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Horizontal Collaboration in the Maritime Industry: Ports and Terminals

©2013 Textbook 82 Pages

Summary

This study investigates horizontal collaboration initiatives of ports and terminals. It includes the identification of drivers, benefits and barriers. Moreover, it examines how collaboration initiatives can be managed effectively.<br>At first a literature review has been conducted. Secondly, an in-depth case study based on semi-structured interviews with several organizations has been carried out. Both have been compared and discussed.<br>The study confirmed several trends and factors of the existing literature, whilst at the same time new factors have been revealed and some factors have been refute.

Excerpt

Table Of Contents


iv
3.5. Timeline
...
39
3.6. Data
collection
...
39
3.6.1. Secondary
data
...
39
3.6.2. Primary
data
...
41
3.7. Data
analysis
...
43
3.8. Research
quality
...
43
3.8.1. Reliability
...
43
3.8.2. Validity
...
44
3.9. Research
limitations
...
44
3.10. Conclusion
...
44
Chapter 4 - Findings and results ... 46
4.1.
Interview no. 1 - A feeder logistics centre ... 46
4.2.
Interview no. 2 ­ A number of ports of a particular state ... 47
4.3.
Interview no. 3 ­ A german port ... 48
4.4.
Interview no. 4 ­ A german port ... 49
4.5.
Interview no. 5 ­ A german port ... 50
4.6.
Interview no. 6 ­ A german port ... 51
4.7.
Interview no. 7 ­ A german terminal operator ... 52
4.8. Conclusion
...
53
Chapter 5 - Content analysis of the interviews ... 54
5.1. Initiatives
...
54
5.2. Drivers
...
55
5.3. Benefits
...
56
5.4. Barriers
...
57
5.5. Effective
Management
...
58
5.6. Conclusion
...
59

v
Chapter 6 - Analysis ... 60
6.1. Initiatives
...
60
6.2. Drivers
...
62
6.3. Benefits
...
62
6.4. Barriers
...
64
6.5. Effective
management
...
65
6.6. Conclusion
...
67
Chapter 7 - Conclusion ... 68
7.1.
Summary of findings and results ... 68
7.2.
Further research opportunities ... 70
List of references...70
Appendix ... 78
Appendix A ­ Cover sheet, information sheet and interview guideline ... 78

vi
List of figures
Figure 1.1 - Study layout ... 11
Figure 2.1 - Scope of collaboration ... 15
Figure 2.2 - Relationships between competitors ... 15
Figure 2.3 - Horizontal co-operation and the level of integration ... 17
Figure 2.4 - Three types of logistics collaboration ... 18
Figure 2.5 - Value net concept ... 19
Figure 3.1 - The research onion ... 35
Figure 3.2 - Research choices ... 38
Figure 3.3 - The culminating and redefining process of a literature review ... 40

vii
List of tables
Table 2.1 - Opportunities for ports to cooperate ... 20
Table 2.2 - Co-operation activities between ports ... 21
Table 2.3 - Drivers of collaboration initiatives ... 23
Table 2.4 - Benefits of collaboration initiatives ... 27
Table 2.5 - Barriers of collaboration initiatives ... 29
Table 2.6 - Efficient management of collaboration initiatives ... 33
Table 3.1 - List of databases ... 40
Table 3.2 - List of generated key-words ... 41
Table 3.3 - Overview of interviewed contact persons and organizations ... 42
Table 4.1 - Overview of findings from interview no.1 ... 47
Table 4.2 - Overview of findings from interview no.2 ... 47
Table 4.3 - Overview of findings from interview no.3 ... 49
Table 4.4 - Overview of findings from interview no.4 ... 50
Table 4.5 - Overview of findings from interview no.5 ... 50
Table 4.6 - Overview of findings from interview no.6 ... 51
Table 4.7 - Overview of findings from interview no.7 ... 51
Table 5.1 - Content analysis of initiatives ... 55
Table 5.2 - Content analysis of drivers ... 55
Table 5.3 - Content analysis of benefits ... 57
Table 5.4 - Content analysis of barriers ... 58
Table 5.5 - Content analysis of effective management ... 59
Table 6.1 - Colour indications for comparing literature and field research ... 60
Table 6.2 - Comparing initiatives from the literature review and the field research ... 61
Table 6.3 - Comparing drivers from the literature review and the field research ... 62
Table 6.4 - Comparing benefits from the literature review and the field research ... 63
Table 6.5 - Comparing barriers from the literature review and the field research ... 65
Table 6.7 - Comparing facilitators from the literature review and the field research .. 66

viii
Abbreviations
24/7
-
24 hours a day, 7 days a week
ESI
-
Environmental
Ship
Index
Etc
-
Et
cetera
EUR
-
Euro
i.e.
- Id
est
IT
- Information
technology
Mio
-
Million
N/A
-
Not
available
No
- Number
P
-
Page
UNCDAT
-
United Nations Conference on Trade and Development

