Heiner Heseler New strategies of port enterprises and their effects on the structures in the seaports

Transcription

1 Heiner Heseler New strategies of port enterprises and their effects on the structures in the seaports I. Introduction In the 1990s the port industry has witnessed fundamental changes worldwide. Following the triumph of containerisation in the seventies and eighties, the challenges of the nineties were globalisation and privatisation. Ports have always been involved in world trade as an important link in the chain of international transportation. Seen from this point of view, globalisation is not a new development. But port operators were normally limited to a local or national sphere of activity, and often partly or wholly state-controlled. Cross-border alliances or mergers were the exception. For these reasons, ports were the weakest link in the transportation chain. Very often they were trapped in a functional squeeze between forwarders and shipping lines which had formed worldwide alliances. The direct net product of the ports dropped due to the high degree of rationalisation achieved by containers. Many port operators diversified and branched out from the loading and unloading of goods into the field of logistics. However, this expansion into preand post-handling activities was only to a limited extent. In addition, many activities which were formerly performed in the ports as a matter of course, can now be carried out anywhere, even far away from the ports or coast themselves. In past years more and more alliances, joint ventures and mergers have been formed. The rise of global stevedores operating worldwide, national and transnational joint ventures and mergers, and privatisation of port activities - all these developments have become general trends which have considerably changed the competition factor in and between the ports. These new strategies and their effect on the structure of the port economy is the subject of the following contribution. It is concentrated on container ports and container handling. 9

2 II. Some basic trends The container has changed the ports more than any other development. Since 1980 container traffic has tripled and in 1998 reached a level of 188 million TEUs. An end of this growth in container traffic and the degree of containerisation is nowhere in sight. The projected outlook for the world market is an increase in container volumes of 40% to 220.4m TEU over the period, reaching 300m-342m TEU by 2005 and 407m-525m TEU by (OSC 1997) Drewry s forecast may be more cautious (Drewry 1998), but it also anticipates container volumes at ports worldwide reaching million TEUs by This is the equivalent of an annual growth rate of 7.4%. This scenario is based not only on the expected increase in world sea-trade; it also takes into account the effects of the Asian crisis and more especially a particularly high increase in transhipment traffic (feeder services). In the past, port growth was nourished on the one hand by the fact that world trade and shipping grew faster than the GNP (GDP), and on the other by the steady increase in container traffic. In many big ports of the world today, the degree of containerisation has reached more than 90%. Degree of containerisation for selected ports (in per cent of general cargo) Port Singapore 86,7 89,1 90, ,7 92,7 Hong Kong,,,,,, 80,4 84,6 82,7 84,3 Long Beach 93,2 94,2 94,8 96,9 96,6 96,6 Busan 91 85,3 86,6 87,7 85,2 Rotterdam 66,3 67, ,4 72,8 73,8 Antwerp 43,4 43,4 48,9 50,9 59,2 58,8 Hamburg 77,6 81,4 82,9 84,6 88,4 90,6 Oakland 90,2 91,7 92,5 91,5 90,1 92,2 Bremen Ports 63,6 67,2 70,9 73,4 74,9 75,5 Source: ISL 10/99 In the future a further increase in the degree of containerisation is also anticipated. Many lesser developed ports have a considerable potential and in many regions new terminals will be created. Other types of commodities will also be transported increasingly in containers (eg dry bulk). Another expansion factor for container traffic in sea-ports is to 10

