Mediterranean ports in global trade networks: managing conflicting interests and sustainable growth

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1 Mediterranean ports in global trade networks: managing conflicting interests and sustainable growth Francesco Parola, University of Naples Parthenope (Italy)

2 Outline 1. The Mediterranean basin: a multi-facet market environment 2. Mediterranean market and international trade: an overview 3. Gateway ports: growth, externalities and conflicting interests 4. Transhipment hubs: towards a spatial re-positioning? 5. Conclusions: incoming trends and challenges

3 Med: an heterogenous market Macroeconomic background - political stability - culture (latin, arab, russian, etc.) - economic growth - consumption / production (country) markets - cost of labor Market-related factors - port model / governance - hinterlands served (extention, connectivity) - capacity of attracting port PPPs (FDI) - generate traffic volumes (gateway / transhipment)

4 Different port sub-regions Castellon da la Plana Algeciras Malaga Arzew Tangeri Oran Odessa Trieste Venice Koper Illychivs k Marseille-Fos Rijeka Genoa Novorossijsk Savona Ravenna Zara Constanta Sete La Spezia Ancona Spalato Ploce Varna Toulon Livorno Dubrovnik Poti Civitavecchia Mersina Bar Mardas Barcellona Bari Durazzo Ambarli Haydarpasa Naples Tarragona Valona Gebze Salerno Salonicco Gemlik Taranto Brindisi Trabzon Valencia Gioia Corfù Igoumenitsa Cesme Cagliari Palermo Tauro Patrasso Izmir Corinto Augusta Pireo Mersin Algeri Skikda Annaba Tunisi La Valletta Bejaia Heraklion Lattakia Mostaganem Sousse Marsaxlokk Tartous Limassol Larnaca Beirut Casablanca Tripoli Haifa Al Khoms Marsa el Brega Bengasi Ashdod Damietta Alessandria El Dekheila Port Said

5 Outline 1. The Mediterranean basin: a multi-facet market environment 2. Mediterranean market and international trade: an overview 3. Gateway ports: growth, externalities and conflicting interests 4. Transhipment hubs: towards a spatial re-positioning? 5. Conclusions: incoming trends and challenges

6 Crude Oil Traffic in major Med ports Port de Bouc Fos Savona Venice Genoa Livorno Trieste Constantza Novorossijsk Tutunciftlik Sarroch Algeciras Augusta Ceyhan Arzew Bejaia Skikda Banias Tartous Zawia Ras Lanuf Zueitina Es Sider Marsa el Brega Sidi Kerir 5 Unloading ports Million tonnes 10 Loading ports 20 Source: author s elaboration from Lloyd s MIU (2006 data).

7 Cruise Passengers Visits (2011) Source: Rodrigue and Notteboom (2012).

8 Gaining a new centrality 100% 90% 24% 20% 15% 13% 80% 40% 70% 60% 50% 42% 44% 47% 45% 40% 41% 30% 20% 34% 37% 37% 42% 10% 19% 0% Transatlantic Transpacific Europe-Far Est

9 Container Throughput in major Med ports Odessa Savona Genoa Trieste Venice Koper Ravenna La Spezia Illychivs k Constantza Novorossijsk Marseilles-Fos Livorno Ambarli Barcelona Palma de Mallorc Naples Salerno Taranto Thessaloniki Haydarpasa Gemlik Algeciras Malaga Alicante Valencia Cagliari Gioia Tauro Izmir Piraeus Mersin Lattakia Tangier (mid- 2007) Marsaxlokk Limassol Beirut Haifa Damietta Ashdod El Dekheila Alexandria Port Said Growth rates Stable or slight decline 15% - 50% 50% - 100% Million TEUs 100% - 200% > 200% Type of port Gioia Tauro hub Barcelona regional port Source: author s elaboration from CI on-line (2007 data).

10 Container Throughput in major Med ports Savona Genoa Trieste Venice Koper Ravenna La Spezia Odessa Illychivs k Constantza Novorossijsk Marseilles-Fos Livorno Ambarli Valencia Barcelona Palma de Mallorc Naples Salerno Taranto Thessaloniki Haydarpasa Gemlik Algeciras Tangier Malaga Alicante Algiers Bejaia Djen Djen Cagliari Gioia Tauro Marsaxlokk Izmir Piraeus Mersin Limassol Beirut Haifa Lattakia Damietta Ashdod El Dekheila Port Said Alexandria El Sokhna Growth rates % - 50% Stable or slight decline 50% - 100% Collapse (-15% / -50%) Million 100% - 200% > 200% TEUs Type of port Gioia Tauro hub Barcelona regional port Source: author s elaboration from CI on-line (2011 data).