9
Chapter 1 - Introduction
Several trends, such as globalisation, the growth of shipping alliances, the growing
size of vessels and the development of intermodal transportation, have caused
competition amongst ports and terminals to become intense (Song, 2002, 2003, 2004;
Wortelboer-Van Donselaara and Kolkmana, 2010; Lee and Song, 2007). Nowadays, a
port cannot maintain a monopoly status as it did in the past. To adapt to increasing
competition, ports and terminals are forced to implement new strategies (Song, 2004).
One approach to remain competitive in the changing business environment is the
implementation of collaborative initiatives between ports. By collaborating with other
ports and terminals, benefits can be obtained that cannot be achieved alone. Due to
this relatively new development, literature regarding collaborative practices within the
port industry is quite rare. Detailed investigations regarding the drivers, benefits,
barriers and facilitators are, with a few exceptions, completely absent. In addition,
Song (2004) mentioned in his paper of port co-opetition, that a questionnaire survey
or interview-based research can overcome his content-analysis-based research and
help to build a solid theory. Due to the identified research gap, this study aims to
make a contribution to the field of horizontal collaboration between ports and termi-
nals.
1.1.
Research objective and questions
The overall purpose of this research is to investigate and to analyse horizontal
collaboration initiatives of ports and terminals. This includes the identification of
drivers for collaboration initiatives as well as benefits and problems involved organi-
zations are facing. Finally, it has been examined how collaboration initiatives can be
managed effectively. In order to respond to the research objective, the research
questions have been compiled as listed below:
· What collaboration initiatives are currently being undertaken in the port and
terminal industry?
· What are the drivers for collaboration initiatives?
· What are the benefits and problems experienced by companies involved in
collaborative initiatives?
· How can collaboration initiatives be managed effectively?

10
1.2.
Study structure
The study is divided into six chapters.
Chapter 1
This chapter gives a short introduction to the topic with current trends as well as
informing about the research objective and research questions.
Chapter 2
The second chapter reviews the relevant literature on theoretical concepts, initiatives,
drivers, benefits and barriers. Where port collaboration-specific literature is not
available, the review refers to the literature on horizontal collaboration or even just
collaboration in general.
Chapter 3
The third chapter explains the research methodology including the research design
and research strategy. Furthermore, the data collection process, the analysis process,
the quality of the data and the limitations have been addressed.
Chapter 4
Chapter four presents the findings of the interviews.
Chapter 5
The fifth chapter includes a cross organization analysis and a content analysis where
the findings of all interviews have been put together and the mentions of the respond-
ents have been counted.
Chapter 6
Chapter six discusses the findings from the primary research and compares them to
the relevant literature from the literature review.
Chapter 7
Chapter seven concludes the study and suggests ideas for further research.

Figu
Ch
Ch
Ch
Ch
Ch
Ch
Ch
ure 1.1 depi
apter 1
·
apter 2
· L
·
apter 3
·
apter 4
·
·
apter 5
·
apter 6
·
·
apter 7
·
icts the stud
Introduct
Literature
R
Concepts, In
Research
Findings a
Seven interv
Content A
· Cross inte
Analysis o
Comparison
Conclusio
dy layout.
Figure
ion
Review
nitiatives, Dri
Methodo
and result
views
Analysis o
erviews ana
of the find
n of literature
on
11
e 1.1 - Study L
ivers, Benefit
ology
ts
f the inter
alysis
dings
e review and
Layout
ts, Barriers,
rviews
d field resear
Effective Ma
rch
anagement