3 be seen in the increasing importance of transhipment. 1 Big container ships call at only a few container terminals; from there the containers are forwarded to smaller ports by feeder vessels (Hub and spoke). The proportion of transhipments in container traffic as a whole grew from 12% in 1980 to 30% in As feeders grow in size, this volume will also increase. In some ports, the transhipment rate is as high as 80% (for example Gioa Tauro, Malta, Algeciras). For these reasons, container volumes will almost certainly continue to expand in the next decade. These expected growth rates call for considerable investment. In the past, most leading ports invested huge amounts of money in the modernisation and extension of container handling as well as in the creation of new terminals. This trend towards more investment in this field seems to be continuing, although repeated warnings have been made on the dangers of overcapacity. The Drewry Report already cited estimates that in the period up to 2005 over 100 million TEUs of additional handling capacity will be required (Drewry 1998). This corresponds to an investment requirement of $29bn, or the equivalent of 200 new container terminals worldwide. Despite the growth in handling, earnings achieved by port operators through containers dropped in some instances. Based on a survey of port operators, Lemper concluded that in the European north range (between Le Havre and Hamburg) average earnings per container rose in the eighties, but dropped in the first half of the nineties. 2. At the same time, according to the survey, the utilisation of terminals steadily decreased. Due to fierce competition and the political significance of the ports in the north west range, these investments were sometimes made in spite of the low earnings achieved. As port infrastructures are mostly state financed and suprastructures occasionally subsidised, the costs resulting from overcapacity are carried only to a certain extent by the port operators, which are often partly or completely owned by the state. The need for continued expansion investment in container terminals was also the result of the increased market power of the shipping lines gained in the eighties through mergers and alliances. The major carriers expect their vessels to be able to berth at the 1 The transfer of good in a port from one ship to another, may be direct or it may be necessary to discharge the goods on to the qua prior to loading them to another ship. It covers also interlining/relaying, crossfeedering and the transfer of cargo onto overland transport for the next leg of cargo`s journey. see Cargo Systems Report 1998 p.33 2 Up-to-date and publicly accessible figures on this subject are not available (see Lemper 1996 p. 178ff). In particular, it is not possible to determine the exact extent of overcapacity. The trend towards lower prices is also confirmed by Schiffer (see Schiffer 1999). 11

4 terminals without having to wait and to be loaded and discharged in as short a time as possible. Due to the keen competition in and between the ports, they can enforce these demands. III. Globalisation and Privatisation - Trends in the Nineties In the course of the 1990s, joint ventures, strategic alliances or mergers within and between ports have become extremely important. Trans-national and inter-continental amalgamations have led to the creation of new company groups and global players, which have in turn brought about lasting changes in inter-port competition. Three trends can be recognised: 1. The emergence of global stevedores 2. Alliances, international cooperation or mergers between port companies 3. Alliances between shipping lines and port operators. First of all I would like to outline the main developments and later look into the causes of this new form of globalisation. 1. The worldwide operating global stevedore In the last ten years, some port enterprises have built up a worldwide network of terminals; the three most important are: Hutchison Ports Hong Kong (HPH), PSA Singapore, P&O Ports Australia followed by ICTSI Philippines and SSA USA. These five concerns account for around 30% of the world's annual container liftings. 3 IV. Hutchison Ports Numerous acquisitions in the nineties have made HPH the biggest port enterprise in the world. It currently operates 17 container terminals in Asia, America and Europe handling a volume of almost 15 million containers in about 10% of the world market. Hutchison is based in Hong Kong, where the concern is the biggest terminal operator. It owns 88% of Hongkong International Terminal (HIT) and 44% of Cosco-HIT. HIT handles around 5m TEU of HPH. The new River Trade Terminal is wholly owned by HPH. 3 See Lloyd's List August Linking up with global giants 12

