil and oil products (http://epp.eurostat.cec.eu.int,

25.02.2007).

European ports, like all ports in the world, are be-

ing confronted by forces of change and uncertainty

that are reducing their abilities to control their own

destinies. Since several years, other actors in the

transportation industry (the shipping lines in particu-

lar) are shaping port development. More than ever

before, as intermediate points in transport chains,

linking shipping with road and rail modes, ports are

vulnerable to developments on both land and water.

These developments have brought about uncertainty

and change that has made port planning extremely

difficult. Inter-port competition has been heightened

in unanticipated ways (Slack 2001).

Shipping, being the most important mode of

transport in terms of volume, gets an important sup-

port from the EU. In fact, the common transport pol-

icy favours the development of environmental

friendly modes of transport in compliance with the

idea of sustainable development (Lisbon and Goete-

borg Strategy). The EU, through a set of political ac-

tions, legal and financial instruments, promotes in-

termodal transport (Marco Polo Program) and

creation of motorways of the seas, for instance.

Furthermore, as a result of its geography, its his-

tory and the effects of globalisation, maritime

Challenges for Polish Seaports’ Development

in the Light of Globalisation Processes in

Maritime Transport

A. Przybyłowski

Gdynia Maritime University, Gdynia, Poland

ABSTRACT: Ports operations become more capital intensive, labour saving and space consuming. Due to

globalization processes and liberalization of the EU transport markets the seaports are under the huge compet-

itive pressure put mainly by container transport operators committed in the logistic transport chains. Polish

seaports have difficulties in facing such a competitive environment.

458

transport will continue to be the most important

transport mode in developing EU trade for the fore-

seeable future (Maritime transport 2006). The Green

Paper on a Future Maritime Policy for the European

Union launched a broad debate on the development

of an overall maritime policy which combines an in-

tegrated, cross-sector analysis with effective policy

co-ordination and common action. According to the

Commission, such a policy should combine the

competitiveness and employment objectives of the

Lisbon agenda with improving the health of the ma-

rine environment (EC Commission 2006).

The Blue Paper reflects the outcome of a one year

consultation period launched with the adoption of

the Green Paper. The results of that consultation

have been brought together in a separate communi-

cation which was also published. The Maritime Pol-

icy “Blue Paper” sets out a comprehensive action

plan including the Port Policy Communication

which was published on 18 October 2007. The

Commission identified the Blue Paper as a crucial

first step for Europe’s oceans and seas towards un-

locking its potential and towards facing the chal-

lenges of a Maritime Europe. It should also allow

the EU to make the most of its maritime assets and it

will help Europe face some of the major challenges

before it. The Blue Paper identifies five areas of ac-

tion necessary to launch an integrated Maritime Pol-

icy for the European Union: sustainable use of

oceans and seas, knowledge and innovation, quality

life in coastal regions, European leadership in inter-

national maritime affairs and, finally, visibility of

maritime Europe and its heritage.

These areas are translated in a concrete action

plan which accompanies the Blue Paper. Key actions

include the development of a European Maritime

Transport Space without barriers, a White Paper on

maritime transport strategy, a roadmap towards mar-

itime spatial planning, a strategy to mitigate the ef-

fects of climate change on coastal regions, reduction

of CO² emissions and pollution by shipping (includ-

ing promotion of shore-side electricity in EU ports),

sustainable maritime tourism and a European net-

work of maritime clusters (http://www.espo.be,

2008).

The ongoing growth of the world economy in

terms of GDP and industrial output accelerates the

growth of the international trade and as a conse-

quence boosts the increase of the world seaborne

trade (UNCTAD 2005). According to WTO calcula-

tions, it accounts for more than 80 % of the world

total trade in tonnage terms. The growth rates of the

seaborne trade were especially high in the recent

twenty years of the 20.th century. In 2004 it reached

6,76 billion tones of loaded goods. The annual

growth rate reached 4.3 % over that of 2003, and the

increase of the world merchandise exports volume

was 13% higher at that time. The world merchant

fleet grew in deadweight tons (dwt) up to ca 900

million that represents 4.5% increase. This tendency

is still going on and especially the number of con-

tainerships grew by 15.5% (see tab. 1). The rapid in-

crease of the world seaborne trade boosts the devel-

opment of the maritime transport. As a result, it

accounts nowadays ca. 90 % of the world transport

in ton-miles. As a consequence the total throughput

of the world sea ports has been growing considera-

bly, reaching (according to the provisional data)

more than 14 billion tones (loaded and unloaded)

(Grzelakowski & Przybylowski 2006).

