Port Selection Criteria

Today’s international trade is increasingly more globalized. This increases the importance of port choices in managing the global supply chain. This places more pressure on port operators to deliver quality services to their diverse customers due to the increased competition between ports.

Port users include ocean carriers like container liners and oil/liquid bulk tankers, and shippers such as freight forwarders. Each of them has different perspectives when choosing ports. For example, Southeast Asian freight forwarders view efficiency, ship frequency, adequate infrastructure and location as the more important criterias when selecting ports (Tongzon, 2009). On the other hand, container liners tend to view port charges and the wide range of port services as the important determinants (Tongzon and Sawant, 2007).

These perspectives can be further analyzed. An example is larger vessel operators having different port requirements to smaller vessel operators. Also, shippers with long term contracts who prefer door-to-door deliveries would leave the port choices to the ocean carriers while shippers preferring just merchant haulage would make the port selection themselves (Steven, Corsi and Smith, 2012). Therefore, relative importance of the different port resources vary among the different port users when selecting their ports.

The current transport literature however does not contain much research on the different ports’ intangible resources. As ports worldwide get developed further, their tangible resources tend to only give marginal competitive advantage (Tongzon, 2009). Instead, factors like human capital, Information Technology (IT) capability and port prices seem to become determinants that are increasingly being considered vital by shipping firms when choosing ports. Hence, this research aims to understand the intangible resource preferences of the shipping firms when choosing ports.