Ports are points of convergence between two domains of freight circulation, land and maritime domains. The term port came from the Latin word “portus”, which means gate or gateway. Ports are bound by the need to serve ships, and so access to navigable water has been historically the most important site consideration. Ports can be classified in two categories; Mono-functional port and Polyfunctional port. Monofunctional ports transit a limited array of commodities, most often dry or liquid bulks (raw materials). For example, the oil ports of the Persian Gulf or the mineral ports of Australia, Africa and in some measure of Canada. They have specialized piers designed to handle specific commodities and where the flows are commonly outbound. Meanwhile, polyfunctional ports are vast harbors where several transshipment and industrial activities are present. They have a variety of specialized and general cargo piers linked to a wide variety of modes that can include containers, bulk cargo or raw materials. Ports produce a combination of public and private goods. Public goods include those that are inherently non-divisible and non-consumable, such as public safety, security, and a healthy environment on the one hand, and coastal protection works necessary to create port basins on the other hand. Private goods are both consumable and divisible and their use entails a minimum of economic externalities. Public goods create positive externalities when they are used; the social benefits they generate are greater than the price that private parties can charge for them. Thus, some form of public intervention is appropriate in their production to make certain that an adequate level of public goods is maintained. Moreover, ports generate direct economic benefits (private goods) through their operations, as well as additional indirect benefits (public goods) in the form of trade enhancement, second order increases in production volumes, and collateral increases in trade-related services. Both through targeted development policies and the unplanned growth of interrelated industries, many ports have become the location for industrial clusters. Industrial clusters are geographic concentrations of private companies that may compete with one another or complement each other as customers and suppliers in specialized areas of production and distribution. Clustering of related activities improves the competitive advantage of cluster participants by increasing their productivity, reducing transaction costs among them, driving technological innovation, and stimulating the formation of new business spin-offs. To name a few, several notable port-centered industrial clusters have developed over the last 50 years, for instance, those in Dubai, Colon, Norfolk, Rotterdam, Yokohama, Antwerp, Hamburg, Marseilles, and Houston. The gradual shift from conventional break-bulk terminals to container terminals since the early 1960s brought about a fundamental change in layout of terminals as well as in site selection. In fact, as a matter of strategic development policy, many ports encourage the co-development of various value-added services through franchising, licensing, and incentive leasing. Today, ports here and abroad seek to attract enterprises that extend their logistics chains or provide them with specialized capabilities to add value to cargoes that are stored and handled in the port. General services that many ports attempt to develop include chandlering, ship repair, container maintenance, marine appraisals, insurance claims inspections, and banking. Futhermore, many governments are directly or indirectly involved in port development. They often use a “growth pole” argument to justify the direct financing of basic port infrastructure. This growth pole rationale derives from the belief that investments in port assets have strong direct and indirect multiplier effects on the...
References: Basilio Enrico L. 2003, The Philippine Port Sector; PPA: A Case of Regulatory Capture; International Conference on Challenges to Development: Innovation and Change in Regulation/ Competition
Llanto Gilberto M. Et Al., 2005, Competition Policy And Regulation In Ports And Shipping, PIDS-World Bank Competition Policy Project
http://www.ppiaf.org; Alternative Port Management Structures and Ownership Models, Port Reform Toolkit,USA
http://www.investphilippines.gov.ph; Sea Port Development/Operations, Board of Investments Industry and Investment Building 385 Sen. Gil J. Puyat Avenue, Makati City
Figure 1. Philippine Port System
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