Table 1. World fleet structure by type vessel in 2005 - 2007

(DWT x 100)

Source: Complied by UNCAD secretariat on the basis of data

supplied by Lloyd’s Register – Fairplay 2008.

Containerisation that has given shipping lines

greater freedom to serve markets from a wider

choice of ports, thanks to so-called transferability

(Fleming et al. 1994), deepened the globalisation

process. Ports have no longer control over inland

markets and can not be sure of the trade even in their

own local areas. They have to invest huge sums of

money in superstructure and infrastructure to partic-

ipate in the container industry. However, it is not a

guarantee to take profits from this business as some

of them, despite having a container terminal, may be

bypassed because of the reasons linked to the whole

459

transportation chain, like hinterland connections.

The shipping lines, being the most important players

in the logistics chains, widen their maritime services

and extend control over landward movements. They

certainly do not take into consideration the specific

merits of a particular port, but the economies of

scale and conditions of the entire chain. For in-

stance, services in the Mediterranean have concen-

trated in southern entirely new pivot ports, such as

Gioia Tauro and Algeciras, bypassing direct services

with northern reputed ports as Livorno and Mar-

seilles. Thus, port operations can be compared to a

lottery (Slack 1993). Actually, the most dynamic in-

crease of the handled volume of the biggest EU ports

concerns the container traffic. There is a high level

of correlation between the EU ports development

and their container handling volume. On the list of

top 20 container terminals only three EU ports are

named, i.e. Rotterdam, Hamburg and Antwerp,

ranked 7, 9, 11 respectively. However, the percent-

age change of container throughput in the EU con-

tainer terminals is above the world average level. In

the Baltic Sea Region the level of containerization is

unfortunately the lowest in Poland (see fig. 1). How-

ever the latest investments in the seaports of Gdansk

and Gdynia should increases their competitiveness.

Figure 1. Level of containerisation in external trade of the Bal-

tic Sea Region countries

Source: M. Matczak, The Baltic Container Outlook 2007, Actia

Forum, p. 26.

The changes in the maritime transport sector con-

cern not only the growing volume of commodity

flows and the structure, but also ships’ size, speciali-

sation, containerisation and transport chain organisa-

tion. The growing ships’ size involve huge capital

expenditures in ports. They refer to extensive dredg-

ing, much more dockside and handling capacity, for

example. However, such an anticipation may be a

risky undertaking, as there is an uncertainty over the

ultimate vessels’ size. As far as the organization of

the maritime transport is concerned, some forms of

cooperation such as strategic alliances (SAs) and eq-

uity merger and acquisition activities (M&As) have

been developed. They refer mainly to the interna-

tional container transport - Hanjin/Senator, P&O

Nedlloyd, Hamburg-South-Group, etc.

The main result of the capital integration and oth-

er forms of cooperation is enhancing the competitive

position by improving learning capabilities and the

timely access to technological knowledge and also

vertical integration, control of intermodal and lo-

gistic cycles and logistics outsourcing, as well. Thus,

the transport of goods by sea costs have been de-

creasing and the effectiveness of the international

combined transport chains is steadily growing. This

process is still going on, despite huge unavoidable

ports investments (Grzelakowski & Przybylowski

2006).

Major shipping lines formed strategic alliances

because of the pressures of globalisation requiring to

be present in all the major markets of the world. As

a result, formerly separate services of members are

being integrated and create new service configura-

tions that ports are unable to predict the outcome.

Meanwhile, ports operations become more capital

intensive, labour saving and space consuming. Due

to liberalization of the EU transport markets the sea-

ports are under the huge competitive pressure put

mainly by container transport operators committed

in the logistic transport chains. Not all of them are

able to face such a competitive environment.

The adjustment to the above mentioned globaliza-

tion processes needs huge additional public invest-

ment in port infrastructure and lowering of the oper-

ational handling costs. Only the biggest terminals

and port handling operators can meet those chal-

lenges and requirements set by the growing competi-

tive environment (pressures from container opera-

tors, liners). Due to the relatively low port tariffs

ports are unable to increase their income. Therefore,

they need to apply for a huge public money and the

access to the capital of parties involved in the mul-

timodal transport chain. However, such a strategy is

very often connected with the change of their con-

temporary role in a transport chain and the evolution

of their model of administration and management, in

particular. The Polish ports should consider specific

approaches depending on the environment they are

operating in to face the ongoing challenges.

3 STRATEGIES FOR POLISH SEAPORTS

DEVELOPMENT

In 2005, one of the Polish Gdynia Port container

terminals has been taken over by Hutchison Port

Holdings Group (HPH). HPH handled that year

460

51,8 mln TEU on 251 quays in 43 ports. This global

operator has shares on the terminals in 21 countries

all over the world: in Asia, Africa, both Americas

and Europe. In Europe, they are present in Belgium,

Germany, Spain, the Netherlands and Great Britain.