11 Outline 1. The Mediterranean basin: a multi-facet market environment 2. Mediterranean market and international trade: an overview 3. Gateway ports: growth, externalities and conflicting interests 4. Transhipment hubs: towards a spatial re-positioning? 5. Conclusions: incoming trends and challenges

12 Historical gateway ports Barcelona Naples Genoa Marseille

13 New paradigms of port development Port generations (UNCTAD) Middle Age XIX century Specialization Downtown Urban expansion Terminal facilities Port-related activities Water depth Rail Highway Reconversion Negative externalities Source: J-P Rodrigue (personal web page) Where is value (employment, richness, FDI, etc.)?

14 Port cities: externalities vs. added-value Spatial concentration of negative externalities (air and water pollution, road congestion) Spatial dispersion of the released value (added-value, employment, investments) Source: Notteboom and Rodrigue (2005) Profound misperception of the balance between pros and cons of port activities by the citizens and the local community

15 The coexistence of different interests Different activities sharing limited spaces and resources MIDAs Tourism/Pax Shipbuilding PORT Logistics & distribution Trade (handling) Navy Many (public and private) stakeholders groups defending conflicting interests.

16 Stakeholders and conflicts Conflicts may be categorized into three large families: i) Legislative gap ; conflicts between governance rules and behaviours fixed by the existing legislation and the requirements dictated by companies real world that requires fast decisionmaking procedures in a complex environmental scenario in rapid evolution. ii) Conflicts among the public and/or private actors of the port community in a loose sense. Among them are the stakeholders that influence in different ways or are influenced by the port management and the port operations. iii) Territorial, social and environmental conflicts, materializing when the port community is in conflict with the external world due to the negative externalities, diverging interests, etc.

17 Outline 1. The Mediterranean basin: a multi-facet market environment 2. Mediterranean market and international trade: an overview 3. Gateway ports: growth, externalities and conflicting interests 4. Transhipment hubs: towards a spatial re-positioning? 5. Conclusions: incoming trends and challenges

18 Transhipment and hubs Gioia Tauro Tangier Med

19 Transhipment The development of transhipment allow Mediterranean to regain a new centrality as: 1) the Med is not anymore a simple transit area within deep-sea trade patterns; 2) transhipment hubs are able to catch cargo along the Europe-Far East trade lane (North-South Europe); 3) new port sub-regions have been able to enter the game (Black Sea, Morocco, etc.); 4) the new port projects stimulated FDIs and the entry of international terminal operators.

20 The generations of hubs Constantza Taranto Ambarli Valencia Cagliari Algeciras Bejaia Djen Djen Gioia Tauro Piraeus Algiers Tangier Enfidha Malta Damietta Port Said El Dekheila (Alexandria) 1st generation (pre-1990) 2nd generation (1990-early 2000s) 3rd generation (early 2000s-late 2000s) 4th generation (late 2000s onwards) El Sokhna

21 The spatial repositioning of TRS Contrary to gateway traffic, whose captive component can not be (easily) contested by the competing ports, transhipment is highly delocalisable! 1) large port spaces at lower costs; 2) lower cost of labour; 3) collaborative support from governments willing to stimulate investments from overseas; 4) the new port projects stimulated FDIs and the entry of international terminal operators.

22 Outline 1. The Mediterranean basin: a multi-facet market environment 2. Mediterranean market and international trade: an overview 3. Gateway ports: growth, externalities and conflicting interests 4. Transhipment hubs: towards a spatial re-positioning? 5. Conclusions: incoming trends and challenges

23 Concluding remarks growing centrality in international trade networks emergence of new sub-regions in deep sea trade (North Africa, Black Sea) historical gateway ports are experiencing a critical phase (traffic diversion, growing conflicts, etc.) delocalization of transhipment operations in lowcost countries the sustainability of the (gateway and transhipment) growth for EU Med ports is questioned...

24 MERCI! Francesco Parola, University of Naples Parthenope