River Depth and Container Port Market Shares: The Impact of Deepening the Scheldt River on the West European Container Hub-Port Market Shares

Abstract

For the economic and financial evaluation of investment projects in container ports it is important to know the relation between container throughput and the price of using the port, the demand function of the port's services. The accessibility of the Port of Antwerp is greatly influenced by the depth of the Scheldt River. For the assessment of the economic impact of a river deepening project the demand function for the Port of Antwerp is derived. We have distinguished, among other variables of the demand function, a ‘maritime resistance variable’ expressing the time ships have to wait for the tide. This variable appeared to be statistically significant and to play an important role for the assessment of the competitive position of the Port of Antwerp with respect to other ports in North West Europe.

APPENDIX A: ANNEX DATA ON CONTAINER FLOWS AND ATTRIBUTES

Data concerning the continental hinterland

The statistical analyses for the continental hinterland were based on container movements in 2001 between 6 continental hub-ports and the 71 regions in Germany, Netherlands, Belgium, Luxemburg and France and split into rail, road and inland waterway transport. The flows were assembled on the basis of cargo flow and container flow data from ports and modes of transport, from partly public sources and internal sources made available by some of the hub-ports. Empty containers are excluded and no distinction is made for the direction of trade, that is imports or exports.

The price and transit time of hinterland transport by road and rail are related to travel distances, based on a formula by NEA, Transcare and Sterc (2001). For inland waterway transport, prices were based on published tariffs, while an amount was added reflecting pre- and on carriage by road. Frequencies of rail and inland waterway were based on information on published transport schedules.

Data concerning the overseas hinterland

For the overseas hinterland the analysis was based on container movements between five continental hub-ports, two hub-ports in the UK and 10 feeder regions in West Europe, for which sufficient information could be collected on both container flows and the explanatory variables. The cargo flows were assembled using the flows of incoming and outgoing containers transhipped in the hub-ports and generated by the feeder regions in combination with information on the structure of the shipping services offered.

The price of feeder transport was collected through a series of interviews with operators. The transit time of feeder services was derived from the roundtrip time of the services offered.

Data on port specific variables

Maritime access resistance

The maritime access resistance variable expresses the weighted average time that ships have to wait for tidal restrictions and is expressed as follows:

where: A _h , maritime access resistance port ‘h’; C _i , capacity of containerships in TEU for ships of size class ‘i’; W _ihd , waiting time for ships of size class ‘i’ entering or leaving ‘d’ port ‘h’.

Tidal restrictions for containerships are assumed to apply in the ports of Antwerp, Hamburg and Bremerhaven (only in 1997) and not in the ports of Zeebrugge, Felixstowe and Southampton. Since Wilhemshaven is very close to Bremenhaven, this will mean no future bottlenecks in Bremenhaven and an access resistance of zero. Data on tidal windows were collected. The expected waiting time per ship call is equal to the product of the average time ships have to wait (assuming a uniform distribution of ships entering or leaving) and probability that ships have to wait. In formula:

where, W, expected waiting time in hours; T, tidal period in hours, V, tidal window in hours.

The expected waiting times W are assessed for each of the ports, for incoming and outgoing vessels separately, as the tidal window differs in both situations, and for ship size classes of up to 1,000 TEU, 2,000 TEU etc and further of ships in excess of 7,000 TEU. The corresponding capacities C _i concern the capacities of ships calling at all hub-ports and are set equal for each port. The resulting values of A _h , the maritime access resistance of the ports in 2001, were:

Port:

Value in hours

Antwerp:

0.93

Bremerhaven:

0

Hamburg:

0.10

Maritime access cost

For the users of shipping services, ocean freight rates do not vary between the continental hub-ports. There is a difference between the continental hub-ports and UK hub-ports, where freight rates for the latter are higher. For commercial and historic reasons, shipping companies appear to smooth out most differences, which relate to sailing time costs, costs of containers in transit, differences in port tariffs on ship and cargo and terminal handling charges. Maritime access costs are lowest for Zeebrugge and are the highest for the port of Hamburg with a difference of €44 per TEU.

Details on the data used and a description of the collection and assembly of data are available on request (ECORYS (2004)).