This example reflects the abovementioned globalisa-

tion and integration processes.

The existing traditional seaport administration

and management systems as well as port policy ob-

jectives and requirements, based principally on the

concept of exclusively port-oriented management

forms in Polish ports, do not comply any more with

the new logistic management challenges and grow-

ing competitive transport environment. The tradi-

tional concepts and models of national seaport poli-

cy are being steadily evolved, getting much more

global and transport chain oriented. Polish seaport

authorities, confronted with the abovementioned

processes, must adopt efficient survival strategies in

order to resist global and integration pressures. Slack

mentions two possible reactions that could be adopt-

ed by seaports: keeping pace with market demands

or pursuing customer-driven strategies. Porter and

Robinson studies suggest providing superior value-

delivery to targeted customers at a cost that provides

acceptable profit levels.

The first strategy consists on carrying out expen-

sive investments in superstructure and infrastructure

in order to keep pace with shipping lines expenses

on larger vessels. The second one is a response to

concrete demands coming from shipping line clients.

Certainly, investing huge money is not a guarantee

of success and may not be even economically and

economically sustainable. The third approach re-

quires important adjustments in ports functions to fit

better into local, regional and global markets (con-

centration on passenger business or container feeder

port role, f. ex.). This solution could be a good idea

for Polish ports as their participation in the container

market is relatively low.

A port authority may be not only a port operator

but also a land developer. Sites that have no more a

port-use character can serve for urban redevelop-

ment. Such an alternate use of port sites may bring a

lot of income, because waterfront land is of a great

value (Slack 2001). As mentioned above, the neces-

sary step is a full integration of those entities into the

transport chains. Such a process has already started.

It is performed by horizontal and vertical forms of

integration. The first one is caused by the ongoing

process of privatisation of the ports terminals, main-

ly container ones. The global container operators,

like HPH, take over container terminals becoming

their owners in the world scale. The reason of this is

an increasing rentability of port container terminal

companies. According to Drewry Shipping Consult-

ants, the leading container operators like HPH, CSX

WT, PSA Corp., ICTSI and P&O Ports reach turno-

ver rentability of 33%, 29%, 25%, 18,8% and 17,4%

respectively. The vertical integration is based on

capital concentration among the ports terminal com-

panies and other logistic transport operators such as

global container alliances (Maersk).

Till now, the ports behaved passively being taken

over by other operators players/ carriers. Thus, de-

spite the growing concentration of the commodity

flows in the main EU ports which strengthen their

competitive position on the open European seaport

market, the majority of them seem to be unable to

resist the enormous global challenges. However,

since the mid 90. some European seaports are get-

ting much more pro-active on the global transport

market which is not the case of Polish ones yet. The

simplest form is the EU biggest container terminal

operators (Eurogate) set together with the strongest

railway companies container railway services which

operate as a global player on the European transport

market. Such services connect the main European

terminals (Bremen, Hamburg) with the main con-

sumer and production centers in Europe. Conse-

quently, European ports binds huge area of the hin-

terland and the main initiative is overtaken by the

container terminals.

The wider concept, based on stronger position of

container terminal operator in land transport rela-

tions is aimed at strengthening its position in relation

to the container transport operator (container alli-

ances). Nevertheless, the port container operators are

partly overtaken by still stronger maritime transport

operators. In fact, the shipping lines become multi-

modal logistics providers controlling the routing of

the flows in conjunction with the ocean services of

the consortia. Thus, a port is an incidental entity in

this global network system. Containerisation has re-

duced the economic impact of ports on cities, be-

cause ships crews are smaller than they used to be,

spend little time in port and dock labour considera-

bly diminished. As local economic benefits (em-

ployment) are declining, it is no longer justified to

invest huge public money in the port area. The Eu-

ropean Commission wants to minimise subsides in

accordance with proper competition policy and a re-

strictions on public state aid.

The increased competitiveness of the Polish ports

can be achieved by establishing port clusters either

via their port authorities or via municipal govern-

ments. The port cluster may be defined as ‘the set of

interdependent firms engaged in port related activi-

ties, located within the same port region and possi-

bly with similar strategies leading to competitive ad-

vantage and characterized by a joint competitive

position vis-à-vis the environment external to the

cluster’(Hong-Seung-ROH 2004). There is an urgent

need to enhance the relationships between the port

461

and associated companies in the port area in order to

create an added value (Notteboom T. E. 2005).