12
2.
Chapter 2 - Literature review
This section assesses the existing literature and establishes what research has been
published in the field of collaboration between ports and terminals. It is written as a
critical review and thus makes judgements in terms of value and organizes as well as
summaries the findings and ideas of other researchers that are of value into a review.
According to Saunders, Thornhill and Lewis (2009) a critical review is of importance
as it improves knowledge of a research area and demonstrate awareness of the current
state of knowledge in a subject. In addition, it shows how this research fits into the
research area.
Firstly this chapter defines the term collaboration and reviewed the general concept of
collaboration. Secondly the topic has been narrowed down to collaboration issues and
concepts in the maritime industry of ports and terminals. The last subsections focus on
collaborative initiatives, drivers, barriers and factors on which effective management
is based on.
2.1.
Concept of collaboration
2.1.1.
Definition
The literature provides several definitions for collaboration which varies to a certain
extent. It has to be noted, that the term "collaboration" is used interchangeably with
other terms like "co-operation" or "alliances".
According to Daugherty et al. (2006, p.61) "collaboration involves two or more
independent companies working together to jointly achieve greater success than can
be attained in isolation". This definition is clearly focused on the objective, which is
supposed to be a "greater success". This focus is also part of the definition from
Lupgens (2004 cited in Wortelboer-Van Donselaara and Kolkmana, 2010, p.271),
which states that "co-operation is a relation between two or more parties with
compatible or additional interests or aims where the relationship is foreseen to be of
reciprocal advantage". Both definitions focus on the mutual gain as an output of the
collaboration initiative. But a question has to be asked about the input of such
initiatives as no definition mentioned this. The definition of UNCDAT (1996, p.3)
helps to answer this question. The organization describes collaborations as "joint

13
activities carried out by at least two parties who are reciprocally committed. Each
party commits resources such as financial resources, know-how or time, etc., and
draws advantages from the co-operation such as financial savings, improvements in
quality of services, increased market share, etc.". In contrary to the other explanations,
this definition describes the input and the output as "reciprocally committed" and
therefore provides a comprised definition.
Mentzer, Foggin and Golicic (2000) diversified the terms collaboration and co-
operation. According to an interview with supply chain executives, the authors
conclude that collaboration includes much more about information-, knowledge-, risk-
and profit-sharing than co-operation. Anyhow, all definitions highlighted the
importance of aimed objectives i.e. profit or greater success in general.
The importance of the collaboration objective can be strengthened by Wortelboer-Van
Donselaara and Kolkmana (2010, p.271), who pointed out that "co-operation between
companies is not an aim in itself, but a means to reach a certain objective". Regarding
the objective one can diversify in tangible and intangible objectives. On one hand,
Sandberg (2007) claimed, that researchers found lowered total costs, improved service
and shorter lead times as the main objectives. On the other hand, more intangible
effects like the objective to strength the market position and increase competitiveness
can be seen as a driving force to setup collaboration initiatives.
2.1.2.
Ways of collaboration
Barratt (2004) provides a framework with various ways of collaborating. The ways
can be mainly categorized into two forms; vertical and horizontal (Figure 2.1). Beside
the horizontal and vertical form, Simatupang and Sridharan (2002) defined the lateral
form of collaboration.
In a supply chain context, the vertical form includes collaboration with customers,
suppliers and internally (Barratt, 2004). Vertical collaboration within the port industry
mainly deals with supply chain integration of ports and includes activities like
providing value added services, integration of transport modes and IT-systems,
building a relationship with shipping lines, and inland transport providers (Song and
Panayides, 2008) as well as providing dedicated terminals to shippers (Bichou and
Gray, 2005).

14
The horizontal form of collaboration is a relationship between competitors, non-
competitors or internal departments (Barratt, 2004). In the port industry, this way of
horizontal integration is often conducted due to port co-operation and mergers
(Bichou and Gray, 2005).
By comparing horizontal and vertical collaboration, Bengtsson and Kock (1999,
p.178) stressed that "horizontal relationships between competitors have not been
analyzed to the same extend as vertical relationships". This general statement seems
to be also valid for the port industry as Bichou and Gray (2005, p.85) maintain that
"horizontal integration strategies were less common in the past but are gaining more
support in recent years". Furthermore, Bengtsson and Kock (1999) argue, that vertical
relationships are easier to capture due to their nature of economic activities among
supply chain members. "Horizontal relationships, on the other hand, are more
informal and invisible" (Bengtsson and Kock, 1999, p.178). Nevertheless, both types
of relationships can be equally valuable for a firm.
Regarding the internal form of collaboration (across functions), Barratt (2004, p.32)
pointed out the importance of internal collaboration by saying that many companies
see external collaboration as a "fresh battlefield which is free of many of the
longstanding internal disputes".
The lateral form of collaboration is a combination of the horizontal and vertical form
and mainly aims "to gain more flexibility by combining and sharing capabilities"
(Simatupang and Sridharan, 2002, p.19).