5 International expansion began in 1991 with the acquiring of a majority share in Felixstowe, the UK s largest container port. In 1998, Hutchison extended its activities in England with takeovers of Thamesport and Harwich. Since 1993 it was involved mostly in widespread investments or joint ventures with Chinese ports. Together with the Shanghai Port Authority, the 40%-owned SCT (Shanghai Container Terminals) operates three terminals with ten berths. After major refurbishment and terminal conversion, SCT can now handle more than 2.05 million TEUs per annum. In Shenzhen, HPH has a controlling stake in Yantian International Container Terminals (YICT), one of China's four designated international deep-water ports. Upon completion of phase II scheduled in 2000, Yantian Phase I and II will provide six container berths with a total annual capacity of two million TEUs. A network of six river/coastal ports in the China is controlled by Hutchison Delta Ports, a subsidiary of HPH, established to develop and operate smaller Chinese ports. They attract cargo from the hinterland for transportation to hub ports for onward shipment to final destinations worldwide. They will also provide port and containerisation facilities for the growing intra-asia trade. In strong competition with US-American competitors HPH was awarded rights to operate a 25-year concession to develop Panama's two canal ports Balbao and Cristobal for transhipment traffic. On completion of the modernisation both ports will have a combined annual throughput capacity of 650,000 TEUs. In operating these ports at the opposite ends Panama Ports Company (PPC) a subsidiary of HPH provides the link and strategic access for the trans-atlantic and trans-pacific trades to the east and west coasts of the Americas and the Caribbean. In partnership with the Grand Bahamas Development Company, HPH is developing a deep-water transhipment container port in Freeport, Bahamas. The first phase of Freeport Container Port (FCP) provides a capacity of 560,000 TEUs, with room for further expansion. HPH was not successful in all ports. The planned takeover of the port of Ipswich fell through as well as an involvement in the Philippines. Projects in Italy and Germany were also not realised. In 1997 it had expressed interest in acquiring a majority share of BLG. But in other countries, expansion continued. In 1997 ECT won the concession to operate Trieste's Molo VII container terminal and is also investing in a completely new container terminal at Duisburg. It 13

6 has also emerged as the operating partner in one of three consortia bids for the proposed transhipment hub at Tanger. 4 In 1999 HPH gained a 35% share of ECT Rotterdam, Europe s biggest container terminal, handling almost three quarters of all containers in the port of Rotterdam. In the same year, ECT handled 4.5 million TEU and employed 2300 workers. This move was met initially by fierce opposition from shipping lines, who feared higher prices due to the concern s increased market power. With the involvement in ECT, HPH now controls about a quarter of container handling in north-west Europe. The final decision in this case depends on the results of an investigation by the European Commission. This involvement with ECT means not only an increase in the strategic significance of northern Europe. ECT itself is also developing more and more into an international port enterprise. Development of HPH compared to selected container ports (in 1000TEU) Hutchison Ports Rotterdam Hamburg Bremen Ports see Lloyd's List August Terminal firms flock to sell-off opportunities 14

7 In the nineties Hutchison realised growth rates in container handling far above average. These were based both on the expansion in the "home terminals" in Hong Kong and on the acquisition-strategy in Asia, Europe and the Carribean. V. PSA Singapur After Hutchison, PSA Singapore has progressed to become one of the fastest growing global players in container handling. The former Port of Singapore Authority converted to a private company in It performs container handling in the port of Singapore, which with 15 million TEUs in 1998 overtook Hong Kong for the first time as the world s biggest port. By the year 2007, PSA intends to handle at least 10 million containers outside of Singapore; until then an annual investment of $300 million is planned. Eight terminals in Asia, Middle East and Europe have already been taken over completely or partly by PSA or are under construction: Dalian Container Terminal, China Fuzhou, China Tuticorin Container Terminal, India Pipavav, India Muara Container Terminal, Brunei Aden Container Terminal, Yemen Inchon, the main port of Seoul. South Korea in a joint venture with Samsung to be opened in 2003 Voltri Terminal Europa, Genoa, Italy Sinoport Portugal In 1999 negotiations were completed on a 60% involvement in the construction of a new container terminal in southern Portugal (Port of Sines, 170 km south of Lisbon). A container throughput of around 250,000 TEU in 2005 and 825,000 TEU by 2010 is expected. Like HPH, PSA expanded at first in the Asian region, focusing on India before securing strategic holdings in European ports. Although PSA could not compete with Hutchison in Rotterdam, it did manage to secure a strategic share of Sinport and so controls together with FIAT Genoa s most modern container terminal. Voltri Terminal Europa (VTE) is the largest privately owned container terminal in Genoa and one of the most modern ports in Italy. The start of operations at Voltry in 1994 was one of the main factors for the re- 15