Moreover, the strategies for port competitiveness

must take into account local impact in order to

strengthen the link between the port and its

city/region (Pando J. et al.2005).

Port management systems should also meet the

criteria of sustainability, i.e. combining economical,

ecological and social factors. The sustainable com-

position will be reached if all stakeholders having

different goals are taken into account (Musso E.

2006). It is not an easy task, as ports authorities may

be often in conflict with legislation, environmental-

ists and the general public while trying to accommo-

date their sites to growing economic needs (f. ex. ac-

cess to water depths requiring a frequent dredging).

There is a need for more partnership solutions as re-

gards port management, implementing ecological

systems preventing pollution and excessive emis-

sions. This requires paying more attention to local

labour markets in order to avoid social protests (EU

‘service’ directive proposal, for example). The pos-

sible reaction leading to raising ports’ competitive-

ness could be also a horizontal integration and port

networking and combining competition and coopera-

tion.

So the Polish seaports need to be much more effi-

cient in micro and macroeconomic terms. They

should become an integral part of the vertically inte-

grating logistic transport chain. The simplest form of

performing these strategy is the development on

their areas the distribution and logistics centres, for

example. This is the case of three major seaports in

Poland: Gdansk, Gdynia and Szczecin-Swinoujscie

(fig. 2) where such investments are taking place.

They also need to enforce much more integrated, lo-

gistic transport chain oriented sea port activities be-

cause of the still growing competitive requirements

from maritime and land transport operators, as well

as exporters and importers. Such kind of seaport re-

orientation can not be efficiently carried out without

a transformation of their administration and man-

agement systems, i.e. going towards more partner-

ship solutions, for instance. Some of them will have

to find other solutions and cultivate niches as sec-

ondary ports. Others may be forced to be pro-active

and work closer with logistics providers, railroads

and truckers raising the service attractiveness of the

port.

Fig. 2. Transshipment turnover in Polish seaports (2007)

Source: Porty morskie, www.start.gov.pl

, 19.10.2008.

However, the abovementioned strategies would

require more partnership solutions, going far beyond

the port area. Ports could also allocate births to a

single user in exchange for along-term commitment

which would integrate and even completely attach

shipping lines to the particular port. The develop-

ment of logistics features: inventory control, data

management, packing and processing could also en-

hance economic benefits of port operations, like in

Port of Rotterdam. The horizontal port alliances

seem to be a good solution for survival, as well. A

group of northern European ports already gather to-

gether to solve common problems. However, this

process is quite a challenge because of the differ-

ences concerning port management models and sys-

tems. Finally, the Polish seaports’ position in rela-

tion to global carriers can be upgraded thanks to the

privatisation processes (difficult to undertake, be-

cause contested by trade unions in Port of Gdynia, f.

ex.) and emergence of grouping of terminal own-

er/operators (Przybylowski A. 2007).

4 CONCLUSION

1 Polish seaports are under a very strong influence

of the globalisation and integration processes.

Vertically integrating transport chains make

them, especially such seaports as Polish ones,

vulnerable to rapidly changing contemporary en-

vironment.

2 The European Commission acknowledges that the

growth in trade and shipping is dependent on hav-

ing adequate port capacity and recognises that

this need is under competition from environmen-

tal objectives. It is not clear yet whether the EU

wants to support bigger (Rotterdam, f. ex.) or less

developed European ports (like Polish ones). In

fact, this dilemma is a choice between the highest

competitiveness and the sustainable development

of the European territory.

3 Traditional port management models and the state

of the transport infrastructure decrease the com-

462

petitive position of Polish seaports. Thus, there is

a need for novel organisation solutions and more

investment in the infrastructure and superstruc-

ture also in order to enhance their competitive-

ness.

4 The appraisal of the seaports’ position in Poland

is possible through capital integrated transport

chain oriented models of management. Actually,

the efficient seaport policy needs to take into ac-

count such strategies as vertical and horizontal in-

tegration, port networking and port clustering.

5 Some Polish seaports will have to find other solu-

tions and cultivate niches as secondary ports.

Others may be forced to be pro-active and work

closer with logistics providers, railroads and

truckers raising the service attractiveness of the

port. However, this would require more partner-

ship solutions, going far beyond the port area.

Ports could also allocate births to a single user in

exchange for along-term commitment which

would integrate and even completely attach ship-

ping lines to the particular port. The development

of logistics features: inventory control, data man-

agement, packing and processing could also en-

hance economic benefits of port operations, like

in Port of Rotterdam. The horizontal port allianc-

es seem to be a good solution for survival, as

well.

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