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An Application of AHP on Transhipment Port Selection: A Global Perspective

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Maritime Economics & Logistics Aims and scope

Abstract

The research presented in this paper applies the Analytic Hierarchy Process (AHP) to reveal and analyse transhipment port selection by global carriers. In all, 47 relevant service attributes were recorded from a literature review. Two rounds of Delphi surveys – followed by brainstorming sessions – were conducted among experts in industry and academia, in order to narrow their number to four main service attributes/criteria comprising 12 sub-criteria. An AHP designed questionnaire survey was distributed to 20 port users, which covered the total population of global ocean container operators, and to 20 transhipment service providers (port operators/authorities). The results of the AHP analysis revealed that both global container carriers and port service providers had a similar perception of the most important service attributes for transhipment port selection. However, the AHP weight ranking of the sub-criteria involved was not identical between the two surveys, providing scope for further adaptation of service providers to users' priorities. Differences in the performance ranking of six major container ports by global carriers, as revealed in the AHP survey, were then combined with the calculated weights for the 12 transhipment port selection sub-criteria to explore critical attributes where transhipment market strategy could focus.

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Notes

  1. Historically, the organisation of modern liner shipping progressed from the East–West routes. For data, see Containerisation International (2002, monthly issues: January, February, April, May, July and August). Also February 2003 issue, pp. 5–7. See also UNESCAP (2001). For the relation of the three principal routes with the introduction of global services see Lim (1996).

  2. The four leading port operators in 2001 and 2002 were HPH, PSA, APM Terminal and P&O Ports (Damas and Motllery, 2003).

  3. The world port container throughput was 230 million TEUs in 2002, and 33 million of them were estimated to be transhipment containers (Flynn, 2002). For shares of transhipment in the total traffic of major ports, see also Fleming (2000) and Baird (2002b).

  4. The geographical designation of these Asian countries has been according to the classification in recent documents (UNCTAD, 2001; Comtois, 1994).

  5. This involved two rounds of Delphi surveys as responses had become uniform after the second round. See Lirn et al (2003).

  6. A total of 14 port selection literatures were reviewed to decide the initial port selection criteria.

  7. Although Saaty (2000) indicated that the AHP survey results could still produce consistent answers even if the number of major criteria was as high as 7, it is indicated in the recent literature that when the number of major criteria exceeds 5, the inconsistency index increases markedly (Bodin and Gass, 2003).

  8. The trend towards larger vessels has been well documented and predictions on vessels up to 10,000 TEU entering in service before 2010 (Baird, 2002a; Richardson, 2002) seem close to be fulfilled. In October 2003, a letter of intent to build eight 9,500 TEU ships was signed between Seaspan in Vancouver and Samsung (Richardson, 2003). All lines have now committed to new-building programmes that will see delivery of over 150,000 TEUs of new alliance capacity into the Asia–Europe or the Transpacific trades up to 2005.

  9. In two instances, replies were sent from carriers' regional headquarters, either referred there by the global headquarters or for practical reasons as not to delay the results beyond a short period, which would create problems with the time-base of the survey.

  10. These were again selected based on their ranking by total container throughput on the basis of 2001 volume data in Containerisation International Yearbook (2002).

  11. Unless ship sizes deployed in the East–West trades reach and exceed 10,000 TEUs (UNESCAP, 2001).

  12. The rank correlation coefficient (Spearman's correlation index) was 0.25, which is not statistically significant at the 5% level with one-tail testing, as the critical value is 0.7818 while the correlation coefficient remained high at 0.92.

  13. Brooks (1985), (1995) has successfully transposed the Aaker and Day concept of purchase determinant in a maritime context looking for salient determinants of carrier choice in liner shipping.

  14. For a comprehensive analysis of market segmentation for consumer and business markets (Kotler and Armstrong, 2001, Chapter 7).

  15. While individual carrier size within the population surveyed in terms of capacity and number of vessels ranged from 120,319 to 773,931 TEUs and from 32 to 312 vessels in 2002, the range of alliance capacity ranged between 300,612 TEUs (87 ships) and 637,684 TEUs (255 ships) as at the end of 2001 (OECD, 2002).

  16. The use of mean values of importance-performance ratings to categorise attributes (Martilla and James, 1977) is a popular option (Matzler et al, 2003; Chu and Choi, 2000). The use of the median as the crossing point in constructing the Importance-Performance Model can avoid the strong bias influences derived from outliers in the six alternatives performance evaluation. The application of the median in importance performance analysis was also recommended in earlier literature (Oh, 2001; Martilla and James, 1977). The use of the median in Figure 2 has allowed the clear discernment among criteria where higher variability existed, pointing to attributes that could be classified as a potential purchase determinant.

  17. See http://www.singapore-window.org/sw02/020410re.htm, accessed November 17, 2003.

  18. At the time of writing of the final draft of the paper, Pusan, South Korea's busiest container port, and Kaohsiung Port both discounted port charges to transit/transhipment container cargo (Damas and Motllery, 2003and UNESCAP, 2002).

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Acknowledgements

The authors are grateful for the co-operation of leading port service providers and of global carriers in the survey. Special thanks are due to two senior shipping executives from global container companies for their insightful comments provided to the surveying author and also to Prof. L. Harris, Cardiff Business School, for comments on the final part of the paper. The authors are also indebted to two anonymous referees for comments.

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  1. Cardiff Business School, Cardiff University, Cardiff, CF10 3EU, UK

    T C Lirn, H A Thanopoulou, M J Beynon & A K C Beresford

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  1. T C Lirn
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  2. H A Thanopoulou
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  3. M J Beynon
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  4. A K C Beresford
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APPENDIX : INTRODUCTORY PAGE OF THE SURVEY QUESTIONNAIRE

APPENDIX : INTRODUCTORY PAGE OF THE SURVEY QUESTIONNAIRE

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Lirn, T., Thanopoulou, H., Beynon, M. et al. An Application of AHP on Transhipment Port Selection: A Global Perspective. Marit Econ Logist 6, 70–91 (2004). https://doi.org/10.1057/palgrave.mel.9100093

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