8 emergence of Genoa as the premier port in Italy. It handled about 550,000 containers in It also holds a 53% share in the container terminal of Venice. Vecon, which operates the Venice Container Terminal, handled more than 200,000 TEUs in Now PSA operates container terminals on the Tyrrhenian and Adriatic coasts of Italy. VI. P&O Ports P&O Ports a subsidiary of P&O Nedloyd, the British-Dutch shipping line - had originally developed a core network of ports in Australia. The company operates large-scale terminal facilities in each of the major container ports in Australia, including Sydney, Brisbane, Melbourne and Fremantle. In the nineties it won influence or shares in more than fifteen ports in other countries (Cargo Systems 1998 p.20). P&O Ports handles a throughput of about 8 million TEUs worldwide, representing 4% of world trade. With more than 12,000 employees, P&O Ports is rapidly expanding in all continents. P&O Ports: Container handling 1999 by countries Land 1000 TEU UK Australia Indonesia Philippines 540 USA 510 Argentina 500 India 470 Mozambique 420 Thailand 340 SriLanka 310 Pakistan 190 Russia 60 Source: P&O Ports The expansion started in Asia with the setting up of Bangkok Modern Terminals (1988). Now its portfolio of existing and planned ventures comprises container and bulk ports in many Asian countries, Europe, South America. Nowadays P&O Ports is moving into Turkey and Surabaya and emerging as the preferred bidder for Kandla in India. P&O Ports is planning a US$300m spending spree at the Pelindo III Surabaya International Container Terminal after winning a US$173.76m deal to take a 49% stake in the complex at Tanjung 16

9 Perak. 5 The Australian Company has been picked by the Kandla Port Trust to develop a new container terminal at the Indian port on a build, operate, transfer basis. 6 Its Container Terminal at the Jawaharlal Nehru port, near Mumbai, is nearing completion. The P&O Ports bid edged out rivals including Hutchison Ports of Hong Kong and the PSA Corporation of Singapore, both of whom had been short-listed for the project. The next move will see the group announce its first acquisition in the United States later this summer. Today P&O Ports is the world's largest international port developer in terms of terminal spread. 7 In Europe, P&O Ports started to set up a container terminal network in the Mediterranean including ports in Italy, Turkey and Egypt. There were also suggestions that P&O Ports is interested in the privatisation of the Greek ports Piraeus and Thessaloniki. In Italy it bought a 20% stake in the Italian holding company port company Gruppo Investimenti Portuali (GIP) in 1997 and increased its share to 50% in The purchase will see P&O take control of Genoa's south European container hub terminal, which handled about 270,000 TEU in It gained also influence in the Mediterranean international transhipment hub of Cagliari, which has a potential annual capacity of 2m TEU and will be operational later this year. Cagliari is a central port for both eastern and western Mediterranean transhipment. 8 In the United Kingdom P&O Ports operates two container terminals with local strategic partners: it is a 51 per cent shareholder of the Southampton Container Terminal, SCT, and owns the Tilbury Container Services Limited (TCS) jointly with Associated British Ports (ABP) and Forth Ports. 5 LLP June P&O Ports Australia wins Surabaya deal 6 LLP May P&O Ports awarded Kandla contract 7 LL June No-nonsense Hein puts P&O Ports on fast track 8 see Feb 20, 1998 Italians take the lead over regional rivals 17