2.1.
Ben
fram
3.
Horizo
ngtsson and
mework of f
ntal relatio
d Kock (199
four differen
Figu
Figure 2.1
(
onships
99) investig
nt types (Fi
ure 2.2 - Rela
(Bengts
15
- Scope of co
(Barratt, 2004
gated in hor
gure 2.2).
ationships bet
sson and Koc
ollaboration
4)
rizontal rela
tween compet
ck, 1999)
ationships a
titors
and develop
ped a

16
At first, the co-existence relationship includes only social and information exchange.
No economic exchange is taking place, and the companies are reaching their goals by
themselves. In the competitive relationship, both companies have same sources, same
aims and same customers. This results in an action-reaction pattern. Bengtsson and
Kock (1999) call this relationship a "zero-sum game". Within the type of co-opetition
relationships, companies are collaborating in some fields while at the same time
competing in other fields. When co-operating, tight links are established between both
companies including economic-, information- and social-exchange.
According to the definition of collaboration, which has been made at the beginning,
co-existence and competition relationships cannot be treated as collaborative relation-
ships. Consequently the study focuses on co-opetition and co-operation. Both forms
include joint activities and can therefore be treated as horizontal collaboration.
2.1.4.
Horizontal collaboration
The general definition of collaboration has been discussed at the beginning and need
now to be specified for horizontal relationships. The European Union (2001, p.2)
claims that "a co-operation is of a `horizontal nature` if an agreement or concerted
practice is entered into between companies operating at the same level(s) in the
market". Therefore, the level of the market in which firms are operating can be
considered as the specifying factor.
Within the literature there are many authors presenting several types of collaboration
in terms of the intensity (Lambert, Emmelhainz and Gardner, 1996; Zinn and
Parasuraman, 1997; Spekman, Kamauff and Myhr, 1998; Muckstadt et al., 2001;
Gulati and Kletter, 2005). Most of them are mentioned in a supply chain context. Due
to the statement of several authors, that not supply chains but networks compete
against each other (Christopher, 2005; Pfohl and Buse, 2000), the classification of
Lambert, Emmelhainz and Gardner (1996) will be presented in this study which
focuses on networks. They developed a classification for the vertical form of
collaboration, later on Visser (2007) and Cruijssen, Dullaert and Fleuren (2007)
adapted it to the horizontal form of collaboration (Figure 2.3).

17
Figure 2.3 - Horizontal co-operation and the level of integration
(adapted from Cruijssen, Dullaert and Fleuren, 2007)
The classification shows that there is a minimum and a maximum level of collabora-
tion (Arm´s length and horizontal integration). Arms length relationships consist of
one-time exchanges or multiple transactions, a sense of joint operations is not present.
Type 1 co-operations include jointly coordinated activities, which are limited in terms
of time, strength, closeness etc. Type 2 co-operations have a long-term horizon and
the involved organizations are planning and conducting integrated activities. Type 3
co-operations can be seen as "forever" as the organizations see the other firm as an
extension of itself; activities are very close integrated. Horizontal integration includes
merger activities and joint ventures (Lambert, Emmelhainz and Gardner, 1999). As
this study follows the definition of collaboration made by UNCDAT (1996), where
joint- operations and planning are elementary components of the collaborative
initiative, all types of collaboration except the arm's length type will be investigated.
Vos et al. (2003) as well as Wortelboer-Van Donselaara and Kolkmana (2010)
identified a classification and maintain that collaboration can take place at the
operational, coordination and strategic level. Vos et al. (2003, cited in Visser, 2007)
defines different types of collaboration by three characteristics, which are scope,
objective and horizon (Figure 2.4). According to him, operational collaboration uses
the existing network and deploys activities more efficient within a short time horizon.
Consequently the time horizon is extended in the coordination collaboration form
which reduces costs by coordinating two organizations. Finally at the strategic level of
collaboration, partners invest together to restructure the network and work together on
a long term basis.
T
ra
n
sa
ct
io
n
a
l
Relati
o
n
al

