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Container hub port development in a peripheral location: The case of Indonesia

Wiradanti, Bahana 2019. Container hub port development in a peripheral location: The case of Indonesia. PhD Thesis, Cardiff University.
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Abstract

This PhD research is sponsored by the Indonesia Port Corporation (PT. Pelabuhan Indonesia II Persero) with an aim of identifying ways for Indonesian ports to contribute to the nation’s economic growth. There are always two sides to a story. The large and small; the centre and periphery. Since containerisation in the late 1950s, research in maritime transport has been looking at trends in port competition, how ports are chosen by shipping lines to be their port of call and concentration of cargo in particular ports or regions. From this concentration, large world hub ports have emerged undertaking transhipment activities, enabling economies of scale, cost saving and increased connectivity links to more destinations. In contrast, this research considers smaller ports in peripheral locations. Increasing containerisation and large ship sizes increased the need for transhipment in order to transport container cargoes around the globe. This includes the rise of secondary hub ports from smaller peripheral ports. The main purpose of this research is to explore how a container hub port in a peripheral location could capture opportunities of growth, or in other words to identify factors for a peripheral port to reduce its peripherality by becoming a hub. Besides contributing to peripheral ports research which is still understudied, this study combines literature from port concentration/deconcentration, peripheral port challenges, port selection factors and hub port choice. The Indonesian ports and maritime transport industry are chosen as the focus of this empirical study because Indonesia is a developing country with one of the longest coast lines and a significant number of small container ports. Furthermore, Indonesian ports are still understudied. A survey research strategy using mixed methods is conducted. Players in the Indonesian maritime transport industry in a national level is the population for data collection and non-probability sampling is used. Respondents are customers of a port operator company, which approximately handles 50% of the entire flow of goods coming in and out of the country. Qualitative interviews were conducted to understand the meaning of peripherality, identify concentration-deconcentration factors and willingness of stakeholders to expand business in peripheral locations. This phase consisted of 13 preliminary interviews to a port operator company and main interviews to 46 respondents which represents 7 types of stakeholders (port operators, shipping lines, cargo owners, logistics companies, central government, local government and financial institutions). Interviews were transcribed and analysed using Nvivo 11, qualitative data software. Meanwhile, quantitative data was collected through an online survey questionnaire to reduce 111 item variables from 7 latent variables identified from literature and interview results. These variables were analysed through Exploratory Factor Analysis, to identify critical factors for a peripheral port to become hub. Results shows that peripherality is a cycle. Peripheral locations with low cargo volume lead to low shipping connections, low port performance and infrastructure, low economic activities, low population and political power, and returns to low volume. To break out of the cycle, cargo volume needs to be generated, new market and routes opened and hub dependence to be shifted to emerging secondary hubs. Quantitative results show that there are 66 item variables from 3 main factors identified for a peripheral port to become a hub, which are: standardised port operations; clear policy, financed and governance; and positive spatial aspects. Implications of the research is addressed to the sponsor, to the literature and to peripheral ports in developing countries globally.

Item Type: Thesis (PhD)
Date Type: Acceptance
Status: Unpublished
Schools: Business (Including Economics)
Uncontrolled Keywords: peripheral ports, peripherality, container hub ports, port development, Indonesia.
Date of First Compliant Deposit: 9 April 2019
Date of Acceptance: February 2019
Last Modified: 09 Apr 2019 11:12
URI: http://orca.cf.ac.uk/id/eprint/121630

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