10 The global stevedores: Overview Ports/Terminals Hutchison Port Holdings (HPH) Hongkong International Terminals (HIT) River Trade Terminal Company HK China: Hutchison Delta Ports Jiangmen International Container Terminals Nanhai International Container Terminals Shantou International Container Terminals Xiamen International Container Terminals Zhuhai International Container Terminals (Gaolan) Zhuhai International Container Terminals (Jiuzhou) Yantian International Container Terminals Guanlan Inland Container Depot Shanghai Container Terminals Jakarta International Container Terminals Myanmar International Terminals Thilawa Freeport Bahamas (Caribik) Cristobal and Balbao (Panama channel) UK: Felixstowe Thamesport Harwich ECT Rotterdam PSA Corporation, Singapur runs the Singapur`s port operations Dalian Container Terminal, China Fuzhou, China 30 year concession to develop and operate the southern Indian port of Tuticorin (opening Dec 1999) 60% share in Sinport, a holding previously wholly owned by Fiat Voltri Terminal Europa, Genoa, Italy Venice Container Terminal Agreement to build a container port with capacity of 1.3m TEU in Portugal's southern port of Sines 18

11 Aden Container Terminal, Yemen Muara Container Terminal, Brunei Pipavav, India Building a container terminal at Inchon, South Korea in a joint venture with Samsung (opening 2003) P&O Ports Terminals in most ports in Australia Bangkok Modern Terminals Colombo Kandla container terminal, India (30-year concession) Pelindo III Surabaya International Container Terminal Terminales Rio de la Plata, Buenos Aires International Terminal Operating (ITO), Jersey City, u.a.: Baltimore, Miami Gulfport Gulf Services New Orleans 49% of new terminal operating company in Qingdao Shenzhen Tianjin bid for Shell Haven on the Thames 51% share in Container port Southampton Tilbury Container Services Limited (TCS) Seaport Terminals' Antwerp bid for third container terminal in Antwerp inland terminal at Duisberg Gruppo Investimenti Portuali (GIP), Italy Cagliare Genoa's South European Container Hub terminal Flavio Gioia Terminal, Naples International Container Manila International Container Terminal Terminal Services Inc (MICT), Philippines (ICTSI), Port of Buenos Aires, Argentina Port of Rosario, Argentina Specialized Container Terminal Veracruz, Mexico Berths 22-24A Port of Karachi, Pakistan 19

12 Stevedoring Services of America (SSA) Eurogate (Eurokai/BLG) Ensenada Container Terminal, Mexico Container and Reefer Cargo Terminal, Saudi Arabia 9 terminals in USA Chittagong,Bangladesh Interest in planned Gibraltar hub Puerto Cortes Manzanillo, Mexico Bremerhaven incl. North Sea Terminal, Eurogate/Maersk-SeaLand Hamburg Gioia Tauro La Spezia. Klaipeda (Litauen) Sepetiba (Brasilien) 20

13 Other global stevedores are International Container Teminal Services (ICTSI) Philippines, the US Stevedoring Services of America (SSA) and Ceres Terminals. ICTSI has ports in Manila and Cebou, in Buenos Aires, Veracruz, Ensenada (Mexico) and in Pakistan and Saudi Arabia. In 1998 ICTSI S volume handled in terminals in Asia and South America totalled 1.75m TEUs and it is expected to increase to over 2.2m TEUs in SSA operates nine terminals at the US west- and east coast and has interests in Central America, South East Asia, South Africa and India. The group handles around 3m TEU annually. Ceres Terminals operates 29 terminals in the USA and Canada and started in 1996 terminal operations in Odessa, Ukraine. In the same year Ceres Terminals bought Combined Terminals Amsterdam which went in receivership after its former owners, Nedlloyd and Internatio-Muller, withdrew from stevedoring activities in Amsterdam to concentrate on their facilities in Rotterdam. In this year Ceres Terminals together with Amsterdam port Authority won approval to build the first `indented berth' that will enable cranes to work a vessel from both sides. The terminal will have a capacity of 610,000 containers or 950,000 TEU a year, with productivity of up to 300 container moves an hour targeted. It will be designed to handle the very largest containerships afloat. The container handling in the Amsterdam port has virtually disappeared since a number of customers rationalised their services a couple of years ago. After 2001 it will start again. Deregulation, Port privatisation, carrier globalisation and the expectation for high profits are the main factors for the emergence of global stevedores or terminal operators. 9 Other reasons include: increasing competition in core markets looking for additional sources of revenue spreading risks setting up networks of facilities to increase cargo volumes for given ports attracting further customers by offering standardised as well as harmonised services on a network of ports potential to gain greater leverage in negotiations with crriers and terminal equipment manufcturers ability to offer customers total logistic packages 9 Cargos Systems