18
Figure 2.4 - Three types of logistics collaboration
(Visser, 2007)
2.1.5.
Horizontal collaboration in the maritime industry
Within the port collaboration-specific literature, Hwang and Chiang (2010) identified
two types of port co-operation which are in line with the distinction made by
Bengtsson and Kock (1999) (Figure 2.2). This are complementary co-operation and
co-opetition. Hwang and Chiang (2010) explain that "complementary co-operation is
developed as a port needs another port and it also can create situations where ports
may complement one anthers competitive advantage". Relationships between hub and
spoke networks are one example mentioned by Yap and Lam (2004).
Collaboration due to the form of co-opetition has been introduced to public discussion
by Brandenburger and Nalebuff in 1996. Song (2003) applied this concept in the port
industry. Co-opetition can be defined as a combination of competition and co-
operation (Noorda, 1993 and Song, 2004). Song (2004) says that co-opetition is a
strategic approach for organizations in the same market to reach a win-win situation
instead of a win-lose one. Hamel, Doz and Prahalad (1989) add that it is a practice of

19
collaborating to compete and that partners can strengthen each other against outsiders.
Research in this area confirms that there is a positive correlation of the level of co-
opetitive relationships and the ability to remain competitive (Massanti and Zoboli,
2008 and Macedo and Martins, 2008). Co-opetition mainly bases on the theory, that
beside the group of suppliers, customers and competitors, there is another group
interacting in business which can be called "complementors" (Brandenburger and
Nalebuff, 1996). Song (2004, p.3) defines a complementor as "a player whose
products or services are complementary to the company´s production". The
expression "player" has its origin from Brandenburger and Nalebuff (1996) who
applied game theory to explain co-opetition. The players are illustrated in the Value-
Net framework which has been developed for a general business view. Hwang and
Chiang (2010) have modified this framework in order to apply it to the port industry
(Figure 2.5).
Figure 2.5 - Value net concept
(Hwang and Chiang, 2010)
2.2.
Collaboration initiatives
Collaboration amongst ports and terminals can take place in several fields. Brooks et
al. (2011) identified 21 different initiatives of port collaboration involving more than
70 ports on five continents. The initiatives for ports located in the same geographical
region often include joint development of infrastructure, joint regional marketing and
promotion as well as common approaches to environmental issues. Common
collaboration activities for ports located in distance to each other are joint training,
technical co-operation, sharing of information on port development, environmental
activities and the development of common positions at international fora. These
findings are also in line with UNCDAT (1996), which furthermore claims that the

20
conclusions from the maritmime meetings between 1986 and 1990 shows, that
collaboration initiatives like training, exchange of know-how, standardization of
statistics and tariffs, and participation in the activities of regional and international
port associations are well developed and used quite often. On the other hand, co-
operation initiatives consisting of "joint investments in equipment and infrastructure
on a commercial basis was not reviewed" (UNCDAT, 1996: p2). Furthermore, Song
(2004) claimed that collaboration in the way of co-opetiton is a new concept in the
port industry. In addition, UNCDAT (1996) as well as the Association of Danish
Transport and Logistics Centres (2009) distinguish collaboration initiatives into
formal and informal. According to them, formal collaboration relies on legal
agreements and written contracts. Informal collaborations are "ad hoc in nature" in
order to react to a specific situation.
Beside specific activities, the Association of Danish Transport and Logistics Centres
(2009) provides an overview where potential opportunities exists for port
collaboration. These have been listed in Table 2.1 and a short explanation is provided
in the same row.
Activity
Explanation
Inland Terminals
Co-owned and managed intermodal inland terminals by various ports.
Planning
Joint planning in the areas of developing port infra- and supra-structure.
Waterways
Common maintenance of waterways like dredging etc.
Marketing
Joint promotion and marketing activities.
Environmental
protection and
monitoring
Working together on projects to reduce the impacts of port-operations on the
environment. Sharing experiences with new equipment could be one way.
Training and human
resources
Ports could pool resources to offer joint courses to improve the skills of the
employees.
Rails & Road
infrastructure
Working together to improve the infrastructure to and from the port.
Information and
Communication
Technology
Ports can jointly develop and adapt IT-systems, which have the same
standards in all participating ports.
Table 2.1 ­ Opportunities for ports to cooperate
(adapted from the Association of Danish Transport and Logistics Centres, 2009)
Brooks et al. (2011) developed general categories where previous mentioned areas
and initiatives can be distinguished and therefore gives a comprehensive overview of
port collaboration initiatives. The categories are: Marketing and business
development, operations, administrative and regulatory. These categories are used as a

Details

Pages
Type of Edition
Erstausgabe
Year
2013
ISBN (eBook)
9783954896059
ISBN (Softcover)
9783954891054
File size
797 KB
Language
English
Publication date
2013 (August)
Keywords
co-operation maritime logistics co-opetition horizontal collaboration maritime industry partnerin Ports and terminals
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