Known as the “humble heroes” of globalization, containers are handled in hundreds of millions at container ports worldwide annually. Efficient and well-connected container ports enabled by frequent and regular shipping services are key to minimizing trade costs, including transport costs, linking supply chains and supporting international trade. Thus, port performance is a critical factor that can shape countries’ trade competitiveness. Every hour of port time saved by ships translates into savings in port infrastructure expenditure for ports, ship capital costs for carriers, and inventory holding outlays for shippers.
Recognizing the importance of measuring container port performance, UNCTAD developed the Liner Shipping Connectivity Index (LSCI) in 2004 to determine countries’ positions within global liner shipping networks; the latest country-level LSCI statistics were published in July 2019. Subsequently, on 7 August, UNCTAD launched two new datasets:
1. The port LSCI. This indicator draws upon the same methodology applied to the country-level LSCI. It is developed in collaboration with MDSTransmodal and covers more than 900 ports over the 2006-2019 period.
2. A new comprehensive table that features port calls by country, the typical turnaround time as well as the average size and age of ships. The statistics are derived from automatic identification system (AIS) data in collaboration with MarineTraffic. The first year of coverage is 2018, with updates scheduled every six months.
The two new datasets complement existing UNCTAD maritime statistics and indicators that measure and track progress towards the achievement of the Sustainable Development Goals and their targets. Insights generated by the new data will help businesses and governments identify global trends in liner shipping connectivity and port efficiency as well as monitor the position of their ports within the global container ports landscape.
Container ports – connecting and competing
Ports in smaller countries tend to provide transhipment services to larger neighbouring countries. Often, smaller economies benefit from cabotage restrictions in larger neighbouring countries, as these restrictions limit the options of connecting (feedering) services along the coasts, e.g. of Brazil, India, Japan or the United States. Colombo (Sri Lanka) has a higher LSCI than any Indian port, Montevideo (Uruguay) has significantly improved its connectivity, while the LSCI of Santos (Brazil) has been stagnant. In the Caribbean, Balboa (Panama), Caucedo (Dominican Republic) and Kingston (Jamaica) have long been leading hub ports.
The expanded Panama Canal has led to shifts in service patterns. The LSCI of New York/ New Jersey and Savannah on the east coast of North America grew by more than 20% since 2016, while the leading ports on the west coast of North America have seen their LSCIs stagnate. The all-water route from Shanghai to the east coast has gained competitiveness vis-à-vis the competing land bridge and the Suez Canal route. Ports in Panama and Cartagena in Colombia saw their respective LSCI scores increase significantly. There are still no major hub ports on the west coast of South America.
New investments attract additional services. Investment growth (public and private, as well FDIs) in ports generate new services and activities. It’s worth noting that Piraeus (Greece), operated by COSCO (China), has become the best-connected port in the Mediterranean in 2019. Other ports with Chinese investments that have seen their LSCIs go up include Colon (Panama), Khalifa (UAE) and Lomé (Togo). West African ports have attracted direct services from China, leading to larger vessels being deployed on these routes.
Africa: Both geography and port reforms matter. The best- connected ports in Africa are those located at the north-eastern, north-western and southern edges of the continent, i.e. ports in Morocco, Egypt and South Africa. In comparison, western African ports display relatively lower connectivity levels given their location outside the trajectory of major north-south and east-west shipping routes. Mombasa (Kenya) and Dar es Salaam (Tanzania) connect Burundi, Rwanda and Uganda to overseas markets through dedicated corridors; however, they remain highly congested.
Asia: China’s ports feature at the top of the list. Shanghai is the best-connected port in the world today; it has overtaken Hong Kong, China SAR, which ranked first in 2006. Ningbo doubled its LSCI since 2006. Outside China, the highest LSCI scores were recorded in Singapore and Busan (Republic of Korea). Connectivity in Kobe and Nagoya (Japan) declined over the last decade, reflecting slower economic growth in Japan and the fact that its ports are less competitive as transhipment centres.
Pacific: The plight of Small Island Developing States (SIDS): Pacific Island countries exhibit some of the lowest shipping connectivity levels worldwide. Port Vila (Vanuatu) receives about one container ship every three days, and there are only four companies providing any regular shipping services to the country. In Kiribati, only one operator is offering regular liner shipping services, with one ship arriving about every 10 days. Many SIDS are confronted with a vicious cycle where low trade volumes discourage investments that would improve maritime transport connectivity. At the same time, low connectivity also translates into more costly and less competitive trade.
*To be concluded
Discussion about this post