14 2. Alliances, international cooperation or mergers between port companies Global stevedores have built up a strategic network of ports in recent years. At the same time, previously locally or regionally operating companies have gone into national and transnational cooperations and mergers. Examples of this are ECT and the merger of Eurokai s and BLG container activities. The Hamburg-based terminal operator Eurokai was one of the first to realise cross border investment. In 1984 it took a 16%-minority share in the Liscont Container Terminal, Lisbon. Through its 33.4% interest in Contship Europe Eurokai later became involved in the La Spezia Container Terminal in the 1980s and more recently in the Medcenter Container Terminal. On completion of the merger with BLG the new grouping Eurogate with headquarter in Bremen became the largest container terminal operator in Europe. In 1999, Eurokai's European Terminal Group, comprising its 100% owned Eurokai Terminal in Hamburg and its Italian and Portugese interests handled a total of 6,32m TEU. The Container terminal in Bremerhaven handled around 2.15m TEU (including North Sea Terminal, a joint venture with Maersk/SeaLand), Hamburg 1,1m TEU, Gioia Tauro and La Spezia 2,91m TEU. Eurogate has emerged as one of the new superpower in European container terminal operations. The other is Hutchison after the takeover of UK ports and ECT in Netherlands. This process offers the following advantages: in these mergers and alliances are the following: 10 technology transfer, rationalisation and cost savings through combining services, marketing, accounting and so on effective use of labour opportunities for shared investment and a spread of risks improved capacity utilisation stronger negotiating position with the global carriers and alliances resulting from decrease in inter- or intra- port competition general synergetic benefits After a long time of strong and sometimes ruinous competition with a decrease in profit margins in Europe more and more we saw first examples of cooperation between the port companies. There are no deep experiences. So we will have to wait to see if the advantages are 10 see Cargo Systems 1998 p. 73f 22

15 stronger than the obstacles to these mergers and alliances. Such obstacles could be the different corporate culture, differing expectations or objectives between the partners, especially in the case of the merger between a private and a publicly owned company or unexpected reaction of customers. When the potential power base of such operations is examined, it is not hard to understand why a number of shipping lines are not keen on such developments: they argue that it will place too much control over pricing and other key issues in the hands of one entity. Indeed, privatisation and globalisation does not necessarily mean lower prices. 11 However, it must be recognised that the trend within the shipping line sector towards bigger and bigger power blocs has, in part at least, triggered the same trend within the container terminal operator sector. Just as shipping lines derive benefits from economies of scale, so do terminal operating consortia, even if their operations are spread over a number of locations. 12 In any case, major structural changes are taking place in the European container port landscape i. UK ports are competing with UK ports, German ports with German ports, Benelux ports with Benelux ports, and all with each other. This picture may change and the emergence of the Eurokai/Contship Italia/BLG union, combining terminals in Germany, Italy and Portugal under one corporate roof, shows that the industry has discovered the new trend of cooperation and cross border investment. All ports are investing heavily, usually with government support for the infrastructure 3. Alliances between shipping lines and port operators Container shipping lines are becoming increasingly involved in terminal operations, thus guaranteeing themselves stability, priority treatment and shorter berthing times as well as more control of their traffic. Maersk, Sea-Land and Evergreen in the shipping sector steadily built up their involvement in the terminal sector in the 1990s and started to set up dedicated terminals in key markets, for example in Bremen and in Rotterdam. They want to offer and control transport from door to door. The terminals are the hinges of this concept. If they are not controlled by shipping lines, an important link in the transport chain is missing. Reduction of costs and having more influence on the fixing of harbour fees could also play a role as well as the expectations of higher profit 11 see Lloyds List European Container Ports & Shipping. A Lloyds List special report 12 see Lloyds List

16 margins in this sector compared to the depressed rates in the shipping sector. VII. Conclusions The nineties saw massive investments made worldwide in port infrastructure and suprastructure - in particular in the expansion of container terminals. Brand new ports were created and container terminals were added to existing harbours. In the eighties, investments in ports were made primarily by the state or state-owned companies; in developing nations the World Bank was the most important financier of port development. In the nineties, however, the port landscape worldwide went through a complete change. Private enterprises, the so-called global stevedores, were created and these exerted more and more influence on container handling in ports all over the world. They were also the initiators of the most significant impulses in port development. Until then, the activities of port companies were almost without exception concentrated on one location. The creation of global stevedores meant companies could operate worldwide without being tied to one geographical location while at the same time being able to set up a network of ports at strategically important sites. The investors were terminal operators who had reached their limits for expansion locally. As a rule, the pioneers in this trend towards internationalisation were those companies in possession of financial power, political clout, strong local partners as well as suitably qualified management personnel. The global stevedores created to a certain extent a counterbalance to the new might of the merged shipping lines. The leading enterprises in the ports of Europe, which had previously been locally oriented, with close links to the region and local politics, were not exempt from this trend, as shown by the case of Eurogate. At the same time, the major shipping lines invested more and more in dedicated terminals, or formed alliances with local port companies and the global stevedores with a view to joint terminal operation. In this way, the shipping lines hope to achieve preferential and flexible handling of their cargo at the ports, while at the same time having more influence on the transportation chain and greater control of their costs. Deregulation and privatisation were the driving forces and main factors which benefited globally operating enterprises. In some case there were political reasons for countries partly or wholly privatising 24

17 port companies and activities. In others, construction and operating requirements caused capital demands which could not be met by the state or the local authorities. The state s increasing financial problems frequently resulted in more pressure so that the political and financial reasons often went hand in hand. Privatisation of ports began in the 1980s in England, where the highest degree was also achieved. In the nineties it became a global trend which will certainly continue. In South America in,particular great port projects are planned which will be realised by private enterprises, in many cases as joint ventures. The privatisation process is multifarious in degree and form, and does not necessarily mean a transfer of ownership. In many cases, privatisation means first of all commercialisation. Originally port activities are performed by government authorities. Then the company status is changed. The company is granted more autonomy in its direct dealings with the state. One of the global stevedores, PSA, is still a state enterprise although it was converted in 1997 into a private company with a clear demarcation between administrative and regulating functions of the authorities on the one hand and operating activities of the port company on the other. Many terminals are operated as public-private partnerships. The port area often remains in state ownership with private investors being granted long-term (20-30 year) leases. There are differences in the degree of privatisation between ports as well as in the functions performed by private enterprises or state authorities. Privatisation, globalisation and cross-border investment, cooperation and mergers are general trends and the dominant factor worldwide as well as in Europe. There is no going back to the old style of local port ownership. European container ports are in the process of reshaping their structure. A major cause of the trend towards privatisation and investment in container terminals worldwide is to be found in the increasing integration of the transportation chain from consignor to consignee. Ports and port enterprises can no longer limit themselves to the physical movement of the cargo from quay to ship. They have now made it their aim to become providers of a more comprehensive logistic service; by doing so, they can compete against forwarders and shipping lines. The integration of the transportation chain as well as the increasing range of services expected of the port operators, has forced them to enter into new forms of cooperation of both a horizontal and a vertical nature; this was a major factor in the merger development of the last decade. It is an ongoing process which is a long way from completion. 25

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